Texas Tycoons Convicted|in $550 Million Fraud

     MANHATTAN (CN) – A jury on Monday convicted a Texas billionaire and his dead brother of raking in more than $550 million through illegal trades.
     Samuel Wyly and the estate of his brother, Charles, were found guilty in Federal Court.
     The SEC accused them of trying to hide assets from their four companies – Sterling Software Inc., Michaels Stores Inc., Sterling Commerce Inc. and Scottish Annuity & Life Holdings Ltd. – from 1992 to 2004.
     The two face additional charges of taking in $31.7 million from insider trading deals in 1999.
     U.S. District Judge Shira Scheindlin will rule on penalties in that matter on Aug. 4.
     Samuel Wyly made Forbes’ list as one of the richest Americans in 2012 with a net worth of $1 billion. His brother, Charles, died in a car crash in 2011, but his estate was swapped in as a co-defendant.
     During trial, the SEC accused the tycoons of playing a “global game of hopscotch” by hiding corporate assets in offshore accounts for 13 years.
     The SEC claimed the Wyly brothers, who owned the arts-and-crafts franchise in Michaels Stores, made hundreds of millions of dollars with more than 700 undisclosed transactions in Isle of Man trusts that shuffled money between the Cayman Islands and Dallas.
     SEC Enforcement Director Andrew Ceresney said in a statement Monday: “We are very gratified by the jury’s verdict finding the Wylys liable for fraud and violations of reporting requirements for corporate insiders. We proved that the Wylys used a system of offshore trusts to conceal their transactions as directors of publicly-traded companies. We will continue to hold accountable, and bring to trial when necessary, those who commit fraud no matter how complex their scheme or how hard they try to hide it.”

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