Former Gerova Financial Group President Sentenced to 6+ Years in Prison
Gary Hirst, the former president and chairman of the board of Gerova Financial Group, Ltd. (“Gerova”), was sentenced to 78 months in prison for defrauding the shareholders of that company by secretly giving away nearly $72 million of company stock to himself and his co-conspirators for no legitimate business purpose.
According to the allegations contained in the Indictment as well as the evidence presented during trial, from 2009 to 2011, Hirst, along with his co-conspirators Jason Galanis, John Galanis, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova, and the investing public, by issuing shares of Gerova stock for no legitimate business purpose and by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on Hirst and his co-conspirators.
Hirst and his co-conspirators created fraudulent, back-dated documents to conceal their theft of the stock and cover their tracks. They also deliberately misled Gerova’s other officers, including its chief financial officer, and caused Gerova to fail to disclose the stock giveaway in Gerova’s public filings with the SEC.
Acting U.S. Attorney Joon H. Kim stated, “Today’s sentence reflects the magnitude of Gary Hirst’s massive fraud scheme, which netted tens of millions in ill-gotten gains. Hirst and his co-conspirators issued large amounts of stock, lied about their roles, and found other novel means to defraud the stockholders of Gerova Financial and the investing public. Ultimately, Hirst’s stock manipulation resulted not in huge returns, but instead in a long prison sentence.”
Hirst’s stock manipulation scheme resulted in the theft of nearly $72 million in company stock, which was secretly given to himself and his co-conspirators for no legitimate business purpose.
The defendant, Gary Hirst, is a resident of New York, and his scheme was committed in the Southern District of New York. The case was investigated by the Federal Bureau of Investigation.
Hirst’s sentence was handed down on September 29, 2016, by U.S. District Judge P. Kevin Castel. The exact date of the crime was not specified in the source, but it is believed to have occurred between 2009 and 2011. The defendant’s exact criminal charges were not specified in the source, but it is believed to be related to stock manipulation and corporate fraud. The dollar amount of the theft was $72 million, and the sentence was 78 months in prison.
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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