back to article Software billionaire accused of hiding $2bn in income from IRS – potentially the largest tax scam in US history

The US Justice Department on Thursday charged billionaire software tycoon Robert Brockman with tax evasion, wire fraud, money laundering, and other offenses. Brockman, 72, of Houston, Texas, and Pitkin County, Colorado, is the CEO of auto-dealership software maker Reynolds & Reynolds. He is alleged to have participated in a …

  1. Neil Barnes Silver badge
    Holmes

    One is not cognizant of the details of the US justice system

    but one wonders why someone up before the beak on a two billion dollar fraud case is wandering around on a fiddling little million dollar bail...

    1. Zarno Bronze badge
      Joke

      Re: One is not cognizant of the details of the US justice system

      Likely because that was the maximum the input field went to on the software used to process things.

      1. gobaskof
        Joke

        Re: One is not cognizant of the details of the US justice system

        Well there has to be an entry for each dollar on a new excel row. How else would you do it?

    2. Insert sadsack pun here

      Re: One is not cognizant of the details of the US justice system

      There are many factors that determine whether someone should get bail. I don't know this guy specifically, but a pension-age man with ties to the local community (family, residence, faith community, cat, dog...), no particular foreign connections (dual citizenship, property abroad, family abroad), and no prior history of breaching bail conditions who is accused of a non-violent offence ought usually to be in with a good shot at bail.

      More generally, the US is in the midst of a very sensible movement away from cash bail. It effectively privatises the pre-trial monitoring system and it ends up with poor people and people of colour being banged up for bad reasons. Innocent people who can't afford bail are pleading guilty to avoid remand. People on remand are spending more time incarcerated before trial than their sentence would have been. It's madness.

      See this about one third down: https://www.justice.gov/archives/jm/criminal-resource-manual-26-release-and-detention-pending-judicial-proceedings-18-usc-3141-et

      https://www.newyorker.com/news/annals-of-activism/where-bail-funds-go-from-here

    3. Alan Brown Silver badge

      Re: One is not cognizant of the details of the US justice system

      it's actually $100,000 cash and the rest payable if he doesn't show up

  2. Zarno Bronze badge

    Close, but not Glenn Close with a cigar.

    It's not the copy paper that has the encoding in it, that I'm aware, it's the printer that puts the itty bitty dots down.

    1. Norman Nescio

      Re: Close, but not Glenn Close with a cigar.

      It's not the copy paper that has the encoding in it, that I'm aware, it's the printer that puts the itty bitty dots down.

      That what they want you to think!

      Actually, the yellow dots thing is well known: https://www.eff.org/issues/printershttps://www.eff.org/issues/printers

      Certain papers are identifiable. The paper used for banknotes had specific identifying features that made it more difficult to reproduce, and I am sure a totalitarian regime could do similar for copy paper.

      An easy technique would be to mix a small proportion of some artificial fibres in the paper, which could be a mixture of different types of fibre, different lengths and even different colours. There's enough variation to provide a simple encoding mechanism so each batch could have a unique identifying number, which could be extracted by microscopic analysis of the fibre content of the paper by someone in the know. Kind of variation of the theme of 'DNA water' used to mark high value objects.

      1. MiguelC Silver badge

        Re: Close, but not Glenn Close with a cigar.

        Yes, certain papers are made to be identifiable, but certainly not copy paper bought in reams from Staples or similar

        1. Jellied Eel Silver badge

          Re: Close, but not Glenn Close with a cigar.

          That's what I thought. I did some work for De La Rue in the past, who made a variety of secure paper, from banknotes to anti-counterfeit/traceable 'plain' paper.. Which was a lot more expensive than plain'ol bulk copier paper.

      2. Paul Hovnanian Silver badge

        Re: Close, but not Glenn Close with a cigar.

        "Actually, the yellow dots thing is well known"

        Damn! My printer is out of yellow ink again.

        1. Dale 3

          Re: Close, but not Glenn Close with a cigar.

          Yellow is always the last to run out on my printer. So whatever encoding they're using, is very efficient.

    2. This post has been deleted by its author

    3. Alan Brown Silver badge

      Re: Close, but not Glenn Close with a cigar.

      It's both, these days. Paper can be traced back to a manufacturing batch fairly easily

      There are administrator options to disable the dots on some of the higher end printers deal with but I suspect it just turns off SOME of them

  3. Yet Another Anonymous coward Silver badge

    Idiot

    Surely he should have made some political donations to insure against this sort of thing

    1. gobaskof
      Facepalm

      Re: Idiot

      Seems like he went to a lot of effort to keep his sophisticated tax dodge under wraps. He is forgetting the simpler trick of becoming president and then lying incoherently whenever tax is mentioned.

