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Making Dallas Even Better

Sam Wyly Committed Tax Fraud, May Owe IRS $1.4 Billion

A bankruptcy-court judge yesterday found that Dallas former-billionaire Sam Wyly and his late brother Charles committed tax fraud by putting more than $1 billion in trusts in the Isle of Man in the 1990s.

Wyly filed for bankruptcy protection in 2014, after he and Charles were found liable for $299 million in damages for federal securities violations involving the same trusts. Joseph Guinto wrote in D Magazine about the potential problems for the Wylys ahead of the SEC trial in 2013.

In the October 2015 issue of D CEO, John Browning described what was unusual about the Wylys’ bankruptcy strategy:

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Judge Says Dallas Can Ban Exxxotica From Convention Center

The ruling over the city’s decision to bar porn convention Exxxotica came down late this morning. From the DMN:

U.S. District Judge Sidney Fitzwater denied Exxxotica’s request for a preliminary injunction, which was filed in February after seven members of the Dallas City Council sided with Mayor Mike Rawlings’ resolution banning the porn expo from returning to the Kay Bailey Hutchison Convention Center.

Exxxotica had hoped to return next month, following last August’s Dallas debut. Today’s ruling means that will not happen.

Roger Albright, one of Exxxotica’s attorneys, said he and his client are “surprised and disappointed” by the opinion and weighing their options, which include the possibility of an appeal to the Fifth Circuit Court of Appeals, refiling a motion for a preliminary injunction or merely waiting for trial.

The judge’s decision bought into the the city’s argument that the Kay Bailey Hutchison isn’t so much a “public forum” in which free speech must remain unhampered but is instead just a building that the city happens to own that it rents out for commercial purposes:

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Ross Avenue Mechanic Who Fought For Property Rights Can’t Sell Shop

Tristan Hallman at the Dallas Morning News followed up on the case Hinga Mbogo, who fought for (and lost) the right to keep his auto shop in business on Ross Avenue in violation of zoning that was changed 11 years ago:

But in his latest crusade to borrow more time, Mbogo withheld a key piece of information about his suddenly illegal 30-year-old auto repair shop.

Even if he wanted to sell his shop, he couldn’t.

“Somebody is crowding the title,” he said.

That somebody is Mbogo’s former business partner, who claims he still has an ownership stake in the business. Mbogo, whose plight has been nationally showcased as a government infringement on property rights, has spent the last year trying to secure the full rights to his property, according to Dallas County civil court filings.

Mbogo’s long-ago partner Mohamed Ahmed contributed $30,000 toward the down payment and never sold his share. The two went into business together in 1990.

Mbogo and Ahmed disagree about what their deal was when Ahmed left the day-to-day business of the shop in 1997.

This helps explain why Mbogo claimed her couldn’t get a good offer for his shop, despite 30 years of appreciation for his property values. But why didn’t he mention it before the council? All he told Hallman was “That’s not their business. That’s my business.”

Mbogo says he’s not shutting down until the city comes to forcibly close his doors, which would presumably happen next month.

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Leading Off (4/13/16)

Funeral held for food reporter Stacey Fawcett and her two sons. More than 2,000 people filled Prestonwood Baptist Church yesterday to pay their respects to popular WFAA food reporter Fawcett and her sons. News broke Friday morning that Fawcett’s eldest son, 19-year old McCann Utu, Jr., murdered the reporter and her younger son, 17-year-old Josiah Utu, before turning the knife on himself. Friends and family say McCann’s mental health suffered after two concussions. His brain was donated for research.

Two dead in Southlake murder-suicide. Police found Anil and Neeta Kharabanda dead in a bedroom. Authorities believe the man shot the woman before killing himself, however they could not confirm how the two were related. This marks the city’s first murder since Mexican lawyer, and possible cartel leader, Juan Jesus Guerrero Chapa was gunned down in the Southlake Town Square.

Ethan Couch to appear in adult court. The “affluenza” teen who killed four people while driving under the influence, who then cost taxpayers a hefty $200K in rehab bills, who then skipped out on his cush probation sentence, is scheduled to appear in adult court for the first time today. He celebrated his 19th birthday in solitary confinement on Monday. Today’s hearing could keep Couch in jail for another four months. Fingers crossed.

Dallas woman caught riding dirty. Real dirty. Like, $1.6-million-worth-of-meth-hidden-inside-custom-tires-on-a-Chevy-Trailblazer kind of dirty. Eat her dust, Chamillionaire.

