Tech Mogul in Biggest Tax Case Facing Dementia, Lawyers Say

Robert Brockman, the software executive charged in the largest-ever tax case against a U.S. individual, is facing progressive dementia that will render him unable to help in his defense, according to a legal filing citing his doctors.

Brockman, 79, was indicted on tax evasion and money laundering charges that accused him of using a complex trust structure in the Caribbean to hide $2 billion in income over two decades. His lawyers want his case moved from San Francisco, where he was indicted on Oct. 1, to Houston, where he lives and his doctors treat him.

Tech Mogul in Biggest Tax Case Facing Dementia, Lawyers Say

In a filing late Monday, physician James L. Pool said Brockman had symptoms consistent with Parkinson’s disease, parkinsonism, Lewy body dementia or some combination of them. The diagnosis can be “totally confirmed” only with an autopsy, but each results in rigid muscles, slow movements and tremors, according to Pool, a pharmacology professor at the Baylor College of Medicine in Houston.

“All are characterized by progressive dementia, and in Mr. Brockman’s case, the medical reports confirm cognitive impairment, which includes, but is not limited to, both short- and long-term memory loss,” according to Pool’s declaration.

Brockman’s condition renders his “long-term memory inaccessible and defective,” according to the filing. “For these reasons, I concur with the medical position that Mr. Brockman cannot assist his attorneys in his defense.”

Brockman’s lawyers have said they’ll seek a competency hearing for their client. Prosecutors are expected to oppose the claim by Brockman’s lawyers that he isn’t competent to stand trial, and the legal burden for establishing that is high. If a judge rules Brockman’s not competent, that could end the case.

U.S. District Judge William Alsup held a hearing Tuesday to consider an earlier, more limited request by Brockman to move only the tax evasion counts to Houston. Prosecutors argued against that request but didn’t address the broader request filed Monday to move the entire case. The judge didn’t rule and will hold a Dec. 15 hearing on transferring the case.

Brockman, the former chief executive officer of Reynolds & Reynolds Co., a maker of software for auto dealers, has pleaded not guilty. He was the first investor two decades ago in billionaire Robert Smith’s initial private equity fund, eventually putting up $1 billion.

Smith, the chief executive officer of Vista Equity Partners, avoided prosecution over his taxes after agreeing to cooperate against Brockman. Smith admitted in a non-prosecution agreement that he evaded $43 million in taxes from 2005 through 2014. Both men hid money from the Internal Revenue Service by using Swiss bank accounts and secretive Caribbean trust structures initially set up by the same Houston lawyer, according to prosecutors.

In their filing Monday, Brockman’s lawyers said three doctors affiliated with Baylor confirmed Pool’s conclusions. Each would testify, as would his wife and colleagues, to establish that Brockman has “demonstrable cognitive and memory challenges,” according to a filing by defense attorney Kathryn Keneally.

Keneally said she gave copies of reports and correspondence from Pool and the three other doctors to prosecutors on April 9, or nearly six months before Brockman was indicted. She encouraged the government to investigate the opinions by contacting the doctors without defense lawyers participating, but prosecutors didn’t do so, Keneally said.

Brockman didn’t resign as CEO of Reynolds & Reynolds until Nov. 6, when he was succeeded by Tommy Barras, who joined the Dayton, Ohio-based company in 1976.

Defense lawyer Neal Stephens has said the prosecution’s case against Brockman involves 22 million pages of documents. Both sides agreed on a trial date of next Nov. 15.

©2020 Bloomberg L.P.

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