As investment fraud attorneys, our law firm learned about Glen Galemmo's Ponzi scheme last summer when we started receiving frantic calls from individual investors who trusted Galemmo with their money and who were becoming concerned about whether it was a scam. Within ten minutes of talking to the first investor who contacted our office we knew it was a Ponzi scheme.
Ohio Investors lost millions of dollars in Glen Galemmo's Ponzi scheme, and just this morning, he pled guilty to federal charges of wire fraud and money laundering. Galemmo is the former owner of Queen City Investments, where he operated a huge Ponzi scheme. According to the federal charges, Galemmo promised investors that they would see returns up to 30 percent.
Sentencing is next for Galemmo. Both wire fraud and money laundering can warrant up to 20 years in prison, which means that Galemmo could face 40 years in prison, although he'll likely only be sentenced to 8 to 15 years based on our experience working on similar cases.
The United States Attorney's Office said in a statement that 200 investors lost an estimated $7 million to $20 million as a result of Galemmo's Ponzi scheme, but investors are claiming their losses were much greater than this – as much as $300 million.
In addition to a prison sentence, Galemmo could face criminal fines up to $750,000 not including financial restitution to victims. Galemmo's Park Avenue office building, two homes, five vehicles and $1.7 million in personal investments will all be forfeited. Sentencing is scheduled to take place on May 28th.
We knew from the very first call to our office that every one of Galemmo's victims had a slam dunk case against him and his companies for violations of Ohio's securities laws (and many other claims). Of course, after handling hundreds of investment fraud claims, we also knew that Galemmo and his companies would not have sufficient assets to make the investors whole. The real question is whether there are other third party financial institutions that could be held responsible for assisting Galemmo in conducting his Ponzi scheme. Our firm has handled several recent cases with very similar facts and has been successful in recovering investor losses against third parties.
About Galemmo's Scheme
According to Galemmo's indictment, he operated his scheme from 2005 to July 2013. Although he took over $100 million from investors, he only invested a small fraction of that, keeping the rest for his own personal uses. Galemmo conned investors by using a position of trust. Many of the victims were friends, members of his church or in his social network.
Galemmo also manipulated his investors by starting them out on small investments that supposedly performed relatively well. This encouraged them to keep investing and invest more money. Galemmo often associated himself with trusted names such as Goldman Sachs to add credibility to his scheme. Some have described Galemmo's Ponzi scheme as the largest financial fraud in Ohio.