You wouldn't have been able to get through a single Forbes' billionaire list in almost the last decade without seeing the Wyly brothers' names come up.
The first time would have been in 2006, when the Texas-based entrepreneurs Sam and Charles sold (what would go down as) their greatest investment ever - the arts and crafts chain Michaels - to Bain Capital and The Blackstone Group for a cool $6 billion. Having acquired the chain in 1982 when revenues were just $10 million per year (they would later soar to $1.24 billion by 1996), it was a long-term investment indeed - and one that paid off terrifically.
The year the sale closed, Forbes estimated each brother to be worth $1.1 billion. Interestingly, that figure didn't even include the so-called "hidden" funds the brothers had reportedly been keeping in trust accounts on the Isle of Man - a small pistachio-shaped island nestled just in between Northern Ireland, Scotland, England and Wales - for more than a decade by that point. It didn't take long before the IRS and SEC had their sights set on the brothers.
From shore to off-shore
According to Celebrity Net Worth, the trusts held around $380 million. And though they were reportedly (only) opened to generate $16 million in annuity income, they were - as the SEC emphasized in their case against the brothers - breaking the law.
The SEC further argued that the brothers were using the accounts to dance around having to pay taxes on a reported $30 million in taxable assets - such as artwork, jewelry, and furniture - as well as a number of publicly-traded stock.
Altogether, the brothers were charged with fraud, insider stock trading, and with hiding over $500 million in profits over a period of 13 years - to which the Wyly brothers plead innocence.
After all, they had been audited every year without Uncle Sam finding so much as a misfiled gas receipt. They had paid a collective $239 million during that time period - and, not that it mattered, but also another $90 million to charities over the years (as far as tax-evading supervillains go, they could have done a lot worse). The brothers decided to fight the case. Then, in 2011, 77-year-old Sam passed away after being involved in a car accident on a Colorado highway.
Charles was left to fight the case for both himself and on behalf of his brother's estate.
In 2013, a New York City jury found both brothers guilty of all charges. The jury settled on $300 million in penalties as punishment. At the same time, the IRS filed for a claim of $540 million in back taxes and penalties pertaining to the trust accounts. As for Charles' legal bill by this point in the case - $100 million.
But he wasn't prepared to back down. He immediately filed for bankruptcy, effectively protecting his personal assets from being seized by either the IRS or the SEC. The bankruptcy would draw the IRS to the negotiation table - which Charles wagered would be to his benefit.
A judge gave the IRS until April 17, 2015 to name their new price.
They did. $3.2 billion. As far as penalties and back taxes go, it's a record for the IRS. The previous record was $2.6 billion, issued against Credit Suisse in May of last year.
An estimated 75 percent of Charles' new bill is penalties and interest owing. But it isn't quite over - and Charles still has an opportunity to argue the case for having the bill reduced. For now, the 80-year-old entrepreneur, who was once one of only a handful to ever make the billionaires' list, has now switched over to driving a Subaru.
There's no place like home
It's not all bad news for Mr. Wyly though: He and his wife still get to live in the $12.5 million Dallas mansion he bought for $160,000 back in 1965 - which, thanks to Texas law, is forever protected from government seizure under any circumstance.
Perhaps that one will go down as his next-greatest investment ever - but still, it's no Michaels.