Attorney General James Announces Sentence For Albany Financial Advisor In $9 Million Family Trust Scheme
Attorney General James Announces Sentence For Albany Financial Advisor In $9 Million Family Trust Scheme
Lagan Sentenced To 4 To 12 Years In Prison
ALBANY – New York Attorney General Letitia James today announced the sentencing of financial advisor and lawyer Thomas Lagan to 4 to 12 years in prison for a scheme in which he and former Town of Guilderland Judge Richard Sherwood plundered over $9 million from family trusts they were responsible for overseeing.
“Financial advisors exist to help protect our money, not steal it,” said Attorney General Letitia James. “These individuals were entrusted with protecting financial assets, but instead, they took advantage of their clients and stole funds for personal use. We will not allow anyone to get away with cheating New Yorkers or our system.”
Lagan pleaded guilty before Albany County Supreme Court Judge Thomas Breslin to Grand Larceny in the 1st Degree (a Class B felony) on May 1, 2019. As detailed in the complaint, Lagan and Sherwood have provided estate planning and related legal and financial services to Capital Region philanthropists Warren and Pauline Bruggeman and Pauline Bruggeman’s sister, Anne Urban, since at least 2006. The Bruggemans each created a revocable trust, which contained sub-trusts designed to provide for Anne Urban and Pauline’s other sister, Julia Rentz. Other funds were to be awarded to Anne Urban and Julia Rentz outright upon the deaths of the Bruggemans.
To date, law enforcement has recovered $5.5 million in criminal proceeds from the $9.8 million larceny.
In 2011, the Anne S. Urban Irrevocable Trust (AUIT) was created using some of the funds from the Bruggeman trusts; Sherwood was named Trustee and Lagan was named Successor Trustee.
In one instance, a sub-trust with approximately $2,000,000 was to be returned to the Pauline Bruggeman Revocable Trust for distribution to six named charities upon Anne Urban’s death. The complaint alleges that, rather than returning those funds after Urban died in 2013, the funds were disposed of through the AUIT primarily for the benefit of Sherwood and Lagan. In another part of the scheme, Sherwood and Lagan allegedly conspired to deceive an Ohio attorney into sending over $2,000,000 of Julia Rentz’s money to the AUIT, under the premise that it would be sent to charity. In fact, Sherwood and Lagan shared those proceeds.
Sherwood and Lagan allegedly formed the Empire Capital Trust to benefit themselves and funded it with over $1,000,000 of stolen money. In January 2015, they allegedly transferred $3,598,908 from AUIT to a Trustco Bank account in Sherwood’s name and $2,693,865.92 from the AUIT to a Trustco Bank account in Lagan’s name.
On June 11, 2018, Richard Sherwood pleaded guilty to Grand Larceny in the Second Degree (a Class C felony). Sherwood faces up to three to ten years in prison.
Attorney General James thanks the New York State Police Special Investigations Unit, the U.S. Attorney’s Office for the Northern District of New York, the Federal Bureau of Investigations, and the New York State Office of Taxation and Finance for their valuable assistance in this investigation.
This case is being prosecuted by Assistant Attorneys General Christopher Baynes and Matthew Peluso of the Attorney General’s Public Integrity Bureau, under the supervision of Bureau Chief Travis Hill. The Criminal Justice Division is led by Chief Deputy Attorney General José Maldonado.
The investigation was led by Investigator Mark Spencer of the Attorney General’s Investigations Bureau, under the supervision of Deputy Chief Investigator Antoine Karam. The Investigations Bureau is led by Chief Oliver Pu-Folkes. Meaghan Scotellaro, Forensic Auditor Investigator, provided the financial analysis. Senior Analyst Sara Pogorzelski assisted in the investigation.