Software developer

Robert Brockman, software developer who fought the IRS, dies

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

Robert Brockman, who built a multi-billion dollar fortune as an entrepreneur and software 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 hospice home care, died Friday evening, said Kathy Keneally, his attorney. He had been fighting tax evasion charges since 2020, but his lawyers said his dementia meant he was unfit to stand trial.

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

“The government has wasted time and resources charging a man with progressive and terminal dementia,” Keneally said.

As a young man, Brockman was known as a tireless worker with a passion for physical fitness, fly fishing in Colorado and dove hunting in Argentina. Forbes estimated his net worth at $4.7 billion.

A Florida native of humble origins, Brockman sold computer services to car dealerships on behalf of International Business Machines Corp. when in 1970 he founded a company that helped revolutionize the way industry operated in North America and Europe.

Brockman, a self-taught programmer, developed a software system that helped car dealerships manage virtually every aspect of their operations. He was awarded more than a dozen patents and grew his software company, Reynolds & Reynolds, into a 5,000-person operation worth around $5 billion.

As Brockman built his company into an industry force, he also defended numerous lawsuits accusing him of bare-knuckle business practices. Sellers accused his company of stiffening them on payments; car dealers said he tricked them into expensive multi-year contracts. The Federal Trade Commission investigated whether he had engaged in anti-competitive practices.

A former Navy 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 one rule: don’t do business with the government,” said Robert Tyson, a contractor who won a lawsuit against Brockman for unpaid compensation for services rendered. “He didn’t want the feds looking at anything.”

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

burner phones

Brockman helped launch the private equity career of Robert F. Smith, America’s wealthiest black citizen, by providing the initial investment in his company, Vista Equity Partners. Prosecutors alleged that Brockman used a network of offshore entities, codenames and cellphones to hide $2 billion in income from the IRS, most of it from Vista investments.

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

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

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

Brockman pleaded not guilty, but his attorneys soon began arguing that dementia rendered 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 like it and went out to do something about himself,” his younger brother, David, told The Wall Street Journal in 2021.

Seeding overview

After graduating summa cum laude from the University of Florida in 1963, Brockman worked as a marketing intern at Ford Motor Co. before joining IBM, where he became a top salesman in Washington and Houston. In 1970, he started his own company, Universal Computer Systems, and began providing car dealerships with weekly inventory reports, Auto News reported.

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

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

The combined business took the name Reynolds & Reynolds and was controlled by a Bermudian charitable trust set up 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 stakes in a software company, 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 Bermudian court. .

Opera support

The Bermudian Trust and the Brockmans also became active philanthropists. Their donations 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 have also supported dozens of students with scholarships.

However, in 2018, US tax authorities raided Brockman’s attorneys in Houston and Bermuda. They uncovered 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, related to taxes he would have owed from 2004 to 2018. In January, he sued the United States to end the immediate assessment of this tax by the agency. A few days later, he filed a separate lawsuit in Tax Court. While his criminal case winds down, the IRS battle against his estate could drag on for years.

“Whether Bob Brockman in fact owed more taxes, which we dispute, 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 pretty girl; a grandson; and a granddaughter.