John Peter Galanis

John Peter Galanis (b. 1943-) of Greenwich, Connecticut

John Peter Galanis was a financier in the 1970s and 1980s who became a notorious white collar criminal [ [http://www.wbaltv.com/news/2070619/detail.html WBAL TV News,"11 News Investigates Fairbanks Capital's CEO, Mortgage Company Still Under Investigation", March 28, 2003] ] . He was tried and sentenced to 27 years in federal prison as a result.

History of Financial Crimes

1970s

In early as the beginning of the 1970s, John Peter Galanis had his first experience with the criminal justice system for white collar crime.

In 1971, three investors in a company named Armstrong Investors amended a civil complaint in the United States District Court for the Southern District of New York, in the case of Delfino v. Armstrong Investors S.A., seeking to recover $13.5 million in damages for the alleged weakening of their investment by fraudulent or negligent conduct of Armstrong, its affiliates and partners, including Everest Management Corporation (the investment manager for Armstrong). Galanis was an officer [ [http://www.johnklotz.com/galanis2.htm Defense attorney John C. Klotz website] ]

Ultimately, nine criminal actions were brought for violations of the securities laws. Galanis was charged with looting the securities and cash of domestic and offshore mutual funds and also charged with engaging in a scheme to defraud domestic and foreign mutual funds, and was sentenced to prison [ [http://sechistorical.org/collection/papers/1970/1973_SEC_AR.pdf SEC Annual Report, 1973] ]

1980s

On June 8, 1983, Galanis was charged, along with two former Chase Manhattan Bank Vice presidents with stealing $9.5 million from Chase through fraudulent loans in 1978 and 1979. The case was brought by Manhattan District Attorney, Robert M. Morgenthau.On May 12, 1987, Galanis was charged in separate Federal and state cases in Manhattan with stealing more than $115 million from investors and cheating the Government of millions worth of dollars false tax deductions [ [http://query.nytimes.com/gst/fullpage.html?res=9B0DE1DA1E3AF930A25756C0A961948260 "Shelter Promoter is charged", New York Times, By Arnold H. Lubasch, May 13, 1987] ] .Galanis was promoting a tax-shelter. In the Federal case, as announced by then United States Attorney Rudolph W. Giuliani in Manhattan. The Federal case involved "a massive racketeering scheme" with Galanis operating a tax-shelter program that obtained about $40 million from about 2,500 investors. Giuliani called Galanis, “a career white collar criminal” [ [http://www.jailhurwitz.com/textfiles/PART1A.TXT Jail Charles Hurwitz website] ] The scheme was this. Galanis’ company lent the investors $4 for each $1 they invested and told them that they were eligible to deduct four times their actual investment on their taxes. However, the loans were fabricated.In the New York State case, Galanis was charged with selling real-estate tax shelters involving the Nashua Trust Company, which was said to be acquiring and developing non-casino hotels in Atlantic City [ [http://www.johnklotz.com/galanis3.htm "Behind The Project, A Man Protected By A Maze", Philadelphia Inquirer, George Anastasia and Fen Montaigne, Sunday, June 15, 1986] ] . None of that work ever happened.As many as 1,400 investors entrusted Galanis with $75 million. The cash was used to pay other debts with $6 million going to Galanis’ family.
Eddie Murphy was an investor with Galanis [ [http://www.forbes.com/forbes/2000/0918/6608186a_print.html "The Long Reach Of John Peter Galanis", Forbes, Bernard Condon, September 18, 2000] ] .

On September 16, 1987, a new 58-count RICO indictment was served to Galanis, along with eight others, for a Greenwich, Connecticut based racketeering enterprise.

Here, Galanis’ company took control of three mutual funds in Oakland, California, ISI Trust Fund, ISI Growth Fund and ISI Income Fund. Galanis was accused of obtaining $3.9 million by selling the funds securities at inflated prices and also fraudulently obtaining control of the Columbia Federal Savings Bank of Westport, Connecticut through lying to the Federal Home Loan Bank Board [ [http://query.nytimes.com/gst/fullpage.html?res=9B0DEFD71638F934A2575AC0A961948260 "8 Indicted In Fraud Case", THE ASSOCIATED PRESS, September 17, 1987] ] .

On September 29, 1988, Galanis was ultimately sentenced to 27 years in a Federal prison for 44 counts of involvement in a racketeering enterprise after being convicted in July 1988.

He stated at his sentencing, cquote|My arrogance did not allow me to fully examine the events through another's eyes. I thought of myself as a kind man, imparting good values, not a racketeer. [ [http://query.nytimes.com/gst/fullpage.html?res=940DE6DB103DF933A0575AC0A96E948260 "27-Year Term For Fraud", Associated Press, September 30, 1988] ]

2000s

In 2001, Galanis was released from prison on a work release program and disappeared. [ [http://www.highbeam.com/doc/1P1-47739221.html Feds: "Ecstasy ring linked to mob, Kosovo" , United Press International, 10-25-2001] "...John Peter Galanis, a fugitive financier who disappeared earlier this year from a prison work-release program while serving prison time for swindling investors out of millions of dollars"] [ [http://www.cybersleuths.com/news/00__2001news/01232001.3658.htm "Swindler walks away from work release program - John Peter Galanis, 57 - at large", Boston Globe, Jan 22 2001] ]

References

Additional Information

Jason Galanis