State's top court suspends Sherwood from town justice office

Richard Sherwood

Richard Sherwood

GUILDERLAND — On Tuesday, the state’s highest court, the Court of Appeals, suspended Richard J. Sherwood from the office of justice of Guilderland Town Court. The court ordered that he be suspended immediately with pay.

On Friday, the same day that Sherwood was arrested for felony larceny and fraud charges — charges he’s denying — his judicial duties were reassigned and he was barred from the non-public areas of the town court.

That directive came from the state’s chief administrative judge, Lawrence K. Marks; only the state’s top court has the constitutional authority to suspend a judge, according to the Court of Appeals spokesman, Gary Spencer.

On the afternoon of Feb. 27, the top court reached its decision, made by Chief Judge Janet DiFiore, and judges Jenny Rivera, Eugene Fahey, Michael Garcia, Rowan Wilson, and Paul Feinman. Judge Leslie Stein took no part. Spencer said the court does not explain reasons for recusal.

The Court of Appeals sent a letter to Sherwood on Tuesday, signed by John P. Asiello, saying it was notified of a complaint with felony crimes, and had ordered Sherwood’s suspension. The letter also says that the court, during its March session, will consider the continuation of his suspension. The court is not currently in session.

“You may, pro se or by counsel, write to the Court stating your position as to the continuation of the suspension and, if it is continued, whether the continuation of suspension should be with or without pay,” the letter to Sherwood says.

The town suspended Sherwood’s salary as of Feb. 23, the date of his arrest, Guilderland Supervisor Peter Barber said on Monday. Sherwood made $51,170 in 2017 as one of three part-time Guilderland judges.

Barber said on Tuesday evening that he was waiting for clarification of the issue of whether Sherwood is to be paid. He wrote in an email, “I’m not sure if the Court of Appeals’ Order is final and what is the position of the Office of Court Administration on that issue.”

Lucian Chalfen, spokesman for the Office of Court Administration, said on Tuesday evening that Sherwood was to be paid, and that the Court of Appeals “determines what happens.”

Spencer explained, “It is traditional for the Court of Appeals to suspend a judge with pay because of the presumption of innocence.”

At the conclusion of the criminal proceeding, Chalfen said, the State Commission on Judicial Conduct would determine “what sanctions or punishment or removal that he would face.”

Sherwood, 57, was arrested on Friday, following an investigation by the New York State Attorney General’s Office. He is charged with working with financial advisor Thomas Lagan, 59, to steal more than $4 million from family trusts that the two managed jointly. Sherwood and Lagan are each charged with these felonies: two counts of first-degree grand larceny, first-degree scheme to defraud, and two counts of first-degree criminal possession of stolen property.

The felony complaint says that Sherwood and Lagan were handling trusts for philanthropist Warren Bruggeman, his wife, and her two sisters. None of the four people, now all deceased, whose assets were managed in the family trusts had any children, according to the complaint. Eventually, monies left over in the funds were to be distributed to six charities.

Chalfen said cases like this happen “very rarely.” The last one he can remember, he said, was in Erie County, when a supreme court judge was caught up in a bribery case.

Robert H. Tembeckjian, administrator and counsel with the New York State Commission on Judicial Conduct, added another example, saying that a judge in Rockland County was charged last year with a felony related to filing false instruments and statements in connection with a real-estate matter.

“Those are among the relative few,” Tembeckjian said, referring to the Erie and Rockland county cases. “Thankfully, it’s very rare for a judge to be charged with a crime.”

Jordan Carmon, a spokesman for the Attorney General’s Office, said that he could not comment on how the office was alerted to Sherwood’s alleged activities, but he referred The Enterprise to an area of the office’s website for the office’s Charities Bureau, which can investigate “improper activities of executors, administrators, trustees, and personal representatives responsible for honoring gifts or bequests to a charity.”

Carmon said that he did not know what six charities were involved.

Sherwood was arraigned in Albany City Criminal Court on Friday, represented by William J. Dreyer of Dreyer Boyajian in Albany.

Sherwood pleaded “not guilty” at his arraignment, said Sean Gallagher, senior court-office assistant at the Albany City Criminal Court.

