EVER SINCE FORD MOTOR COMPANY BEGAN SELLING ITS MODEL T IN 1908, FEW PIECES OF TECHNOLOGY HAVE BEEN AS IMPORTANT TO CAR DEALER PROFIT MARGINS AS THE DOCUPAD.
The 45-by-29-inch flat screen sits atop a salesman’s desk, giving him the ability to quickly coax customers through what would normally be mountains of paperwork. By enabling car buyers to check boxes with a stylus and sign contracts on the interactive screen, the DocuPad takes the friction out of a car salesman’s stock in trade—the upsell.
In a 2019 court deposition, the secretive Robert Brockman, 79, whose enterprise software company, Reynolds and Reynolds, sells DocuPad, offered a rare peek into the microeconomics of car sales. Brockman said the DocuPad enabled finance managers to upsell by at least $200 per transaction in a business where margins on every car sold or leased are typically razor-thin. “You recover the initial cost of DocuPad very, very quickly,” Brockman said, alluding to the $10,000 startup fee, plus an ongoing $1,000 monthly license. “And then, from that point on, it is a massive generator of profits.”
Naturally, a dealer can get the DocuPad only if he’s also a licensee of one of Brockman’s integrated dealer management systems—digital platforms for everything from parts inventory and service scheduling to the machines that secure the thousands of keys at an average dealership. When you have thousands of captive dealers locked into multiyear contracts, those fees turn into $1 billion, with annual income estimated to be $300 million. And Brockman controls 98% of it through an offshore trust, a stake worth at least $3 billion.
Brockman’s ability to quietly pile up billions came to a crashing halt in October 2020, when he was charged with masterminding the largest tax-evasion case in American history, accused of hiding some $2 billion in income from the Internal Revenue Service over the last two decades. Brockman has pleaded not guilty to all charges and is free on a $1 million bond. Neither Brockman nor his attorneys have responded to Forbes’ requests for interviews.
Brockman’s alleged scheme helped hide profits gushing from one of the nation’s most successful private equity firms, Austin, Texas–based Vista Equity Partners, founded by the nation’s richest Black person, Robert F. Smith. Last October, Smith signed a nonprosecution agreement with the Department of Justice and confessed to what would have been a host of tax felonies tied to secret offshore accounts set up at Brockman’s behest. Starting in 2000, Brockman committed $1 billion in capital to Vista’s first fund and taught Smith the ins and outs of running an enterprise software business. He continues to hold large interests in several of Vista’s $73 billion in private equity funds. Smith has already paid a record $139 million to get the IRS off his back and agreed to cooperate with investigators in the case against his onetime benefactor and mentor.
The saga has all the drama and intrigue of a crime novel, involving a Playboy model, a network of offshore accounts and an encrypted email system in which Brockman referred to Smith as “Steelhead.” Brockman’s attorney, an Australian named Evatt Tamine, who functioned as the billionaire’s nominal trustee, was known as “Redfish.” The IRS was “the House,” and Brockman, the tip of the pyramid, was “Permit.”
A months-long investigation by Forbes reveals that the alleged tax evasion is not the first, or only, sin Brockman may have committed during his impressive career. On his way to amassing a net worth estimated to be $6 billion, the Houston-based entrepreneur has left a trail of hundreds of arbitrations and lawsuits from auto dealers who are his core customers, claiming that his underhanded tactics cheated them, too, out of hundreds of millions.
Born during the Second World War to a physiotherapist and a gas station owner, Robert Brockman grew up in St. Petersburg, Florida, and graduated summa cum laude from the University of Florida in 1963, a member of its business honor society. While serving in the U.S. Marine Reserves, he worked in marketing at Ford and then joined IBM in 1966, becoming a star selling mainframe computer services to auto dealers.
In 1970 he left IBM, launched Universal Computer Services and taught himself how to program at a time when it involved feeding decks of punched cards into hulking machines. Soon he was providing dealers with printed weekly reports on parts inventory.
“Brockman was the first provider who could enable an owner to synthesize the financial statements of his 10 dealerships into one. He was doing this in the 1980s,” marvels Paul Gillrie, a veteran auto-industry consultant. By the late 1980s Brockman had dozens of computers installed at dealerships, and he introduced what remains his one of his core software operating systems, called Power. On his personal website, since taken down, Brockman, who holds 21 patents, wrote: “I’m still a programmer at heart. And although I had to give up hands-on programming many years ago, I still stay very closely involved in all of our product decisions.”
By the early 1990s, Ford decided it didn’t want to be in the IT business, so it sold Dealer Computer Services to Brockman’s Universal Computer Services for $103 million. The deal came with a stipulation: Ford would allow Brockman to continue using the Ford blue oval, brand, letterhead, address and even the same employees for five years, incognito.
“When Brockman took over, it was like a frog in boiling water,” according to a consultant who advised dealers on arbitrations. “Ford was so laid-back and easygoing. The dealers trusted them, and Ford took very good care of them.” The dealers liked the tech upgrades—even the era’s clunky monitor beat the microfiche and paper volumes they were used to. “Brockman computerized it all, created a superior system.” And then, according to a typical case, he leveraged that goodwill by signing dealers to contract extensions “with the intention of locking in dealers beyond the life of their computer systems, in order to impose costly system upgrades.” Some dealers were irate when they realized that they hadn’t been dealing with Ford at all—and had little recourse against charges like $12,000 for the installation of a 500-megabyte hard drive or $2,400 for a printer.
Those who tried to get out of their contracts met the buzzsaw of Brockman’s litigation team. He had created what an industry insider refers to as “the Darth Vader contract” because it enabled his attorneys to destroy rebellious dealers. Many upgrades or new services came with lengthy contract extensions. Says Gillrie, “When you have a contract that gives you a monopoly on your customer for 30 years, you don’t have to listen to anything they say.”
In 2010 Jay Gill, a Fresno, California–based entrepreneur with 10 dealerships, was hit with a $3 million bill when he acquired Livermore Auto Group, which had been paying $35,000 a month to Brockman’s company. They settled for about half that. “Brockman made his money by screwing people,” Gill says. “Anytime you asked for something or you needed something, he would automatically extend your contract without you knowing. When you have a 12-inch-thick contract, it’s somewhere in there.”
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