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SEC says Wylys used money to buy art and Aspen real estate, make charitable contributions

The Securities and Exchange Commission's complaint alleging a massive fraud by Texas billionaires Sam and Charles Wyly paints an unusually detailed picture of how they used hundreds of millions of dollars in allegedly ill-gotten gains to buy art and condos, and make charitable contributions. We should note that a lawyer for the Wylys has denied all the charges. Here are some excerpts from the SEC complaint:

Luxury goods

The Wylys used the proceeds from their offshore stock sales to purchase tens of millions of dollars worth of art, collectibles and jewelry.

Real estate

The Wylys spent nearly $100 million of the proceeds from their offshore stock sales to purchase real estate in the United States ... The properties purchased using offshore funds include two ranches in Aspen, Colorado used by Sam Wyly's and Charles Wyly's families respectively; two condominiums located in downtown Aspen, Colorado, one of which is used by an art gallery that is part-owned by one of Sam Wyly's daughters; and a 100-acre horse farm outside Dallas, Texas formerly run as a business venture by one of Charles Wyly's daughters.

Charitable contributions

The Wylys used offshore cash to cover charitable commitments each had made. In 1996, for example, Sam Wyly pledged to donate $10 million to his business school alma mater over five years in connection with the construction of a new building on campus, which was subsequently built and named for him. Although Sam Wyly made the initial $2 million portion of this donation from domestic sources, he caused the remaining $8 million to be paid from the Offshore System. Similarly, Charles Wyly used cash from his Offshore System to fund a five-year, $2.5 million charitable-donation commitment he had made to a church in the United States.

By Zachary Goldfarb  |  July 29, 2010; 8:17 PM ET
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Next: The Wylys's GOP contributions


Seems the writer left out some important stuff.

Posted by: jimbobkalina | July 30, 2010 2:09 AM | Report abuse

It would be nice to have some intelligent commentary on the actual charges rather than just list all of their assets and what they did with their ill gotten gain.

The news is that they sold shares in their own companies using insider information, hiding the sales in the off shore accounts. They also failed to file the reports which are required by the SEC when a director sells shares in his company. Two different charges.

They claim their lawyer, who is apparently also charged, told them it was okay. The so called advice of counsel defense. Sort of hard to make when the lawyer who gave the advice is sitting in the jail cell next to you!!!

Posted by: Anonymous | July 30, 2010 7:50 AM | Report abuse

Put 'em on suicide watch! These guys love their money so much, they may try to avoid even more taxes by dying in 2010 while the estate tax is neutered.

I'm also thinking RICO, to get this case out of Texas where they own more people than the biggest slaveholder ever dreamt of.

Posted by: Anonymous | July 30, 2010 9:09 AM | Report abuse

They should be put on suicide watch. Didn't Kennth Lay from Enron die under mysterious circumstances?

Posted by: tony_in_Durham_NC | July 30, 2010 1:00 PM | Report abuse

Yes, and given their complete lack of moral integrity probably have money invested in Mexican Drug Cartels too.

But who are the candidates who's campaigns they financesd with their tainted money?

Posted by: Anonymous | July 30, 2010 1:25 PM | Report abuse

What'd ya think they'd spend their wealth on?

Harry Potter books?

Posted by: perryneheum | July 30, 2010 1:33 PM | Report abuse


Posted by: Anonymous | July 30, 2010 4:34 PM | Report abuse

Corrupt rich people ripping people off and donating to the GOP (greediest of politicians) -- surprise, surprise....

I have no doubts that they will be "vindicated" or pay some itty-bitty fine and continue to do business as usual.

Posted by: abbydelabbey | July 30, 2010 6:25 PM | Report abuse

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Posted by: Anonymous | July 31, 2010 5:15 AM | Report abuse

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