SEC says businessman lied at trial

 By Larry Neumeister

Associated Press
 
NEW YORK (AP) — A Securities and Exchange Commission lawyer panned a wealthy Texas entrepreneur’s testimony Tuesday as she delivered a closing argument at his civil fraud trial, saying he lied repeatedly when he claimed that he acted honorably and did not try to earn hundreds of millions of dollars illegally.
 
SEC attorney Bridget Fitzpatrick accused 79-year-old retired Dallas entrepreneur Sam Wyly of lying “many, many times” when he explained the role he and his brother Charles took regarding offshore accounts the government claims they created to hide their true interest in four public companies they controlled.

The brothers sold companies including an arts and crafts retail chain, Michael Stores Inc., and two technology companies for a total of over $14 billion before turning to other interests several years ago. After the sales, Sam Wyly landed on the Forbes list of billionaires for a time while the brothers donated millions of dollars to mostly conservative Republican candidates and causes. Charles Wyly died in a car accident in Aspen, Colorado, three years ago.
Fitzpatrick said Wyly lied during multiple days on the witness stand when he said he was happy to disclose information to the SEC and that he never hid assets in the Isle of Man, where offshore trusts enabled the brothers to make millions of dollars in trades in the securities of their public companies without disclosing the depth of their ownership to the public.

Citing hundreds of recommendations the brothers made that were followed, Fitzpatrick said there was no dispute “that the Wylys had sufficient influence that they should have reported their influence.”

The lawyer said hiding the extent of their ownership enabled them to claim they owned as little as 1 percent of an insurance company when they actually owned up to 16 percent and 20 percent of Michaels when they owned over 40 percent.

She said they used money from the offshore accounts to build businesses and homes and to fund an Aspen art gallery and a Dallas horse farm.

But defense attorney Stephen D. Susman said his client relied on the good advice of others, including multiple attorneys, to do the right thing regarding all of his companies.

Susman said Wyly trusted employees to make required document filings.