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NEW YORK, Nov 7 (Reuters) - The U.S. Securities and Exchange Commission will ask a federal judge to more than double the money Texas businessman Sam Wyly must pay from $200 million to $455 million for his involvement in an offshore fraud scheme, a lawyer for Wyly said on Friday.
U.S. District Judge Shira Scheindlin in New York has already ordered Wyly and the estate of his late brother Charles to pay $187.7 million plus interest to the SEC, which the regulator has said should total just under $300 million.
Sam Wyly, 80, who last appeared on Forbes' list of the 400 richest Americans in 2010 with a net worth of $1 billion, is responsible for around two-thirds of damages and has filed for bankruptcy in Dallas, saying he cannot afford the SEC's claim as well as potential tax claims from the Internal Revenue Service.
Scheindlin will preside over a hearing Wednesday at which the SEC will have an opportunity to convince her that the damages should be even higher.
During a hearing in Dallas bankruptcy court on Friday, Terrell Oxford, a lawyer for Wyly, said in written testimony read in court that the SEC is expected to seek $195 million plus interest from Sam Wyly, for a total of approximately $455 million.
The SEC is likely to ask that Scheindlin increase the award against Charles Wyly's estate, as well.
Meanwhile, lawyers for Wyly also disclosed at the hearing that preliminary settlement talks involving the Wyly family, the SEC and the IRS had taken place earlier on Friday.
"We began to get to know each other," said Josiah Daniel, another Wyly lawyer, adding that the parties discussed "in broad strokes" how a resolution might be reached through the bankruptcy proceeding.
A spokesman for the SEC did not immediately respond to a request for comment.
The SEC's case is centered on a system of trusts in the Isle of Man that the regulator said netted the brothers $553 million in untaxed profits over a decade of hidden trades in four companies they controlled.
The companies included Sterling Software Inc, Michaels Stores Inc, Sterling Commerce Inc and Scottish Annuity & Life Holdings Ltd, now Scottish Re Group Ltd.
Charles Wyly died in 2011, a year after the SEC sued, and his estate was substituted as a defendant. His widow, Caroline, has filed for bankruptcy as well, citing the SEC claim.
A jury found the Wylys liable for fraud earlier this year, leading to Scheindlin's damages ruling in September.
The SEC and the Wylys, including their children and grandchildren who are beneficiaries of the offshore trusts, have clashed on whether the regulator is entitled to tap into the hundreds of millions of dollars held offshore.
Sam Wyly's bankruptcy lawyer has said Wyly may be willing to repatriate the money held in the trusts as part of the bankruptcy proceeding in an effort to settle the SEC and IRS claims.
The bankruptcy case is In re Samuel E. Wyly, U.S. Bankruptcy Court, Northern District of Texas, No. 14-35043.
The SEC case is U.S. Securities and Exchange Commission v. Wyly et al, U.S. District Court, Southern District of New York, 10-5760. (Reporting by Joseph Ax; Editing by Diane Craft)