The chief financial officer of Vista Equity Partners may testify at a hearing in the largest tax-evasion case ever brought in the U.S. against an individual, a prosecutor said Monday.
The case involves Houston billionaire Robert Brockman, the owner and former CEO of dealership management systems firm Reynolds & Reynolds who is accused of evading taxes on $2 billion in income, most of which came from his early investments in Vista.
Brockman, 80, claims he has dementia that’s left him unable to help his lawyers at trial. But prosecutors say he’s faking, and a judge will hold a hearing in Houston next month to assess whether Brockman is competent.
Vista CFO John Warnken-Brill had “extensive contact” with Brockman and the government’s chief cooperating witness, Evatt Tamine, prosecutor Corey Smith told a federal judge in Texas. Smith said Warnken-Brill would only appear at the hearing in Houston if Tamine is unable to come from the U.K. because of travel restrictions.
Tamine, an attorney, worked with Brockman for more than a decade to create a web of opaque Caribbean entities to hide income from the U.S. Internal Revenue Service, prosecutors allege. Brockman “directed” that at least $1.6 billion be invested in Vista funds over 17 years, according to a Bloomberg analysis of the indictment. It’s unclear whether the entire amount was ultimately committed to Vista.
Warnken-Brill, who joined Vista in 2006 and is a member of the management committee, is not accused of wrongdoing. A Vista spokesman declined to comment.
Vista founder Robert Smith has admitted illegally hiding some of his own income offshore but avoided prosecution by cooperating against Brockman and agreeing to pay $139 million in back taxes and penalties.
During a teleconference with the judge on Monday, Brockman lawyer Jason Varnado asked why Tamine and Warnken-Brill had appeared on the government’s witness list for the competency hearing. Neither man has seen Brockman in the past three years and can’t answer whether he’s presently competent to stand trial, Varnado said.
The prosecutor said Tamine can testify that Brockman knew about the criminal investigation by 2015 or 2016, which may have given him a motive to exaggerate his memory loss after that.
Varnado said that what Brockman knew in 2015 or 2016 isn’t relevant to his competency, but U.S. District Judge George C. Hanks Jr. said he would allow the testimony.
The competency hearing, scheduled for Nov. 15, is expected to last at least a week.