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Podcast: Texas Law Hawk Bryan Wilson on His Talons of Justice

Fort Worth lawyer Bryan Wilson, aka the Texas Law Hawk, stopped by the Old Monk on Thursday to talk about how his outrageous commercials went viral and led to a Super Bowl ad appearance for Taco Bell. A Q&A with Wilson appears in the April issue of D Magazine, which is on newsstands now.

Today is Good Friday, which means I’m abstaining both from the consumption of meat and the writing of notes about podcast episodes. So let’s get right to the show. Remember to subscribe to EarBurner via iTunes, Stitcher, or your favorite podcatcher.

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Leading Off (3/11/16)

Elephants Arrive in Dallas. Just 17 pachyderms will be coming to America from Swaziland. Dallas Zoo officials revealed that one of the original 18 died in December of an acute gastrointestinal condition. The death means that only five of the animals, which got to North Texas a little after midnight this morning, will stay in Dallas while the others are headed to Omaha, Nebraska, or Wichita, Kansas.

Trinity East Dispute in Court Today. Lawyers for Dallas will argue that the lawsuit filed by the energy company should be tossed because the city has immunity from the suit. For its part, Trinity East charges the city with breach of contract, negligent misrepresentation, and fraud in denying the company access to land near the Elm Fork Golf Course for which it had hoped to obtain gas leases.

Captain America Robs Beauty Store. Plano Police say a man in a superhero sweatshirt — and his partner in an unimaginative black hoodie — may be connected to the burglaries of several ULTA cosmetics stores in the Dallas-Fort Worth area.

Dallas Police to Investigate Racist Facebook Post. Lt. Thomas Glover said the Black Police Association asked the DPD  to investigate after at least two officers made comments indicating their support of the posting of a picture reportedly snapped at an office party in Russia.

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First Exxxotica Lawsuit Against Dallas Has Been Dropped

Last week the legal actions began against the city of Dallas for the decision to ban the Exxxotica pornography expo from returning to the Kay Bailey Hutchison Convention Center. The first lawsuit to be filed surprisingly didn’t come from the organizers of Exxxotica but instead was brought by a vendor who said his interest was just in being able to attend the event himself.

However, it was reported today, his suit was officially dropped last Thursday, after the organizers of Exxxotica finally took the city to court. The DMN asked the man’s attorney, Gary Krupkin, why he even bothered filing the case at all, given that it was a foregone conclusion the other suit was coming:

Krupkin responded by saying “defending the 1st Amendment is never a bother to me,” then offered this anecdote.

“My father, a wonderful physician that still made house calls at age 87, used to leave a light burning in a downstairs window. One day, I asked him the reason. He said, ‘Gary, that light burns for anybody that needs help. They know they can get it in this house.’ I said, “Dad, I don’t get it. You go the the office everyday to help people.’ He looked at me, and said, ‘Someday, you’ll understand.’ That same light has burned ever since I received my law degree in both my home and my office.”

This explanation is more high-minded than I would have expected from the same lawyer who last week seemed to have his eyes on representing a class-action, speculating that a host of suits from other Exxxotica vendors and patrons might be coming. “What Exxxotica would file would be a suit particular to them,” he said then. Guess Krupkin’s client saw things differently.

The council is going to discuss the ongoing suit and “others who want to lease a city facility for an adult entertainment event” during an executive session Wednesday. On Friday’s Exxotica’s attorney filed for an injunction, asking a judge to prevent the city from banning the event so that it could take place on the desired May dates even as court hearings continue.

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Cole Hamels Couldn’t Get Into Victoria’s Secret Show, So He’s Suing

Philadelphia Magazine shares the details of a lawsuit Texas Rangers pitcher (formerly longtime Phillies pitcher) Cole Hamels has filed against a London-based company that sold him three VIP packages to November’s Victoria’s Secret Fashion Show in New York after he was denied entry to the event:

According to his lawsuit, he paid a U.K. company £49,382 (currently $68,730.36) for three VIP packages that included tickets to the fashion show. He and his wife have sued Cornucopia Entertainment, LLC, and related defendants for a sum “in an amount in excess of $50,000.”

The lawsuit says Cornucopia told Hamels it could provide him with a VIP package that included tickets to the show and afterparty, accommodations at the Kensington Hotel in London, a limo to and from the event and other related perks for £15,995 a person. At the time, the lawsuit alleges, Cornucopia said the show would not be returning to New York — where it has always been held — and would be in London instead.

