Reclusive tech billionaire accused of hiding $US2b in income


“The allegation of a $US2 billion tax fraud is the largest-ever tax charge against an individual in the United States,” David Anderson, the US attorney in San Francisco, said at a news conference.

The indictment charges Brockman with crimes including money laundering, evidence tampering and destruction of evidence. He’s also charged with wire fraud for using intermediaries to manipulate debt securities at his company. Brockman used code names and encrypted emails to secretly manage the trusts, according to the indictment.

As part of Smith’s settlement, he admitted that he failed to pay about $US30 million in taxes, with penalties and interest making up the remainder of the expected payout. Smith used untaxed income to buy a vacation home in Sonoma County, California, and ski properties in the French Alps, and to make charitable contributions, Anderson said.

Smith, 57, entered into a non-prosecution agreement and will pay $US139 million, Anderson said.

“Smith committed serious crimes, but he also agreed to cooperate,” he said. “Smith’s agreement to cooperate put him on a path away” from criminal charges.

Smith faced a related four-year criminal tax inquiry involving about $US200 million that moved through Brockman-linked offshore structures.


With a net worth of $US7 billion, Smith is the wealthiest black person in America. The criminal tax probe into Smith was first reported by Bloomberg News in August.

Like many wealthy Americans, Brockman set up offshore trusts that on paper were overseen by independent directors. However, the indictment charges that he conspired over two decades to secretly maintain “complete” control over trust assets while failing to pay capital gains and income taxes.

Brockman created false paper trails to secretly purchase a luxury yacht now known as Albula and to spend $US30 million on properties called the “Frying Pan Canon Ranch” and the “Mountain Queen” vacation home in Pitkin County, Colorado, prosecutors said.

As the CEO of Reynolds & Reynolds, Brockman oversees one of the largest vendors of software to manage auto dealerships in the US and abroad.

Brockman’s investment in the first private equity fund set up by Smith came from an entity held as part of the A. Eugene Brockman Charitable Trust, which was named for Brockman’s late father. Brockman is a beneficiary of the trust.


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