Phil shook up the city in 2008 when he became the biggest shareholder of New York Times Co. and tried to wrest strategic changes from the controlling Sulzberger clan.

Tabloids pounced when the Falcones' former butler, a gay man, alleged in a lawsuit that Lisa sexually harassed him. She denies it.

This year, Lisa produced "Mother and Child," a film that stars Annette Bening and Naomi Watts and that deals with adoption issues.

Make Or Break

The wireless play could save or break Falcone and his dwindling fund. Falcone started 2009 with just $6.5 billion, an investor says, after losses and the return of billions of dollars to anxious clients. Falcone has at least $800 million of his own money in the Capital Partners fund, according to investors.

In 2009, he borrowed $113 million from his Special Situations Fund to pay his personal taxes, a move that could invite scrutiny from the U.S. Securities and Exchange Commission because the fund wasn't allowing investors to take money out at the time, says Bobroff, a former SEC attorney.

"Regulators would love to jump on that," he says.

Falcone says the loan was proper. "That's been disclosed and discussed with investors," he says.

Falcone is going all in on wireless. LightSquared and other telecommunications investments account for about 90 percent of net assets in the Capital Partners fund and more than 50 percent of the Special Situations Fund, which together hold about $5.5 billion, according to investors.

Rapid Build-out

Falcone declined to confirm the numbers.