Dryer told The Enterprise there are no court appearances scheduled yet, and declined further comment.

“Uncharted waters”

Initially, Barber had planned to have the town board meet in executive session on March 2 to discuss “issues separate from removal.” After Sherwood was suspended on Tuesday, Barber said that he would cancel Friday’s executive session and that he would likely add an agenda item to the town board’s March 6 meeting, to discuss steps necessary to minimize impacts on the operation of the town court.

“This is uncharted waters for us,” Barber said on Monday. “I’ve asked the town attorney to research the issues.”

Town Attorney James Melita said on Monday that the charges came as a shock; he had known Sherwood for years and taken over his position as town attorney. “He’s always seemed to be an upstanding guy,” said Melita.

Decisions stand?

On the likelihood of challenges to Sherwood’s decisions as town judge, Chalfen said, “It depends if anyone raises concerns.”

Melita noted that the actions Sherwood is alleged to have taken “weren’t done within his capacity as a town judge.”

They were done as part of Sherwood’s private practice, he said, adding, “There’s nothing in my experience to make me think that there’s any reason to believe he was doing anything illegal in the courts.”

Melita specified that, in Guilderland Town Court, Sherwood would have heard criminal matters prosecuted by the Albany County District Attorney’s Office, traffic cases, and town-code matters, which Melita said he prosecutes. He added, “And he did hear small-claims matters, in which there are money judgements granted, but they’re very small.

“There’s nothing in the town of Guilderland court that would, it’s my understanding, involve any substantial sum of money that was reviewed by Dick Sherwood,” Melita said.

The head of Guilderland’s ethics committee, Joseph Glazer, said this week that, if the ethics committee received any complaints about Sherwood, it would need to investigate them, but it has not.

Glazer said that if defendants or victims who appeared in Guilderland Town Court had any issue with Sherwood’s decisions, the best course of action for them would be to contact one of the following: the office of the attorney who represented them, whether the public defender or a private attorney; the Albany County District Attorney’s Office in the case of a victim; the New York State Magistrates Association; or the New York State Commission on Judicial Conduct.

If people have a complaint about Sherwood in his capacity as an attorney, Glazer said, they could contact the New York State Supreme Court, Appellate Division Third Judicial Department Attorney Grievance Committee.

Tanja Sirago, executive director of the New York State Magistrates Association, based in Delmar, said this week that Sherwood is currently a member, and that taking complaints would not be part of the association’s purview. The organization provides information and education to town and village magistrates, Sirago said. She recommended directing any complaints to the New York State Commission on Judicial Conduct.

Tembeckjian of the New York State Commission on Judicial Conduct said on Wednesday that, because the commission’s procedures are governed by a confidentiality statute in the judiciary law, he cannot discuss any complaints “unless there is a public discipline of a judge, or the judge waives confidentiality.” Since the current case is the only matter in which Sherwood has been charged or disciplined, “there is no other complaint or matter involving him as a judge that I would be able to talk about,” Tembeckjian said.

“The confidentiality statute is pretty broad,” he said.

Filling in

Guilderland has posts for three justices and the other two judges have agreed to fill in during Sherwood’s suspension.

Judges Denise Randall and John Bailey both said that they would continue to handle the cases in the town’s court but would not comment further on how the increased caseload would affect them.

The third judge’s post was added in 2013 because the number of cases handled by the Guilderland Town Court were deemed too many for the two part-time judges. Sherwood was elected to fill the post, besting two Republican opponents. He was previously the town’s attorney for 14 years.

Barber said, “I’ve spoken extensively to Judge Bailey and he’s confident that they can take care of the court for a while. People take vacations and whatnot, so they’re always covering each other anyway.”

Randall told The Enterprise last fall, during the campaign, that each of the three town justices is on 24 hours a day each third week. On “so-called ‘off-weeks,’” she said last fall, judges try to schedule trials and suppression hearings, do research and draft opinion, and do “all the other behind-the-scenes stuff that you don’t see on Monday and Thursday.”

Stacia Smith-Brigadier, the town’s personnel administrator, said this week that Guilderland’s justices accrue retirement credit and so are required to fill out time cards in three-month increments, which are average. “They are always well above 70 hours bi-weekly,” she said of the town justices.

