In August 2021, 80-year-old William Neil “Doc” Gallagher pleaded guilty in connection with a Ponzi scheme that defrauded victims to the extent of $32 million. He has been awarded three life sentences and an additional 30 years for good measure.
Gallagher operated the scheme through the Gallagher Financial Group (GLG) based in Hurst, Texas, and preyed upon churchgoers who perhaps saw him as a fellow Christian and were able to trust with their money.
He was also sentenced to another 25 years in prison last year in Dallas County. The charges were similar and he had, again, pleaded guilty.
He styled himself as the “money doctor,” advertised extensively on Christian radio and also through books like “Jesus Christ, Money Master” that he authored.
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What is a Ponzi scheme?
A Ponzi scheme is a type of fraudulent financial scheme where early investors get paid with the money being invested by new investors. The returns received by early investors create the impression of a profitable business and keep the charade going as long as more new investors can be lured in. Eventually, of course, it collapses under its own weight as usually there is no underlying business that generates profits.
This type of scheme gets its name from one Charles Ponzi, who is understood to have perpetrated such a fraud in the 1920s.
This type of scheme is also classified as an ‘affinity fraud’ where participants could be connected to each other in some manner. The Securities and Exchange Commission (SEC) even has a definition for it on their ‘how to avoid investment scams that target groups’ website.
“Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster’s ruse.
These scams exploit the trust and friendship that exist in groups of people who have something in common. Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. Victims often fail to notify authorities or pursue their legal remedies and instead try to work things out within the group. This is particularly true where the fraudsters have used respected community or religious leaders to convince others to join the investment.”
Over a dozen seniors who became a victim of this scheme testified at the hearing. Individual losses claimed by the testifying individuals range between $50,000 and $600,000.
Speaking on the case, the chief of Tarrant County Criminal District Attorney’s Elder Financial Fraud team Lori Varnell said, “Doc Gallagher is one of the worst offenders I have seen. He exploited many elder individuals. He worked his way around churches preying on people who believed he was a Christian. Gallagher targeted elderly people, teachers, police officers, single moms, people who really needed this money and can’t earn it back. These people live in fear of tomorrow because they have no other means to live. They invested with him time and time again because they trusted him.”
What to do if you are a victim of Gallagher Financial Group (GLG)?
Fraudsters are conjuring up new schemes to cheat people. People get impacted despite exercising caution. With offices nationwide, Haselkorn & Thibaut, P.A. represents investors nationwide in their battles for recovering losses incurred due to their malpractices and fraud. You can speak to one of their experienced securities attorneys should you have doubts or questions about your account and how it has been handled. Most of our representation is on a contingent basis; we don’t get anything as legal fees until you are successful.
They can be reached for a free consultation at 1-800-856-3352.