1/2/2024 0 Comments Toa new yorkJohn Galanis, for example, secretly received $2.35 million in proceeds of the first bond issuance, which he spent on a variety of personal expenses and luxury items, including cars, jewelry, and hotel expenses. Specifically, although the Tribal Bonds were supposed to be invested in an annuity, Dunkerley, at the direction of Jason Galanis, transferred significant amounts of the bond proceeds to support the defendants’ business and personal interests. The defendants and their co-conspirators then misappropriated the proceeds of first Tribal Bond issuance. In addition, Hughes’ clients were not told about substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf. Within weeks of taking control of Hughes, Morton and Hirst placed the entire $28 million first series of Tribal Bonds with Hughes clients but failed to disclose material facts about the Tribal Bonds, including the fact that the Tribal Bonds fell outside of the investment parameters set forth in the investment advisory contracts of certain Hughes clients. Morton and Hirst were installed as Hughes’ Chief Executive Officer and Chief Investment Officer, respectively. Simultaneously, Jason Galanis, with the backing of ARCHER and others, worked to acquire Hughes Capital Management (“Hughes”), a registered investment adviser. The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by John Galanis. Damian Williams, the United States Attorney for the Southern District of New York, announced that DEVON ARCHER was sentenced today by the Honorable Ronnie Abrams to a year and a day in prison for defrauding a Native American tribal entity and various investment advisory clients of tens of millions of dollars in connection with the issuance of bonds by the tribal entity and the subsequent sale of those bonds through fraudulent and deceptive means.įrom March 2014 through April 2016, ARCHER, Bevan Cooney, John Galanis, Jason Galanis, Gary Hirst, Michelle Morton, Hugh Dunkerley, and others engaged in a fraudulent scheme that involved (a) causing the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity, to issue a series of bonds (the “Tribal Bonds”) through lies and misrepresentations (b) deceptively causing clients of asset management firms controlled by Hirst, Morton, and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market and (c) misappropriating the proceeds resulting from those bond sales.
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