Dallas tycoon Wyly files for bankruptcy protection

DALLAS (AP) — Prominent Dallas businessman Samuel Wyly is filing for bankruptcy protection as he and the estate of his brother face up to $400 million in penalties after being found liable for hiding stock holdings overseas.

Wyly filed a bankruptcy petition in federal district court in Dallas on Sunday.

The one-time owner of the Michaels arts-and-crafts store chain says his biggest liabilities are to the IRS — the amount is unknown — and $198 million to the Securities and Exchange Commission.

A judge in New York ruled last month that Wyly and the estate of his brother, Charles, must surrender up to $400 million after a civil jury found that they had engaged in a 13-year fraud that involved creating a web of trusts and subsidiaries to hide assets overseas.