      1. Anonymous Coward
        Anonymous Coward

        Re: Idiot

        "He is forgetting the simpler trick of becoming president and then lying incoherently whenever tax is mentioned."

        No...this guy apparently owes tax on $2bn of income, not almost $1bn of loans to foreign entities that you need to be a self proclaimed billionaire.

      2. Anonymous Coward
        Anonymous Coward

        Re: Idiot

        Or come down with a well-timed fake infection of a virus, and see how the tax conversation completely evaporates. (As a bonus, four days later you're completely cured and, in fact, "invincible".)

    2. Doctor Syntax Silver badge

      Re: Idiot

      Or decided that 1 billion was enough for anyone and retired long ago.

      1. Tom 7 Silver badge

        Re: Idiot

        Having a lot of money seems to turn people paranoid. Unless your hobby is burning money a billion is near impossible to spend sensibly in a lifetime. But more often than not they turn into utter misers and spend more time and effort holding on to a couple of $ than it took them to amass their fortune.

        1. MiguelC Silver badge
          Pirate

          Re: Idiot

          I would like to buy Turks and Caicos. How much does a small island nation in the Caribbean cost? I bet it's a bit more than a mere billion or two.

          1. Doctor Syntax Silver badge

            Re: Idiot

            That's the trouble. All those who didn't know when to stop keep outbidding each other because they can.

          2. Outski Bronze badge

            Re: Idiot

            You may be able to buy an island, but buying an island does not grant you sovereignty.

          3. Rustbucket

            Re: Idiot

            You could probably buy the small nations' politicians for a lot less than a few billion dollars.

        2. Alan Brown Silver badge

          Re: Idiot

          "Having a lot of money seems to turn people paranoid"

          It becomes about keeping score once you've got more than you can possibly spend

          unlike clocking a galaxian machine, there are real world effects to these high scores

    3. uccsoundman

      Re: Idiot

      He has nothing to worry about. Trump will surely pardon him. He always pardons white collar crimes.

  4. Anonymous Coward
    Anonymous Coward

    Deferred prosecution agreement with no admission of liability or criminal accountability where he pays back ~10% of the stolen cash incoming in 5... 4...

    1. IGotOut Silver badge

      Came to write the same thing.

      Rich man, pay a token fine, no jail time, free to move on.

      Poor person, 2 years on in hell hole prison because you can't afford bail, a plea bargain to admit to a lesser charge rather than risk overworked lawyer failing to prove your innocence (and another 6 months in prison waiting for trial). Then a criminal record that will ruin your life.

      Welcome to the US legal system, the best money can buy.

      1. Potemkine! Silver badge
  5. Flocke Kroes Silver badge

    Evidence Eliminator

    Who else looked at that and wondered if it is distributed by the FBI?

    1. Roland6 Silver badge

      Re: Evidence Eliminator

      In its early editions it was a great piece of software (distributed on magazine cover disks) - hence why the 3 letter agencies and forensic investigators tended to use it themselves but disliked job public using it. However, it then got revamped and received some very heavy-handed pushy and deceptive adware that made you think it was a vehicle for something unsavoury...

      If you really need to clean a PC and not want stuff to come back to bite you, without wiping the HDD and starting over then tools such as Evidence Eliminator are a really useful part of the support toolkit. However, in saying that, I've not come across a publicly available tool that can clean all the system areas that rootkits etc. can hide - out of sight of Windows.

      What does surprise me, is that given the age of EE (last version released in 2008) is that anyone is still using this software. Wouldn't want to use it on x64 OS's nor on anything more recent than W7/32.

      1. Anonymous Coward
        Anonymous Coward

        Re: Evidence Eliminator

        Pointless. Even after the long run rimes. If it's an SSD, wouldn't even fully work. Better off zapping the hard drive with a car charger or running a drill through it. That's what I do if I'm decommissioning old disks

  6. Anonymous Coward
    Anonymous Coward

    Another poster boy for

    defunding the military. And the police. Etc.

    When there are no police left, who will keep the mobs at bay when they climb over his gated community walls to loot his stuff?

    1. Yet Another Anonymous coward Silver badge

      Re: Another poster boy for

      The last few administrations have been defunding the IRS enforcement branch.

      Odd really when it has a 50x payoff in the money it gets back.

      Almost as if rich political donors don't want to be audited by the tax man

      ps. He's back and is the poster boy for "there is no racism cos this guys rich". He did the stunt where at the graduation speech at a black university and announced he was paying off everyone's student loan. It was part of a deal he was trying to do with the IRS where he claimed that he had planned to give all the money away to charity - and it was just resting in his anonymous swiss bank account

      1. Alan Brown Silver badge

        Re: Another poster boy for

        "Odd really when it has a 50x payoff in the money it gets back."

