State and federal officials said a Cooperstown man pleaded guilty Wednesday to charged in connection with the theft of about $11.8 million from estates for which he served as a fiduciary.

United States Attorney Grant C. Jaquith, New York Attorney General Letitia James and officials of the FBI and IRS announced in a media release that Thomas K. Lagan, 60, pleaded guilty to money laundering and filing a false tax return

Lagan, an investment adviser and attorney, reportedly admitted that he conspired with Richard J. Sherwood between November 2011 and February 2018 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 pleaded guilty on April 30 in Albany County Court, to a charge of first-degree grand larceny.

Sherwood, an attorney who served as Guilderland Town Justice, pleaded guilty in June 2018 to federal and state charges.

Jaquith said in the release: “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 said: “Thomas Lagan’s despicable greed and deceit led to the theft of money meant for churches, charities, and even a woman 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.”

Starting in 2006, the release said, Lagan and Sherwood 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. 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 about $20 million.

Lagan admitted that he and Sherwood conspired to steal, and did steal, millions of dollars from Pauline Bruggeman’s estate, as well as from Anne Urban, who died in 2013. Officials said the conspiracy included the diversion and transfer to themselves of several million dollars belonging to 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 also admitted that he and Sherwood convinced 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 allegedly 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. The returns were false because he did not report, as other income, about $5.4 million that he received from the fraudulent scheme, officials said.

Lagan faces up to 20 years in prison, a maximum fine of $250,000, and up to three years of post-imprisonment supervised release when he is sentenced on Dec. 12, by Senior United States District Judge Lawrence E. Kahn. 

Lagan had been a member of Cooperstown's Economic Development and Sustainability Committee. He resigned from that position in February 2018.

He was a partner in the BTP Cooperstown LLC group, which tried to build a hotel in the village at 124 Main St. in 2014 and 2015. According to public records, BTP also bought the Key Bank building, a four-story building at 99 Main St. in February 2015 and a year earlier bought a historic building across the street, at 134 Main St. 

The plan to build a hotel on Main Street was abandoned in 2015 after the denial of several variances that would have allowed a four-story structure.

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