Feds want Sherwood’s variable annuity policy

Richard Sherwood

Enterprise file photo — Michael Koff
Richard Sherwood, at left, stands with his lawyer, William Dreyer, before Judge Peter Lynch in December 2018.

GUILDERLAND — The federal government filed a complaint for an in rem forfeiture on Aug. 19 against a variable annuity policy held by Richard Sherwood, a former Guilderland town judge.

In rem means the action is against property, not the owner of property, and the forfeiture is the taking of that property because of illegal conduct. In this case, the federal government is seeking Sherwood’s variable annuity policy because it was part of a violation of United States criminal procedure law related to money-laundering. 

Sherwood pleaded guilty in federal court in August 2018 to money-laundering and filing false income tax returns. He was charged, in his private practice as an attorney, with working with a co-conspirator, Thomas Lagan, to steal more than $11 million from a family of elderly wealthy clients. Lagan, too, has pleaded guilty in federal and state courts.

Asked by The Enterprise how much Sherwood has forfeited to date, Assistant United States Attorney Michael Barnett said that that information is not public and that it is also not knowable at this point, since many of Shewood’s forfeited assets are bank and brokerage accounts, whose value can fluctuate. 

Barnett added, “I can say it does not equate to what was stolen.” 

Where the recovered monies will go — whether they will be disbursed to the charities that the elderly clients had intended — is a matter for later discussion, Barnett said. For now, his office’s focus is, as it always is in cases like this, on making “every effort to recover as much as possible, under the conditions as we find them,” he said. 

Sherwood and Lagan together handled the family trusts of Capital Region philanthropists Walter and Pauline Bruggeman and of Bruggeman’s two sisters, Anne Urban and Julia Rentz, all of whom were elderly and none of whom had children. Sherwood and Lagan took monies that were intended to go from these trusts to charities and instead funneled them into accounts that they had set up in order to benefit themselves.

The policy is held in the name of Sherwood and his wife, Carol D. Sherwood. Carol Sherwood has not been charged with any wrongdoing.

The complaint says that the $200,000 variable annuity account was part of a $3.6 million transfer that Sherwood made from a trust purporting to benefit client Anne Urban, into an account in his own name. Eventually, $1 million of that money was transferred into an account Sherwood shared with his wife, and a portion of it used, in 2016, to purchase the variable annuity policy. 

The joint account owned by Richard and Carol Sherwood is one of the assets included by the court in its final order of forfeiture against Sherwood. 

Sherwood also pleaded guilty to state charges in June 2018 in county court, to second-degree grand larceny, a felony. 

Sherwood faces up to 20 years in prison on the federal charges, and three to 10 years in prison on the charges in county court. 

In January, Judge Lawrence E. Kahn ordered Sherwood to forfeit, as Sherwood had previously agreed, $5,560,505, as well as 12 bank, credit-union, and other accounts, and a piece of property at 3055 S. Shore Drive in Galway, New York; as part of his plea in June 2018, Sherwood agreed to forfeit a property on Galway Lake that he said he and Lagan had transferred from the ownership of their clients.

Sherwood is currently scheduled to be sentenced in federal court on Oct. 2. 

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