|
 U.S. Bankruptcy Judge Barbara Houser in Dallas ruled that there was
"clear and convincing evidence" Wyly committed tax fraud, rejecting
his arguments that he relied on professional advisers to vet the
offshore system.
"The Court does not believe that the law permits Sam to hide behind
others and claim not to have known what was going on around him,"
Houser wrote.
The ruling followed a trial in which the Internal Revenue Service
sought $1.43 billion in back taxes, penalties and interest from Wyly
and $834.2 million from Caroline Wyly, the widow of his late brother
Charles.
The IRS claimed the Wylys, through a scheme that dated back to 1992,
used offshore trusts to avoid paying taxes on $1.1 billion while
exercising stock options and warrants of four companies on whose
boards the brothers sat.
While Houser found that Sam and Charles Wyly committed tax fraud,
she ruled that Caroline "Dee" Wyly was innocent of wrongdoing and
did not know the details of what was done offshore.
The judge directed the IRS and Sam Wyly's lawyers to attempt within
30 days to determine how much he should pay. If no agreement can be
reached, Houser said both sides should submit proposals within 45
days.
Stewart Thomas, the Wyly family's general counsel, in a statement
said while the Wylys were pleased Houser found Dee Wyly was
innocent, "They are surprised and disagree with the court's fraud
finding as to Sam and his brother Charles."
The ruling came nearly a year after Sam Wyly and the estate of
Charles Wyly were ordered to pay the U.S. Securities and Exchange
Commission $299.4 million for engaging in securities fraud through
those same trusts.
[to top of second column] |
In that case, a Manhattan jury in 2014 found the Wylys liable for
scheming to hide $550 million in trading profits in the stocks of
Sterling Software Inc, Michaels Stores Inc, Sterling Commerce Inc
and Scottish Annuity & Life Holdings Ltd, now called Scottish Re
Group Ltd .
Following that verdict, Sam Wyly, who last appeared on Forbes' list
of the 400 richest Americans in 2010 with a net worth of $1 billion,
and Caroline Wyly filed for bankruptcy in October 2014. Charles Wyly
died in a car crash in 2011.
The case is In re Samuel Evans Wyly, U.S. Bankruptcy Court, Northern
District of Texas, No. 14-35043.
(Reporting by Eric M. Johnson in Seattle and Nate Raymond in New
York; Editing by Simon Cameron-Moore and W Simon)
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