        Same in the UK

        20,000-odd benefit fraud investigators finding a few tens of millions of pounds of fraud at most (mostly perpetrated by department employees)

        1200 Inland revenue investigators chasing BILLIONS

        It's a big business worldwide: $11 TRILLION uncovered last year

        https://uk.reuters.com/article/uk-oecd-tax/governments-sharing-bank-details-uncover-11-trillion-in-offshore-assets-idUKKBN241129

    2. LDS Silver badge

      "who will keep the mobs at bay"

      Their private army, of course. It worked that way in times of old... why the serfs didn't loot the castle?

  7. Maelstorm Bronze badge

    Wow...

    I've never heard of this guy, but how stupid can you be? IRS investigators are very efficient and thorough. Many have been busted for using tax shelters. As for the paper being tracible, I doubt it. Inkjet printers use yellow ink while laser printers use microdots.

    1. Anonymous Coward
      Anonymous Coward

      Re: Wow...

      > IRS investigators are very efficient and thorough.

      They may well be but, from the fine article:

      > He is alleged to have participated in a two-decade-long scheme to hide $2bn in income from the US Internal Revenue Service (IRS).

      So 20 years to catch and charge him, and then only after a tip off.

  8. ST Silver badge
    Devil

    This is NOT how it's supposed to work

    Rule #1: Billionaires never commit tax fraud.

    Rule #2: When a billionaire is caught committing tax fraud, see Rule #1.

  9. Pascal Monett Silver badge
    Trollface

    he "created and used a proprietary, encrypted email system"

    His employees shredded incriminating evidence, destroyed electronic media, and yet, with all these precautions, the IRS still knows what's in the emails, the codenames of the accomplices and probably much, much more.

    Next time the FBI wants to crack an iPhone, instead of once again whining publicly for Apple to put in a backdoor, I think it should call the IRS for help.

    That said, given that every time the FBI has whined about Apple, in the end it still proclaims that it got results without the backdoor, so maybe they already do.

    1. LDS Silver badge
      Joke

      Re: he "created and used a proprietary, encrypted email system"

      Maybe a warning about using your self-designed encryption system? Maybe he hired cheap developers to create and deploy it?

    2. mark l 2 Silver badge

      Re: he "created and used a proprietary, encrypted email system"

      I guess the guy who turned witness for the prosecution kept copies of the mails so he could hand them over to the IRS if things went south?

      As others have noted he had been doing this for 20 years and squirrelled away $2 billion. If he had not been as greedy and stopped after a couple of hundred million he could be happily retired in Mexico now sipping cocktails on the beach and the IRS would be none the wiser. Instead he now faces the possibility of spending the rest of his life in prison

      1. A.P. Veening Silver badge

        Re: he "created and used a proprietary, encrypted email system"

        Instead he now faces the possibility of spending the rest of his life in prison

        Do you really believe that? With that kind of money, he can make a court case so expensive it becomes prohibitive and the IRS knows that as well, so he'll admit to a lesser amount, pays a hefty fine and promises to never do it again.

      2. Mark192 Bronze badge

        Re: he "created and used a proprietary, encrypted email system"

        "he now faces the possibility of spending the rest of his life in prison"

        And the certainty of having to fake a chronic illness to keep that prison time only a remote possibility.

      3. Anonymous Coward
        Anonymous Coward

        Re: he "created and used a proprietary, encrypted email system"

        "I guess the guy who turned witness for the prosecution kept copies of the mails so he could hand them over to the IRS if things went south?"

        25 years ago my wife was working as a receptionist for a local business. When the boss discovered she could do bookkeeping she asked her to look after the business accounts. Wife didn't like what she saw but needed the job. Thinking that, in the event of a tax inspection, the boss would just point to "the dopey girl that does the books getting it wrong" she created a parallel but "correct" set. When the taxman did come calling, incredibly they gave a few days notice so there was time for the boss to burn a mountain of evidence. The taxman wasn't fooled. As expected, the finger was pointed at my wife who was able to be very helpful to the investigators...

  10. Potemkine! Silver badge
  11. AMBxx Silver badge
    FAIL

    Sounds like a lot of work

    Who'd have known fraud could be such hard work? Imagine how much more he could have earned if he'd put all that effort into doing what he was supposed to be doing.

  12. Colonel Mad

    Old stuff

    Thats why I still have some red & black T&E cable in the shed.

  13. Aseries

    Hoping for Trumps 2nd term

    Brockman may be pouring funds into POTUS campaign. Donald Trump hates to see his billionaire club friends put away, at least not for long.

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