Barber also said of the period the two judges will carry the extra caseload, “I’m going to shorten the time as much as possible.” He said that he wants to move to get to a more permanent solution.

“There are all sorts of possibilities,” Barber said. “We might end up having an interim judge brought in.” He said he had no particular candidates in mind.

Partisan issue?

Jacob Crawford, of the Guilderland Democratic Committee, last Friday called the accusations “completely shocking” and said that he hoped that everyone would let the investigation take its course before passing judgment. Crawford said Sherwood was “always nice, funny, easy to talk to, and very well-liked by the folks he interacted with.” Throughout the campaign in the fall, Crawford said, the committee received nothing but praise for the work of the town’s three justices.

Two Republicans who served on the Guilderland Town Board a decade ago, Mark Grimm and Warren Redlich, have, since Sherwood’s arrest, said that character flaws were evident in 2008.

That year, the town board voted, 3 to 2, to reduce Walgreens’ assessment by about half-a-million dollars. The two Republicans voted against the reduction, stating that Sherwood, as the town’s attorney, had a conflict of interest in advising the board since Walgreens rented property from a firm with a chief executive officer who was a founding partner of the law firm where Sherwood then worked.

The matter was referred to the town’s ethics board, which cleared Sherwood. The attorney hired to look into the matter, Robert Roche, told the town board in 2009 that his extensive investigations had uncovered no conflict and no economic or financial relationship, which meant that the appearance of any impropriety “evaporated.”

Grimm writes in a letter to the Enterprise editor this week, “Town Democrats had a chance to deal with Mr. Sherwood nearly a decade ago and did nothing. In 2008, when I was a Guilderland Town Board member, Sherwood negotiated a $540,500 assessment reduction for Walgreens at routes 20 and 155. This reduction cost Guilderland School District taxpayers alone more than $10,000 a year.”

He further says the ethics committee “whitewashed” the charges.

Redlich, who now lives and practices law in Florida, contacted The Enterprise, too. “I told you he was a rat 10 years ago,” Redlich emailed on Saturday.

Redlich said this week that the need to hold public officials accountable for misconduct is not a partisan issue. Democrats and Republicans alike have a tendency, he said, to sweep problems under the rug rather than exploring them, when they involve people “on their side.”

That’s what happened in 2008,” Redlich said. “They tried to sweep it under the rug.”

Referring to Sherwood, he said, “It starts to make people think there’s no consequences for misconduct.”

The greatest irony, Redlich said, is that Sherwood also served for years as the chair of the ethics board in Albany County.

Grimm also wrote in his letter that Barber’s first concern shouldn’t be for Sherwood.

Barber said, “When someone is arrested like that, it can be a life-changing event. And sometimes people do things rashly.” He said, “I just wanted to make sure that he had family support.”

At the same time, he said, he was concerned that the town court continue to operate properly.

Barber has not contacted Sherwood, he said; he did not think he should, while the town is looking into options for removing him. Barber said that the other judges had been in touch with Sherwood and had indicated that he was at home and “seemed to be doing well, or OK.”

Barber called Grimm “a mini Trump” and said that his signature was to launch ad hominem attacks after the fact. Republicans cross-endorsed Sherwood in November’s election, he said. If Grimm had concerns, why didn’t he bring them up before that endorsement? Why didn’t he ask the justices about it during the process of interviewing candidates?

According to the town’s Republican Party chairman, Doug Breakell, Grimm had opposed endorsing Sherwood when the GOP committee held its endorsement meeting. Also, Grimm said, and Breakell confirmed, he did not circulate Sherwood’s petition with the other GOP-endorsed candidates. Finally, Grimm did not interview justice candidates because he is not an officer of the committee.

The complaint

According to the felony complaint filed in Albany City Court on Feb. 23, Sherwood admitted on Jan. 21 during an interview at his law firm with Investigator Mark Spencer of the Attorney General’s Investigations Bureau, “in sum and substance,” to conspiring to deceive an Ohio attorney into wiring more than $2 million to a trust that he and Lagan solely controlled; that the trust was a means to steal estate funds, and that he and Lagan divided proceeds from it equally; and that the idea for the scheme was Lagan’s but that he, Sherwood, drew up the documents to effectuate it.

