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