| NEW YORK, Sept 7
NEW YORK, Sept 7 U.S. securities regulators said
on Wednesday they want the executor of Charles Wyly's estate
held in contempt for failing to pay the $101.2 million owed as a
result of the late Texas businessman's fraud.
In a letter filed in Manhattan federal court, the U.S.
Securities and Exchange Commission said Donald Miller, Charles
Wyly's son-in-law, had taken no steps in his role as executor to
pay the sum after being ordered to do so in February 2015.
The SEC said the estate had failed to seek a stay of the
judgment pending appeals by it and former billionaire Sam Wyly,
Charles Wyly's brother, of a federal jury's verdict two years
ago finding them liable for securities fraud.
The commission asked U.S. District Judge Paul Oetken to
order Miller to demonstrate why the estate could not pay the
sum, and if he failed to do so, hold him in contempt.
The SEC said it would also seek an order requiring the
repatriation of sufficient assets from offshore trusts at issue
in the case to pay the judgment. Those trusts have a net worth
of $350 million, the SEC said, citing Charles Wyly's widow.
A representative for the Wyly family had no immediate
The SEC sued the Wylys in 2010, contending the brothers
earned $553 million in undisclosed profits by trading in four
companies they controlled using trusts in the Isle of Man.
The companies included Sterling Software Inc, Michaels
Stores Inc, Sterling Commerce Inc and Scottish Annuity & Life
Holdings Ltd, now Scottish Re Group Ltd.
Charles Wyly died in 2011, and his estate was substituted as
a defendant. Following the jury's May 2014 verdict, a federal
judge ordered Sam Wyly, 81, to pay $198.1 million and Charles
Wylys' estate to pay $101.2 million.
The judgment was entered after Sam Wyly, who last appeared
on Forbes' list of the 400 richest Americans in 2010 with a net
worth of $1 billion, and Caroline "Dee" Wyly, Charles Wyly's
widow, filed for bankruptcy in October 2014.
The Internal Revenue Service in bankruptcy court took both
Wylys to trial as well, contending Sam and Charles Wyly
committed tax fraud by shielding much of their family's wealth
in offshore trusts.
U.S. Bankruptcy Judge Barbara Houser in Dallas earlier this
year found Sam Wyly liable, and in June ordered him to pay $1.11
billion in back taxes, interest and penalties.
The case is U.S. Securities and Exchange Commission v. Wyly
et al, U.S. District Court, Southern District of New York, No.
(Reporting by Nate Raymond in New York; Editing by Alan Crosby)