A five-year-old case against Wall Street mogul Mario Gabelli and his companies, including Lynch Interactive, is picking up momentum after the Justice Department requested to take over the suit on March 8. The suit accuses Gabelli of creating fraudulent bidding entities that defrauded the U.S. Treasury by improperly participating in federal auctions of wireless telephone licenses in the 1990s.

In 2001, rival bidders filed suit against Gabelli in the U.S. District Court in Manhattan on behalf of the government, alleging a violation of the federal False Claims Act. At the time, Gabelli had stated publicly that the government's failure to intervene in the case was proof of the lawsuit's weakness. However, the suit has gained traction now that the federal government wishes to intervene, and damages could reach more than $1 billion.

U.S. District Court Judge Paul Crotty is expected to rule on the request by April 10.