Reynolds CEO allegations exposed in Bermuda case

Bob Brockman, head of the largest private dealership management system company in the U.S., is under criminal investigation on suspicion of tax evasion and money laundering, a former employee alleges in a civil case in Bermuda.

Australian lawyer Evatt Tamine cited the allegations against Brockman in court testimony in a case in Bermuda involving Brockman's trusts. Tamine is being investigated there separately on suspicion of stealing more than $20 million from a company administering Brockman's charitable trust fund, of which Tamime was a director for eight years.

Brockman is CEO of Reynolds and Reynolds Co. of Dayton, Ohio, a DMS provider to dealerships and manufacturers in the U.S., Canada and Europe. The company, which also has offices in Texas, employs more than 4,300 people.

"Reynolds and Reynolds is not a party to these matters, and therefore we cannot comment," company spokesman Tom Schwartz told Automotive News.

Tamine said the claims against him are part of attempts to obstruct a U.S. Department of Justice investigation into Brockman's tax affairs, according to a March 26 judgment filed in the Supreme Court of Bermuda.

Tamine's U.S. lawyer, Michael Padula, told the court that Brockman concealed from the IRS more than $2 billion in gains and that if the investigation proceeds to trial, "it will be one of the largest tax evasion cases by individuals in U.S. history."

The Department of Justice would not confirm or deny whether Brockman was a target of an investigation, "as a matter of policy," a spokesman said in an email.

Tamine was the sole trustee of Brockman's St. John's Trust Co. in Bermuda from 2010 to 2018. St. John's is a corporate trustee administering the A. Eugene Brockman Charitable Trust, according to Bermuda Supreme Court documents.

St. John's Trust is suing Tamine, alleging he stole more than $20 million from the fund.

Bermuda police were asked in April 2018 to assist the U.S. Justice Department in an investigation. Search warrants were executed on Tamine's storage units and a residence in September and October that year, according to a separate March 26 Bermuda Supreme Court opinion. Computer equipment and files were seized.

Padula could not be reached for comment. Messages were left with the IRS.

In 2006, publicly traded Reynolds went private when it merged with Brockman's Universal Computer Systems Inc. — a company he founded in 1970 in his living room — in a $2.8 billion deal.

Brockman, a publicity-shy businessman, has been a member of a number of education boards.

He formerly was on the board of Baylor College of Medicine in Houston, is trustee emeritus of Rice University in Houston and was chairman of the board for Centre College in Danville, Ky., the small liberal arts school he attended.

That was the same institution where a $250 million donation — one of the largest for a U.S. college ever at the time — fell through in 2013.

The college said a deal involving the A. Eugene Brockman Charitable Trust was to blame, Reuters reported. The donation was dependent on a Reynolds refinancing deal, which would have resulted in a payout to shareholders, including the Brockman trust, Reuters said, citing Moody's Investors Service.

The Brockman Foundation, which has a mailing address in Bermuda, has supported education and medical research initiatives for more than 30 years. The foundation's philanthropy efforts are funded by distributions from the trust established by Brockman's father, A. Eugene Brockman. Bob Brockman is listed on the foundation's website as a member of its scholarship advisory board.

The judgment and investigation were first reported by The Sydney Morning Herald of Australia.