June 28, 2018 / 9:59 PM / 3 months ago

New York jury finds three guilty of $60 mln tribal bond fraud

NEW YORK, June 28 (Reuters) - A jury in Manhattan federal court on Thursday found three people guilty of orchestrating a scheme to defraud a Native American tribe and multiple pension funds through the issue of $60 million worth of tribal bonds, prosecutors said.

John Galanis, 74; Devon Archer, 44; and Bevan Cooney, 45, were convicted of conspiracy and securities fraud following a 5-1/2-week trial, according to a statement from the office of Deputy U.S. Attorney Robert Khuzami.

“As a unanimous jury swiftly found, these defendants orchestrated a highly complex scheme to defraud a Native American community and multiple pension funds, all to corruptly bankroll their own personal and business interests,” Khuzami said in a statement.

Lawyers for the defendants could not immediately be reached for comment.

Galanis is already serving a six-year sentence for a separate financial fraud involving manipulation of the stock of now-defunct reinsurer Gerova Financial Group Ltd. His son, Jason Galanis, has pleaded guilty to taking part in both the Gerova and tribal bond schemes, for which he has been sentenced to more than 11 years and five years, respectively.

Prosecutors said John Galanis persuaded an entity affiliated with South Dakota’s Oglala Sioux Nation to issue bonds, using false representations. Jason Galanis, Archer and Cooney fraudulently induced pension funds to invest in the bonds through an investment adviser firm they controlled, according to prosecutors.

Prosecutors said the defendants misappropriated the proceeds of the bond issues for themselves. The tribe was not accused of wrongdoing. (Reporting by Brendan Pierson in New York; Editing by Peter Cooney)

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