Jason Galanis, an ex-investment banker, who is already serving eleven years behind bars for stock rigging, has been sentenced to five years in prison for fraud involving a Native American tribal bond. He must forfeit over $43M and pay nearly $44M of restitution.
In the tribal bond scam, Galanis and his father John Galanis are accused of convincing Oglala Sioux Tribe affiliate Wakpamni Lake Community Corp. of issuing $60M in municipal bonds. The two of them and others then misappropriated the proceeds from the bonds, including $8.5M for Jason personally. Meantime, bond investors were left with worthless securities while the tribal corporation had no means of paying the interest payments that it owed on the bonds.
According to the prosecution, the bond scam bilked Galanis’ tribal bond clients and the investing public while “defrauding the Native American tribe into issuing bonds.” Galanis and his co-conspirators sold the bonds, which were illiquid, to pension funds, and stole the profits. Meantime, they allegedly hid conflicts of interest and the fact that the bonds were not liquid.
Galanis pleaded guilty to his involvement in the tribal bond fraud earlier this year.
$20M Pump-and-Dump Scam Involving Gerova Financial Group
Last summer, he pleaded guilty to a $20M pump-and-dump fraud involving the rigging of shares of Gerova Financial Group Ltd., which is now defunct. (For recent news developments on the securities fraud involving Gerova’s ex-president Gary Hirst, read our blog post, which we link to below.)
In addition to his early conviction and its accompanying 11-years and 3-month prison term, Galanis was ordered to forfeit $38M, as well as a mansion in California and a New York apartment. Previous to that, the US Securities and Exchange Committee fined him $60K in 2007 for allegedly preparing false accounting information for Penthouse International. He was a large stakeholder of the company at the time.
Except for six months, Galanis’s latest prison term will run concurrently with his earlier sentence.
Shepherd Smith Edwards and Kantas, LTD LLP is an investment fraud law firm. We help investors to recover their investment losses.
Jason Galanis Sentenced To More Than 11 Years In Prison For Securities Fraud, Justice.Gov, February 15, 2017
Ex-Los Angeles investment banker gets extra five years for tribal bond fraud, Reuters/Business Insider, August 11, 2017
Securities Fraud: Ex-Gerova Financial Head is Sentenced to Six Years, Black Elk Claims Reinsurer Aided Platinum Fund Scam, and Bank of Tokyo-Mitsubishi Is Accused of Spoofing, Securities Fraud, August 4, 2017