Billionaire’s heirs agree to pay IRS $750 million
The family of a late billionaire accused of a massive tax evasion scheme involving Bermudian-based entities has agreed to pay $750 million to the Internal Revenue Service in the United States.
Robert Brockman was accused of hiding about $2 billion from the IRS — the largest such criminal case involving an individual in US history — but died in 2022 before he could stand trial.
The IRS sought to recover $1.4 billion from his estate with a civil action in the US Tax Court and the case was settled last month, with a December 23 decision signed by Judge Kathleen Kerrigan.
The decision, obtained by The Royal Gazette from the Offshore Alert website, states that the petitioners will pay the IRS $456 million in owed income tax, plus penalties amounting to $294 million, for various years between 2004 and 2018.
The petitioners are listed as the estate of Mr Brockman, his widow, Dorothy, and an independent executor.
Mr Brockman, the former chief executive of Reynolds & Reynolds, a car dealership software company, was charged in 2020 with multiple counts of tax evasion, money laundering, failing to file foreign bank account reports, wire fraud affecting a financial institution, evidence tampering, destruction of evidence and other crimes. He denied the charges.
Prosecutors claimed he used a web of entities based in Bermuda and Nevis, as well as bank accounts in Bermuda, Switzerland and the British Virgin Islands, to hide income from private-equity investments from the US tax authority.
The entities were linked to the A Eugene Brockman Charitable Trust, formed in Bermuda in 1981 by Mr Brockman’s father, and said in court documents to have estimated assets of $6 billion.
After he was criminally charged, the IRS issued a 70-page “jeopardy assessment” and related jeopardy levy against Mr Brockman to try to recover more than $1.4 billion in taxes, fraud penalties and interest.
It said this step was necessary because Mr Brockman had begun “moving and liquidating assets” to put it out of the US Government’s reach — a claim the Texan tycoon vociferously denied in a civil action.
Mr Brockman’s attempt to have the levy dropped was dismissed by US District Judge George Hanks in September 2022.
The judge wrote in an opinion and order that: “The scale and complexity of the schemes through which Brockman allegedly avoided paying US taxes are immense.”
The Royal Gazette reported extensively on this matter in September, 2021.
The Brockman Charitable Trust employed staff on the island to co-ordinate educational scholarships for students at Texas A&M University.
Mr Brockman died in August 2022, aged 81, after he was deemed fit to stand trial, despite suffering from dementia.
According to US media reports, Mr Brockman was survived by Dorothy, his son Robert II, his brother David, a daughter-in-law and two grandchildren.
