Billionaire Sam Wyly off Texas defrauded the IRS by shifting his assets between a grouping of offshore trusts and evaded millions in taxes, a federal judge has ruled. The SEC had filed a lawsuit against Wyly and his brother in 2010 and in 2014, a federal jury in Manhattan found the brothers had used a network of offshore trusts to hide stock holdings. This allowed them to take in $550 million in illegal profit. That caused the filing of a bankruptcy action by Sam Wyly.
Wyly and his brother got rich building business that included the arts and crafts chain Michaels stores.
The IRS seeks to recover $1.4 billion from Sam Wyly and $834 million from his sister in law with penalties.
The ruling from Judge Barbara Houser in Dallas is 459 pages and in it she says: “to accept the Wyly’s explanation requires the courts to be satisfied that it is appropriate for extraordinarily welathy individuals to hire middlemen to do their bidding in order to insulate themselves from wrongdoing so that, when the fraud is ultimately exposed, they have plausible deniability.”
Jeffrey Newman represents whistleblowers.