News from the New York Attorney General's Office

FOR IMMEDIATE RELEASE

June 11, 2018

Attorney General’s Press Office / 212-416-8060

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A.G. UNDERWOOD ANNOUNCES GUILTY PLEA OF FORMER GUILDERLAND TOWN JUDGE RICHARD SHERWOOD FOR STEALING OVER $11 MILLION IN FAMILY TRUSTS HE OVERSAW

Sherwood Faces Up to Three to Ten Years in Prison

ALBANY – New York Attorney General Barbara D. Underwood today announced the guilty plea of lawyer and former Town of Guilderland Judge Richard Sherwood for a scheme in which he and an alleged co-conspirator plundered over $11 million from family trusts they were responsible for overseeing.

Sherwood pleaded guilty before Albany County Court Judge Peter A. Lynch to Grand Larceny in the Second Degree (a Class C felony). As a result of these charges, he previously resigned as Guilderland Town Judge. Sherwood faces up to three to ten years in prison.

“New Yorkers should be able to trust that their financial advisors will make sound decisions – not scheme to line their own pockets,” said Attorney General Underwood. “We will continue to hold accountable those that try to game the system and violate the public trust.”

As detailed in the complaint, since at least 2006, Sherwood and alleged co-conspirator 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.

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.

In another part of the alleged scheme, Sherwood conspired with Lagan to deceive an Ohio attorney into sending over $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 allegedly 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 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.

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. Sherwood also pleaded guilty in federal court to money laundering and filing false federal tax returns.

United States Attorney Grant C. Jaquith stated, “Richard Sherwood betrayed his clients and his profession when he stole $11.8 million from their estates. His elderly clients, including one who suffered from dementia, planned to continue their philanthropy after their deaths by using their estates to support churches, charities, and civil organizations. Instead of carrying out their wishes, as he was required to do by both legal and ethical obligations, Sherwood used his legal skills to divert and steal their money. Any lawyer preying on elders should take notice that criminal conduct by attorneys will be aggressively investigated and prosecuted to the fullest extent of the law.”

The charges against Lagan are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

Attorney General Underwood thanks the New York State Police Special Investigations Unit, the U.S. Attorney’s Office for the Northern District of New York, the Federal Bureau of Investigation, and the New York State Department of Taxation and Finance for their valuable assistance in this investigation.

The investigation was led by Investigator Mark Spencer of the Attorney General’s Investigations Bureau, under the supervision of Deputy Chief Investigator Antoine Karam. The Investigations Bureau is led by Chief Dominick Zarrella. Associate Forensic Auditor Meaghan Scotellaro provided the financial analysis. The Forensic Audit Section is supervised by Edward Keegan. Senior Analyst Sara Pogorzelski assisted in the investigation.

This case is being prosecuted by Assistant Attorneys General Christopher Baynes and Matthew Peluso of the Attorney General’s Public Integrity Bureau, under the supervision of Bureau Chief Daniel G. Cort and Deputy Bureau Chief Stacy Aronowitz. The Criminal Justice Division is led by Executive Deputy Attorney General Margaret Garnett.