Federal witness upends federal tax fraud case
A U.K. lawyer who got immunity from prosecution in exchange for helping the U.S. bring a taxevasion case against billionaire Robert Brockman testified that his former boss is innocent of the charges, a stunning declaration from a key government witness.
Evatt Tamine, who worked for Brockman in Bermuda, appeared Wednesday at a federal court hearing in Houston to determine whether the 80-year-old software tycoon is competent to stand trial. Brockman’s lawyers say his dementia leaves him unable to understand the case, but prosecutors say he’s been faking his decline to avoid trial on charges he evaded $2 billion in income.
Tamine recounted how he and Brockman took many steps to conceal his boss’s control of a multibillion dollar family trust based in Bermuda, including using code names, encrypting communications and destroying evidence. But on cross-examination, Tamine said he told prosecutors that he doesn’t believe his boss broke U.S. laws.
“Did you tell the U.S. government you think Brockman is innocent and he did everything properly?” Brockman attorney Jason Varnado asked. “Yes,” Tamine answered.
“You told the government some information in the indictment is factually wrong?” Varnado asked. Tamine again said yes.
While the focus of the hearing is whether Brockman is competent, Tamine’s testimony could help the billionaire if U.S. District Judge George C. Hanks Jr. decides he’s fit for trial.
It wasn’t immediately clear why Tamine appears to have broken with prosecutors. He received immunity from prosecutors after a raid on his Bermuda home in 2018, and he testified three times to the grand jury investigating Brockman, who was indicted last year on charges including tax fraud, money laundering and wire fraud.
On Wednesday, Tamine recounted how he spent 14 years working for Brockman and his trust, which prosecutors say was central to the largest individual tax-evasion case in U.S. history. He said he met in May 2019 with lawyers at Jones Day, the firm defending Brockman, and didn’t meet again with prosecutors until this year.
Tamine also agreed with Varnado when asked if he told prosecutors that he did not engage in tax evasion and money laundering, and that he believed Brockman didn’t have to pay taxes on money until he brought it back to the U.S.
The testimony could also be helpful in other ways to Brockman, the former chief executive officer of Reynolds & Reynolds, which develops software for auto dealers. Tamine said Brockman “never took a nickel” from the A. Eugene Brockman Charitable Trust. But Tamine said that while he was the trustee, Brockman told him how the money should be used.
Brockman, Tamine said, also began to decline physically in 2015 or 2016, and he lacked the robust energy that once drove his seven-days-a-week work habits. Brockman’s focus was not as good, and he didn’t work as many hours, Tamine said. He recalled that during a trip to Argentina in October 2017, Brockman was careful when stepping over a threshold.
“I had never seen that before,” Tamine said.
Brockman launched the private equity career of Robert Smith in 2000 when he invested in Smith’s Vista Equity Partners, eventually providing at least $1 billion in capital. Last year, Smith avoided prosecution when he admitted he evaded taxes, paid $139 million in back taxes and penalties, and agreed to cooperate against Brockman.
Both Smith and Brockman used a Houston lawyer, Carlos Kepke, to set up offshore trusts. Kepke has been indicted and pleaded not guilty.
In his testimony, Tamine admitted that he fabricated a document filed to a bank in Bermuda. He also said he lied about his reasons for wanting to review Smith’s records at Kepke’s office. He acknowledged he could face legal problems in Bermuda and Switzerland, where related investigations are underway and he doesn’t have immunity.