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Feds: Man admits money laundering in theft of nearly $12M from Niskayuna philanthropists' estates

Feds: Man admits money laundering in theft of nearly $12M from Niskayuna philanthropists' estates

He is to be sentenced in December
Feds: Man admits money laundering in theft of nearly $12M from Niskayuna philanthropists' estates
Photographer: Shutterstock

ALBANY — A former Slingerlands man admitted Wednesday in federal court to money laundering and false tax return counts in connection to the theft of nearly $12 million from the estates of three Niskayuna philanthropists, federal prosecutors said.

The pleas appear to be the final ones in the ongoing case that involved the Slingerlands man and a former town judge working together to take the money.

Thomas K. Lagan, 60, now of Cooperstown, previously pleaded guilty to state charges in April. His co-defendant, former Guilderland Town Justice Richard Sherwood, pleaded guilty to both state and federal charges last year.

The two men provided estate planning and related legal services to philanthropists Warren and Pauline Bruggeman, and to Pauline's sister, Anne Urban. All three were from Niskayuna, officials said.

Lagan and Sherwood were advising the Bruggemans in 2006 when the couple signed wills directing that their assets go to charities, churches and civic organizations, along with bequests to Urban and Pauline's other sister, Julia Rentz, officials said.

Warren Bruggeman died in 2009, his widow in 2011. At the time of Pauline's death, her assets were valued at $20 million.

Lagan admitted that after Pauline's death, he and Sherwood conspired to steal millions from her estate, as well as Urban's. Urban died in 2013. The scheme also came to include millions belonging to Rentz.

Rentz, then a resident of Ohio, was suffering from dementia at the time of the thefts and died in 2013, prosecutors said.

Lagan admitted that he and Sherwood stole $11,831,563, and that nearly $6.3 million was transferred outright to him, prosecutors said. An additional $1.96 million transferred to an entity, Empire Capital Trust, LLC, that he and Sherwood controlled, prosecutors said. 

Lagan admitted that he and Sherwood induced Urban to create a trust whose purpose, unknown to her, was to allow Lagan and Sherwood to transfer the Bruggeman/Urban assets to themselves, prosecutors said. Sherwood and Lagan also set up more than 10 bank accounts, and created the limited liability company 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 — false because he did not report $5.4 million in proceeds he received from the scheme.

"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," U.S. Attorney Grant C. Jaquith said in a statement. "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.”

Lagan is to be sentenced in December and faces up to a maximum of 20 years in prison, prosecutors said.

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