John Peter Galanis

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

John Peter Galanis (born 1943) was an American financier in the 1970s and 1980s, who became a notorious white-collar criminal.[1] He was tried and sentenced to 27 years in federal prison as a result, of which he served 13 years. Galanis has four sons and currently resides in California.

Early life[edit]

Galanis was born in the Boston, Massachusetts area and grew up on a farm.

History of financial crimes[edit]


In 1971, three investors in a company named Armstrong Investors amended a civil complaint in the United States District Court for the Southern District of New York, in the case of Delfino v. Armstrong Investors S.A., seeking to recover $13.5 million in damages for the alleged weakening of their investment by fraudulent or negligent conduct of Armstrong, its affiliates and partners, including Everest Management Corporation (the investment manager for Armstrong). Galanis was an officer.[2]

Ultimately, nine criminal actions were brought for violations of the securities laws. Galanis was charged with looting the securities and cash of domestic and offshore mutual funds and also charged with engaging in a scheme to defraud domestic and foreign mutual funds, and was sentenced to prison.[3]


On June 8, 1983, Galanis was charged, along with two former Chase Manhattan Bank vice presidents with stealing $9.5 million from Chase through fraudulent loans in 1978 and 1979. The case was brought by Manhattan District Attorney, Robert M. Morgenthau.

On May 12, 1987, Galanis was charged in separate federal and state cases in Manhattan with stealing more than $115 million from investors and cheating the government of millions of dollars in false tax deductions.[4] Galanis was promoting a tax shelter.

In the federal case, as announced by then United States Attorney Rudolph W. Giuliani in Manhattan, involved "a massive racketeering scheme" with Galanis operating a tax shelter program that obtained about $40 million from about 2,500 investors. Giuliani called Galanis "a career white-collar criminal."[5] The scheme was this: Galanis's company lent the investors $4 for each $1 they invested and told them that they were eligible to deduct four times their actual investment on their taxes. However, the loans were fabricated.

In the New York state case, Galanis was charged with selling real-estate tax shelters involving the Nashua Trust Company, which was said to be acquiring and developing non-casino hotels in Atlantic City.[6] None of that work ever happened. As many as 1,400 investors entrusted Galanis with $75 million. The cash was used to pay other debts with $6 million going to Galanis's family. Comedic film actor Eddie Murphy was an investor with Galanis.[7]

On September 16, 1987, a new 58-count Racketeer Influenced and Corrupt Organizations Act (RICO) indictment was served to Galanis, along with eight others, for a Greenwich, Connecticut-based racketeering enterprise.

Here, Galanis' company took control of three mutual funds in Oakland, California, ISI Trust Fund, ISI Growth Fund, and ISI Income Fund. Galanis was accused of obtaining $3.9 million by selling the funds securities at inflated prices and also fraudulently obtaining control of the Columbia Federal Savings Bank of Westport, Connecticut through lying to the Federal Home Loan Bank Board.[8]

On September 29, 1988, Galanis was ultimately sentenced to 27 years in a federal prison for 44 counts of involvement in a racketeering enterprise after being convicted in July 1988.

He stated at his sentencing,

My arrogance did not allow me to fully examine the events through another's eyes. I thought of myself as a kind man, imparting good values, not a racketeer.[9]


In 2001, Galanis was released from prison on a work release program and disappeared.[10][11]