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Blixseth seeking $1.2 million in lawsuit over Emerald Cay

American billionaire Timothy Blixseth is suing the people who sold him the Emerald Cay mansion in 2006, saying the sellers and their lawyers caused underpayment of stamp duty now being sought by the Turks and Caicos Islands government.

Blixseth is seeking at least $1,258,684.93 in general damages from Gary di Silvestri, Angelica Morrone, Southaven Ltd. and ITAL Swiss Investments Ltd., according to a lawsuit filed July 8 in U.S. District Court in Miami.

That’s approximately the same amount that a TCI judge ruled in June that Blixseth’s company, Emerald Cay Ltd., and di Silvestri’s company, Worldwide Commercial Properties Ltd., owe the government for underpaid stamp duty in the $28 million transaction for the 30,000-square-foot mansion on the south side of Providenciales.

Justice G.W. Martin called the sale “a carefully crafted scheme of tax evasion,” saying it could not have happened without lawyers drafting and backdating documents. The judge invited the Attorney General to investigate the actions of lawyers in the case.

Blixseth’s lawyer, Michael Flynn of Boston, has told the fp that Blixseth was an innocent foreign purchaser who relied on di Silvestri and his lawyers to determine how much stamp duty to pay.

Blixseth’s U.S. lawsuit is seeking $8,775,000 in damages from the defendants, which are accused of fraud, breach of contract and other causes of action.

The lawsuit says that the mansion was valued at $10 million for stamp duty purposes, but that di Silvestri and his lawyers said another $18 million Blixseth also paid in the transaction was tax free.

“Mr. Blixseth may have been perfectly willing and prepared to proceed with the purchase of Emerald Cay if, under Turks and Caicos law, the total value of the components of the transaction would have been subject to Stamp Duty Tax,” the complaint states. “However, di Silvestri would not do this deal unless only $10,000,000 would be allocated as the value of the real estate under Turks and Caicos law, and therefore Mr. Blixseth deferred to di Silvestri regarding the value of Emerald Cay, given his familiarity with the property and the unique nature of Emerald Cay.”

The suit says the contract called for the buyer and seller to each pay half of the stamp duty.

The government got $975,000 in stamp duty instead of $2,730,000, the government claims. But the judge awarded the government only another $975,000 in stamp duty, plus $282,883.56 interest through June 16, against Emerald Cay Ltd. and Worldwide Commercial Properties.

Another hearing will be held in the TCI Supreme Court at which time the judge will decide if the two companies will have to pay damages, which the government contends is another $7 million.

Flynn said Blixseth is willing to pay his share of the lawful amount of stamp duty in the TCI, but that he will fight “to the highest court in London” paying any other damages.

The house features a two bed/two bath boat house, a caretaker cottage, a 6,000-bottle wine cellar, two adjoining swimming pools with a waterfall, tennis and volleyball courts, two boat slips and two private beaches, according to real estate listings.

 

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