Patriarch Of Father 'N Sons Pump And Dump Scam Pleads Guilty To Protect One Of Three Offspring

That'll make for awkward dinner conversation.
Author:
Publish date:
Getty Images

Jason+Derek just outside the shot. (Getty Images)

Yesterday, we discussed the uncomfortable situation going down in the Stewart family, wherein ex-Perella Weinberg employee Sean Stewart might go to jail because of a recording of his father, Bob Stewart, talking to a government witness about his son giving him inside information obtained at work.* Today, there's awkward state of affairs of the Galanis clan, whose father John, and three sons Jason, Jared and Derek, have been accused of running a pump and dump scheme. It's unclear what Jared did to become dad's favorite but now this is happening:

[John] Galanis pleaded guilty Wednesday before U.S. Magistrate Judge Sarah Netburn in New York to one count of securities fraud and one of conspiracy to commit securities fraud, in exchange for a sentence of as much as 10 years in prison and a fine of $30,000 to $5 million. He also agreed to forfeit more than $19 million. His lawyer, David Touger, said after the hearing that his client pleaded guilty to avoid implicating his son Jared, without mentioning the other children named in the indictment. 

That's going to take some therapy to get over! In related news, for those of you wondering, yes, 50% of Team Galanis is battling securities fraud charges on multiple fronts:

Jason and John Galanis face additional charges, in an unrelated case, that they stole the proceeds of a $68 million bond issue in the name of a South Dakota American Indian tribe. They used the proceeds to pay legal bills and taxes, buy luxury goods and make $3 million in improvements to Jason Galanis’s Bel Air, California, home, prosecutor charged.

Patriarch in Alleged Pump-and-Dump Scheme Pleads Guilty [Bloomberg]

Related: In Retrospect, L.I. Father Probably Would *Not* Have Recounted Story About Son Chiding Him For Failing To Trade On Inside Tip, In Presence Of Guy Wearing A Wire

*Stewart the Younger's lawyers claim that Daddy Stewart obtained and traded on information unbeknownst to his son; prosecutors say otherwise.

Related

Former Madoff Employee Pleads Guilty To *A* Madoff Securities Scam Just Not *The* Madoff Securities Scam

You know what has got to suck? When you decide to start charging stuff that doesn't fall under "business expenses" to your corporate card and engage in a few other amateur hours scams that probably wouldn't have been found out (or, if discovered, not taken to the authorities because your boss had high tolerance for fraud) but then they are because the CEO of your firm had to go and engage in the largest Ponzi scheme on record, which shone an uncomfortable light on company personnel and all of the cheese, popcorn, and salsa of the month clubs you joined (for example).  Craig Kugel knows what we're talking about. The son of a longtime trader for convicted Ponzi scheme operator Bernard Madoff pleaded guilty to conspiracy and other criminal charges Tuesday, but denied any involvement in the decades-long fraud. Craig Kugel, the son of David L. Kugel, a former supervisory trader in Madoff's proprietary-trading operation, admitted to filing false forms that claimed people were on the Madoff payroll when they didn't actually work for the firm and to not declaring as income personal expenses charged to the firm's corporate credit card. Those individuals were paid salary and benefits, but weren't actual employees, he said. "I am sorry for my lapses in judgment in committing these federal crimes, but I want to make clear I had nothing to do with the Madoff Ponzi scheme and I was never involved in the Madoff trading operation," Craig Kugel said at a hearing before U.S. District Judge Laura Taylor Swain in Manhattan. Ex-Madoff Employee Pleads Guilty to Conspiracy [WSJ]