Lynn Tilton, one of the richest self-made women in America, has vowed to fight fraud charges brought by the Securities and Exchange Commission, calling it a battle between "good and evil."
In an exclusive interview with CNBC in mid-March in anticipation of the allegations, Tilton, CEO of Patriarch Partners, said the SEC charges are "ill-founded," and she vowed to fight them rather than settle.
"I am shocked," she said. "I am disappointed, saddened and ... I am certain that the allegations are ill-founded."
She called the case "the ultimate battle in good against evil, light against dark," and that after fighting battles before over her reputation, "I have prevailed and I expect to do that again."
Tilton also vowed to continue running her more than 70 companies, which she said would be unaffected by the charges and wouldn't be sold off in any kind of fire sale.
"My No. 1 priority is protecting my company and my people so that I can maximize the value of the funds," Tilton told CNBC. "My people need to know that I am fighting for them. I also want to live in a country where I can fight for truth without assuming that because it's the government that I am guilty without the battle. As someone who has always fought for truth, and protected her integrity and her intent, and have prevailed, I expect to do that."
The SEC charged that Tilton failed to properly value assets using the methodology described to investors in offering documents for her three collateralized loan obligation (CLO) funds. Patriarch used the CLOs to fund the purchase of distressed companies. The agency said all the valuations of loan assets were reported to investors as unchanged from the time they were acquired despite many of the companies making partial or no interest payments to the funds for several years.
"We allege that instead of informing their clients about the declining value of assets in the CLO funds, Tilton and her firms have consistently misled investors and collected almost $200 million in fees and other payments to which they were not entitled," said Andrew J. Ceresney, director of the SEC's enforcement division. "Tilton violated her fiduciary duty to her clients when she exercised subjective discretion over valuation levels, creating a major conflict of interest that was never disclosed to them."
Tilton said that the investors in her funds are sophisticated investors and that the finances of the CLOs were properly disclosed in monthly statements. She added that the nature of her business, turning around distressed companies, takes years and often has high failure rates, which investors also understand. But Tilton said she has also had a number of corporate successes that haven't seen their value marked up "because we don't change the value until it's sold or there's an event."
She also said that she believed all of the accounting was in accordance with GAAP.
"I used accounting specialists in Patriarch and outside accountants, every month for more than a decade, to review these financial statements before I signed them and sent them out," she said. "If there was a different methodology to follow, I would've happily followed that."
Read MoreThis coin just sold for nearly $1.2M
Tilton said the SEC investigation has dragged on for five years and that "they have looked at every aspect of my business trying to find something."
"The fact that they have chosen to bring an ill-founded case based on financial statements technicalities and a contract interpretation with very sophisticated investors with a strategy that was disclosed to all, really, is very disappointing and one that I don't understand," she said.
"I'm fighting for ... the tens of thousands of people I'm so proud of in these manufacturing lines across Main Street America," she told CNBC. "They have worked tirelessly to take companies that everyone else would have tossed away, and try to rebuild them."