Hike sentence

Devon Archer gets a year in prison for defrauding the Oglala Sioux tribe

Published on 03/17/2022

Devon Archer (47), former business partner of Hunter Biden (son of US President Joe Biden), was sentenced on February 28, 2022 to more than a year in prison for his role in a scheme to defraud a Native American tribe – Oglala Sioux – approximately US$60 million in bonds. The Oglala Sioux Tribe is the poorest county in the United States and one of the poorest Indian reservations in the United States. The defendant, Devon Archer, was sentenced to a year and a day in federal prison by Manhattan Judge Ronnie Abrams, who said the crime was “too serious” to let him walk. In addition to the prison sentence, Devon Archer was sentenced to one year of probation. Devon Archer was also ordered to confiscate US$15,700,513 and return US$43,427,436. Devon Archer has maintained his innocence and intends to appeal the conviction and sentence.

According to the DOJ press release in February, “As established by the evidence at trial:

From March 2014 to April 2016, ARCHER, Bevan Cooney, John Galanis, Jason Galanis, Gary Hirst, Michelle Morton, Hugh Dunkerley and others engaged in a fraudulent scheme that involved (a) provoking the Wakpamni Lake Community Corporation ( “WLCC”), a Native American tribal entity, to issue a series of bonds (the “Tribal Bonds”) through lies and misrepresentations; (b) deceptively inducing clients of asset management companies controlled by Hirst, Morton and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market; and (c) divert the proceeds of such bond sales.

The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations of John Galanis. Simultaneously, Jason Galanis, with support from ARCHER and others, worked to acquire Hughes Capital Management (“Hughes”), a registered investment adviser. Morton and Hirst were named chief executive and chief investment officer of Hughes, respectively. Weeks after taking control of Hughes, Morton and Hirst placed the entire first round of $28 million Tribal Bonds with Hughes’ clients, but did not disclose material Tribal Bond facts. , including the fact that the Tribal Bonds did not meet the defined investment parameters. in the investment advisory contracts of certain clients of Hughes. Further, clients of Hughes were not advised of material conflicts of interest regarding the issuance and distribution of Tribal Bonds prior to the Tribal Bonds being purchased on behalf of such clients.

The defendants and their co-conspirators then misappropriated the proceeds of the first tribal bond issue. Specifically, although the Tribal Bonds were meant to be invested in an annuity, Dunkerley, under the leadership of Jason Galanis, transferred significant amounts of the bond proceeds to support the business and personal interests of the defendants. John Galanis, for example, secretly received $2.35 million from the proceeds of the first bond issue, which he spent on various personal expenses and luxuries, including cars, jewelry, and business expenses. hotel. Similarly, Jason Galanis used some of the proceeds from the first tribal bond issue to fund the purchase of a $10 million luxury apartment in Tribeca, which he purchased on behalf of ARCHER with the consent of ARCHER.

Additionally, after John Galanis instigated the WLCC to issue a second round of Tribal Bonds, ARCHER and others used $20 million of bond proceeds from the first issue to purchase the entire second issue. Due to the use of the recycled proceeds to purchase additional issues of Tribal Bonds, the nominal amount of Tribal Bonds outstanding has increased and the amount of interest payable by the WLCC has increased, but the actual proceeds of the Bonds available for investment on behalf of the WLCC did not increase. In order to deposit the bonds in a bank, ARCHER misrepresented the source of the money used to purchase the bonds, falsely claiming that he had obtained it through estate sales. The bonds purchased by ARCHER and others were then used to meet the net capital requirements of two brokers in which ARCHER and others had interests. In addition, millions of dollars of bond proceeds from the first and second issues were used to finance the acquisition of companies that the defendants and their co-conspirators acquired as part of a strategy to build a financial services conglomerate. , which ARCHER expected to control.

In the spring of 2015, John Galanis prompted the WLCC to issue an additional $16 million in Tribal Bonds. Simultaneously, Jason Galanis and others purchased a second investment adviser, Atlantic Asset Management (“Atlantic”), and appointed Morton as CEO. Within days of gaining control of Atlantic, Morton placed the entire $16 million tribal bond issue with an Atlantic client, without the client’s consent and without disclosing the fact that the tribal bonds were outside the client’s investment parameters and that numerous conflicts of interest existed. . Proceeds from the $16 million issue were again not invested in an annuity as promised, but instead were diverted, among other things, to fund the defendants’ acquisition of another company as part of of their plan to build a financial services conglomerate, and make payments to one of the brokers in which ARCHER and others had interests. »

Additionally, Jason Galanis, who pleaded guilty to conspiracy to commit securities fraud, securities fraud and investment adviser fraud, was sentenced to 173 months in prison on May 11. August 2017. Gary Hirst, who pleaded guilty to securities fraud, conspiracy to commit securities fraud, investment adviser fraud and conspiracy to commit investment adviser fraud, was sentenced to 84 months in prison on September 7, 2018. John Galanis, who was found guilty at trial for securities fraud and conspiracy to commit securities fraud, was sentenced to 120 months jailed on March 8, 2019. Bevan Cooney, who was found guilty at trial for securities fraud and conspiracy to commit securities fraud, was sentenced to 30 months in prison on March 31 July 2019. Michelle Morton, who pleaded guilty to conspiracy to commit securities fraud and investment advice fraud, was sentenced to 15 months in prison on November 18, 2020. Hugh Dunkerley, who pleaded guilty to conspiracy to committing securities fraud, two counts of securities fraud, fraudulent bankruptcy and falsifying documents to obstruct a government investigation, also awaits sentencing.

Devon Archer is the co-founder of Rosemont Capital, LLC (Heinz Family Office) and Rosemont Seneca Partners. Rosemont Farm is the name of the Heinz family’s 90-acre estate outside of Fox Chapel, Pennsylvania. Christopher Heinz is the son-in-law of former United States Senator John Kerry and son of the late United States Senator John Heinz of Pennsylvania. Hunter Biden had worked at Rosemont Capital.