Thomas Lagan of Cooperstown was arraigned Friday on charges of plundering more than $11.8 million from elderly clients’ family trusts.
Lagan, 60, faces federal indictments for money laundering and filing false tax returns, which allege that he conspired with lawyer and former town of Guilderland Judge Richard J. Sherwood between November 2011 and February 2018. 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.
Lagan appeared Friday 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.
Sherwood pled guilty in June to federal and state charges. He practiced as an attorney mainly in trusts and estates, and provided estate planning and legal services to Albany philanthropists Warren and Pauline Bruggeman, and to Pauline’s sister, Anne Urban, of Niskayuna, starting in about 2006. The Bruggemans signed wills while he was advising them in 2006 that directed 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.
Sherwood admitted in pleading guilty that after Pauline Bruggeman’s death, he and Lagan stole and laundered millions of dollars from her estate as well as from Anne Urban, who died in 2013. Several million dollars belonging to Julia Rentz was also diverted and transferred to themselves. Rentz, a resident of Ohio, was suffering from dementia at the time of the thefts and died in 2013.
Sherwood agreed to forfeit $3,742,211.65 as well as a residence on Galway Lake that previously belonged to the Bruggemans. He is facing three to ten years in prison.
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.
Erin Jerome, staff writer, may be reached at firstname.lastname@example.org or (607) 441-7221. Follow her at @DS_ErinJ on Twitter.