US probes Isle of Man scheme used by billionaire Bush donors

[cal04]

The Manhattan District Attorney, the Securities and Exchange Commission (SEC) and the US Internal Revenue Service (IRS) are jointly probing a tax-shelter plan run out of the Isle of Man.The scheme, devised by one of America's biggest banks and used by two billionaire donors to George Bush's election campaign among others, is being probed for possible breaches of securities and anti-money-laundering rules.

The investigating bodies believed that up to $100m (£55m) of tax was saved through one scheme alone, and as much as $700m in taxes may have been avoided over an 11-year period. The scheme involved executives and corporations handing over stock to trusts that they declared they neither owned nor controlled. When the options were cashed in, no tax was payable. However, the IRS changed the rules in 2003 to say that tax should be paid anyway.

In the previous 11 years, tax schemes were marketed by Bank of America to at least 42 corporations. Earlier this year the Manhattan District Attorney, Robert Morgenthau, started probing allegations that some of these trusts were controlled by the people passing on the stock options. Both the IRS and the SEC have now joined in this probe. They have contacted the regulators on the Isle of Man asking for information on one particular scheme used by two Texan billionaire brothers, Charles and Sam Wyly.

The duo, who made their money in computing and retailing, not only gave over $200,000 to President Bush's re-election campaigns, but also bankrolled TV adverts attacking his rivals, John Kerry and Senator John McCain. Sam Wyly describes himself as "the entrepreneur's entrepreneur" and came to prominence when he unsuccessfully tried to oust the board of Computer Associates in 2001 - only a year after the brothers sold their Sterling Software business to the group for $4bn.

http://news.independent.co.uk/business/news/story.jsp?story=644159

[starroute]

1. The Wyly Brothers? Wonderful!

The Wyly Brothers have been major Bush contributors for many years. They were tangled up in the UTIMCO investment scandal. And Sam Wyly was the funder for the Swiftboat Liars. Couldn't happen to a more deserving pair of guys.

[clydefrand]

5. Oh, this does my heart gooooooooooood. Thanks.

[struggle4progress]

15. This sad news brings tears to my rheumy eyes.

:D

[aquart]

20. Nice, but not an indictment.

Still waiting for Georgie's Cuties to go to jail.

[Tigress DEM]

22. If the IRS is on the trail, this is good.

They were being held back before from investigating the high money, but so many people were squawking about high level abuse - I mean even the pResident promised to go after those bad corporate people (He didn't mean it, of course, but that gave the IRS just enough clout to do it.)

Even if they just get all these high level players to pay back whatever they have stolen, it could fix social security or something equally expensive.

[aquart]

23. Still waiting for the indictment.

[ngGale]

26. Is this why the new SEC appointment?

Chris Cox. Known, with Cox there would have never been a crime with Enron or Worldcom. Hummm....

http://business.timesonline.co.uk/article/0,,13129-1639131,00.html

AMERICA’s biggest investors expressed grave fears over the direction of US corporate governance yesterday after President Bush nominated a Republican congressman with a history of hostility towards the investment community as the new chairman of the US Securities and Exchange Commission.

Christopher Cox, a Republican congressman on the right of his party who was a key supporter of a Bill that limited the ability of investors to sue their companies, was proposed as the new chairman of the SEC, the Wall Street watchdog, by President Bush.

[acmejack]

29. The W bros (confluence of initials)

Coincidence? I think not. These fellows are major prix, do my heart good to see them go to jail...

[Amonester]

34. So we suppose they'll be 'sentenced' more

or less like Ex-Enron's super-crook...

So what's the point of even spending thousands or even millions of taxpayers' monies on "doomed-in-advance" investigations and phoney trials?

These Ganstas From Outter Space really R above the law NOW that the New PNAC Monarchy won't ever be eVoted out until Jesus Christ Himself dares caring enough to come back down on this little lost planet of ours...

/sarcasm

On edit: changed the little h for the big H.

[lovuian]

2. WHOAH!!!! Great article!!! Follow the money!!!

Whoah!!!

[Democrat 4 Ever]

3. So we now know why the SEC chairman suddenly decided

to make a career move.

Wanna bet that the SEC steps out of the investigation now? The old head was just a tad too independent for Chimpy & Co.

The SEC gave Commander Cuckoobananas a free pass back with Daddy Dumbass was prez for multiple crimes to disclose sales, insider trading, etc. He should have been prosecuted. If the SEC had done their job then Chimpy would be a convicted felon and unable to hold office. The SEC is to blame for this mess!

[TahitiNut]

18. I'd say it's more likely that Donaldson is up to his eyebrows in this scam

Donaldson, Lufkin, and Jenrette (I knew Dick Jenrette), now a part of Credit Suisse, was one of the largest investment banking houses in the country ... and I know of one stock manipulation scheme in particular that landed them something probably in the 9-figure range. It was long after that particular event that I found out that Dick Jenrette, a Harvard grad, got his start in the 50's at Brown Brothers Harriman. It's a small world when the stink gets that close.

[Supersedeas]

4. won't see the Corporate Media light of day

[napi21]

7. I'm sure the MSM will try their best to hide it, but that's a lot of $$.

It could easily get out of the control of any individual group or Dept.

OH GOD, LETS HOPE SO!!!!

