Skip to comments.CEO of Multibillion-dollar Software Company Indicted for Decades-long Tax Evasion and Wire Fraud Schemes
Posted on 10/16/2020 10:04:06 AM PDT by ransomnote
A federal grand jury in San Francisco, California, returned a 39 count indictment charging Robert T. Brockman, the Chief Executive Officer of an Ohio-based software company, with tax evasion, wire fraud, money laundering, and other offenses, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division, U.S. Attorney David L. Anderson for the Northern District of California, and Chief of Internal Revenue Service (IRS) Criminal Investigation Jim Lee. The charges stem from an alleged decades-long scheme to conceal approximately $2 billion in income from the IRS as well as a scheme to defraud investors in the software company’s debt securities.
“Today’s indictment reflects the Department of Justice’s commitment to finding and prosecuting the costliest and most sophisticated tax crimes in the United States,” said Principal Deputy Assistant Attorney General of the Tax Division Richard E. Zuckerman.
“Complexity will not hide crime from law enforcement,” said U.S. Attorney Anderson. “Sophistication is not a defense to federal criminal charges. We will not hesitate to prosecute the smartest guys in the room.”
“As alleged, Mr. Brockman is responsible for carrying out an approximately two billion dollar tax evasion scheme,” said Jim Lee, Chief of IRS Criminal Investigation. “IRS Criminal Investigation aggressively pursues tax cheats domestically and abroad. No scheme is too complex or sophisticated for our investigators. Those hiding income or assets offshore are encouraged to come forward and voluntarily disclose their holdings.”
According to the indictment, Brockman, a resident of Houston, Texas, and Pitkin County, Colorado, used a web of offshore entities based in Bermuda and Nevis to hide from the IRS income earned on his investments in private equity funds which were managed by a San Francisco-based investment firm. As part of the alleged scheme, Brockman directed untaxed capital gains income to secret bank accounts in Bermuda and Switzerland. The indictment further alleges that to execute the fraud, between 1999 and 2019, Brockman took measures such as backdating records and using encrypted communications and code words to communicate with a co-conspirator, among other alleged actions.
In addition to the tax offenses, the indictment alleges that, between 2008 and 2010, Brockman engaged in a fraudulent scheme to obtain approximately $67.8 million in the software company’s debt securities. As CEO, Brockman was contractually restricted from purchasing any of the software company’s debt securities without prior notice, full disclosure, and amending the associated credit agreements. The indictment alleges that Brockman used a third-party to circumvent those requirements, to acquire the debt securities, and to conceal from the sellers valuable economic information. The indictment further alleges that Brockman used material, non-public information about the software company to make decisions about purchasing the debt. In addition, Brockman allegedly persuaded another individual to alter, destroy, and mutilate documents and computer evidence with the intent to impair the use of such evidence in a grand jury investigation.
Brockman is charged with conspiracy, in violation of 18 U.S.C. § 371; seven counts of tax evasion, in violation of 26 U.S.C. § 7201; six counts of failing to file foreign bank account reports, in violation of 31 U.S.C. §§ 5314 & 5322(b); 20 counts of wire fraud affecting a financial institution, in violation of 18 U.S.C. § 1343; two counts of concealment money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i)), and tax evasion money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(ii)); and one count each of international concealment money laundering, in violation of 18 U.S.C. § 1956(a)(2)(B)(i)); evidence tampering, in violation of 18 U.S.C. § 1512(b)(2)(B), and destruction of evidence, in violation of 18 U.S.C. § 1512(c)(1).
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Brockman potentially faces a substantial period of incarceration, as well as restitution and criminal forfeiture. Any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Brockman is scheduled to make his initial federal court appearance before U.S. Magistrate Judge Nathanael M. Cousins today.
The case is being prosecuted by Senior Litigation Counsel Corey Smith of the Tax Division, Assistant U.S. Attorney Michael G. Pitman, and Trial Attorneys Lee Langston and Christopher Magnani of the Tax Division. The Justice Department’s Office of International Affairs of the Department’s Criminal Division also provided extensive assistance in this matter.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
That’s quite the serious pile of charges.
Started in the 90s.
Well if you get to live like few can only dream of for 20 or more years, it may be worth some years behind bars in a Fed pen.
If it’s more than 10, then it wasn’t worth it.
A federal grand jury in San Francisco, California, returned a 39 count indictment charging Robert T. Brockman, the Chief Executive Officer of an Ohio-based software company, with tax evasion, wire fraud, money laundering, and other offenses
Decades long? It was probably worth it, then.
Not saying the charges aren’t legit. No clue.
I do find it interesting that a SAN FRANCISCO court convicts an Ohio software company though. Hmmmm... Why not indict in Ohio? Should Ohio courts indict Silicon Valley corporations?
Bummer. I was hoping it was my CEO.
I used to ask this ethics question to juxtapose against a four year college education:
If you could steal 10 million dollars, get caught, spend four years in a country club prison, and then get out and get to keep the money, would you do it?
Darn. Not RNA vandal Bill Gates?
He must have been behind on his protection payments to SanFranNan.
I personally know a guy who stole just over a million dollars as the Controller of a decent sized company.
I believe he did 19 months at the same Club Fed minimum security prison in West Virginia where Martha Stewart was housed. He had conjugal visits among other things.
Seems like crime more or less paid in his case.
Why does the “software company” go un-named?
Conjugal visits were NOT with Martha Stewart. Just to clarify.
19 months for a million dollars. Yeah. From an income perspective, I would say that paid.
But only from an income perspective.
I would spend four years in a non country club federal prison (they exist) and have the 10 million waiting for me.
Now one of the harder prisons? No.
Why does the software company go un-named?
Yeah. I wanted to know too. During the current economy, there’s more of a focus on keeping the jobs/company intact for people who worked there but didn’t commit crimes (Or innocent investors, dependent businesses). Naming the company might harm the survival of said jobs/company.
Is he guilty of being a businessman while Republican?
If he was a democrat this would be a badge of honor- evading taxes while wanting others to be socialists.
Probably either about where the company is incorporated, or where he lives. My company is headquartered in Waterloo Canada, but the CEO lives in San Mateo.
Brockman, a resident of Houston and Pitkin County, Colorado, is chairman and CEO of Reynolds and Reynolds, a 4,300-employee company near Dayton, Ohio, that sells accounting, sales and management software to auto dealerships. The software helps set up websites, including live chats with potential customers, find loans and calculate customer payments, manage payroll and pay bills.
Reynolds & Reynolds Co
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