Billionaire Robert Brockman Is Still Hiding Assets in Tax-Evasion Case, U.S. Says 

(Bloomberg) -- Billionaire Robert Brockman is still moving assets among offshore tax havens and transferring property to family members to avoid paying his $1.4 billion tax bill, according to U.S. officials seeking a judge's authorization for an immediate government levy.

The Justice Department urged a federal judge in Houston to rule by Feb. 9 that the Internal Revenue Service rightly demanded payment by Brockman, 80, a retired software mogul who was separately indicted in the biggest-ever U.S. criminal tax-evasion case against an individual. The IRS wants a “jeopardy” levy to bypass a review process that can take years, the department said in a court filing Monday. 

Brockman has used complex foreign trusts and corporations to hide billions of dollars from the IRS, and “these efforts are continuing,” the department said. He appears to be acting “quickly to place his property beyond the reach of the government by maintaining his property offshore, transferring it from one tax haven to another, concealing it, dissipating it, or transferring it to other persons, including family members.” 

In a lawsuit filed last month, Brockman's lawyers sought to undo the jeopardy assessment and denied he's hiding assets. “There is no jeopardy,” they wrote. “The IRS's actions were baseless and wholly unreasonable, and must be immediately abated.”

Brockman is separately contesting the amount of the jeopardy assessment in Tax Court.

A spokesperson for the Justice Department declined to comment, and an attorney for Brockman didn't immediately return requests for comment.

Dementia Question

The IRS battle is unspooling before U.S. District Judge George C. Hanks Jr., who is separately weighing whether Brockman's dementia leaves him incapable of helping defend against a 39-count indictment. Hanks, who heard arguments on Brockman's competency in November, is expected to rule in the coming weeks. 

But now the judge also must wade through hundreds of pages filed by the Justice Department that offer far greater detail about Brockman's sprawling offshore trust network, which spanned Bermuda, the Cayman Islands, Nevis, Switzerland, Singapore, Guernsey, Jersey, the British Virgin Islands, and the Isle of Man. 

Brockman avoided reporting $2.7 billion in income through an “own nothing, control everything” strategy that hid assets behind offshore trusts and nominees, according to the filing. 

“When Brockman is confronted with government action against him, his assets, his entities, or his foreign bank accounts, he responds by opening new foreign accounts, creating new mirror companies to hide his assets, and moving control to other foreign entities in well-known tax havens,” U.S. lawyers wrote. 

They cited litigation that succeeded in transferring control of a Brockman family charitable trust, worth billions of dollars, from Bermuda to the Cayman Islands, “where a U.S. judgment for taxes may be unenforceable.”

The filings also give new insights into Brockman's investments, which prosecutors say included stakes in approximately 11 Vista Equity Partners funds between 2000 and 2018. Vista founder Robert Smith avoided prosecution by admitting tax crimes, paying $139 million, and cooperating with the government against Brockman. 

Read More: Billionaire Smith Avoided Tax Charge With Security, Barr Appeals

The case is Robert T. Brockman v. United States of America, 22-cv-202, U.S. District Court, Southern District of Texas (Houston). 

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