Prosecutors are building what may be a case against the Reynolds and Reynolds CEO “according to Bermuda court records and people familiar with the matter,” a recent Bloomberg news service report says.
The Brockman investigation was first reported by the Australian newspaper Sydney Morning Herald.
The Bloomberg report links Brockman to Smith, who according to the news service is “being pursued by Justice Department prosecutors and Internal Revenue Service agents for potential tax crimes.” The news service cites what it says are four people “familiar with the matter.”
“The two men’s business connections involve a jumble of offshore entities, trusts and foundations, much of it opaque to anyone without subpoena power,” Bloomberg said.
A message seeking comment was sent to a spokesman for Reynolds and Reynolds, the Dayton-area company that Brockman has owned for nearly 14 years.
The Bloomberg story notes that Smith has not been charged. And the story suggests that Smith may have “talked to prosecutors about possibly cooperating with their investigations in exchange for leniency,” again with unnamed sources being cited.
That cooperation may be tied to what Bloomberg called the “larger tax case” against Brockman.
Smith and Brockman -- who has been called a “man of mystery” in the automotive industry -- have a long history, according to media accounts over the years.
In 2000, a Brockman family charitable trust agreed to commit $1 billion to Vista Equity Partners, Smith’s private equity firm.
When Smith worked at Goldman Sachs, he advised Houston auto-dealership-software maker Universal Computer Systems Inc. as a client, and, according to The Wall Street Journal in a 2018 story, Smith persuaded Universal founder Brockman to buy other business-software companies.
One of the companies Brockman bought: Reynolds and Reynolds, in 2006. Reynolds at the time was a rival of the company Brockman started in 1970, Universal Computer Systems.
Reynolds was born as a business forms company in Dayton in 1866, turning toward the automotive industry in 1927.
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