ALBANY – Former Guilderland Town Judge Richard Sherwood pleaded guilty Monday to charges related to a scheme to steal more than $11 million from family trusts, according to a statement by New York Attorney General Barbara D. Underwood.
Sherwood and an alleged co-conspirator stole the funds from trusts they were responsible for overseeing, according to Underwood’s office.
Sherwood pleaded guilty before Albany County Court Judge Peter A. Lynch to second-degree grand larceny, a felony.
He resigned as Guilderland Town Judge after being charged in the case and now faces up to three to 10 years in prison, according to Underwood’s office.
“New Yorkers should be able to trust that their financial advisors will make sound decisions – not scheme to line their own pockets,” Underwood said in a prepared statement. “We will continue to hold accountable those that try to game the system and violate the public trust.”
According to the criminal complaint, since at least 2006, Sherwood and Thomas Lagan provided estate planning and related legal and financial services to Capital Region philanthropists Warren and Pauline Bruggeman and Pauline Bruggeman’s sister, Anne Urban. In 2011, the Anne S. Urban Irrevocable Trust (AUIT) was created using some of the funds from the Bruggeman trusts with Sherwood named Trustee and Lagan named Successor Trustee, according to the complaint.
In the specific instance to which Sherwood pleaded guilty, a sub-trust with approximately $2 million was to be returned to the Pauline Bruggeman Revocable Trust for distribution to six named charities upon Anne’s death. Rather than returning those funds after Urban died in 2013, the funds were disposed of through the AUIT – primarily for the benefit of Sherwood and Lagan, according to court documents.
In another part of the alleged scheme, Sherwood conspired with Lagan to deceive an Ohio attorney into sending more than $2 million of Julia Rentz’s money to the AUIT under the premise that it would be sent to charity, when in fact Sherwood and Lagan shared those proceeds, according to court documents.
Sherwood and Lagan allegedly formed the Empire Capital Trust to benefit themselves and funded it with more than $1 million of stolen money, according to court documents. In January 2015, they transferred $3,598,908 from AUIT to a Trustco Bank account in Sherwood’s name and $2,693,865.92 from the AUIT to a Trustco Bank account in Lagan’s name, according to the court documents.
Sherwood has agreed to forfeit $3,742,211.65 that has already been seized from him, as well as the residence on Galway Lake that previously belonged to the Bruggemans, according to a prepared statement from Underwood’s office. Sherwood also pleaded guilty in federal court to money laundering and filing false federal tax returns, according to the prepared statement.
Underwood thanked the state police Special Investigations Unit, the U.S. Attorney’s Office for the Northern District of New York, the FBI, and the New York State Department of Taxation and Finance for their assistance in the investigation, which was led by Investigator Mark Spencer of the Attorney General’s Investigations Bureau, under the supervision of Deputy Chief Investigator Antoine Karam.