The Robert Brockman Tax Fraud Case
WEEK 10 ASSIGNMENT - CASE ON TAXES
Week 10 Assignment - Case on Taxes
Overview
Federal prosecutors have charged Texas billionaire, Robert Brockman, with a $2 billion tax fraud scheme in what they say is the largest such case against an American. Before attempting this assignment, review the case, CEO of Multibillion-Dollar Software Company Indicted for Largest-Ever Tax Evasion as Private Equity CEO Makes NPA to Cooperate in the Case.
Instructions
Write a 2–3 page paper about this tax fraud case, in which you:
Summarize the Robert Brockman tax fraud case.
Evaluate the issues that led to the tax fraud.
Analyze a CPA's culpability in cases of tax fraud by clients, regardless of whether they had knowledge of the fraud.
Evaluate ways a tax preparer can detect signs of tax fraud in order to prevent future tax fraud.
Use three sources to support your writing
Case on Taxes
Student’s Name:
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The Robert Brockman Tax Fraud Case
Robert T. Brockman, the CEO of an Ohio-based software company, was indicted on 39 counts by a federal grand jury in San Francisco, California, for tax evasion, wire fraud, money laundering, and other offenses. According to the indictment, Brockman, a resident of Houston, Texas, and Pitkin County, Colorado, used a web of offshore entities based in Bermuda and Nevis to hide from the IRS income earned on his investments in private equity funds which were managed by a San Francisco-based investment firm. Brockman is charged with conspiracy, seven counts of tax evasion, six counts of failing to file foreign bank account reports, 20 counts of wire fraud affecting a financial institution, two counts of concealment money laundering, and tax evasion money laundering, one count each of international concealment money laundering, and destruction of evidence. The allegation of a $2 billion tax fraud is the largest ever tax charge against an individual in the United States (U.S Department of Justice, 2020). The indictment also alleges that between 2008 and 2010, Brockman engaged in a fraudulent scheme to obtain approximately $67.8 million in the software company’s debt securities. As CEO, Brockman was legally prohibited from acquiring any debt securities of the software company without providing advance notice, full disclosure, and modifying the related credit arrangements.
CPA's Culpability in Cases of Tax Fraud by Clients
An active CPA should know that a taxpayer could face fraud or other criminal activity accusations. The taxpayer will typically face incarceration and hefty financial penalties if found guilty. CPAs may offer helpful guidance on tax obligations and IRS administrative processes, but once a client's conduct seems to have the makings of criminal fraud or other crimes (Schlesser, 2011). If any fraud is detected, CPAs ought to recommend this client to an attorney knowledgeable and qualified in that field. The CPA must refrain from doing any actions that could be seen as legal practice if they are not also attorneys. However, CPAs can prevent unintentionally complicating or impeding the client's legal defense by being familiar with the legal definitions of criminal tax fraud and IRS investigative techniques. The CPAs support some clients' fraud by avoiding to deliver their services accountably as legally required.
Also, if a CPA has reason to believe that one of his clients may have engaged in tax fraud, his first instinct might be to inquir...