James F. Lagona, Mail Fraud and Obstruction of Justice, New York 2012

A New York man has been sentenced to 11 years in prison for committing mail fraud and attempting to escape the charges by exerting pressure on a U.S. Attorney’s spouse and candidate for office.

James F. Lagona, 52, of Snyder, N.Y., was sentenced by Chief U.S. District Judge William M. Skretny in the Western District of New York. Lagona was sentenced to serve nine years in prison on 27 mail fraud charges, one year in prison on one obstruction of justice charge and one year in prison for committing obstruction while on release in the fraud case.

In addition to Lagona’s prison term, he was sentenced to serve three years of supervised release and ordered to pay restitution of $6,396,359 for the fraud charges.

The charges stem from a Ponzi scheme operated by Lagona and his co-conspirators, which solicited investors for waterfront real estate and promised a 10 percent return on investment after one year. In truth, no investments were made, and new investors were recruited to pay off the earlier investors.

A total of 94 victims suffered a loss of over $6 million as a result of the scheme. Lagona was found guilty of committing 27 counts of felony mail fraud related offenses for his role in the Watermark M-One Financial Services Ponzi scheme.

Lagona also attempted to corruptly influence a U.S. Attorney by meeting with a campaign staffer for U.S. Representative Kathy Hochul and offering to publicly support her if her spouse, Western District of New York U.S. Attorney William J. Hochul Jr., dismissed the criminal case against him.

The investigation into Lagona’s obstruction charges revealed no evidence that the campaign staffer, Rep. Hochul, or her campaign ever intended to accept or considered accepting Lagona’s proposal, nor that the proposal was ever communicated to or considered by U.S. Attorney Hochul.

Mandatory Facts:

Defendant: James F. Lagona
Criminal Charges: 27 counts of mail fraud, one count of obstruction of justice, and one count of obstruction while on release
City and State: Snyder, N.Y.
Exact Date: February 23, 2011 (crime date), December 18, 2012 (obstruction charges), and February 25, 2013 (sentencing)
Sentence: 11 years in prison, three years of supervised release, and restitution of $6,396,359
Dollar Amounts: $6,396,359

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