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Gabelli will pay $130 million to settle wireless auction fraud suit

The U.S. Dept. of Justice announced in a July 13, 2006 press release that Mario Gabelli and affiliated entities will pay $130 million to settle charges he defrauded the Federal Communications Commission. The suit, which originated as a whistleblower action brought under the qui tam provisions of the False Claims Act, alleged that Gabelli set up sham companies to qualify as “small businesses.” These businesses would then be able to bid at FCC wireless spectrum license auctions when those auctions were limited to small businesses or where small businesses were given bidding credits and favorable financing.

The whistleblower, R.C. Taylor III, was represented by the law firms of Phillips & Cohen and Williams & Connelly. As a result of the government’s intervention in the suit and settlement of the claims against the defendants, Taylor will be entitled to $32.2 million of the recovery.

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