SEC spent $8.6M collecting $3.7M from former corporate raider in $62M case
Once a high-profile corporate raider, Paul Bilzerian was convicted of fraud in 1989 and served 13 months.
The U.S. Securities and Exchange Commission won a $62 million judgment in a subsequent civil suit. Now, more than 20 years later, the SEC is winding up its efforts to collect.
The final tally is about $8.6 million spent by a court-appointed receiver to collect just $3.7 million, reports the Wall Street Journal (sub. req.) in a lengthy front-page story. At a 1989 court hearing Bilzerian said he had some $50 million in assets.
Bilzerian, who is currently 64, contended he was stripped of assets by the time he filed for bankruptcy in 1991 and also says he had no interest in working to pay a judgment that he believes should never have been entered.
At the same time, it appears he successfully fended off collection efforts through years of litigation–often acting as his own attorney–and protected assets for family members by utilizing a complex network of domestic and offshore trusts, as well as charities and partnerships, the newspaper says.
Responding to a WSJ reporter’s comment about bank accounts, Bilzerian said: “What bank accounts? Do you think I’d be stupid enough to have a bank account?”
Although he is now in voluntary exile on a Caribbean island, Bilzerian for years lived with his wife in Tampa, Florida, in a waterfront mansion they built there under her ownership during the early 1990s. As it was bought by various corporate structures, the couple stayed put, only departing for a St. Kitts condo owned by one of their sons as the mansion was in foreclosure proceedings last year.
After Bilzerian served time for contempt, his wife agreed in 2002 to have the partnership that owned the Tampa mansion sell it and split the proceeds with the receiver. Another partnership with links to the couple then bought it.
“I think he was a little smarter than those who were trying to pursue him,” says bankruptcy trustee James Orr.
Bilzerian says he would have been better off not to fight the government over the past 25 years, given the cost to his family. But, since he is already long established on his current course of action, he is contemplating filing another motion to challenge the SEC judgment.
One of the two reporters whose byline appears on the story, Michael Rothfeld, discusses it in a Tuesday video on the Money Beat page of the Wall Street Journal (sub. req.).
New York Times (1987, reg req.): “Corporate Raider: Paul Bilzerian; A Scrappy Takeover Artist Rises to the Top”
CBS News 60 Minutes (1993, transcript): “Bankrupt in Florida”
St. Petersburg Times (2001): “Ex-corporate raider files for bankruptcy”
Tampa Tribune: “Bilzerian mansion for sale again — for $6.5 million”