The U.S. Justice Department has officially moved to take over the case against fund manager Mario Gabelli, the U.S. Attorney's office confirmed on Wednesday.

The motion was filed March 17 in Manhattan federal court, reports Reuters.

Two weeks ago, the Department let it be known that it would seek control of a private suit originally filed in 2001 by Russell C. Taylor III, a lawyer who claims Gabelli illegally exploited government discounts on wireless telephone licenses in the late 1990s, discounts intended for small-scale entrepreneurs.

The Justice Department also filed a complaint on Monday, in which it said it would bring additional charges against the case's defendants, including principals of Lynch Interactive Corp, a Gabelli-controlled company, although it also dismissed ten defendants from the case. Signed by U.S. Attorney Michael Garcia, the complaint accused Gabelli of unjust enrichment, demanded a trial by jury, and declared an intention to seek damages.

According to Reuters, the government has said its involvement in the case emerged from a November ruling that would have prevented Taylor, as a private plaintiff, from forcing the defendants to turn over ill-gotten profits. A memorandum filed in connection with the case claims the government has new evidence pointing to wrongdoing on Gabelli's part, including indications that he charged hidden fees to the telecommunications entities he funded.

The defendants have maintained that the financial backing Gabelli provided to several bidders for phone licenses was lawful and complied with FCC regulations. They have until April 3 to respond to the motion, after which the government has another week to make its rebuttal.  

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