The Justice Department has agreed to settle a civil fraud lawsuit accusing prominent money manager Mario Gabelli in a scheme to gain unfair advantage in cell-phone spectrum auctions, a government spokeswoman said Tuesday.
The deal — announced at a hearing Tuesday in U.S. District Court — would include a $100 million payment from Gabelli to the government, The Wall Street Journal reported on its Web site, citing people briefed on the negotiations.
No information about the terms of the settlement were immediately announced, though they may be released at a hearing June 29, said Heather Tasker, the spokeswoman.
The deal came after the government sought to intervene in a 5-year-old lawsuit brought by private parties alleging Gabelli and others should pay hundreds of millions of dollars in damages for their participation in auctions conducted by the Federal Communications Commission between 1995 and 2000.
The lawsuit, initially filed in Washington, accused Gabelli of rigging the system by creating phony companies which bid for wireless phone licenses at a discount under rules favoring minority and small businesses. He then resold the licenses at a profit, according to the government.
Tim Metz, a spokesman for Lynch Interactive Corp., where Gabelli is board chairman, said he did not know terms of the settlement.
He said he also did not know if the deal would permit Gabelli to continue to participate in auctions.
"I know there's an application pending for the client, Lynch Interactive, to continue to participate in these auctions," Metz said.
At a hearing in federal court several weeks ago, Gabelli lawyer William P. Frank said prosecutors were treating his client unfairly.
Frank did not immediately return a call Tuesday seeking comment.