ALBANY, NEW YORK – Thomas K. Lagan, age 60, of Cooperstown, New York, and formerly of Slingerlands, New York, pled guilty today to 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.

 

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. 

In a related case being prosecuted by the New York Attorney General’s Office, Lagan pled guilty on April 30, 2019, in Albany County Court, to grand larceny in the first degree.

Lagan’s co-conspirator, Sherwood, pled guilty in June 2018 to federal and state charges. 

United States Attorney Grant C. Jaquith stated: “Thomas Lagan’s fraud was staggering, both in terms of the amount stolen and in his misuse of his professional standing and betrayal of longtime clients who trusted him to direct their money to family members, churches, charities, and other organizations after they died.  Instead, Lagan and Richard Sherwood lined their own pockets and then lied about it on their tax returns. Now they will be held accountable for their contemptible crimes.”

FBI Special Agent in Charge James N. Hendricks stated: “Thomas Lagan’s despicable greed and deceit led to the theft of money meant for churches, charities, and even a women suffering from dementia.  He took advantage of his client’s trust for his own personal gain and will now face the consequences of his fraudulent actions. The FBI, in concert with our federal and state partners, will continue to identify and stop those who line their own pockets at the expense of others.”

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 other sister.

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, with an additional $1.96 million transferred to an entity, Empire Capital Trust, LLC, that he and Sherwood controlled. 

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, about $5.4 million that he received from the fraudulent scheme.

IRS-CI Special Agent in Charge Jonathan D. Larsen stated: “Society places attorneys/financial advisors in positions of trust, and the clients victimized in this case clearly trusted the defendant to direct their money according to their wishes.  Lagan violated this faith purely out of selfishness and greed, causing significant harm to the entire community and especially those that would have benefited from the victims’ legacies.  IRS-CI Special Agents are working tirelessly to protect taxpayers from fraud and to hold those in positions of power and trust accountable.” 

Lagan faces up to 20 years in prison, a maximum fine of $250,000, and up to 3 years of post-imprisonment supervised release when he is sentenced on December 12, 2019, by Senior United States District Judge Lawrence E. Kahn.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

The federal case was investigated by the FBI and IRS-CI, and is being prosecuted by Assistant U.S. Attorney Michael Barnett. 

The state case is being 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.

ALBANY, NEW YORK – Thomas K. Lagan, age 60, of Cooperstown, New York, and formerly of Slingerlands, New York, was arraigned today on money laundering and tax charges relating to 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 Barbara D. Underwood; James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation; and James D. Robnett, Special Agent in Charge of the New York Field Office of IRS-Criminal Investigation.

A federal indictment charges that Lagan, between November 2011 and February 2018, conspired with Richard J. Sherwood to launder the proceeds of a fraud conspiracy.  Lagan is also accused of failing to report more than $5.3 million in income to the Internal Revenue Service in 2013 and 2015.  In a separate indictment being prosecuted by the New York Attorney General’s Office, Lagan is charged in Albany County Court with grand larceny in the first degree, criminal possession of stolen property, and a scheme to defraud.  The charges in the indictments are merely accusations. The defendant is presumed innocent unless and until proven guilty.

Lagan appeared today before United States Magistrate Judge Daniel J. Stewart, who ordered him released on his own recognizance. 

If convicted on the federal charges, Lagan would face up to 20 years in prison, a maximum fine of $250,000, and up to 3 years of post-imprisonment supervised release.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors. 

Lagan’s alleged co-conspirator, Sherwood, pled guilty in June 2018 to federal and state charges. 

Sherwood, an attorney since 1988, practiced primarily in the area of trusts and estates.  Starting in about 2006, he 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.  Sherwood was advising the Bruggemans when, in 2006, they 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 other sister.

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, Sherwood admitted that after Pauline Bruggeman’s death, he and Lagan conspired to steal and launder 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. 

The federal case is being investigated by the FBI and IRS-CI, and is being prosecuted by Assistant U.S. Attorney Michael Barnett. 

The state case is being prosecuted by Assistant Attorneys General Christopher Baynes and Matthew Peluso of the Attorney General’s Public Integrity Bureau, under the supervision of Bureau Chief Daniel G. Cort and Deputy Bureau Chief Stacy Aronowitz. The Criminal Justice Division is led by Executive Deputy Attorney General Margaret Garnett.  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 Chief Dominick Zarrella. Meaghan Scovello, Associate Forensic Auditor, provided the financial analysis. The Forensic Audit Section is supervised by Edward Keegan. Senior Analyst Sara Pogorzelski assisted in the investigation.