The complaint says that, since 2006, the lawyers provided financial services to Warren Bruggeman, who “was the head of Global Nuclear Energy for General Electric and a generous philanthropist to Capital District”; to his wife, Pauline; and to his wife’s sisters, Anne Urban and Julia Rentz. Warren Bruggeman died in 2009, and his wife in 2011; both sisters died in 2013, the complaint says.

The complaint details how events unfolded:

Warren and Pauline Bruggeman created a revocable trust containing sub-trusts designed to provide for Pauline Bruggeman’s two sisters, Urban and Rentz, throughout their lives. Other funds were to be provided outright to the sisters upon the couple’s deaths.

In 2011, the Anne S. Urban Irrevocable Trust, or AUIT, was created, using some of the funds from the Bruggeman trusts; Sherwood was named trustee, and Lagan, successor trustee.

In one instance, a sub-trust of about $2 million was to be returned to the Pauline Bruggeman Revocable Trust, to be distributed to six named charities, upon Anne Urban’s death; rather than returning those funds after Urban’s death in 2013, the complaint says, the funds were disposed of, “primarily for the benefit of Sherwood and Lagan.”

In another part of the scheme, Sherwood and Lagan allegedly conspired to deceive an attorney in Ohio, where Rentz lived, to send more than $2 million of Rentz’s money to the AUIT, under the premise that it would be distributed to charity; instead, Sherwood and Lagan shared that money.

Sherwood and Lagan formed the Empire Capital Trust to benefit themselves, the complaint says, and Sherwood sent funds to it from the AUIT.

In addition, in 2015, Sherwood authorized a wire transfer of more than $3.5 million from the AUIT to a Trustco Bank account in his name. Sherwood also authorized a wire transfer of almost $2.7 million from the AUIT to a Trustco Bank account in Lagan’s name.

Lagan, the complaint says, was employed as an investment advisor with a national financial-planning company at the time of the scam. Sherwood had worked as a partner with Mazzotta, Sherwood & Vagianelis but is no longer named on the firm’s website.

Editor’s note: Gary Spencer is a one-third owner of The Altamont Enterprise and is married to the newspaper’s editor.

Updated on Feb. 27, 2018: Information was added from the spokesmen for the New York State Court of Appeals, the New York State Attorney General’s Office, and the New York State Commission on Judicial Conduct, and from a clerk at the Albany City Court.

Updated on Feb. 28, 2018: Portions were deleted that became irrelevant, including comments on executive sessions by Robert Freeman of the New York State Department of State’s Committee on Open Government. Comments were added or clarified from the spokesmen for the New York State Court of Appeals, the New York State Attorney General’s Office, and the New York State Commission on Judicial Conduct. Comments were also added from Sherwood’s attorney, William J. Dreyer; former Guilderland town councilmen Mark Grimm and Warren Redlich; town personnel administrator Stacia Smith-Brigadier; and Tanya Sirago, executive director of the New York State Magistrates Association.

Corrected on March 2, 2018: Information was added on Mark Grimm’s role regarding the Republican Party’s endorsement of Richard Sherwood in the 2017 election.

More Guilderland News

  • In a Jan. 5 letter to the Surface Transportation Board, village attorney Allyson Phillips writes that Altamont is opposed to CSX’s attempted acquisition of Pan Am Systems because the running of a 1.7-mile-long train twice per day over the Main Street railroad crossing would leave parts of the village inaccessible to emergency responders for as long as 10 minutes.  

  • The use variance request was made by John Polk and and his wife, Rebecca Stump, to allow for up to six chickens on their nearly 20-acre Bozenkill Road property. 

  • Albany County has just directed schools to change from a 10-day period of isolation for infected students to a five-day period, so Guilderland is following suit, said Superintendent Marie Wiles.

The Altamont Enterprise is focused on hyper-local, high-quality journalism. We produce free election guides, curate readers' opinion pieces, and engage with important local issues. Subscriptions open full access to our work and make it possible.