Diamond Bracelet
Earlier in the week, IRS lawyer Jonathan Blacker showed Caroline Wyly invoices for jewelry, art and antiques that were picked out for her or her husband’s personal use and billed to an offshore entity. They included a $735,000 diamond necklace, a $298,000 diamond bracelet and a $32,400 George III breakfast table.
After the items were selected, invoices were sent to the offshore trustees with recommendations that the trust purchase them, according to exhibits Blacker introduced.
Evan Wyly, 54, Sam’s eldest son, testified during cross- examination that Isle of Man trust entities purchased three residences in Dallas, a condominium in Aspen, Colorado, and a ranch in the Rockies that includes six custom houses. All the properties were used by the Wyly family.
A real estate agent testified last year that the 244-acre ranch would be put up for sale for $50 million.
Evan Wyly called the luxury homes “investment opportunities” for the trusts. The son, who testified that he has his own offshore trust, said the entities were like 401(k) plans that let assets grow pre-tax. Blacker pointed out that 401(k) participants can’t take money out of their accounts to buy art and jewelry without paying income taxes.
The case is In re Samuel E. Wyly, 14-bk-35043, U.S. Bankruptcy Court, Northern District of Texas (Dallas).