Former Reynolds and Reynolds Co. CEO Bob Brockman will face federal charges of tax evasion and wire fraud in a Texas court, closer to his home in Houston, following a judge's order last week.
U.S. District Judge William Alsup, in an order issued Monday, Jan. 4, granted a motion Brockman's attorneys filed in November to transfer the government's case against him to the U.S. District Court for the Southern District of Texas. Alsup wrote that several factors, including Brockman's residence and declining health favored moving the case out of federal court in San Francisco, where Brockman was indicted in October.
Alsup's decision to move the case out of the U.S. District Court for the Northern District of California came about a week before the judge was scheduled to hear arguments on a motion Brockman's lawyers filed in December seeking a competency hearing to determine whether Brockman can assist in his defense. The motion hearing, which had been set for Tuesday, Jan. 12, has been removed from Alsup's calendar, according to the California court. Future case proceedings will happen in Texas.
Brockman's lawyers did not respond to a message seeking comment last week.
In his order, Alsup wrote that transferring the case is warranted based on a test of several factors, including the defendant's location, the location of witnesses and other considerations. He wrote that the location of possible witnesses and alleged events related to the case is either neutral or slightly favorable to keeping the case in California.
But other factors — namely, Brockman's health conditions and U.S. Department of Justice policy that aims to prosecute criminal tax cases where a taxpayer lives or works for "the most significant deterrent effect" — make Houston the most appropriate place to pursue the case, Alsup wrote.
He added that moving the case as a whole would "better serve the interests of justice" than separately transferring charges that Brockman failed to file required foreign bank account reports for several years starting in 2013.
Brockman's lawyers had contended the California court was not the proper venue for those charges.
"It would similarly defeat the ends of justice to try the whole case here only to have our court of appeals vacate those counts for a retrial. For the reasons stated above, such a reversal would be a realistic scenario should the case remain here," Alsup wrote. "Given Brockman's age and questionable health, we do not have the luxury to try this case twice. In the interests of justice, it should be tried where venue is unquestionably proper and that is the place of his residence."
Brockman, 79, faces 39 counts, including tax evasion, wire fraud, money laundering and evidence tampering. He has pleaded not guilty. In November, Brockman stepped down from his roles as chairman and CEO of privately held dealership management system giant Reynolds. He was succeeded by Tommy Barras, who had been promoted to president and COO in June.
In the defense motion filed in December seeking a competency hearing, Brockman's lawyers cited a diagnosis indicative of Parkinson's disease or Lewy body dementia. The condition is progressive and has impeded his ability to process and retain information, according to the defense lawyers' court filings.
While agreeing a competency hearing is warranted, prosecutors argued that Brockman's continuation in the top role at Reynolds after his diagnosis — and even after he was formally charged — raises skepticism about claims that he is unable to aid in his defense.
