Federal prosecutors have charged Robert Brockman, CEO of Reynolds and Reynolds Co., a software company based in Ohio with 39 counts of tax fraud, totaling $2 billion – the case is the biggest tax fraud charge being answered by an American. The Department of Justice announced on Thursday that Brockman did not declare his capital gains for over 20 years.
To hide the money from the IRS, Brockman used a host of offshore accounts and corporations in Bermuda, Nevis, and Switzerland.
Robert F. Smith, CEO of Vista Equity Partners, a private equity corporation that helped Brockman, has agreed to cooperate with prosecutors and pay a sum of $139 million to take care of his part of the scheme. Last year, Smith pledged to pay up the students’ loan of the graduating class at Morehouse, a college in Atlanta, Georgia.
The indictment charges Brockman on 39 counts of tax evasion, money laundering, wire fraud, and other money-related offenses.
“Compounding a crime will not hide it from law enforcement agencies, being refined will not save an individual from answering to their crimes,” said David L. Anderson, attorney for the Northern District California. “We will not be intimidated from prosecuting even the smartest guys in the room.”
Brockman, 79, put in a virtual appearance in federal court on Thursday. He pleaded not guilty to all counts and the court released him on a bond of $1 million according to Abraham Simmons, spokesman for the Northern District of California.
“Mr. Brockman pleaded not guilty, and we will vigorously defend him against the charges,” Brockman’s attorney, Kathryn Keneally, announced.
Persecutors have accused Brockman of using encrypted emails that contain different code names such as Permit, Redfish, Steelhead, and Snapper in the scheme and had instructed his people to manipulate or destroy the evidence against him.
Brockman lives in Houston and in Pitkin County. His Ohio-based company, Reynolds and Reynolds, has over 4,000 employees. The company deals in sales, management, and accounting of auto dealerships. The software sold by Reynolds and Reynolds helps auto dealerships set up their websites, manage their payroll system, calculate loans and customer payments, pay and manage their expenses, as well as chat with prospective customers.
The Ohio-based company has issued a statement separating itself from the CEO. The company declared that it is not liable for any wrongdoing carried out by Brockman. About seven years ago, a charitable trust that was established by Brockman’s father withdrew its promise of $250 million to be donated to Center College, an art school in Kentucky. Brockman is an alumnus of the college and was once the chair of the board of trustees of the school. A spokesman for Reynolds and Reynolds announced in 2013 that the incident was a proposed refinancing venture involving Smith’s firm, Vista Equity Partners.
The indictment stated that in 2013, Brockman had instructed an anonymous person to gift the money to the school if his conditions were met and also gave the order to pull out in August the same year. Prosecutors accused Smith of purchasing and restructuring a vacation home in California with $2.5 million amidst other things.
Source: foxbusiness.com
