Former Guilderland Town Justice Richard Sherwood and Financial Advisor Thomas Lagan Took Advantage of Elderly Sisters and Stole Millions of Dollars Intended for Charity
NEW YORK – New York Attorney General Letitia James and United States Attorney for the Northern District of New York Carla B. Freedman today announced that they have secured nearly $6.3 million for individuals who were defrauded by attorney Richard J. Sherwood of Guilderland, New York and financial advisor Thomas K. Lagan of Cooperstown, New York. Sherwood and Lagan took advantage of their positions as trustees of three sisters’ estates to steal approximately $11.8 million that was intended to benefit charitable organizations throughout the Capital Region. Sherwood and Lagan were both found guilty of Grand Larceny and sentenced to prison in 2019.
“New Yorkers should be able to trust that their financial advisors and attorneys are looking out for their best interests—not stealing their hard-earned money,” said Attorney General James. “Sherwood and Lagan defrauded a well-meaning family, and in the process, cheated local nonprofit organizations out of funds intended to support their missions. Thank you to U.S. Attorney Freedman for her partnership in rooting out fraud and stopping individuals who abuse the system.”
“This substantial recovery is the result of our efforts to make sure that crime does not pay,” said U.S. Attorney Freedman. “We will continue to use every appropriate avenue to enforce restitution judgments against Sherwood and Lagan in an effort to return as much money as possible to the victims of their fraudulent scheme.”
Sherwood and Lagan provided estate planning and related legal and financial services to Niskayuna, New York philanthropists Warren and Pauline Bruggeman, and Pauline’s sister, Anne Urban of Watervliet, New York. Under the advisement of Sherwood and Lagan, the Bruggemans signed wills directing all their assets—aside from trusts for Anne and Pauline’s other sister, Julia Rentz—to churches, civic organizations, a local hospital, and a university scholarship fund.
After the Bruggemans passed, Sherwood and Lagan led Anne to create a trust that, unbeknownst to her, made Sherwood and Lagan the beneficiaries of the sisters’ estates upon her death. When Anne passed away, Sherwood and Lagan, as trustees of the estates, continued to steal funds for themselves and concealed their theft by directing funds through a sham trust they created called the Empire Capital Trust. They would then transfer the money from the Empire Capital Trust to themselves.
After Sherwood and Lagan went to prison for this theft, the Office of the Attorney General’s (OAG) Charities Bureau petitioned the court to reinstate Anne’s original trust to ensure the funds would go to the charitable organizations she initially designated as beneficiaries, instead of Sherwood and Lagan. Lagan attempted to stop this while serving his prison sentence but failed, and the funds will be distributed to Anne’s intended organizations.
In total, Sherwood and Lagan stole $11,831,653 from the family. Nearly $6.3 million has now been recovered and returned to the victims, including St. Nicholas Ukrainian Catholic Church, Ukrainian-American Cultural Center, Inc., Ellis Hospital Foundation, Inc., and the Bruggeman ’46 Scholarship Fund at Rensselaer Polytechnic Institute.
The United States Attorney’s Office’s (USAO) Asset Recovery Unit is continuing work to recover the remainder of the restitution owed.
Assistant U.S. Attorneys Elizabeth Conger and Melissa Rothbart represent the United States on the asset forfeiture and restitution matters in this case, with assistance from the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.
Attorney General James 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 Investigations, and the New York State Office of Taxation and Finance for their valuable assistance in this investigation.
For OAG, the complex trusts and estates litigation to prevent distribution of funds to Lagan was handled by Assistant Attorney General Jennifer Allison of the Charities Bureau, under the supervision of Bureau Chief James Sheehan. The OAG appeal was handled by Assistant Solicitor General Kate Nepveu of the Division of Appeals and Opinions, led by Solicitor General Barbara Underwood. The underlying criminal case was prosecuted by Assistant Attorney General Christopher Baynes and former Assistant Attorney General Matthew Peluso of the Public Integrity Bureau, under the supervision of former Bureau Chief Travis Hill and Bureau Chief Gerard Murphy.
The investigation was led by Investigator Mark Spencer of the Investigations Bureau, under the supervision of Deputy Chief Investigator Antoine Karam. The Investigations Bureau is led by Chief Oliver Pu-Folkes. Meaghan Scotellaro, Forensic Auditor Investigator, provided the financial analysis. Senior Analyst Sara Pogorzelski assisted in the investigation.
The Charities Bureau is part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux, and the Public Integrity Bureau and Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado, all under the oversight of First Deputy Attorney General Jennifer Levy.
