Former Guilderland town justice Richard J. Sherwood has agreed to testify against his alleged co-conspirator, Thomas K. Lagan, after the two were arrested for bilking elderly clients out of more than $11 million.

Sherwood, 58, of Guilderland, pleaded guilty in June to second-degree grand larceny, a felony, in county court, for which he faces three to 10 years in prison, and also pleaded guilty in federal court to money-laundering and filing false income-tax returns for which he faces up to 20 years. His sentencing in county court has been postponed twice.

Lagan, 60, of Cooperstown, was arraigned in federal court on Friday on money-laundering and tax charges related to the theft of about $11.8 million from estates that he and Sherwood managed.

Sherwood’s attorney, William Dreyer of Dreyer Boyajian, LLC, declined to answer questions this week about whether Sherwood’s sentence might be reduced in exchange for testifying against Lagan.

“I think the best thing for me to do is say nothing. You seem to be able to draw conclusions from the documents,” Dreyer said.

Dreyer said that the government had requested the two adjournments for Sherwood’s sentencing.

Lagan’s defense attorney, E. Stewart Jones, wrote to United States Magistrate Daniel J. Stewart, asking the judge not to set a cash bail that would “hobble Mr. Lagan’s ability to defend himself.” He wrote that Lagan disputes the charges against him and that Lagan, earlier, declined to accept a plea bargain that would have required him to plead guilty to grand larceny.

The letter reads in part, “Mr. Lagan was fully aware then and now that Mr. Sherwood had entered in to plea agreements in both the state and federal courts, and in fact had entered pleas of guilty in each of those courts, and as part of his ‘bargain’ and ‘arrangements’ with the state and federal prosecutors had agreed to testify against Mr. Lagan.”

It continues, “The reliance by the government on Mr. Sherwood as the embodiment of the strength of their case inherently contradicts that contention as Mr. Sherwood, both state and federal prosecutors will have to concede, carries all of the baggage of the self-dealing, self-serving, self-promoting witness whose testimony alone is insufficiently credible to convict anyone of anything.”

Stewart ordered Lagan released on his own recognizance, according to a statement from Assistant United States Attorney Michael Barnett.

Sherwood started providing estate planning for Capital Region philanthropists Warren and Pauline Bruggeman in 2006. The Bruggemans, who were childless, signed wills advising that, aside from bequests to Pauline’s sisters — Anne Urban and Julia Rentz — all assets go to charities, civic organizations, and churches.

Warren Bruggeman died in 2009 and his wife died two years later, with personal and trust assets of about $20 million. Sherwood admitted, in his guilty plea, that Lagan and he had conspired to steal and launder money from her estate as well as Urban’s, who died in 2013. The pair, according to court papers, eventually transferred to themselves several million dollars from Rentz, who lived in Ohio and suffered from dementia. Rentz died in 2013.

According to the indictment, Lagan conspired with Sherwood between about November 2011 through February 2018 to launder the proceeds of a fraud conspiracy to steal from the estates of three elderly sisters. Lagan also failed, the indictment says, to report almost $5.4 million to the Internal Revenue Service in 2013 and 2015.

Lagan also faces charges, in Albany County Court, of first-degree grand larceny, criminal possession of stolen property, and a scheme to defraud.

If convicted on the federal charges, Lagan would face up to 20 years in prison, a maximum fine of $250,000, and up to three years of post-imprisonment supervised release, according to Barnett.

Lagan committed the alleged acts, United States Attorney Grant C. Jaquith wrote in one court document, “all for the purpose of enriching himself and at the expense of churches, charities and other civic organizations that were supposed to receive the money upon the sisters’ deaths.”

Witness

Among the court documents is a signed statement from witness Theodore Hargrove, who is said to be in ill health in Florida and unable to travel to New York State to testify and who has offered to be deposed in Florida on videotape, in October, prior to any trial.

Hargrove writes that, as the owner of a restaurant in Cooperstown, he became friends with Lagan and that Lagan would sometimes confide in him.

Lagan told him, Hargrove writes in the statement, that he was loaning money from the estates of three sisters and that his company, Goldman Sachs, had told him several times that it was illegal to do so and had told him to stop.

Lagan became very nervous after the second sister, Urban, died and alluded to the idea that he did not have control over Rentz, the last living sister, in Ohio, Hargrove writes. Lagan told Hargrove that he might need to stop what he was doing, according to the statement.

Goldman Sachs tooks Lagan’s “book” away from him because of the loans from the sisters’ estates, and demoted him to selling insurance as punishment, Hargrove recalls in his statement.

History

Sherwood was arrested in February and pleaded guilty in June. The town suspended his salary as of the date of his arrest, transferred his judicial duties, and barred him from the private areas of the town court; he was officially suspended from his judgeship a few days later by the New York State Court of Appeals. Sherwood was disbarred on Sept. 13, effective retroactively to the date of his guilty plea to felony charges.

Guilderland’s  town board appointed Christine M. Napierski to replace Sherwood as one of Guilderland’s three justices; the others are Denise Randall and John Bailey. The Guilderland Democratic Committee has chosen to back a different candidate, Bryan Clenahan — Randall’s son-in-law — for election to the post in November.