Brockman & Smith Caught in largest Tax Fraud Scheme
According to a report in the Washington Post, Robert T. Brockman, a billionaire from Texas was indicted in the largest tax fraud scheme ever seen in America.
“The allegation of a $2 billion tax fraud is the largest ever tax charge against an individual in the United States,” David L. Anderson, the U.S. attorney for the Northern District of California, said at a news conference.
The 79 year-old Brockman was indicted by a federal grand jury late last week. Among the 39 charges levied by prosecutors are, including tax fraud, wire fraud, evidence tampering and money laundering.
Prosecutors allege that Brockman’s criminal actions started in 1999. It was then that they say be started to move money into overseas accounts and “covering his tracks” as he did so.
A former Marine, Brockman worked at Ford and IBM before starting his own company, Universal Computer Systems. About 30 years later, in 2006, his company was acquired by Reynolds and Reynolds – keeping Brockman as Chief Executive.
In a statement to the New York Times the company said that it “is not alleged to have engaged in any wrongdoing, and we are confident in the integrity and strength of our business.” They went on to say that what Brockman did occurred “outside of his professional responsibilities.”
Over the last 2 decades, Brockman allegedly developed and used a network of entities in Bermuda and Nevis to income from the government, and hid other untaxed profits in banks in Bermuda and Switzerland.
Along with Brockman, Robert F. Smith is listed as a co-conspirator. Smith, a 57-year-old billionaire, fell into the spotlight in in 2019. In May of that year, he pledged to pay off all the student loans for the graduating class of Morehouse College, an all-male, historically Black college in Atlanta.
Smith is the founder of a private equity fund – Vista Equity Partners. However, the firm had only one investor – Robert T. Brockman.
Prosecutors say that Smith helped Brockman hide his profits earned through Vista in offshore accounts so he could avoid paying taxes.
Robert Smith made a deal with prosecutors to testify against Brockman. In exchange, Smith will avoid prosecution while admitting to his part in the scheme. He will however, have to pay $140 million in taxes and penalties for the $43 million in federal taxes he evaded from 2005 to 2014.
Brockman is currently out on a $1M bond after pleading not guilty on the charges.
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