Search
Most Recent
AdSurfDaily Agape agent American Integrity Aronson asset sales Attorney av bar reg baker bank bank of america Bankruptcy baumann bermudez black diamond blackwell bridge loan bull cattle CD celebrity cftc charity china China Voice church cityfund claims claims process clawback commission commodities commodity pool computer program congress Crown Forex currency death sentence denver diamond bar disgorgement Distribution Dodd-Frank donnan Dreier dunhill e-bullion elderly E-M Management SEC england Fairfield family FBI FDIC Fees female ponzi scheme financial advisor fine FINRA football forex fraud fufta fugitive Full Tilt gift card guilty plea GunnAllen hawaii Heckscher HSBC india invers forex janvey John Morgan JP Morgan kansas ken bell kenzie las vegas lawsuit lawyer libya Lifland machado Madoff Marian Morgan metro dream homes mets milberg millers a game Morgan European Holdings mortgage multiple schemes NCAA Net Winner new jersey notes objection Oxford Patrick Kiley paul burks PermaPave Pettengill Petters Picard poker Ponzi ponzi scheme ponzi scheme database ponzi scheme list Prime Rate profitable sunrise prosun pta puerto rico Rakoff real estate receiver receivership regulation relief defendants religion remission repeat offender restitution Rothstein RRA sec sentencing simmons sipa sipc snelling standing stanford stettin subpoena td bank telexfree treasury bonds treasury strip Tremont Trevor Cook UBS UFTA uga utah venture advisors Wachovia wilpon wire fraud woman zeek zeek rewards zeekler zeekrewards
Social
Recent SEC Releases
« California University Seeks Removal Of Ponzi Schemer's Name From Football Scoreboard | Main | Ponzi Schemes Remain Prevalent In 2014; Over $1 Billion In New Schemes Uncovered »
Thursday
Aug282014

Ohio Man Gets 15 Years For $100 Million Ponzi Scheme

“These offenses and their devastation cannot be tolerated.  The court must inflict a punishment that emphasizes this kind of financial chicanery cannot and does not exist. It’s necessary for this court to send a loud message, an emphatic message, that this kind of conduct cannot be tolerated.”

- U.S. District Judge Herman Weber

A Cincinnati man will spend the next 15 years in federal prison for orchestrating a devastating Ponzi scheme that took at least $100 million from over 140 investors.  Glen Galemmo received the maximum possible sentence from U.S. District Judge Herman Weber pursuant to a plea agreement with prosecutors in which he pleaded guilty to one count of money laundering and one count of wire fraud.  Galemmo will also be ordered to forfeit his assets.  With credit for time served, Galemmo will serve at least 13 years of his sentence.

Galemmo operated Queen City Investment Fund ("Queen City"), along with a dozen other investment entities.  Touting himself as an experienced trader, Galemmo promised lucrative returns to potential investors through investments in stocks, bonds, futures, and commodities.  Investors were provided with promotional materials indicating Queen City had enjoyed a streak of consistently above-average returns, including a return of nearly 20% in 2008 when the S&P 500 experienced a -38.49% loss. Potential investors were assured that Galemmo obtained annual audits of Queen City, and were provided with monthly statements showing steady returns.  In total, Galemmo raised at least $100 million from individuals, trusts, and even charitable organizations.

However, Galemmo's touted prowess as a savvy trader was pure fiction.  Galemmo was able to pay the promised outsized rates of return not through trading stocks and bonds, but from using incoming investor funds to pay existing investors - a classic sign of a Ponzi scheme.  Nor was the Queen Fund audited; rather, Galemmo simply listed the name of an audit firm that had not had a relationship with Galemmo or his fund since 2003.  Galemmo also created fictitious trading and account statements that were distributed to investors.  Investor funds were diverted by Galemmo for a variety of unauthorized uses, including the purchase of real estate, the payment of fictional interest and principal distributions, and even to operate other businesses such as entertainment complexes. 

The scheme came to a sudden halt in July 2013 when investors received an email from Galemmo stating that the funds were shutting down and directing all further inquiries to an IRS agent.  Galemmo was later arrested, and agreed to plead guilty shortly thereafter.  The prospect of recovery for victims appears bleak, with one source reporting that the Department of Justice has estimated that victims could recoup 10% to 20% of their investment.  One group of investors has commenced litigation against several national banks, seeking to hold the banks liable for their assisting Galemmo's scheme.  

Galemmo was allowed to remain free on bond while the Bureau of Prisons determines where he will serve his sentence, which could take as long as two months. 

PrintView Printer Friendly Version

EmailEmail Article to Friend

References (4)

References allow you to track sources for this article, as well as articles that were written in response to this article.
  • Response
    Response: intensedebate.com
    Ohio Man Gets 15 Years For $100 Million Ponzi Scheme - Ponzitracker - Ponzitracker
  • Response
    вконтакте
  • Response
    Response: Silagra Pills
    Those pools that utilize this on a regular basis aren't only visually clean compared to the rest but additionally take using lesser chemicals.
  • Response
    Response: NinjaChefs
    Hi, have you ever before asked yourself to write about Nintendo or PSP?

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>