August 15, 2016, Preet Bharara, the US Attorney for the Southern District of New York, announced that Derek Galanis had entered a guilty plea to investment and securities fraud charges via Gerova Financial Group, Ltd, a publicly-owned company listed on the NYSE, and snookering the firm’s shareholders. Co-defendernts in the Gerova pump-and-dump scheme were Derek’s father, John Peter Galanis, and his brothers, Jared and Jason.
“As he admitted in his guilty plea today,” said Bharara, “Derek Galanis conspired to have Gerova issue more than $70 million worth of shares for no legitimate business purpose and to hide Jason Galanis’s control of those shares. Galanis and his co-conspirators then artificially manipulated Gerova’s stock price so that they could secretly cash out for massive profits. Derek Galanis is the fourth person to plead guilty in this stock fraud scheme that left many victim investors holding worthless shares.”
The confessed hucksters were ordered to stake $17 in restituition. Derek was sentenced d to six years behind bars.
It wasn’t the Galanis family’s first foray in a criminal enterprise. Father John defrauded investors in the 1970s. In 1987, he was convicted for stealing $115 million from clients. and falsely claiming millions in tax deductions. On May 13, the New York Times reported, “numerous sales representatives were used to solicit investments from wealthy individuals around the nation, including some public figures. The comedian Eddie Murphy was the only one publicly identified as an investor in the state case.”
Milton I. Schwartz poured $450,000 into a non-existent cable television business in Utah at the urging of Papa John Galanis: “I think he’s brilliant,” Schwartz said. “Someone’s got to put him in jail.”
Despite his legal setbacks, Galanis lived the life of Riley in an elegant $2.5-million mansion in Greenwich, Connecticut deeded to his sons. The Philadelphis Inquirer reported in 1986 that the estate included “a tennis court, an indoor swimming pool and a lake. He once said in a deposition that he owned virtually nothing, but former associates said that, through corporations and trusts, he has owned luxury automobiles and boats. Several former associates and acquaintances said that Galanis is a devoted father of four children who once hired a circus to perform at one of his sons’ birthday parties. He frequently dines at Lutece, an elegant French restaurant in New York City, where he drinks $150 bottles of Champagne and $800 bottles of vintage Bordeaux wine.”
Diversified bysiness interests covered the mortgage. John Galanis and his sons, beginning in the 1990s, dabbled in gambling, pornography and Kosovo drug rings. Gambling and porn are traditional gangster franchises … but Kosovo is a long way from Grennwich. Why peddle narcotics in far-off Knsovo when Harford will do?
Because Hartford, Connecticut wasn’t a war zone. Drug proceeds funded the Kosovo Liberation Army (KLA) when tensions between Kosovo Albanians and the Serbian government erupted into a shooting war in 1993. The KLA ramped up resistance with a rebellion against Serbian rule, and the government lashed back with a brutal crackdown. The Serbs committed mass atrocities against civilians, culminating in NATO intervention and the bombing Serbia in 1999.
Two years later, the name Galanis surfaced when an Ecstasy ring in Escandito, California was rounded up by the DEA.
UPI reported that possible ties to “a New York organized crime family and a rebel leader in Kosovo were unearthed during an investigation into an alleged Ecstasy ring that was broken up this month in California, it was reported Thursday.” A federal prosecutor detailed “the potential links between the Gambino family and an unnamed Kosovo rebel general during a bail hearing Wednesday for defendants in a case involving an alleged Ecstasy lab located in San Diego County.”
The lab, nested inside Internet porn business, scrutinized in a DEA investigation code-named “‘Operation XXX,’ was said to be capable of churning out 1.5 million Ecstasy tablets a month … shipped to dealers in California and Mexico.” In the course of the investigation, telephone taps “produced possible links to the Gambino mob in New York as well as to rebels in Kosovo.” DEA agents searched the premises and seized $429,000 in US currency, hundreds of pounds of precursor chemicals, and lab equipment.
Assistant U.S. Attorney Todd Robinson said: “We base our information not on speculation but on words that came out of Derek Galanis’ mouth,” Galanis was one of 27 defendants indicted,
The DEA’s wiretaps captured Galanis pitching an investment in the lab from Tommy Gambino. Robinson noted that Galanis had actually “lived in Kosovo for five months and may have developed smuggling ties to the unnamed Kosovar general.”
Among the indicted, count John Galanis, “a fugitive financier who disappeared earlier this year from a prison work-release program while serving prison time for swindling investors out of millions of dollars.”
Sammy “The Bull” Gravano, a former Gambino boss was “indicted last year in Arizona on charges he was involved in an Ecstasy ring operating in the Phoenix area. Nine New Jersey men were indicted in March for allegedly trafficking Ecstasy on behalf of Philadelphia mobsters.”
Jacob “Cookie” Orgrad, an Israeli drug dealer in Los Angeles and Heidi Fleiss’s bodyguard, had been Gravano’s supplier of the tablets. He also sold narcotics to Faye Resnick and Nicole Brown Simpson, according to Alex Tome, a Simpson case investigator. Orgrad had ties to the Gambino family, including Italian mobster Joey Ippolito from New Jersey.
The DEA reported in 2001 that a much of the Ecstasy manufactured in the 1990s was trafficked by organized criminals in Europe, Russia and Israel. UN representatives and the KFOR army in Kosovo have, the UPI reported, “been increasingly dealing with criminal organizations rising from the guerilla groups that grappled with Yugoslav troops prior to the U.S.-led invasion of the province in 1999 ”
The Kosovo Liberation Army
Leonardo Leso, commander of the Italian Carabinieri, told Stars & Stripes that the Mafia and its peddlers in the region had “no interest in democracy.” In Kosovo, “not everybody is involved in organized crime,” but “corruption is everywhere and there is no process to democracy, no sense of law and people think it is normal to be a part of illegal activity.”
Frank J. Cillufo, a terrorism analyst with CSIS in Washington, told a a House Judiciary subcommittee the year before that the “Kosovo Liberation Army had its hands in the international drug trade before NATO troops moved in and ousted the Yugoslav army.”
Officially, CIA took control of financing, arming and trainging the KLA in 1995. but e its inception two years before, engaged in strategic planning sessions with resistance leaders and training of the troops. The Agency had the option of throwing its weight behind factions that didn’t mix with organized crime, but chose the KLA anyways.
Amidst the turmoil in Albania, companies in Europe and the US licked their cops at the untappesd oil reserves. Occidental, Shell and BP had their eyes on Albanian crude, and German mining concerns yearned for the minerals: nickel, chrome, copper, platinum, gold.
For an entry to this abundance of natural resources, the CIA would kill.
(To be continued)
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