(Bloomberg) — The judge overseeing billionaire Robert Brockman’s tax evasion case, the largest against an individual in US history, rejected his claims that dementia leaves him incompetent to stand trial.
US District Judge George C. Hanks Jr.’s decision means Brockman, 80, must defend a 39-count indictment accusing him of evading taxes on $2 billion of income and other crimes. Brockman’s lawyers argued his progressive dementia, caused by Alzheimer’s and Parkinson’s disease, has accelerated recently. If his condition worsens, they could file a new incompetency claim.
“The court finds that despite Brockman’s recent health problems, the government has met its burden of establishing that Brockman is competent to stand trial,” Hanks ruled Monday in federal court in Houston.
Testing shows Brockman is “exaggerating his symptoms of severe dementia and his cognitive abilities are not as poor as reflected by his cognitive test results,” the judge wrote. “In other words, Brockman is malingering to avoid prosecution.”
The judge agreed with prosecutors who claimed that while Brockman has some cognitive impairment, he has exaggerated his decline since 2018 as US investigators focused on whether he controlled billions of dollars in a Bermuda charitable trust. They said Brockman functioned at a high level even after his October 2020 indictment. Brockman later stepped down as chief executive of Reynolds & Reynolds, a software company.
Hanks’s ruling follows an eight-day competency hearing in November, when doctors, medical experts and colleagues testified about Brockman’s cognitive state. Defense witnesses said that neuroimaging studies show Brockman suffers from progressive dementia.
Prosecution witnesses said that while Brockman may have early Alzheimer’s disease, he faked the severity of his dementia for years. In a court filing, prosecutors said he led a double life, “presenting to select doctors as severely cognitively impaired, while simultaneously leading a normal, unimpaired life.”
Offshore Holdings
In an unusual twist, Hanks heard testimony from a UK lawyer, Evatt Tamine, who oversaw Brockman’s offshore holdings for more than a decade. Tamine signed an immunity deal with US prosecutors in 2018. Tamine, who faces his own probes in Bermuda and Switzerland, testified that he believed Brockman was innocent of the tax-evasion and money-laundering charges against him.
As lawyers on both sides waited for Hanks to rule, Brockman’s condition deteriorated, according to a May 2 filing by his lawyers.
He entered Houston Methodist Hospital on April 18 and was diagnosed with a urinary tract infection, pneumonia and sepsis, according to the filing. He was unable to swallow, and had a feeding tube in his stomach, his lawyers wrote. “While it is too soon to determine the cognitive impact that these medical events may have, sepsis in particular can trigger delirium and accelerate cognitive decline,” they wrote.
The Justice Department has investigated Brockman for five years. Prosecutors said most of the income he failed to pay taxes on came from investments in Vista Equity Partners, founded by billionaire Robert F. Smith.
An entity tied to Brockman launched Smith into the private equity world with an investment in Vista beginning around 2000 that later grew to at least $1 billion. In 2020, Smith signed a non-prosecution agreement that required him to admit to tax crimes, agree to pay $139 million and cooperate against Brockman.
Brockman must also contend with the Internal Revenue Service, which imposed a $1.4 billion tax assessment against him in October. In January, he sued the US to halt the agency’s immediate assessment of that levy. Days later, he filed a separate lawsuit in Tax Court.
The case is U.S. v. Brockman, 21-cr-09, U.S. District Court, Southern District of Texas (Houston).
(Updates in 10th paragraph with Brockman’s recent medical condition)
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