The feds have netted the largest tax fraud case in history after discovering that Houston, Texas billionaire Robert Brockman evaded $2 billion in taxes over the course of two decades.
According to newly unsealed docs, Brockman, whose net worth is $1 billion, formed companies on the British Virgin Islands and used them to conceal assets from the IRS. The 79-year-old was charged with money laundering, conspiracy, wire fraud, and tax evasion, amongst other charges, in a 39-count indictment. The elaborate scheme was uncovered in part by fellow billionaire Robert F. Smith, who agreed to cooperate with the federal government to bring down Brockman. In return, he avoided criminal charges in his own tax evasion case. Instead, Smith admitted a violation of federal law and agreed to pay $139 million in owed taxes and penalties.
The indictment states that Brockman conspired with a person described as Individual 1, who was put in charge of St. John’s Trust Company, an entity in Bermuda that was owned by Brockman but was set up in a way to conceal any ties it had to him. Individual 1 was ordered to use the “Evidence Eliminator” on his computer to cover their tracks.
“Complexity will not hide crime from law enforcement,” U.S. Attorney Dave Anderson said at a Thursday news conference announcing the charges. “We will not hesitate to prosecute the smartest guys in the room.”
On Thursday morning, Chief Jim Lee of the IRS said that he was “incredibly irritated” and “disgusted” with the nature of the charges during a news conference.
“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.”
Federal prosecutors have pointed out that Brockman owning a jet could make him a flight risk.
However, his attorney, Neal Stephens, said that his client could have run four years when he was first made aware of the investigation. They also pointed out his recent health struggles as another reason why the CEO was not a risk.
“He’s not a flight risk, and he’s certainly not a danger to the community,” Stephens said, later adding, “We deny and refute all the allegations and are looking forward to litigating this.”
U.S. Magistrate Judge Nathaniel Cousins allowed the wealthy fraudster to remain released but imposed a $1 million bond over defense objections.
Brockman is the CEO of software company Reynolds and Reynolds. He amassed much of his fortune from selling software to automotive companies.