KINGSTON, Jamaica (AP) — The Turks and Caicos Islands has won a $9.29 million judgment against a former U.S. billionaire and timber magnate who founded an ultra-exclusive resort in the Montana Rockies, officials announced Wednesday.
The British Caribbean territory's Supreme Court ruled that Tim Blixseth, founder of the Yellowstone Club, helped conceal the true value of his Turks and Caicos retreat called Emerald Cay and underpaid a stamp duty tax on the acquisition deal.
Attorney General Huw Shepheard said the judgment against Blixseth, Emerald Cay Ltd. and Worldwide Commercial Properties Ltd. replaces an interim award of $1.25 million because of stiffer penalties.
"We are delighted to have obtained this judgment, which underlines the commitment the government has to ensuring stamp duty is paid, and to pursue those who do avoid stamp duty," said Shepheard.
Blixseth's Boston lawyer, Michael Flynn, said the defense team was not sure about the possibilities of pursuing an appeal, but he contended that the seller, Gary di Silvestre, was at fault.
Blixseth's team will sue Di Silvestre "for perpetrating this fraud on us and the government," Flynn said in an email. "We intend to collect $28M from (him) and expose his fraud with the government."
Flynn has previously said his client would fight the case to the highest court in Britain, if necessary.
Blixseth bought the 5-acre island in the Turks and Caicos Islands in 2005, when the sparsely populated tourist destination was governed by high-flying politician Michael Misick, who has since been removed as prime minister and is being investigated for alleged misuse of public money and profiting from the sale of government-owned land to developers.
Widespread allegations of corruption against Misick and other officials led British authorities to impose direct rule on the islands in August 2009.
The islands' current government asserted that Blixseth paid $28 million for Emerald Cay while land transfer documents recorded the purchase at just $10 million. They accused him and other defendants of conspiring to avoid payment of taxes of $2.73 million and instead paying $975,000. They pressed for outstanding stamp duty of some $1.75 million as well as a penalty of roughly $7 million.
Blixseth's Emerald Cay property has a nine-bedroom mansion with man-made sandy beach, several docks and a retractable bridge linking it with the island of Providenciales. Blixseth had planned to include the island in his Yellowstone Club World luxury residence group before filing for bankruptcy.
Blixseth was once proclaimed a billionaire in Forbes magazine's list of the 400 richest Americans. He founded the Yellowstone Club, a millionaires-only resort that counted former Vice President Dan Quayle and Los Angeles Dodgers owner Frank McCourt among its members.
The ski and golf club fell into bankruptcy some three years ago, and CrossHarbor Capital Partners of Boston has since bought the 13,600-acre resort for $115 million. Blixseth was accused of diverting hundreds of millions of dollars for his own use.
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David McFadden on Twitter: http://twitter.com/dmcfadden
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