John Peter Galanis has surrendered to federal authorities in San Diego to begin serving one of the stiffest prison terms ever meted out to a white-collar criminal.
Galanis’ surrender concludes the latest phase of a 21-year business career that has gained him the reputation of being one of America’s most notorious confidence men. Late last month, a federal judge in White Plains, N.Y., sentenced the 45-year-old Galanis to 27 years in prison on a wide variety of charges, including fraud, bribery and racketeering.
Through various business and tax-shelter deals, Galanis had cheated taxpayers, investors, financial institutions and shareholders across the country out of $150 million, federal prosecutors estimate. Galanis previously has served a six-month jail term for securities fraud and has twice been barred by the Securities and Exchange Commission from selling securities.
Wherever he went, Galanis left unhappy investors and creditors in his wake, and federal prosecutors were delighted when, on Sept. 28, Galanis received his 27-year sentence from Judge Charles L. Brieant. Rudolph W. Giuliani, U.S. attorney in Manhattan, termed the sentence the “heaviest” he had ever seen for a white-collar crime.
“For years, Galanis’ corrupt agenda has been to bleed dry an investment vehicle or loot a financial institution and then to leave it in ruins while he moved on to the next victim,” according to a report issued by Giuliani’s office. “As a result, thousands of people--some rich, some not so rich--have lost millions of dollars, and a trail of collapsed deals and destroyed institutions has been left in Galanis’ wake.”
Galanis surrendered Monday night after a tearful farewell with family members at the U.S. marshal’s office in San Diego. Galanis and his wife have four children.
“It was kind of emotional,” said Robert T. Lloyd, a spokesman for the marshal’s office. “It took him a while to go through the family members and say his goodbys.”
The emotional scene capped a series of fast-moving events that began Friday when Galanis pleaded guilty to another set of fraud charges in New York State Court in Manhattan. Galanis acknowledged his guilt on four counts of grand larceny that stemmed from the 1986 collapse of a big renovation project in Atlantic City known as Boardwalk Marketplace.
He pleaded guilty to the state charges after a court ordered him to post additional collateral on his $10-million bail bond. Galanis faced a return to state prison in New York City if he could not comply.
The guilty plea to the state charges means that Galanis faces an additional prison term of seven to 21 years, but the state prison term will run concurrently with the federal sentence, according to Clinton W. Calhoun III, assistant district attorney in Manhattan.
“This is a good arrangement for us as well,” Calhoun said. “It sends the right kind of message to white-collar criminals.”
After spending the weekend with his family on the East Coast, Galanis on Monday was granted permission by Judge Brieant to surrender in San Diego, where his family rents a home. Galanis used to own two luxury homes in northern San Diego County--including one near the beach in Del Mar--but lost them through foreclosure, according to Brian Barrett, Galanis’ attorney.
Now in San Diego’s Metropolitan Correctional Center, Galanis has requested that he be sent to the federal prison in Lompoc, not far from Santa Barbara, where one of his sons is attending college, Barrett said.
But authorities said Galanis will end up anywhere that federal prison officials choose to send him--a decision that is not expected for several weeks. “He could end up on the East Coast,” said federal prosecutor Vincent L. Briccetti in Manhattan. “Wouldn’t that be ironic?”