The former CEO of software company Reynolds & Reynolds, Robert T. Brockman, who was the subject of the largest-ever tax fraud case the United States pursued against an individual, has died.
Brockman was indicted in October 2020 on charges that he used numerous offshore accounts in places such as Bermuda, Nevis and Switzerland and a complex corporate ownership structure to hide $2 billion in income from the IRS. In a separate but related civil case where Brockman was challenging the IRS’s $1.4 billion jeopardy assessment against him, his attorneys filed notice Saturday that Brockman died Aug. 5.
“Within 90 days, plaintiff’s successor or representative will move for substitution pursuant to Rule 25(a)(1) of the Federal Rules of Civil Procedure to the extent this matter has not been resolved,” the brief notice reads.
Under the rule, if a party dies before the dispute has been resolved, either party can motion for substitution within 90 days of the death notice, or “the action by or against the decedent must be dismissed.”
Brockman’s death came just two days after his attorney, Kathy Keneally of Jones Day, told U.S. District Judge George C. Hanks Jr. at a hearing in the civil matter that her client was receiving morphine treatments for pain, was in hospice care and had stopped “tolerating food or water.”
As of Monday afternoon, there had not been notice of his death filed in the criminal case, according to the docket.
Jeff Vaden, a partner at Bracewell in Houston and former first assistant U.S. attorney for the Southern District of Texas, said Brockman’s death means the government will have to pursue any claims trying to recoup the money it believes it is owed through U.S. tax courts.
“For the criminal case, not to be cavalier about it, but it’s over,” he said. “Mr. Brockman was indicted alone, and I know Robert Smith had a separate cooperation, deferred prosecution agreement, and that’s been resolved.”
Smith, a former business associate of Brockman’s, had agreed to be a key witness for the government’s criminal case against Brockman in a deal with the government where he avoided prosecution and paid $139 million in taxes and penalties. Forbes has reported Smith’s net worth is $8 billion.
Vaden said the Department of Justice will be able to use the documents and information collected in the criminal case — that had been set for trial in February — in any possible civil suits trying to recoup the funds the IRS alleges Brockman owes.
Brockman had fought hard against a trial setting in the criminal case, with his attorneys repeatedly arguing his dementia diagnosis made him unfit to stand trial. Prosecutors accused Brockman of exaggerating his condition in court filings.
Judge Hanks, who is also presiding over the criminal case, found Brockman fit to stand trial in a May 23 ruling and set trial for Feb. 27.
Brockman is represented by Keneally, Anthony DeRiso, Frank Jackson, Irina Kotchach Bleustein, Michael J. Scarduzio, Jason Scott Varnado, Julia N. Camp, Michael R. Tompkins, Colleen E. O’Connor, Conor G. Maloney, David S. Smith, Georgina N. Druce, James P. Loonam, Neal J. Stephens, Patrick Joseph Manion and Sarah D. Efronson of Jones Day.
The government is represented by Department of Justice attorneys Christopher Magnani, Cory J. Smith, Eric Brent Powers, Jorge Almonte, Lee F. Langston, Boris Bourget, Jessica Nuzzelillo Moran, Herbert W. Linder, John Paul Nasta Jr. and Jonathan L. Blacker.
The cause number in Brockman’s jeopardy assessment challenge is 4:22-cv-00202.
The cause number in the criminal tax fraud case is 4:21-cr-00009.