Hamels doesn’t seem to have been suspicious this was a scam even after learning the event would be in New York after all. Cornucopia apparently assured him and his wife Heidi that there would still be tickets for them at the door. There weren’t.

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Exxxotica Gives Dallas Another Chance to Allow Porn Convention

The lawyer for Exxxotica, Roger Albright, has sent the city attorney a letter inviting the Dallas City Council to reconsider its decision to ban the pornography expo from returning to the Kay Bailey Hutchison Convention Center, as Exxxotica had hoped to do in May.

According to Wilonsky, the council could begin the process of bringing the matter up for another vote with a motion and a second at tomorrow’s meeting. If they don’t, Exxxotica plans to move forward with legal action:

Albright said if nothing happens tomorrow — and if there’s “no indication from the council they will reconsider or have any interest in trying to resolve this” — then the lawsuit will be filed. And it “could be filed after the meeting,” he said.

“Conversely, if there’s progress being made I can certainly hold off,” he said. “One of the issues, of course, is we’re getting closer to those May deadlines every day.”

If a council member who voted for the ban is considering changing positions, they haven’t said so privately or publicly.

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First Exxxotica Lawsuit Has Been Filed

As expected, the city of Dallas has been hit with lawsuit challenging the constitutionality of the council’s decision to forbid the Exxxotica porn expo from returning to the Kay Bailey Hutchison Convention Center.

Only this first legal shot hasn’t come from the organizers of the Exxxotica event. Instead it originates with a vendor who attended and worked the expo last year. Richardson attorney Gary Krupkin filed the suit and has raised the specter of this becoming a class-action:

“There’s a possibility — and I am not saying it’s gong to happen — but a possibility this might turn into a class action suit where the city could be prosecuted by everybody who would like to attend Exxotica,” he said. “And joining them would be commercial vendors too. To that extent, what Exxxotica would file would be a suit particular to them. My suit offers the possibility of having other class members join at some point in the future.”

Dallas: Big Things Happen Here.

Leading Off (1/29/16)

Dallas Schoolchildren Required to Play. The DISD board voted Thursday that all district elementary schools must give students 20 minutes of recess each day for the rest of this school year, increasing that to at least 30 minutes daily next year. Recess also can’t be withheld as a form of punishment in disciplinary matters. Trustee Dan Micciche, who brought the proposal to the board, cited studies indicating recess improves social and emotional health. Considering the gorgeous weather we’re expected to have today, I plan to make the same argument to Wick this afternoon.

Arlington Woman Awarded Millions For Awful Book. I haven’t read Fifty Shades of Grey, unless you count Buzzfeed’s abridged, illustrated version. But millions have bought author E.L. James’ book that began as fan fiction published through a website co-founded by Arlington woman Jennifer Pedroza. A jury last year found that Pedroza’s partner had cheated her out of her rightful share of royalties from the work, and on Thursday a judge awarded the Fort Worth schoolteacher $10.4 million in royalties plus $888,643 in pre-judgment interest, as well as $1.7 million in attorney’s fees. So Fifty Shades has made so much money that a woman who didn’t even write the thing, and is splitting her royalty share with the other partners who worked to publish it, still looks to make $11.5 million? Jeez, you people like your S&M.

Dallas Police Chief Doesn’t Need Your Resume. Testifying as part of a civil suit filed against the city, David Brown explained the process by which he decided whom to promote to the rank of major within the department. His “intricate vetting process” has “little need for resumes, job interviews, detailed personnel histories or opinions outside of his command staff.”

Kennedale Smells Like Old Rotted Fish. Parts of Arlington too. Residents there are blaming recent changes at a landfill run by the city of Fort Worth. If I were better acquainted with Kennedale, I’d insert a cutting punchline here. But for all I know it was previously a veritable Garden of Eden, redolent of lilac and baby powder.

Sam Wyly Considered Renouncing U.S. Citizenship

Dallas (former?) billionaire Sam Wyly is in the midst of a bankruptcy trial in U.S. District Court. He and his sister-in-law Dee declared bankruptcy in 2014 after a judge found Sam and his late brother Charles liable to the tune of $229 million for federal securities violations involving offshore trusts.

The headlining revelation from today’s hearing in the case is that Wyly considered giving up his U.S. citizenship in the hopes of avoiding tax obligations:

Assistant U.S. Attorney Holly Church started her cross-examination of Sam Wyly on Monday by reminding the witness that he testified last week how much he loves America and even cited the Boy Scout oath and its loyalty pledge to the country.

“Isn’t it true that you considered renouncing your citizenship?” Church asked.

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