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Politics

Jason, John and Derek Galanis Pleaded Guilty to Securities Fraud, Sent to Prison

February 17, 2017

NEW YORK – Jason Galanis was sentenced Wednesday in Manhattan Federal Court to more than 11 years in prison , while John Galanis and his son Derek Galanis were each sentenced today to six years in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”) according to the U.S. Attorney’s Office, Southern District of New York.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Jason Galanis was sentenced today to 135 months in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company. Jason Galanis was also sentenced for defrauding the clients of an investment advisory firm. Jason Galanis pled guilty on July 21, 2016, to two counts of conspiracy to commit securities fraud, one count of securities fraud and one count of investment adviser fraud. Galanis was sentenced today by United States District Judge P. Kevin Castel.

U.S. Attorney Preet Bharara said: “As he previously admitted in his guilty plea, Jason Galanis swindled the shareholders and clients of Gerova Financial and Tag Virgin Islands out of tens of millions of dollars in a massive fraud scheme. Today, he was sentenced to a lengthy prison term for his participation in these fraud schemes.”

In addition to the prison term, GALANIS, 46, was sentenced to three years of supervised release, and was ordered to forfeit $37,591,681.10, as well as his interests in properties in New York and Los Angeles. Judge Castel will set a restitution amount at a future proceeding.

Preet Bharara, announced on Thursday that John Galanis and his son Derek galanis were each sentenced today to six years in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and defrauding the shareholders of that company. John Galanis and Derek Galanis each pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud, on July 20, 2016, and August 15, 2016, respectively. Both were sentenced on Thursday by United States District Judge P. Kevin Castel.

U.S. Attorney Preet Bharara said: “John and Derek Galanis conspired to have more than $70 million worth of stock issued, hiding Jason Galanis’s control of those shares, so that they could cash out at the expense of unwitting victim investors. Today, they have been sentenced to prison for their securities fraud.”

In addition to the prison terms, John Galanis, 73, and Derek Galanis, 44, were each sentenced to three years of supervised release, and each ordered to forfeit $19,038,650.53. Judge Castel will set a restitution amount for each at a future proceeding.

Jason Galanis, who pled guilty to two counts of conspiracy to commit securities fraud, one count of securities fraud, and one count of investment adviser fraud, was sentenced to a term of 135 months in prison on February 15, 2017. Jared Galanis, who pled guilty to misprision of a felony, was sentenced to a term of 150 days in prison on January 11, 2017. Gary Hirst, who was found guilty after trial of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud, is scheduled to be sentenced on March 17, 2017. Defendant Ymer Shahini remains a fugitive. The allegations contained in the Indictment as to Shahini are merely accusations, and he is presumed innocent unless and until proven guilty.

From 2009 to 2011, Jason Galanis, along with his co-conspirators John Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova and the investing public by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on JASON GALANIS and his co-conspirators, without adequate disclosure of Jason Galanis’s role in directing the transactions or the benefits received by Jason Galanis and his co-conspirators.

 

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