Lawyer charged in $225 million U.S. tax scheme dies before trial

(Reuters) – A Houston-based tax attorney charged with helping hide $225 million from the US Internal Revenue Service has died before his trial was due to start on Monday, according to the judge presiding over his case.

“The court is notified that Defendant Kepke is deceased,” US District Judge James Donato in San Francisco said in an order Monday calling off the trial.

Carlos Kepke, who was 83, was charged with helping Robert Smith, the billionaire founder of private equity Vista Equity Partners LLC, hide $225 million from the IRS.

Richard Strassberg, a partner at Goodwin Procter representing Kepke, was not immediately available. Kepke’s attorneys said in court filings last month that Kepke has a serious heart condition and has suffered two heart attacks, including one in 2019 that led to triple open-heart bypass surgery and complications.

A spokesman for the US Attorney’s Office in San Francisco gave no further details about Kepke’s death.

Smith was to testify at trial that Kepke helped him hide millions of dollars using a variety of offshore companies and foreign bank accounts. Prosecutors charged Kepke with conspiring to defraud the US and helping to file materially incorrect tax income.

Kepke pleaded not guilty to the charges. Smith signed a non-prosecution agreement with the U.S. Department of Justice, in which he admitted participating in the tax evasion program and agreed to pay $139 million in taxes and penalties.

Kepke is at least the second defendant to die fighting charges in a criminal case related to Smith. In August, 81-year-old Houston technology executive Robert Brockman died while awaiting trial in what prosecutors called the largest tax evasion case in US history.

Prosecutors said Brockman, the chief executive of Ohio-based Reynolds and Reynolds Co., hid $2 billion in revenue from the IRS over two decades by running a web of offshore companies in Bermuda and St. Kitts and Nevis used.

Smith’s cooperation contributed to the charges against Brockman, prosecutors said. The two men had a business relationship dating back to 1997.

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Houston tech mogul Robert Brockman faces charges in record US tax evasion scheme

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David Thomas

Thomson Reuters

David Thomas reports on legal affairs, including law firm strategy, hiring, mergers and litigation. It is based in Chicago. He can be reached at [email protected] and on Twitter at @DaveThomas5150.