Billionaire Indicted in Largest Tax Fraud Scam in U.S. History
Texas billionaire Robert Brockman was charged with tax evasion, wire fraud, money laundering, and other crimes in service of a $2 billion tax fraud scheme, the Department of Justice said at a recent press conference. Over the course of 20 years, Brockman allegedly used offshore bank accounts to hide his money with the help of a private equity firm CEO named Robert Smith. Brockman is the CEO of Reynolds & Reynolds, a software company in Ohio.
David L. Anderson, U.S. Attorney for the Northern District of California said of the crime, “The allegation of a $2 billion tax fraud is the largest ever tax charge against an individual in the United States. Complexity will not hide crime from law enforcement. Sophistication is not a defense to federal criminal charge. We will not hesitate to prosecute the smartest guys in the room."
Brockman allegedly used unreported tax income to purchase homes in France, California, and Colorado as well make high end purchases, such as a luxury yacht called “Turmoil.” The indictment alleges that he used different code names such as “Bonefish” and “Snapper” and several aliases to engage in encrypted communications with his employees. He even encouraged one employee to attend a “money laundering conference” under a new identity.
Jim Lee, chief of the IRS Criminal Investigation Unit claimed, “Dollar amounts aside, I have not seen this pattern of greed or concealment and cover-up in my 25+ years as a special agent.”
Robert Smith, who is #461 on Forbes’ billionaires list, has a net worth of over $5 billion. In exchange for his cooperation in the case against Brockman, he will not be indicted for his crimes. Smith is also expected to pay $139 million to settle his own outstanding tax debts.
Brockman’s company, Reynolds & Reynolds, has not been charged with wrongdoing, as Brockman’s alleged illegal activities occurred outside the purview of the company. The company said in a statement, “The company is not alleged to have engaged in any wrongdoing, and we are confident in the integrity and strength of our business."