Billionaire Accused In Biggest Tax Fraud Case: I Don't Recall

Until last fall, there was not much public intel on Robert T. Brockman beyond that he was rich, private, and cheap. The 79-year-old billionaire lived with his wife in Houston, where he donated to Republicans and ran a company called Reynolds & Reynolds that makes car software. He owned a Bombardier jet and 209-foot yacht called “Turmoil,” but on work trips stayed in dingy hotels and ate frozen dinners. His staff was barred from smoking to cut insurance costs. He kept a collection of guns in the company’s Houston headquarters. He liked to fire people at random; something he called “[shooting] somebody between the eyes.” He refused all interviews and wouldn’t disclose his net worth. One estimate put him at around $10 billion.

That changed last October, when federal prosecutors unsealed a 39-count indictment against Brockman, accusing him of an elaborate conspiracy to shield some $2 billion in income from the IRS using a network of offshore entities over two decades — the biggest tax evasion case against an individual in American history. The complaint alleged Brockman had hid his activity with an encryption service called “Evidence Eliminator” and a rolodex of largely fish-themed code names: “Snapper” and “Steelhead” for his main collaborators; “King,” “Bonefish,” and “Redfish” for staff; “the House” for the IRS. It claimed he’d destroyed illegal material with shredders and hammers, and sent one employee to a “money laundering conference” under a fake identity.

The evidence seemed strong: two associates had cut deals to cooperate against him. One of them was Robert Smith, the private equity billionaire and richest Black man in America, who confessed in a federal affidavit to evading taxes for 15 years while working with Brockman (he secured a a rare non-prosecution agreement that cleared him of any culpability).

But after Brockman pleaded not guilty and got out on a $1 million bail, prosecutors were hit by an interesting development: dementia. That December, the executive’s lawyers released almost 150 pages of unredacted medical records. It was an unusual move both for health information, which is protected by HIPAA, and for Brockman, who hates publicity so much he once subpoenaed Google to unmask an anonymous blogger named “The Trooper” for comparing him to “Bernie Madoff, Satan, and Bobo the Clown.” (The Texas Supreme Court shot it down).

The medical file argued the executive, who’d been running a billion-dollar corporation just one month earlier, had been diagnosed with a degenerative mental condition. The exact condition was unclear; it could have been Parkinson’s, parkinsonism, or Lewy body dementia. But the gist was he couldn’t draw a clock:

He’d also lost his sense of smell and had hallucinations, specifically two — one involved finding his son’s computer open to websites “from the dark web and suicidal information;” they turned out to be pages on Yahoo Answers. The other was described like this: “He saw a bug on the floor of the testing room that was not present.”

More to the point, when it came to his case, he couldn’t remember if he’d been hiding billions from the Internal Revenue Service for two decades:

Quite simply, if information is presented to him, he will be unable to comprehend what is being asked of him and to respond appropriately. In addition, his ability to report on past events may be distorted by the high risk of confabulation. When a person has dementia, his memory function will attempt to fill in gaps to enable him to respond to questions or to report on past events. While the story may sound logical, it will not be based on fact or accurate memory. The speaker will believe the story to be true, but it is not.

The medical records came with physical assessments from three doctors, all of whom work at Baylor College of Medicine, where Brockman happens to have donated tens of millions and been appointed to the board of trustees in 2006. The prosecution argued Brockman was faking, but the court agreed to a mental competency hearing, assigning three neutral experts to the case: psychologist Robert Denney, neurologist Ryan Darby, and the closest thing forensic shrinks have to a celebrity — Park Dietz, who consulted in the cases against Jeffrey Dahmer, the Unabomber, and two Law & Order franchises. (None of the experts agreed to comment for this piece; neither did the prosecution or defense).

Sopranos fans might recognize elements of this case from when Tony’s uncle/mob boss Junior gets arrested by the FBI and pleads medical problems twice — first, a couple clogged arteries that get him let out on house arrest, then a mental illness that renders him incapable of remembering his crimes. But much like a competency assessment, the reality is a bit more complicated — after months of house arrest, Junior starts to exhibit actual signs of mental decline. In one later scene, he gets lost in his bathrobe and house shoes, roaming an old family haunt for hours until two policemen bring him home.

At the time, the storyline was seen as a nod to the trial of Genovese mob boss Vincent “The Chin” Gigante, who spent 30 years pretending to have dementia to get federal agents off his tail. His lawyers maintained Gigante had an IQ of “69 to 72,” even as he oversaw 1,000 underlings and took home as much as $100 million a year. As part of the ruse, Gigante would wander around Greenwich Village in a bathrobe, sleep cap, and slippers, mumbling out loud to himself. Media nicknamed him “the Oddfather,” “the Robe,” and the much wordier “Enigma in a Bathrobe.”

The trick worked for a while — after Gigante got indicted in 1990, he showed up to court in his signature sleepwear with psychiatric testimony, claiming he’d been hospitalized 28 times over three decades for hallucinations and “suffered from ‘dementia rooted in organic brain damage.’" He was deemed unfit to stand trial. But the feds got him six years later on RICO charges and, by 2003, Gigante admitted in court that he’d made the act up.

