(Bloomberg) Former billionaire entrepreneur Samuel Wyly is “stiffing” his creditors by attempting to shield $249 million in offshore annuities and a $12 million Texas mansion in his bankruptcy, federal regulators told a judge.

“It is a request to enjoy a lifestyle of unfathomable wealth” while seeking the court’s protection from litigation, the U.S. Securities and Exchange Commission said in a filing Thursday in Dallas bankruptcy court.

The SEC is seeking hundreds of millions of dollars from Wyly and the estate of his late brother Charles Wyly after they lost a fraud trial in Manhattan. The Internal Revenue Service is seeking $2 billion in the same case.

Wyly’s lawyer, Josiah Daniel, said in an e-mail that the SEC’s objection to the exemptions was “not newsworthy,” without elaborating.

‘Egregious Violations’
Wyly “has been found liable of numerous, egregious violations, has paid nothing as a result of his misconduct while indefinitely residing in a mansion worth 57 times the average cost of a single family home in Dallas,” the SEC said. The agency called his request for exemptions “astonishing.”

The entrepreneur and his brother’s widow, Caroline “Dee” Wyly, filed for bankruptcy after the SEC’s 2014 victory in the fraud case. Charles died in a car accident in 2011.

Wyly argued that Texas law allows people who file for bankruptcy to shield their homes from creditors. The SEC argues that Congress has limited the value of such homes to about $155,000 in cases where federal law has been violated, according to the filing.

As for the annuities, the agency says Wyly set up a web of offshore funds specifically to protect assets in situations like the bankruptcy.

Offshore System
A Wyly employee who met with the lawyer who created the offshore system said in a memo at the time that one of the goals was to "never let a creditor get your asset, no matter how bad your mistake," according to the SEC’s filing. That lawyer was later convicted of an unrelated felony, the agency said.

The IRS is suing to recover unpaid taxes, interest and penalties on money held in offshore trusts from 1992 to 2013 by the brothers, who got rich building businesses including the Michaels Stores Inc. arts-and-crafts chain. U.S. Bankruptcy Judge Barbara Houser in Dallas is expected to rule soon on how much the IRS can claim.

The case is In re Samuel E. Wyly, 14-bk-35043, U.S. Bankruptcy Court, Northern District of Texas (Dallas).

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