Opinion ID: 527542
Heading Depth: 2
Heading Rank: 3

Heading: The Proceedings Against Wilkis

Text: 18 The proceedings by the SEC, the IRS, and the State against Wilkis were roughly similar to those against Levine. In late June 1986, Wilkis signed a Consent and Undertaking (Wilkis Consent), pursuant to which he was to disgorge all assets in which he ... ha[d] a beneficial interest, except for [certain enumerated assets].... Wilkis estimate[d] the disgorged assets to be of a value of approximately $3.3 million dollars [sic ]. Wilkis retained, inter alia, an Upper West Side cooperative apartment, a 1983 automobile, five Individual Retirement Accounts, a money market account, and the sum of $60,000. The proposed judgment incorporated in the Wilkis Consent paralleled the final judgment entered against Levine. By letter dated June 29, 1986, the Commission sent Wilkis a side letter similar to the June 5 letter it had sent Levine, construing the phrase claims against the Defendant[ ] arising out of the purchase and sale of securities ..., to include claims for taxes due and penalties or interest thereon. 19 On July 1, 1986, the Commission filed its complaint against Wilkis, together with the Wilkis Consent and proposed judgment. The complaint alleged that since 1978, Wilkis had, inter alia, misappropriated and used material nonpublic information in order to trade in the stock of more than 52 issuers and had disclosed such information to Levine. On July 2, the district court adopted the proposed judgment and entered a Final Judgment of Permanent Injunction and Other Equitable Relief (Wilkis Judgment). 20 On July 3, 1986, Wilkis turned over approximately $2.2 million worth of assets to a receiver, and an additional $1 million shortly thereafter. 21 On December 22, 1986, the government filed a four-count information against Wilkis, Wilkis having waived indictment. Count one charged him with having misappropriated material nonpublic information and having used it to defraud his employer in connection with the purchase and sale of the stock of Textron Inc. (Textron), in violation of the federal securities laws. This count also charged that Wilkis passed the information to Levine, who used it to trade in Textron stock. The remaining counts charged Wilkis with mail fraud, income tax evasion, and failure to report certain money transactions. 22 On December 24, 1986, Wilkis pleaded guilty to all four counts of the information. He was sentenced to various prison terms and probation. 23 Beginning in April 1987, the IRS obtained liens against Wilkis for federal tax liability for the years 1980-1986 totaling some $2.8 million, including deficiencies, interest, and penalties. In October 1987, the State issued an assessment against Wilkis for state and New York City (hereafter included in State) tax liabilities in the total amount of $595,000. 24