Wyly brothers, Sam and Charles, who are known for their multi-million dollar establishments and contribution to political parties have been alleged by the Security Exchange Commission for committing a fraud for exploiting overseas accounts on the Isle of Man in the Irish Sea and in the Cayman Islands in the Caribbean and benefiting from $550 million of profits, by engaging into illegal trading.
The Brothers started their career from a computer software Company and then expanded to technology firms, restaurant chains, clothing stores and energy Companies.
According to a 2006 Congressional inquiry into tax havens, Wyly brothers used to park their surplus money in foreign Companies and trusts, so as to reduce the burden of taxes.
The lawyers of Wyly Brothers expressed that the investments made by the brothers in offshore Companies were completely legal and they would defend that they were not evading any taxes by doing so.
As told by SEC, the Brothers shifted their shares of Michaels Stores, Sterling Software and Sterling Commerce Companies to the offshore Companies’ options and warrants. SEC also accused them for not revealing their cumulative holdings in the trusts, which accounted for 16-36% of the total shares of the Companies.
Wyly Brothers had funded campaigns in Bush administration and also made monetary contribution to the Republicans.