Bob Brockman's work at odds with impairment claim, judge finds

Bob Brockman's continuation at the top of dealership management system giant Reynolds and Reynolds Co. after his lawyers raised concerns about cognitive impairment contributed to a federal judge's ruling that the former auto software titan is competent to stand trial on tax evasion charges.

The way that Brockman, who turns 81 this month, presented himself in professional settings was at odds with how he presented to his doctors and on cognitive testing, U.S. District Judge George Hanks Jr. wrote in a 42-page ruling this week. The opinion sided with prosecutors who contended that Brockman was faking his symptoms to avoid prosecution.

Hanks said those prosecutors met the burden of proof necessary to find Brockman competent.

Evidence showed "Brockman is also an extremely intelligent person with both a high cognitive reserve and history of malingering for secondary gain," Hanks wrote in his opinion.

The ruling, which came six months after an eight-day competency hearing in November, clears the way for the case to proceed to trial. It's not clear what the next actions in the case will be. The court could set dates for proceedings soon, according to an order from last year that outlined the case's schedule through the competency ruling and the steps that would follow that decision.

Brockman's lawyers requested the competency hearing in December 2020, citing evaluations by his doctors in 2018 and 2019 and a diagnosis of dementia that led to issues with retaining and processing information.

Prosecutors were skeptical of defense lawyers' competency claims, arguing that the timing of his contacts with doctors aligned with key dates in the criminal investigation and that concerns about cognitive impairment were not raised during two civil depositions in 2019 that Brockman gave in antitrust-related matters involving privately held Reynolds and Reynolds.

Lawyers for Brockman did not respond to messages seeking comment. A spokeswoman for the Justice Department declined to comment on the ruling.

Brockman was indicted in October 2020 on 39 counts, including tax evasion, wire fraud, money laundering and evidence tampering. He has pleaded not guilty and stepped down from his roles as Reynolds' chairman and CEO in November 2020.

"Perhaps the most telling evidence of Brockman's current exaggeration of his cognitive disability is the inconsistency between Brockman's performance during past cognitive evaluations and Brockman's contemporaneous, demonstrated superior business acumen and cognitive abilities outside of clinical settings," Hanks wrote. "This inconsistency, which grew more striking over time, continued right up until it became clear that the Government had gathered considerable evidence to support Brockman's prosecution and he resigned from his corporate responsibilities."

The judge based his opinion on testimony during the hearing from medical experts retained by both prosecutors and defense lawyers, close contacts of Brockman and current and former Reynolds executives, as well as on experts' reports, medical records, brain scan images and other court filings.

Hanks wrote that he took Brockman's age and health issues, including Parkinson's disease and some cognitive impairment, into consideration.

But he also wrote that he found Brockman to be an intelligent person able to stay involved in complex company matters.

Hanks cited examples of emails Brockman sent in 2019 and 2020 as Reynolds' CEO — on topics including a dispute among company executives and the profit margins of a newsletter business. That showed Brockman "had a firm grasp of the intricacies of his company and the industry in which it operated," Hanks wrote.

The judge also pointed to the antitrust depositions for which Brockman sat in 2019, including one in January of that year, in which Hanks wrote that no mention was made of cognitive impairment.

By March of 2019, "six weeks after giving hours of astute testimony in a billion-dollar antitrust case, Brockman, when asked during an assessment by a Baylor neuropsychologist to read the word 'two' aloud, responded that he did not think that 'two' was a word," Hanks wrote.

He noted that Brockman told his defense lawyers in the criminal case about his dementia diagnosis in July 2019 but that one of his attorneys testified during the competency hearing that Brockman "did not authorize" the diagnosis to be shared with his civil lawyers. That, Hanks said, "was especially curious under the circumstances, as Brockman sat for another high-stakes deposition in September of 2019 — six months after he was diagnosed with mild-to-moderate dementia, scored in the low-average range on an IQ test, and said that 'two' was not a word."

Lawrence Feld, a New York-based defense lawyer and adjunct professor at New York Law School who is not involved in Brockman's case, told Automotive News that a finding that a defendant is competent to stand trial can be part of an appeal "after a trial if he's convicted and sentenced."

It's possible that defense lawyers could request another competency evaluation should Brockman's health change, though the judge is not required to grant one, said Feld, also a former assistant U.S. attorney in the Southern District of New York's criminal division.

Brockman's lawyers in recent weeks have disclosed additional details in court filings about Brockman's health challenges since the competency hearing, including a COVID-19 diagnosis and two hospitalizations this year.

Reynolds spokesman Greg Uland said last week in an email that "the allegations involving Mr. Brockman focus on activities he engaged in outside of his professional responsibilities with Reynolds [and] Reynolds and have nothing to do with his previous role as chairman and CEO of the Company. Mr. Brockman has had no role with Reynolds [and] Reynolds since stepping down as chairman and CEO in November 2020."

While Brockman has had no position leading Reynolds since then, the government as recently as January wrote in a court filing that the former CEO controlled the company's ownership using offshore structures, which Brockman's lawyers have denied.

Brockman merged his privately held Universal Computer Systems with then-publicly traded Reynolds and Reynolds in 2006. In a transcript of a deposition Brockman gave in January 2019 in a civil antitrust case involving Reynolds that was included in a government court filing, Brockman said Reynolds was a subsidiary of a company called Dealer Computer Services, itself owned by Universal Computer Systems Holding Inc.

An entity called Spanish Steps — one of the companies identified in the prosecutors' case as allegedly controlled by Brockman — owned Universal Computer Systems Holding, Brockman said, according to the deposition transcript. He added that the A. Eugene Brockman Charitable Trust, of which he and several family members were beneficiaries, owned "substantially, all" of Spanish Steps, while two individuals owned less than 1 percent each of Spanish Steps.

It is unknown whether that ownership structure is current. Reynolds and Reynolds is not implicated in the government's case against Brockman.