Mental fitness to stand trial is distinct from the “insanity defense,” when defendants claim they were infirm when they committed the crime and could not understand their own actions. Mental fitness is not a defense of the crime, though it can lead to lighter sentencing, but an assessment of whether the defendant can appear at trial and comprehend the proceedings against them. It is also a Constitutional requirement, owed partly to the due process clause of the 14th Amendment and to a suite of landmark cases like Dusky vs. United States, which outlined the minimum competency standard to stand trial: “The test must be whether he has sufficient present ability to consult with his lawyer with a reasonable degree of rational understanding — and whether he has a rational as well as factual understanding of the proceedings against him.”

Two former federal prosecutors interviewed for this piece, who declined to be named due to involvement in similar cases, said it’s not uncommon for older, high-profile defendants to make mental competency claims or for the prosecution to claim they’re lying. In 2009, for example, when the financier R. Allen Stanford was charged by the Securities and Exchange Commission for running a $7 billion Ponzi scheme, he claimed he had an “incredibly rare” form of retrograde amnesia that precluded him from recalling major events before his arrest, due to a combination of anti-anxiety-medication and a brain injury he sustained from getting punched in jail. After a three-day competency hearing, a judge later found him fit to stand trial (he was convicted and sentenced to 110 years in prison).

Brockman isn’t even the only high-profile defendant to make a dementia claim in recent years. Robert Durst, the central figure in the HBO series The Jinx, which caught audio that seemed to show the real estate heir confessing to three murders dating back to 1982, was hospitalized over a health incident in early June. When he failed to show up in court on June 10, cold case prosecutor John Lewin suggested Durst planned to feign dementia to secure a mistrial. “I have no idea whether this is legitimate or not,” Lewin told the judge in court, “but obviously, given his history, it is certainly suspect as to what his actual condition is.”

As recently as July 14, Tom Girardi, the civil attorney made famous by the case that inspired Erin Brockovich and his marriage to Real Housewives of Beverly Hills star Erika Jayne Girardi, was placed under a conservatorship for a “major neurocognitive disorder” in the middle of a gnarly legal tangle. Last year, his wife — besides being a Housewife, she’s also a singer whose recording credits include a song called “XXPen$ive” — filed for an aptly pricey divorce just weeks before they were both sued for allegedly embezzling millions from Boeing plane crash victims. Around the same time, Girardi’s law firm partner, Robert Keese, filed another lawsuit to dissolve their firm, claiming he never paid them $315,000 and took out secret loans for $7.46 million. (As a result, you can now buy a selection of their office supplies, including a $75-dollar bedazzled globe). Giradi denied the accusations; then cited an evolving medical condition that impairs his memory.

There are obvious dangers when the court doubts claims of diminished competence, but there are also pitfalls of being believed. For example, one outcome of Girardi’s claim: his brother filed to take full control over his finances. (Giradi sounded pretty cogent when contesting that arrangement: “Obviously, I disagree with the conservatorship altogether,” the 82-year-old told a judge in June. “I think that we should put together the reasons why the conservatorship should be dissolved, and then we’ll address it, address the court. Right now, I have nothing to say to the court.”)

Brockman’s mental assessment happened in June, and a judge will decide on his fitness at a hearing in September. But a passive-aggressive feud that unfolded in the court documents gives some clues at the experts’ conclusions. Brockman’s lawyers filed for a deadline extension that included redacted quotes about the assessment. The prosecutors asked to unredact them. The billionaire’s team complained that it would “gratuitously publicize sensitive, non-public physical and mental medical conditions.” The prosecutors responded by publishing the quotes in full. They looked bad: all three experts had deemed Brockman “competent,” and two of the three found evidence of “malingering” — legal jargon which we legally can only translate as: “the intentional production of false or grossly exaggerated physical or psychological symptoms.”

“Why the opinions of [Brockman’s] experts are fairly subject to publication when the experts designated by the Court are not is puzzling,” the government wrote in a markedly hostile filing. “The fact that the experts believe that [he] is faking his alleged incompetency is highly relevant to whether the Court should grant his late request to further delay this case.”

But Brockman’s lawyer disagree that the testimony is “highly relevant.” On Aug. 11, they filed a motion requesting that the experts’ conclusions be struck from the court record entirely. They claimed the doctors were not “genuinely neutral experts,” but had “act[ed] as agents for the government” — specifically because they had questioned Brockman on “substantive and strategic matters” without his defense team present. It’s unclear what exactly the experts asked Brockman; their questions were redacted in the filing. But the defense has called for a do-over.

No one at this website is a judge, chancellor, magistrate, or arbitrator in any professional or legal capacity, so the jury’s out on the veracity of Brockman’s claim until his hearing on Sept. 13. But perhaps other car software executives with billion-dollar fortunes, who may have hidden at least two of those billions in a network of offshore accounts over a period of two decades, could consider investing in some acting lessons.