A federal bankruptcy judge has ruled that a prominent Texas businessman and his late brother committed tax fraud in setting up overseas trust funds that helped them avoid paying billions in taxes.
U.S. Bankruptcy Judge Barbara Houser in Dallas said in a ruling Tuesday that the heart of the offshore system set up by Sam and Charles Wyly "had been established through deceptive and fraudulent actions."
The Internal Revenue Service is seeking to recover more than $2 billion in unpaid income taxes, interest and penalties from Sam Wyly and more than $1.2 billion from the estate of his brother.
In a statement, Sam Wyly's attorney said his client disagrees with the judge's fraud finding.
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The brothers founded or bought controlling interest in software companies and Michaels crafts stores.