Billionaire who offered to pay Morehouse class student debt settles tax fraud case with DOJ

ATLANTA — The billionaire who promised to pay off all the college debt for the Morehouse College class of 2019, is now admitting that he’s guilty of hiding money around the world and failing to pay millions of dollars in taxes.

Channel 2 Action News was there when billionaire investor Robert Smith promised to pay off the graduating class' student debt, which totaled about $34 million.

As far as we can tell, he actually did.

Despite Smith’s guilty plea, one Morehouse graduate told Channel 2′s Richard Elliot that he’s still forever grateful for what Smith did.

Elliot obtained a document that Smith signed last week where he admitted to the U.S. Department of Justice that he was guilty of tax evasion and hiding money in shell corporations around the world.

He also agreed to pay back more than $130 million in taxes, and to abandon more than $180 million in charitable contributions.

Apparently, that $180 million does not include the 2019 student debt promise. Smith already paid that money and inspired others to do the same.

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In a statement Tuesday, Morehouse College said:

“The donation inspired other benefactors to gift more than 50-million dollars in scholarship support to the Morehouse College student success program. We appreciate Dr. Smith’s leadership and generosity.”

From his home in Missouri, Morehouse grad Elijah Dormeus said Smith paid off his entire student loan and the debt of other Morehouse grads.

“I had upwards of $125,000 in debt,” Dormeaus told Elliot.

Now, instead of working to pay off debt, Dormeaus said he works with his own foundation to provide scholarship money to new students.

He said Smith’s admission of guilt shouldn’t tarnish the legacy of what he did for more than 300 Morehouse grads.

“So I mean, yes, it may be an evasion of tax, which I, you know of course, don’t applaud, but at the end of the day, it was still to help somebody else,” Dormeaus said.

By entering into the agreement with the DOJ, Smith avoided prosecution and jail time.

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Cox Media Group