A private pilot for U.K. businessman Joe Lewis pleaded guilty to tax evasion after being swept up in an insider trading case involving his billionaire boss.
Bryan "Marty" Waugh changed his plea during a hearing in federal court in Manhattan on Tuesday after months earlier vowing to defend himself at trial against securities fraud charges. The 65-year-old longtime pilot to Lewis admitted to one count of tax evasion after signing a plea agreement with federal prosecutors.
"I am fully committed to repaying the IRS any taxes that I owe," Waugh said in court.
There is still a dispute between the defense and government as to whether Waugh knowingly engaged in insider trading using information Lewis provided.
Waugh is the last person charged in the insider trading scheme to plead guilty, bookending a high-profile prosecution that cost 87-year-old Lewis millions of dollars in penalties and forced him to cut ties with public companies.
Waugh and another pilot, Patrick O'Connor, were charged with fraud last July, accused of trading on tips Lewis passed on while they flew him in a private jet across the country.
Lewis, who is worth $7.5 billion according to the Bloomberg Billionaires Index, was sentenced to three years probation and ordered to pay a $5 million fine after pleading guilty to fraud earlier this year. It marked a low point in Lewis' rags-to-riches story from humble beginnings in London's East End to building a multibillion-dollar investment empire, which included at one point owning a majority stake in the English Premier League's Tottenham Hotspur Football Club.
Alongside sharing confidential information with his pilots, Lewis also tipped his former girlfriend.
In one instance in 2019, according to Lewis' indictment, a Mirati Therapeutics board member, who also worked at Lewis' hedge fund, told the billionaire about confidential, positive clinical trial results that the company planned to announce publicly.
Lewis loaned his pilots $500,000 each to buy Mirati shares ahead of the trial results being made public. On another occasion that same year, Lewis learned that Australian Agricultural Company — a beef producer that the company he founded, Tavistock Group, was a major shareholder in — had suffered material losses due to flooding. Lewis passed the information to O'Connor and Waugh, urging them to offload their AACo shares.
As part of Lewis' plea deal, Lewis agreed to resign from the boards of U.S. public companies and had to give up his stake in Boxer Capital, the investment vehicle that earned him more than 7,500% in returns.
In Waugh's plea agreement, he agreed to pay $152,000 in restitution and waived his right to appeal any prison sentence less than 18 months. Waugh said he omitted from his tax returns in 2018, 2019, 2020 and 2022 certain payments he received from his employer, Tavistock Aviation, that were loans against deferred compensation.
Waugh is scheduled to be sentenced in October.
The other pilot, O'Connor, pleaded guilty to conspiracy and securities fraud and is due to be sentenced in the coming months.
