The Biggest U.S. Tax Fraud Case Ever Filed

In October of 2020, federal prosecutors charged a man from Houston, Texas with a largest tax fraud case in United States history. According to the charges, Robert T. Brockman has concealed more than $2 billion – that is $2,000,000,000 – in income from the Internal Revenue Service.

As reported in March 2021 by Miriam Gottfried and Mark Maremont of the Wall Street Journal, Brockman  has pled not guilty to nearly 40 criminal counts. These charges include destruction of evidence, money laundering, wire fraud, failure to disclose assets held overseas, and tax evasion.

Brockman made his original money as a software entrepreneur. Back in 2000, a group of sales professionals who worked for Brockman sued him, claiming that he had shorted them their commissions by reporting that the company had made less profit than was the case. They settled the case out of court, but in the original filing accused Brockman of directing customer payments to a shell company in the Cayman Islands.

Brockman’s company, Reynolds & Reynolds Co., manufactured software for automotive companies. Brockman is the only investor in a huge private-equity fund overseen by Vista Equity Partners. Vista’s CEO, billionaire Robert Smith (no relation to the Cure singer), admitted in October 2020 to evading $43 million in federal taxes. Smith, in exchange for his confession, will not be prosecuted. He will, however, need to pay $139 million in fines and back taxes.

According to the federal charges, 79-year-old Brockman earned $2 billion from Vista’s one-man private-equity fund, and diverted all of that money overseas to avoid taxes – to Bermuda, Switzerland, and to the Cayman Islands.