INVESTMENT COMPANY OWNER PLEADS GUILTY TO WIRE FRAUD AND MONEY LAUNDERING
WEDNESDAY JANUARY 15, 2013
Public Affairs Officer
CINCINNATI – Glen Galemmo, 48, of Cincinnati, who owned Queen City Investments and other investment companies in the Cincinnati area, pleaded guilty in U.S. District Court to wire fraud and money laundering, admitting that he defrauded investors by soliciting millions of dollars from them between 2005 and July 2013 and spent the money rather than investing it.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the pleas entered today before Senior U.S. District Judge Herman Weber.
According to court documents, Galemmo lured investors with promotional materials falsely claiming returns of more than 30 percent over seven years.
From 2006 to July 2013, Galemmo received approximately $87 million cumulatively from individual investors, trusts, charitable organizations, and retirement accounts. During this time, Galemmo also received approximately $29 million from some of these investors in the form of short-term loans. The vast majority of these funds were never invested in anything. Rather, the funds were paid to other investors in the form of principal and/or interest payments or spent by Galemmo to finance other businesses or pay for personal expenses.
To induce investors to continue to invest with him, Galemmo mailed or emailed fraudulent monthly statements to investors. To create the monthly statements, each client's principal investment balance was merely multiplied by a fictitious percentage of return, consistent with the returns that Galemmo had promised to his clients. The statements showed positive account balances and fictitious earnings, when in fact, the money had not been invested as promised. Galemmo issued account statements for approximately 260 different investment accounts for the month of April 2013 reporting that these accounts held a total of approximately $109 million. In fact, Queen City Investments held only a small fraction of that balance on behalf of clients.
Galemmo’s investment scheme involved approximately 200 investors.
Each crime is punishable by up to 20 years in prison, restitution and forfeiture but the court will determine the actual sentence after it conducts its own investigation. Judge Weber scheduled sentencing for May 28, 2014 at 10 a.m.
Galemmo agreed to forfeit three pieces of real estate, including a condo in Marco Island, Florida, the contents of bank and investment accounts and five vehicles. The plea agreement requires Galemmo to make restitution to the investors in an amount to be determined by the court prior to sentencing.
“A person who creates a web of financial lies will soon be caught up in it. Mr Galemmo offered rates of return of over 30% to his clients and unfortunately these were false promises, “ said Kathy A. Enstrom, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the investigation by IRS special agents as well as Assistant U.S. Attorneys Emily Glatfelter and Tim Mangan, who are prosecuting the case.