Robert Brockman: US tycoon charged over historic tax fraud scheme

US tech mogul Robert Brockman charged in record tax evasion scheme

Robert Smith, the chief executive officer of Vista Equity Partners, a private-equity firm founded 20 years ago with a US$1 billion investment from Brockman, helped prosecutors with their investigation. Authorities said Mr. Brockman concealed gains he made in Vista's funds from the Internal Revenue Service.

Meanwhile Robert Smith has admitted to his role in the tax evasion scheme as part of a non-prosecution agreement.

The sum of $140 million that Smith will be paying reportedly arose from back taxes, penalties and interest.

An indictment filed earlier this month alleges that Brockman, the chief executive of Reynolds and Reynolds, an Ohio-based company that makes software for auto dealerships, used a network of entities in Bermuda and Nevis to hide investment income from the IRS.

The 39-count indictment charges Mr.

The indictment charges Brockman with crimes including money laundering, evidence tampering and destruction of evidence.

Brockman appeared in federal court from Houston via Zoom Thursday. "We look forward to defending him against these charges", said his attorney, Kathryn Keneally of Jones Day.

A lawyer for Smith did not immediately respond to a request for comment.

Brockman, who lives in Houston and Pitkin County, Colo., is a Marine veteran who started out in marketing at Ford Motor Company. "The company is not alleged to have engaged in any wrongdoing, and we are confident in the integrity and strength of our business". He later worked as a salesman at IBM before founding Universal Computer Services in the 1970 leading the company through its acquisition by Reynolds and Reynolds in 2006.

Mr Anderson said Smith, who helped secure the charges against Brockman and famously announced at last year's Morehouse College commencement that he would pay off the college debt of 2019 graduates, accepted responsibility for his own crimes in the tax evasion scheme. "These allegations should disgust every American taxpayer as well, because the law applies to all of us when it comes to tax and paying our fair share", Mr.

The billionaire used nominees to create a "false paper trail" in a conspiracy to disguise his direct control of these entities, which included the A. Eugene Brockman Charitable Trust, Point Investments Ltd and the St John's Trust Company, all based in Bermuda, prosecutors claimed. Vista wired money to bank accounts in Bermuda and Switzerland owned by an entity controlled by Mr. Brockman.

"The allegation of a $2 billion tax fraud is the largest-ever tax charge against an individual in the United States", David Anderson, the USA attorney in San Francisco, said at a news conference. The misconduct lasted from 1999 to 2019, authorities said.

"Complexity will not hide crime from law enforcement". "We will not hesitate to prosecute the smartest guys in the room".

Prosecutors said that Brockman used encrypted emails with code names, including Permit, Snapper, Redfish and Steelhead, to carry out the fraud and that he ordered evidence to be manipulated or destroyed.

He was also charged over an alleged fraud scheme involving debt securities. Mr Smith shot to fame previous year after giving a speech at Morehouse College's graduation ceremony, promising to pay all student debt for 2019 graduates. The historically Black institution in Atlanta said the donation amounted to $34 million.

Prosecutors said Mr Smith admitted to using a nominee trustee and corporate manager to his involvement in four offshore firms. The Justice Department doesn't typically announce such leniency deals with individuals, Mr. Neiman said.

Would you rather have money or be poor and have a good family?

"Smith's agreement to cooperate has put him on a path away from indictment", he said. "It is never too late to tell the truth".

Forbes lists Smith as No. 461 on its billionaires list, with a net worth of more than $5 billion.

Related:

Comments


Other news