[cal04]

6. Tax probe of billionaires may involve dozens of others

Report: BofA in tax shelter probe
Bank of America, the nation's third-largest bank, is under investigation for helping two wealthy Texans hide their fortunes from taxes, a newspaper reported Friday
The Wall Street Journal, citing unnamed sources, said federal and state authorities are probing whether Bank of America (Research) violated securities and anti-money laundering laws in helping Sam and Charles Wyly shelter more than $100 million in stock-option gains from U.S. taxes. The paper indicated the probes could expand to include other wealthy clients of the Charlotte, N.C.-based bank.
http://money.cnn.com/2005/06/03/news/fortune500/bofa_probe/index.htm?section=money_latest

Tax probe of billionaires may involve dozens of others
A state and federal investigation into offshore trusts involving Dallas billionaires Sam and Charles Wyly first reported in February may involve dozens of other corporations and executives who used a similar tax shelter.

The Wyly brothers in the 1990s set up offshore trusts that held stock and options in the names of family members. They claim the trusts were set up to benefit their family members and some charities, but apparently regulators think they might have been set up as tax shelters.``The Wylys are cooperating with all inquiries and look forward to successfully resolving these issues,'' said Bill Brewer, the Dallas lawyer representing the Wylys.

The Internal Revenue Service has said as many as 42 corporations and many more executives may have been involved in ``an abusive tax avoidance transaction'' involving the transfer of stock options to family-controlled entities. However, an IRS spokesman refused to identify the companies and executives involved.
http://www.mercurynews.com/mld/mercurynews/business/11814672.htm?source=rss&channel=mercurynews_business

[napi21]

8. Ohhhhh, CNN & WSJ!!! I think I'm getting hopeful here! n/t

[peacetalksforall]

11. It means Brits are involved also...most likely the same ones

responsible for planning the war on Iraq. Why would the Brits allow their country to get involved?

Oh my. The United Corporations of America and the Brits and/or Royalty.

While we are ignorant and not doing so well or plain suffering.

So who was doing their job for the citizens to get it this far?

[Straight Shooter]

9. First Ohio, and now the Isle of Man

Oooh, I like that name, Isle of Man. That will get people's attention. Big $$$$$. Texas billionaires. This is red meat.

:woohoo:

[Maple]

10. Yes, it's my homeland

first parliament in the world, a thousand years ago

Celts and Vikings

[lala_rawraw]

12. One has to stop and ask

What was all this money for? I mean really, think about the amount used, raised legally and illegally... anyone doubt that some of it was for paper baggies so that Segretti spin-off bastards could play?

[Ouabache]

14. This could be where the pay comes from for their ubiquitousness

in internet chat rooms. In the corporate media. All the payoff and hush money and black bag job money comes from here, I bet. Every last cent of it.

[ljm2002]

35. This is probably one source of such funds...

...another source seems to be a little coin shop out in Ohio.

[Fridays Child]

13. Sam Wyly is CEO of Michael's Arts & Crafts.

[Justice]

16. Yeks

I didn't know that!

[ooglymoogly]

31. did not know that

will steer clear, though i love arts and craft stores.

[Fridays Child]

37. It's a tough detour for me, too, so I can definitely feel your pain.

x(

[lovuian]

17. This looks like a FreemASON HANG OUT!!!

look at its location!!! WOW!!!

[alfredo]

19. this is too good not to kick

:kick:

[thecrow]

21. kick this again... it needs to be seen by all of us

[proud patriot]

24. Interesting

May truth and justice prevail

[Nothing Without Hope]

25. Kicked, bookmarked, and recommended with a strong wish that these

greedy, corrupt Bush cronies are not only held accountable, but that the money connections into the Administration's doings are pursued to their real ends.

:thumbsup: :thumbsup: :thumbsup:

[unhappycamper]

27. Good story! Here's a Sunday morning kick. n/t

:kick:

[Jose Diablo]

28. Any probe and indictment won't mean diddly squat

By the time all this comes out, Bu$h will have placed all judges they need to appeal any conviction.

The 'bankers' won this round.

[donkeyotay]

30. similar to AIG

"The scheme involved executives and corporations handing over stock to trusts that they declared they neither owned nor controlled"

AIG's scheme to fund poor CEOs was paying 'em billions, tho.

[0007]

32. Why aren't the honest citizens protesting and demanding prison

terms for these two crooks?

[Judi Lynn]

33. This article claims they are Bush's 9th largest career contributors

The Brothers Wyly

Sam and Charles Wyly are slick business partners and brothers. Sam's first company was University Computing Co to sell data processing services to corporations. Charles liked the idea and served as an officer and director there for eleven years. The two then started a business together called Earth Resources Company, a refining and mining company. This was their first large company together. Some other businesses that have involved these two, and Sam's son Evan, are Greenmountain.com, Michael's Stores Inc., Bonanza Steak Houses, Datran, Inc., Scottish Annuity & Life, Sterling Software, and its spin off company Sterling Commerce in addition to Maverick Capital and Ranger Governance (the same idea as Maverick).
(snip/...)

http://www.utwatch.org/utimco/wyly.html

[reprobate]

36. It only proves the entire system is corrupt beyond repair.

If I came upon a string labelled "Pull this and the entire economic system of the USSA will self destruct", I'd pull the damn thing.

It might mean a period of disruption, but at least we'd have the chance to start again with a system that made sense to most of the people.

And if you consider it, with peak oil upon us, the system is already starting to disintegrate. Makes yo wonder if the bastards will ever pay, or will someone put a target on all their backs?

Of course, the military is NOT happy with them right now, are they? They've shown that the mightiest military in the world is a paper tiger against a bunch of insurgents without even a government.