It looks like another group of Ohio investors may be victims of a Ponzi scheme.
The Ohio investment fraud Meyer Wilson is continuing its investigation of the alleged long-standing Ponzi scheme orchestrated by Glen Galemmo of Cincinnati involving many area investors and reportedly over $100 million in investor losses. According to reports, Galemmo allegedly enticed investors with his purported success in consistently beating the stock market and generating double-digit returns for his clients. He appears to have operated under numerous entities including Galemmo Investment Group; Queen City Investment Funds; Landmark Investment Group; Essex & York; QC Power Strategies; Sentinel Strategy Fund; and Sentinel Property Holdings.
Having handled many Ponzi scheme cases throughout Ohio, the one thing I know for sure is that there are many layers to sort through to get to the bottom of how things like this can go on for so long before collapsing. The unraveling usually begins with the hint of a criminal investigation by the state or federal authorities and then it is quickly followed by a lawsuit by some of the victims against the schemer and his companies. This case has followed precisely on that track so far.
It was reported that federal agents recently raided Galemmo's offices. On July 17, 2013, Galemmo emailed investors telling them that his investment firm was no longer in operation and directing any further inquiries to a special agent with the IRS. A few days later, right on cue, many investors got together and filed a civil lawsuit in the Hamilton County Court of Common Pleas against Glen Galemmo and others accusing them of running a Ponzi scheme.
The lawsuit claims that Galemmo and his partners (including his wife, Kristine Galemmo, and his business associate, Edward Blackledge) were operating a classic Ponzi scheme in which unsuspecting investors were paid false "returns" which were, in fact, nothing more than funds contributed by other, newer investors.
According to one court filing, Galemmo made numerous allegedly false representations over many years to investors in order to lure them to invest with his companies, including the following:
It has been reported that Galemmo may have tried to hide his scheme by generating false account statements and keeping investors' assets with several different brokerage firms, which made it difficult for investors to gain a full understanding of how their investments were actually being managed.
In our experience, by the time the scheme collapses, the schemer and the related companies typically do not have the funds to repay the victims and whatever funds they do have are typically allocated to pay for the defense of the criminal proceedings. From the perspective of those running the scheme, the defense of the potential criminal charges receive all the resources because criminal charges involve the potential for jail time and nobody gets sent to prison for not paying judgments resulting from civil lawsuits filed by victims.
Given how these things usually shake out, what does that mean for the victims? I can't say for sure in this case, and our investigation is continuing, but in all the cases like this that I have been involved with over the past 15 years, the money to pay the Ponzi scheme victims never comes from the schemer. It is always more complicated than that. Stay tuned.
If you or someone you know lost money as a result of Glen Galemmo's alleged Ponzi scheme, please contact attorney David P. Meyer for a complimentary case evaluation at (800) 738-1960 or firstname.lastname@example.org.