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Wyly family still dealing with securities fraud allegations

Allegations of tax evasion landed a Texas family in hot water with authorities, but not everyone believes that they did anything wrong. The fines associated with securities fraud and tax avoidance are quite severe and can be understandably difficult to confront. The well-known entrepreneurial Wyly family continues to insist that they did not violate any standing laws.

The Wylys made their claim to fame when Sam Wyly and his brother established a series of successful businesses across a wide range of fields. The brothers succeeded not by manning each business themselves, but instead by bringing in outside experts on an area to lead each respective business toward success. While amassing their fortunes, the Wylys elected to establish offshore trusts, a decision that was overseen by experts on the matter.

Beneficiaries of the trusts, including Samy Wyly's son, Evan, apparently benefited from these trusts by influencing trustees to make lavish purchases. Artwork and jewelry were common purchases that the Wylys understood were owned by the trust, but they also pointed out that it was within their discretion to enjoy the use of these items. The government apparently did not agree with this stance and slapped Sam Wyly fines of $299 million and $1.4 billion for securities fraud and back taxes respectively. His brother's widow was handed a fine of $800 million.

Sam Wyly asserted that it was never his intention nor his desire to avoid taxes, although he did concede that he was under the impression that taxes on the trusts would simply be deferred. Many experts have weighed in on the subject and pointed out that the Wylys did not actually perform any illegal acts by utilizing the benefits of the trusts. Securities fraud is indeed a serious allegation with exceptionally steep consequences when a conviction results, but each and every defendant in Texas has the right to defend him or herself against formal accusations, especially when they appear misguided or untrue. 

Source: dallasnews.com, "Wyly trial expert: trusts buying luxury items for family use not unusual", Mark Curriden, Jan. 7, 2016

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