Phillips & Cohen LLP represents the whistleblower in a qui tam lawsuit against Mario Gabelli and certain affiliates. Below are excerpts and links to news reports about the Gabelli case and settlement.
Gabelli, affiliates settle fraud suit for $130 million
By Paul Davies
The Wall Street Journal, July 14, 2006
NEW YORK -- Money manager Mario Gabelli and his affiliated companies agreed to pay $130 million to the Justice Department to settle a civil-fraud suit alleging that he was at the center of an effort to deceive the Federal Communications Commission in auctions of cellphone licenses. A whistle-blower who brought the initial suit will get more than $30 million from the settlement proceeds.
Mr. Gabelli is best known for running Gamco Investors Inc., a mutual-fund group in Rye, N.Y. Gamco isn't a party to the lawsuit, which focuses on Mr. Gabelli's role as chairman of Lynch Interactive, a telecommunications firm.
The lawsuit, which the government joined in March, alleged that, from 1995 to 2000, Mr. Gabelli was at the center of a scheme to defraud the FCC of more than $160 million in benefits intended for small businesses, and that he then earned profit of more than $205 million in the sale of some of the licenses to third parties.
To read the rest of the story, see The Wall Street Journal .
Gabelli to Pay $130 Million to Settle Lawsuit
By Julie Creswelll
New York Times,July 14, 2006
One of the country’s best-known money managers, Mario J. Gabelli, and affiliated companies have agreed to pay $130 million to settle a civil fraud lawsuit that accused him of orchestrating a scheme to deceive the Federal Communications Commission in its auction of cellphone licenses in the late 1990’s.
The settlement, approved yesterday by Judge Paul A. Crotty of the Federal District Court in Manhattan, is the latest move by the quick-witted and quick-tempered Mr. Gabelli to try to put a series of lawsuits and bad press behind him.
Known as Super Mario for his acumen in stock picking, Mr. Gabelli, 63, who sits atop a complex public- and private-investment empire, has seen his reputation dented in recent months as he faced lawsuits that challenged his business ethics, corporate governance and pay package.
To read the rest of the story, see the New York Times .
Gabelli Settles FCC Auction Charges; Money Manager and Affiliated Firms to Pay $130 Million
By Brooke A. Masters
Washington Post,July 14, 2006
Money manager Mario Gabelli and companies affiliated with him agreed yesterday to pay $130 million to settle allegations that he used sham companies to buy cellphone licenses under a federal program for small and minority-owned businesses.
The federal government alleged that 38 individuals and companies backed by Gabelli's money improperly participated in eight wireless spectrum auctions under special Federal Communications Commission rules reserved for small businesses. The Gabelli-backed entrepreneurs included his relatives, a former aerobics instructor, the caretaker of his vacation home and a retired professional basketball player, the government alleged. Gabelli was not eligible.
To read the rest of the story, see the Washington Post .
Gabelli case to give rich payout to whistleblower
By Dane Hamilton
Reuters, July 13, 2006
NEW YORK, July 13 (Reuters) - The government civil fraud case against Wall Street investor Mario Gabelli that was settled on Thursday began six years ago when a young lawyer named Rufus Taylor noticed unusual patterns in bidders for wireless spectrum licenses.
Taylor, who represented companies that competed for those Federal Communications Commission licenses, found many unfamiliar companies that claimed they were entitled to small business discounts bidding for the valuable licenses, lawyers in the case said on Thursday.
Taylor's suspicion -- and years of legwork backed by two teams of lawyers -- culminated in the first successful claim under the Civil War-era False Claims Act involving FCC licenses.
To read the rest of the story, see Reuters.