The British Caribbean dependency of the Turks and Caicos Islands announced Monday that it has begun civil proceedings against a former U.S. billionaire who is fighting for what remains of his luxury real estate empire.
The territory’s government claims Timothy Blixseth, founder of an uber-exclusive resort in the Montana Rockies that went into bankruptcy after he diverted hundreds of millions of dollars for his own use, helped conceal the true value of his private island retreat called Emerald Cay and significantly underpaid a stamp duty tax on the land deal.
Blixseth’s Boston lawyer rejected the charge, however, accusing the Turks and Caicos of an “outright hold-up.” He said his client would fight the case to the highest court in Britain, if necessary.
“This is an extortionate attempt to extract money from Mr. Blixseth because he owns property in TCI while the responsible parties — the corrupt government of Michael Misick and the seller of the property — appear to have played some role in the original stamp tax transactions,” attorney Michael Flynn said Monday.
Blixseth bought the ritzy 5-acre island in the Turks and Caicos Islands in 2005, when the territory was governed by Misick, a high-flying former premier who is being investigated for the alleged misuse of public money and profiting from the sale of government-owned land to developers.
Widespread allegations of corruption against Misick and other local officials led British authorities to impose direct rule in August 2009.
The islands’ current government asserts Blixseth paid $28 million for Emerald Cay while land transfer documents recorded the purchase at just $10 million. They accuse him and other defendants of conspiring to avoid payment of taxes of $2.73 million and instead paying $975,000. They are seeking an outstanding stamp duty of $1.75 million as well as a penalty of $7 million.
Flynn contends Blixseth does not owe the tax, never signed the land transfer document and is blameless in the entire matter. He puts the fault on the seller, Gary di Silvestre, and Misick’s administration. He said Blixseth intends to “expose all of the corruption.”
Blixseth’s Emerald Cay property has a nine-bedroom mansion featuring a 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.
An advertisement in the Robb Report, a magazine that caters to the wealthy, once said Blixseth would accept $75 million for Emerald Cay or he would be willing to swap it for a Gulfstream jet or a luxury New York apartment. He later lowered his price to $48.5 million.
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 counts former Vice President Dan Quayle and Los Angeles Dodgers owner Frank McCourt among its members. The ski and golf club fell into bankruptcy two years ago, and CrossHarbor Capital Partners of Boston bought the 13,600-acre resort for $115 million last year.
About 23,000 people live in the Turks and Caicos, a sparsely populated tourist destination and financial haven near the Bahamas. (AP)
