Bob Brockman remained at the helm of dealership management system giant Reynolds and Reynolds Co. as he began his fight against federal charges that he hid $2 billion in income and defrauded investors in the company's debt in what prosecutors say was a complex offshore scheme lasting two decades.
Among those charges: an allegation that the Reynolds chairman and CEO misled investors by buying debt securities in his company without disclosing his involvement as required and using insider information to do so.
Brockman, 79, was indicted this month on what the federal government called the "largest-ever tax charge against an individual in the United States." Prosecutors who revealed the indictment late last week allege Brockman spent 20 years hiding income in Caribbean and other secret bank accounts to dodge U.S. income taxes.
It's a potentially dramatic downfall for the wealthy businessman, who faces a slew of federal charges from tax evasion and money laundering to wire fraud. Brockman last week appeared by videoconference in federal court in Houston, where he pleaded not guilty. He was released on a $1 million bond. A Reynolds spokesman last week said Brockman would stay in his company role for now.
The government painted a picture of greed and a complex web of cover-ups, as Brockman allegedly used hidden money on luxurious personal spending — including $15 million to buy a vacation home dubbed "Mountain Queen" and $15 million for "Frying Pan Canyon Ranch," both in Pitkin County, Colo., and some $32 million on a yacht known as Albula. Brockman lives in both Houston and Pitkin County, home to the ritzy ski town of Aspen.
"Mr. Brockman has pled not guilty and we look forward to defending him against these charges," Kathryn Keneally, a lawyer for Brockman and a partner in Jones Day law firm in New York, said in an email to Automotive News.
Brockman allegedly spent decades creating a "false paper trail regarding his offshore structure," using business representatives whom he directed to move money around to skirt taxes, according to the 39-count indictment against him dated Oct. 1 and unsealed last week. The government did not disclose the amount of taxes Brockman is alleged to have evaded.