ALBANY – Thomas Lagan, a financial advisor and lawyer who worked with former Guilderland town justice Richard Sherwood, was indicted by a grand jury for a scheme in which he and Sherwood plundered over $9 million from family trusts they were responsible for overseeing, according to an announcement on July 3 by New York Attorney General Barbara Underwood.

On June 11, Sherwood pleaded guilty in two courts — in Albany County Court, he pleaded guilty to second-degree grand larceny, a felony, and, in federal court, he pleaded guilty to money-laundering and filing false income tax returns.

Lagan was arraigned on July 3 before Acting Supreme Court Justice Roger D. McDonough in Albany County Court. The indictment charges Lagan with five felony counts: two counts of first-degree grand larceny, two counts of criminal possession of stolen property, and one count of scheme to defraud.

As detailed in the complaint, Lagan and Sherwood, since at least 2006, provided estate planning and related legal and financial services to Capital Region philanthropists Warren and Pauline Bruggeman and Pauline Bruggeman’s two sisters, Anne Urban and Julia Rentz. The Bruggemans each created a revocable trust, which contained sub-trusts designed to provide for Urban and Rentz. Other funds were to be awarded to Urban and Rentz outright upon the deaths of the Bruggemans.

The attorney general’s office describes events unfolding this way: In 2011, the Anne S. Urban Irrevocable Trust (AUIT) was created using some of the funds from the Bruggeman trusts; Sherwood was named Trustee and Lagan was named Successor Trustee.

In one instance, a sub-trust with approximately $2 million was to be returned to the Pauline Bruggemen Revocable Trust for distribution to six named charities upon Urban’s death; the complaint alleges that, 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 scheme, Sherwood and Lagan allegedly conspired to deceive an Ohio attorney into sending over $2 million of Rentz’s money to the AUIT, under the premise that it would be sent to charity; in fact, Sherwood and Lagan 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.

Those involved in the investigation include 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.

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.

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. Meaghan Scotellaro, Associate Forensic Auditor, provided the financial analysis. The Forensic Audit Section is supervised by Edward Keegan. Senior Analyst Sara Pogorzelski assisted.