Smith, 57, stunned a senior class last year when he promised to wipe out the student loan debt of the entire graduating class at Morehouse, a historically Black all-male college.
"Complexity will not hide crime from law enforcement. Sophistication is not a defence to federal criminal charges," said David L. Anderson, US attorney for the Northern District of California.
"We will not hesitate to prosecute the smartest guys in the room."
Encrypted emails, destroyed evidence
Brockman appeared in federal court from Houston via Zoom on Thursday. He entered a plea of not guilty to all counts and was released on US$1m bond, said Abraham Simmons, spokesman for the Northern District of California.
Prosecutors said Brockman used encrypted emails with code names, including Permit, Snapper, Redfish and Steelhead, to carry out the fraud and ordered evidence to be manipulated or destroyed.
Brockman, a resident of Houston and Pitkin County, Colorado, is chairman and CEO of Reynolds and Reynolds, a 4300-employee company near Dayton, Ohio, that sells accounting, sales and management software to auto dealerships.
The software helps set up websites, including live chats with potential customers, find loans and calculate customer payments, manage payroll and pay bills.
Reynolds & Reynolds issued a statement saying the allegations were outside Brockman's work with the company and that the company is not alleged to have participated in any wrongdoing.
Smith commended for stepping up
In 2013, a charitable trust set up by Brockman's late father withdrew a pledged US$250m donation to Centre College, a small liberal arts school in Danville, Kentucky, where Brockman attended class and once served as chairman of the board of trustees.
At the time the school said it was due to a "significant capital market event" that didn't pan out. A spokesman for Reynolds and Reynolds said in 2013 that the event was a proposed refinancing deal involving Vista Equity Partners, Smith's company.
According to the indictment, Brockman gave an unnamed individual detailed instructions regarding the proposed gift to the college, including talking points, and directed the person to threaten to pull out if his demands were not met. In August, he instructed the person to cancel the gift.
Prosecutors say that Smith used about USA$2.5m in untaxed funds to buy and upgrade a vacation home in Sonoma, California; purchase two ski properties in France; and spend US$13m to buy a property and fund charitable activities at his property in Colorado.
Anderson applauded Smith for stepping up, despite the serious nature of his crimes, which occurred from 2000 to mid-2015.
"Smith's agreement to cooperate has put him on a path away from indictment," he said.
In 2019, Smith announced to the graduating class at Morehouse College that he would pay off the student loan debt of the entire class, saying that he expected the graduates to "pay it forward". The estimated cost was USZ$40m.
Forbes lists Smith as number 461 on its billionaires' list, with a net worth of more than US$5b.
He founded the tech investment firm Vista in 2000 and Forbes reports that it now has over US$50b in assets and is "one of the best-performing private equity firms, posting annualised returns of 22 per cent since inception".
Vista did not immediately respond to a request for comment.
