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Indictment: Attorney Helped Client Hide $225M

An. 82-year-old tax attorney, Carlos Kepke, has been accused of helping a client conceal $225 million in capital gains income. Kepke faces the federal charges while his client, Robert F. Smith, has avoided any prosecution by agreeing to testify against his former partner, Robert Brockman, who was charged in concealing $2 billion in income from the Internal Revenue Service.

An indictment alleges that about March 2000, Keple created a limited liability company, Flash Holdings, based in the Caribbean Island of Nevis and Excelsior Trust, based in Belize, to serve as tax evasion vehicles.

According to news reports, former attorney general Robert Barr approved a non-prosecution agreement with Smith, who controls private equity firm, Vista Equity Partners, and who is reportedly worth about $7 billion. To avoid jail, Smith had to admit to his crimes and pay $139 million, along with cooperating in the tax-evasion case against his associate Robert T. Brockman. 

In contrast, Kepke faces up to five years in prison on a charge of conspiracy and three years on each of each count of assisting in assisting in the preparation of a false return. Smith earned income from private equity funds with a portion of that deposited into Flash’s bank accounts in the British Virgin Islands and Switzerland. Because Excelsior, not Smith was the nominal owner of Flash, Smith was able to hide income with Kepke assisting in the preparation of Smith’s fraudulent tax returns for tax years 2012 to 2014.

The indictment says Smith paid Kepke nearly $1 million in fees since 2007. It is alleged the fees include an annual payment for Kepke to purge or “securitize” his records related to Smith, Excelsior, and Flash.

Vista invests in technology partners and its website shows it has six portfolio companies in the ERP space, including enteprise financial software vendor Atean

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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