Cooperstown Man Sentenced to 78 Months for Money Laundering, Filing False Tax Return
ALBANY, NEW YORK – Thomas K. Lagan, age 61, of Cooperstown, New York, and formerly of Slingerlands, New York, was sentenced today to 78 months in prison, to be followed by 2 years of supervised release, for money laundering and filing a false tax return in connection with the theft of approximately $11.8 million from estates for which he served as a fiduciary.
The announcement was made by:
- United States Attorney Grant C. Jaquith;
- New York Attorney General Letitia James;
- James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); and
- Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of IRS- Criminal Investigation.
Senior United States District Judge Lawrence E. Kahn also ordered Lagan to pay $7,707,450 in restitution, and to forfeit the following as proceeds of his crimes: 10 bank and brokerage accounts; an additional $255,000 already paid to the Government; three properties in Otsego County; a 2016 Mercedes Benz S550; a 2015 Jeep Wrangler Sport; a 2015 Lexus RX450; and a 2015 Sea-Doo jet ski and accompanying trailer.
In a related case prosecuted by the New York Attorney General’s Office, Lagan pled guilty, in Albany County Court, to grand larceny in the first degree, and was sentenced to 4 to 12 years in prison. The federal and state terms of imprisonment will run concurrent to one another.
In pleading guilty, Lagan admitted that between November 2011 and February 2018, he conspired with Richard J. Sherwood to launder the proceeds of a scheme to defraud the estates of three sisters: Pauline Bruggeman, Anne Urban, and Julia Rentz.
Sherwood pled guilty in June 2018 to federal and state charges. He is scheduled to be sentenced on December 19, 2019.
United States Attorney Grant C. Jaquith stated: “Fueled by insatiable greed, Thomas Lagan stole millions of dollars earmarked for churches and civic organizations. Lagan was trusted to carry out his victims’ charitable endeavors, but betrayed them after they died. Today’s sentence holds him accountable for his despicable behavior and ensures that his crimes won't pay.”
FBI Special Agent in Charge James N. Hendricks stated: “Thomas Lagan chose to steal millions of dollars from estates meant for churches and charitable organizations. The FBI takes our responsibility to investigate and pursue those who commit fraud for personal gain very seriously. We will continue working with our law enforcement partners to hold accountable those who use illegal means and criminal behavior to take advantage of others.”
IRS-CI Special Agent in Charge Jonathan D. Larsen stated: “Mr. Lagan failed to comply with some of the most basic taxpayer responsibilities. Even worse, his self-seeking actions have deprived charitable organizations of funds intended to serve individuals in need. IRS-CI, along with its law-enforcement partners, is committed to impartially enforcing our country’s tax laws. Today’s sentencing should serve as a deterrent to criminals looking to enrich themselves by stealing charitable contributions donated by well-intended citizens.”
Lagan was an investment advisor and attorney. Sherwood, an attorney who served as Guilderland Town Justice, practiced primarily in the area of trusts and estates.
Starting in 2006, they provided estate planning and related legal services to Capital Region philanthropists Warren and Pauline Bruggeman, and to Pauline’s sister, Anne Urban, all of Niskayuna, New York. They were advising the Bruggemans when, in 2006, the Bruggemans signed wills directing that all their assets go to charities, churches and civic organizations, aside from bequests to Anne Urban and Julia Rentz, Pauline’s sisters.
Warren Bruggeman died in April 2009, and Pauline died in August 2011. At the time of her death, Pauline had personal and trust assets valued at approximately $20 million.
In pleading guilty, Lagan admitted that after Pauline Bruggeman’s death, he and Sherwood conspired to steal, and did steal, millions of dollars from her estate as well as from Anne Urban, who died in 2013. Their conspiracy came to include the diversion and transfer to themselves of several million dollars belonging to Julia Rentz, a resident of Ohio, who was suffering from dementia at the time of the thefts and died in 2013.
Lagan admitted that he and Sherwood stole $11,831,563, and that nearly $6.3 million was transferred outright to him.
Lagan admitted that he and Sherwood induced Anne Urban to create a trust whose purpose, unknown to her, was to allow them to transfer Bruggeman/Urban assets to themselves. Sherwood and Lagan also set up more than 10 bank accounts, and created a limited liability company (Empire Capital Trust, LLC), to first conceal the theft of the money and then transfer the money to themselves.
Lagan also admitted to filing false federal tax returns in 2013 and 2015. These returns were false because he did not report, as other income, millions of dollars that he received from the fraudulent scheme.
The federal case was investigated by the FBI and IRS-CI, and was prosecuted by Assistant U.S. Attorney Michael Barnett. Assistant U.S. Attorneys Adam J. Katz and Alicia G. Suarez prosecuted the asset forfeiture aspects of the case.
The state case was 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 Jose 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 Acting Chief John Reidy. Financial analysis was provided by Principal Auditor Investigator Meaghan Scotellaro of the Forensic Audit Section under the supervision of Deputy Chief Auditor Sandy Bizzarro and Chief Auditor Edward J. Keegan, Jr. Senior Analyst Sara Pogorzelski assisted in the investigation.