Whistleblower (qui tam) lawsuit against money manager Mario Gabelli alleges fraud

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 a tentative settlement agreement between Gabelli and the federal government.

 

Gabelli Agrees to Settle Civil-Fraud Suit Over Cellphone Auctions

By Paul Davies and John R. Wilke,The Wall Street Journal,June 7, 2006

The Justice Department has reached a settlement with Mario Gabelli in a civil-fraud suit that alleged the famed money manager was at the center of an effort to deceive the Federal Communications Commission in auctions of cellphone licenses.

Terms weren't disclosed, but are expected to include a payment to the government of more than $100 million, according to people briefed on the negotiations.

Assistant U.S. Attorney David Kennedy announced the settlement yesterday during a hearing before U.S. District Judge Paul Crotty in Manhattan. "We have reached a settlement in principle," Mr. Kennedy said. "We are moving forward."

Read the entire story at The Wall Street Journal .

Gabelli Settles Federal Suit Accusing Him of Deceit on Wireless Licenses

By Julie Creswell, New York Times, June 7, 2006

The Justice Department said yesterday that it had reached a settlement in a civil-fraud-claims lawsuit with Mario J. Gabelli, the money manager, over accusations that he orchestrated a scheme to deceive the Federal Communications Commission in its auction of wireless spectrum licenses several years ago.

The settlement was disclosed in Federal District Court in Manhattan yesterday. The terms of the deal were not announced, but several reports yesterday said that Mr. Gabelli was expected to pay the government more than $100 million.

Read the entire story at the New York Times .

Gabelli reaches tentative deal on cellphone licenses

Paul Davidson, USA Today, June 7, 2006

Mutual fund mogul Mario Gabelli has reached a tentative settlement in a civil lawsuit charging him with defrauding the federal government of hundreds of millions of dollars in auctions of cellphone licenses, according to the Justice Department.

Critics of the Federal Communications Commission's auction system seized on the case as proof that deep-pocketed bidders set up sham companies to win discounts reserved for small businesses.

A settlement in principle in the Gabelli case was announced Tuesday by Assistant U.S. Attorney David Kennedy at a hearing in New York, said Justice Department spokesman Charles Miller.

Terms of the agreement were not disclosed. Details are expected to be revealed at a June 29 court hearing.

Read the entire story at USA Today .

Gabelli reaches accord with U.S.

By David Glovin, Bloomberg, June 6, 2006

Money manager Mario Gabelli has settled a civil lawsuit alleging he defrauded the U.S. government by using ``sham'' companies to win cellular phone licenses.

The settlement was announced today at a hearing in Manhattan federal court, though terms weren't disclosed, Heather Tasker, a spokeswoman for U.S. Attorney Michael Garcia, said. Garcia's office recently sought permission to join the suit, which was filed in 2001 by attorney Rufus Taylor III under the federal False Claims Act.

Read the entire story at Bloomberg .

Gabelli, DOJ agree to settle license fraud case
Reuters, June 6, 2006

NEW YORK - Investor Mario Gabelli reached a preliminary settlement with the U.S. Department of Justice over allegations that a company he controls swindled the government for millions of dollars in bidding for cellphone licenses, government and company representatives said on Tuesday.

At a hearing in the U.S. District Court in Manhattan on Tuesday, Judge Paul Crotty set a June 29 deadline for the parties involved in the case -- the Justice Department, Gabelli and the company, Lynch Interactive to submit final documents, Lynch Interactive spokesman Tim Metz said.

No financial settlement figure was discussed in the courtroom by the judge or others involved in the case, which was originally filed in February 2001, Metz said.

A source briefed on the matter said last week the parties were discussing a payment of about $100 million from Gabelli to settle the case. Further details could not be learned.

Read the entire story at Reuters .