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Gerova swindler sentenced for another scam

Jason Galanis: the man who duped investors in Bermudian-based Gerova has been imprisoned for another fraud

NEW YORK (Bloomberg) – A Los Angeles man who was born into a life of white-collar crime with an opulent lifestyle was ordered to serve more than 14 years behind bars for ripping off poor Native Americans, a sentence that tacked five years to time he’s already doing for ripping off investors in a Bermudian-based firm.

Jason Galanis, who pleaded guilty in January to duping a Sioux tribe in South Dakota in a $60 million bond-issuing scam, was sentenced in Manhattan federal court. He appeared in blue prison garb, sporting a long beard, with his straight hair combed neatly to his shoulders.

“There aren’t enough words to describe how remorseful I am,” Galanis, 47, said. “I’ll never live down the shame. It’ll be with me forever.”

Galanis is already serving 11 years for another crime. The Greenwich, Connecticut, native pleaded guilty in July 2016 to swindling investors in a island-based financial-services firm, Gerova Financial Group Ltd, out of $20 million.

“You’ve spent a good deal of your life charming and manipulating people,” US District Judge Ronnie Abrams said in handing down the sentence. “You’ve had many more opportunities in life than most of the defendants I have before me.”

The judge initially sentenced Galanis to more than 15 years in prison, but later credited him with the 15 months he’s already served. She said her intent was to add five years to his current sentence.

Defence attorney Lisa Scolari had asked for mercy, arguing last month that her client’s life was dominated by his father, John Galanis, whom she referred to as “one of the ten biggest white-collar criminals in America.” The Galanis name, she said in a court filing, is “etched into more than 45 years of state and federal criminal indictments, beginning in the early 1970s”.

“There is a sadly familiar path,” she said, and her client “has followed directly in his father’s footsteps.” Scolari asked the judge to hand down a sentence that wouldn’t result in any additional time behind bars.

Prosecutors didn’t buy it. They urged the judge to impose a sentence of almost 20 years, which would have added more than 8½ years to Galanis’s current term.

“The government has little doubt that being raised by John Galanis was a significant and formative negative experience,” prosecutors said in an August 4 filing. But, “having witnessed first-hand the devastating familial costs of criminal behaviour, Jason might have been expected to live his life on the straight and narrow, and to aspire to a life both more productive and modest than that of his father.”

John Galanis was charged with his son in both frauds, while two of his other sons were charged in the Gerova scam. The elder Galanis once ripped off the former head of the New York Stock Exchange and was previously convicted in 1988 of masterminding a tax-shelter scheme that bilked actors including Eddie Murphy and Sammy Davis Jr. The scam against the Gerova investors in Bermuda was also a family affair.

In the latest case, father and son were accused of persuading a corporation affiliated with the Wakpamni District of the Oglala Sioux Nation, whose members live in one of the poorest regions in the US, to issue limited-recourse bonds the pair had structured. John, now 74, and Jason promised that the bond proceeds would be invested in annuities to benefit the tribe and repay investors. Instead, prosecutors said, they stole more than $10 million.

Their long-time scams helped fund a lifestyle that went from the younger Galanis getting a $100,000 Ferrari for his 16th birthday to the family living in a Del Mar, California, mansion that last sold for $50 million, according to court filings.

John Galanis is at a low-security prison in California. He’s due to be released in 2022 and has pleaded not guilty in the bonds case, according to court records.

The US urged a harsh sentence based on the younger Galanis’s long history of breaking the law.

“Galanis’s conduct is all the more egregious because the Wakpamni fraud was not his first brush with the law but was merely the latest of his repeated efforts to enrich himself and support an opulent lifestyle at the expense of his victims,” the US said. “The scale and scope of his illegal conduct, and his willingness to lie and deceive to cover it up, has only grown over time.”