Houston technology executive Robert Brockman has been charged in the biggest tax evasion case in U.S. history, after fellow billionaire Robert Smith turned against him to avoid prosecution himself, the Justice Department said Thursday.Brockman, the 79-year-old chief executive of Ohio-based Reynolds and Reynolds Co., is alleged in an indictment unsealed Thursday to have hidden $2 billion in income from the Internal Revenue Service over two decades, using a web of offshore companies in Bermuda and St. Kitts and Nevis.Reynolds and Reynolds provides software used by auto dealerships to help manage their business.The indictment alleges Brockman appointed nominees to manage the offshore entities for him as a means of hiding his involvement, saying he even went so far as to establish a proprietary encrypted email system and use code words such as “Permit,” “Red fish” and “Snapper” to communicate.At a press conference in San Francisco, U.S. Attorney David Anderson said Brockman was also charged in a securities fraud scheme, after he bought and sold debt securities in his own company, “breaking a promise to investors that he would not buy or sell his own company’s debt.”The debt was purchased thanks to inside information Brockman possessed, Anderson added.He faces seven counts of tax evasion, six counts of failing to file reports disclosing foreign bank accounts, and numerous other counts, including wire fraud, money laundering and evidence tampering.Representatives of Brockman could not be reached for immediate comment, but he was scheduled to appear in a federal court later Thursday.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.As part of his non-prosecution agreement, Smith admitted to using a nominee trustee and corporate manager to hide his control in four offshore companies. Some of his untaxed income was used to buy a vacation home in Sonoma, California, and ski properties in the Alps, and to fund charitable causes, Anderson said.He will pay $139 million in taxes and penalties and will abandon a $182 million protective refund claim and pay interest as part of the deal.”Although Smith willfully and knowingly violated the law, Smith has accepted responsibility and agreed to provide complete and truthful cooperation,” Anderson said.Smith founded private equity firm Vista Equity Partners. He is listed by Forbes as being the nation’s wealthiest Black investor.
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