Robert Brockman, Software Developer Who Fought IRS, Dies

Robert Brockman, Software Developer Who Fought IRS, Dies
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Robert Brockman, who built a multimillion-dollar fortune as a software entrepreneur and investor before being indicted in a landmark tax evasion case, has died. He was 81 years old.

Robert Brockman, who built a multimillion-dollar fortune as a software entrepreneur and investor before being indicted in a landmark tax evasion case, has died. He was 81 years old.

Brockman, who suffered from dementia and was undergoing home hospice care, died Friday night, said Kathy Keneally, her attorney. He had been fighting tax evasion charges since 2020, but his lawyers said his insanity meant he was not competent to stand trial.

A judge ruled in May that Brockman was competent. At a hearing a month later, the judge tentatively set his trial date for February 1. Jan. 23, 2023. Brockman appeared in bed via video during that hearing.

“The government wasted time and resources accusing a man who he had progressive dementia and was terminally ill,” Keneally said.

In his youth, Brockman was known as a tireless worker with a passion for physical exercise. physical aptitude, fly fishing in Colorado and pigeon hunting in Argentina. Forbes estimated his net worth at $4.7 billion.

A Florida native of modest origins, Brockman sold computing services to automobile dealers on behalf of International Business Machines Corp. when, in 1970, he founded a company that helped revolutionize the way industry operates in North America and Europe.

Brockman, a self-taught programmer, developed a software system that helped car dealers run virtually every aspect of their operations. He took out more than a dozen patents and grew his software company, Reynolds & Reynolds, into a 5,000-person operation worth about $5 billion.

As Brockman built his company into an industry force, he also defended numerous lawsuits accusing him of unfair business practices. The sellers accused his company of forcing them on payments; car dealers said he cheated them out of expensive multi-year contracts. The Federal Trade Commission investigated whether he engaged in anticompetitive practices.

A former Marine reservist who surrounded himself with loyal lieutenants, Brockman had an intense desire for personal privacy that extended to his dealings with the Internal Revenue Service.

Brockman had a rule: do not business with the government,” said Robert Tyson, a businessman who won a lawsuit against Brockman for unpaid compensation for services rendered. “He didn’t want the feds to look at anything.”

In October 2020, the US indicted Brockman in the largest-ever tax evasion case against an individual, as well as money laundering charges.

Burner The telephones

Brockman helped launch the private equity career of Robert F. Smith, America’s wealthiest black citizen, by providing the seed investment in his firm, Vista Equity Partners. Prosecutors alleged that Brockman used a network of offshore entities, code names and burner phones to hide $2 billion in income from the IRS, most of it earned through investments in Vista.

Smith admitted to tax crimes but avoided prosecution by cooperating with prosecutors against Brockman.

The case against Brockman hinged on whether he secretly controlled billions of dollars in an offshore charitable trust, as prosecutors alleged, or managed it independently, as he claimed. Prosecutors said he used untaxed profits from offshore entities to buy a Colorado fishing lodge, a private jet and a 200-foot yacht, which his attorneys denied.

“I haven’t seen this pattern of greed or concealment and cover-up in my 25-plus years as a special agent,” IRS official James Lee said when the charges were filed.

Brockman pleaded not guilty, but his attorneys soon began arguing that dementia had left him unable to assist in his defense.

Robert Theron Brockman was born in St. Petersburg, Florida, on May 28, 1941. His father, Alfred Eugene Brockman, owned a gas station. His mother, Pearl, was a physical therapist. With the family struggling financially, Brockman “decided he didn’t love that and went out to do something for himself,” his younger brother David told the newspaper. Wall Street Journal in 2021.

planting view

After graduating summa cum laude from the University of Florida in 1963, Brockman worked as a marketing trainee at Ford motor company before moving to IBMwhere he became one of the best sellers of Washington and Houston. In 1970 he created his own firm, Universal Computer Systems, and began providing auto dealers with weekly inventory reports, Auto News reported.

While Brockman was building his company, he met Smith, then a Goldman Sachs investment banker in technology. Brockman later seeded Smith’s company, Vista, with at least $1 billion in funds to buy enterprise software companies. The deal was structured to keep profits offshore, prosecutors say.

In 2006, Brockman brought his software and investment interests together to engineer the acquisition that propelled UCS into the big leagues. Brockman’s closely held firm bought Reynolds & Reynolds, a public company nearly twice its size. Some of the equity financing came from the original Vista fund, in which Brockman was the only outside investor.

The combined firm took the name Reynolds & Reynolds and was controlled by a Bermuda charitable trust established in the name of Brockman’s father. As Brockman’s wealth grew, so did the trust’s offshore assets.

In addition to the $5 billion in software company holdings, they included $1.3 billion in investments made through a British Virgin Islands-based entity and $1.4 billion in a Swiss bank, his wife, Dorothy, said. in an affidavit filed in a Bermuda court. . .

support for Opera

The Bermuda Trust and the Brockmans also became active philanthropists. His gifts included tens of millions of dollars to Baylor College of Medicine, where Brockman was a trustee, and Brockman Hall for Opera at Rice University in Houston. They also supported dozens of students with scholarships.

However, in 2018, US tax authorities raided Brockman’s lawyers in Houston and Bermuda. They discovered a cache of encrypted documents and messages that prosecutors used to build their criminal case against Brockman.

Last year, the IRS assessed Brockman for $1.4 billion in taxes he said he owed between 2004 and 2018. In January, he sued the U.S to stop the agency’s immediate evaluation of that lien. Days later, he filed a separate lawsuit in Tax Court. While your criminal case will be over, the IRS’ battle against your estate could last for years.

“If Bob Brockman did in fact owe more taxes, which we discussed, he can await a decision from the Tax Court,” Keneally said.

He is survived by his brother David; his wife of 53 years, Dorothy; one son, Robert Brockman II; a daughter-in-law; A grandson; and a granddaughter.

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