Former billionaire Samuel Wyly’s six-year battle with the U.S. Securities and Exchange Commission neared conclusion after he agreed to pay $198 million to settle a fraud suit the agency won against him and his late brother Charles two years ago, Bloomberg News reported on Friday. The amount is exactly what a New York judge ordered Wyly to disgorge after a jury agreed the brothers had used a web of offshore trusts to hide hundreds of millions of dollars in cash while getting rich building the arts-and-craft chain Michaels Stores Inc. and other companies. The SEC said in a Manhattan federal court filing on Friday that it would do its best to incorporate the settlement into a global accord with the Justice Department and Internal Revenue Service, which it said are still in negotiations with Wyly. The IRS had been seeking more than $2 billion in back taxes and penalties after the SEC won its fraud case. Under the deal, Sam Wyly will take whatever legal steps are needed to get disbursements from his various trusts in the Isle of Man to help finance the settlement and pay it by Dec. 12. Wyly will also drop his appeal of the 2014 jury verdict, and the SEC will drop his children as "relief defendants" in the case, according to the filing. Read more.
For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.
