US CEO Charged with $2bn Tax Evasion Scheme
The CEO of a US-based software firm has been charged with a decades-long tax evasion scheme said to have concealed as much as $2bn from the IRS.
Robert Brockman, who is boss of Ohio-based Reynolds and Reynolds, was charged in a 39-count indictment with tax evasion, wire fraud, money laundering and other offenses.
He is alleged to have hidden income earned from private equity investments from the US tax authorities by siphoning the funds to secret bank accounts in Bermuda and Switzerland.
The authorities alleged that Brockman did so between 1999 and 2019, with the help of a co-conspirator with whom he communicated via encrypted channels and using code words to cover his tracks.
Alongside the tax offenses, Brockman is charged with fraudulently obtaining almost $68m in his company’s debt securities. He is alleged to have used a third party to acquire the securities, circumventing strict laws restricting such purchases by a CEO without full disclosure and prior notice.
He is also said to have used insider information about the company to support his decision making in purchasing the debt, and to have persuaded an individual to destroy and alter documents and computer evidence to hide his tracks.
Brockman is charged with seven counts of tax evasion, 20 counts of wire fraud affecting a financial institution, various counts of money laundering, six counts of failing to file foreign bank account reports and evidence destruction and tampering.
Although Brockman is innocent until proven guilty, the Department of Justice warned that if convicted he potentially faces “a substantial period of incarceration.”
“As alleged, Mr Brockman is responsible for carrying out an approximately two-billion dollar tax evasion scheme,” said Jim Lee, chief of IRS Criminal Investigation.
“IRS Criminal Investigation aggressively pursues tax cheats domestically and abroad. No scheme is too complex or sophisticated for our investigators. Those hiding income or assets offshore are encouraged to come forward and voluntarily disclose their holdings.”