Judge, financial adviser allegedly looted trust funds of $4 million

Attorney general says pair stole from estate of local philanthropists Warren and Pauline Bruggeman

ALBANY — A Guilderland town judge and a financial adviser have been charged with stealing more than $4 million from family trusts set up by a pair of now-deceased philanthropists.

The state Attorney General’s Office announced the arrests Friday. The judge, Richard Sherwood, and the adviser, Thomas Lagan, were arraigned in Albany City Court on two counts each of first-degree grand larceny, one count of first-degree scheme to defraud, and two counts of first-degree criminal possession of stolen property.

The case centers on trusts created by Capital Region philanthropists Warren and Pauline Bruggeman of Niskayuna, who died in 2009 and 2011, respectively. During a long career, Warren Bruggeman was a vice president in General Electric’s nuclear power business. 

The Attorney General’s Office offered the following facts and allegations:

  • Sherwood and Lagan (who also is an attorney) have provided estate planning and related legal and financial services to the Bruggemans and to Pauline Bruggeman’s sister, Anne Urban, since at least 2006.
  • The Bruggemans each created a revocable trust, which contained sub-trusts designed to provide for Anne Urban and Pauline’s other sister, Julia Rentz. Other funds were to be awarded to Anne Urban and Julia Rentz outright upon the deaths of the Bruggemans.
  • In 2011, the Anne S. Urban Irrevocable Trust was created using some of the funds from the Bruggeman trusts; Sherwood was named trustee and Lagan was named successor trustee.
  • In one instance, a sub-trust with approximately $2 million was to be returned to the Pauline Bruggemen Revocable Trust for distribution to six named charities upon Anne’s death; the complaint alleges that, rather than returning those funds after Urban died in 2013, the funds were disposed of through the Anne S. Urban Irrevocable Trust primarily for the benefit of Sherwood and Lagan. 
  • In another part of the scheme, Sherwood and Lagan allegedly conspired to deceive an Ohio attorney into sending more than $2 million of Julia Rentz’s money to the Anne S. Urban Irrevocable Trust under the premise that it would be sent to charity; in fact, Sherwood and Lagan shared those proceeds. 
  • Sherwood and Lagan allegedly formed the Empire Capital Trust to benefit themselves and funded it with over $1 million of stolen money. 
  • In January 2015, they allegedly transferred $3,598,908 from the  Anne S. Urban Irrevocable Trust to a bank account in Sherwood’s name and $2,693,865.92 from the same trust to an account in Lagan’s name.

The complaint alleges that Sherwood and Lagan stole a total of $4 million from the trusts.

“As we allege, the defendants orchestrated a complex scheme to steal millions from trusts they were responsible for protecting,” said New York Attorney General Eric Schneiderman. 

Categories: News, Schenectady County

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