By Chad M. Kohler, Esq.
Prosecutors have asked U.S. District Court Judge Herman J. Weber to sentence admitted Ponzi-schemer Glen Galemmo to over 15 years in prison in connection with his longstanding Ponzi scheme that reportedly bilked more than 200 investors out of approximately $300 million.
Galemmo, formerly of Cincinnati, pleaded guilty in January to one count of wire fraud and one count of money laundering.
In recently filed court documents seeking a 188-month prison sentence, prosecutors say that "Galemmo essentially used the investor accounts as his personal bank." Among other things, Galemmo used investor money to pay $11,000 for a vacation to Italy; $16,000 to a custom clothing designer; $52,000 in country club fees; and over $100,000 to J. Crew. He also used investor funds to make mortgage payments on his East Walnut Hills residence and to pay for a condominium on Marco Island, Florida.
In response, Galemmo, through his attorney, asks Judge Weber to impose a lighter sentence of 6 years or less and places the blame on his fear of failure, which he says motivated him to cover up the collapse of his investment fund and defraud investors:
Glen Galemmo is a man who felt like he was not allowed to fail. Throughout his life from his childhood living with his father, an Air Force Colonel, to his college years as an athlete, to his adult life as the primary means of financial support for his wife and five children – much was expected from Mr. Galemmo, and failure was not an option. It was his belief that he was not allowed to fail that motivated Mr. Galemmo to conceal the failure of his hedge fund (a once legitimate enterprise), and to continue on as though nothing was wrong, all the while believing he could 'fix it' and recover the money he had lost. If he were able to fix it, then nobody would know that he failed.
Trying to downplay his bad intent, Galemmo argues that he "was not motivated by greed" but rather "a belief that he was not allowed to fail." Galemmo also characterizes the prosecution of his case as a "runaway train" and a "persecution."
Absent from Galemmo's sentencing memorandum is any statement that he is sorry for what he did to investors.
Galemmo is set to appear before Judge Weber in person later this week.