New York Securities Fraud Lawyers Blog
A Texas former financial advisor, Christian radio host, author, and self-identified “Money Doctor” Neil Gallagher has been arrested and charged by the SEC for allegedly running a $19.6 million Ponzi Scheme targeting elderly retirees, according to reports. Between December 2014 and January 2019, Gallagher allegedly used religion to solicit and misappropriate the funds of 60 senior investors. The recently unsealed SEC civil complaint alleges that William Neil “Doc” Gallagher using his companies, Gallagher Financial Group and W. Neil Gallagher, Ph. D Agency, Inc. promised guaranteed-risk free returns in a non-existent investment product titled, “Diversified Growth and Income Strategy Account.” Instead of investing the money as promised, Gallagher allegedly used their money to fund his lifestyle and pay falsified returns to other investors, in a typical Ponzi-Scheme fashion. Our Ponzi fraud law team finds the details of the egregious allegations in the SEC complaint horrible, but not atypical in affinity frauds.
Securities attorney Jenice Malecki has extensive knowledge on similarly alleged affinity frauds, having provided her insight on a religious-based Ponzi Scheme to CNBC’s white-collar crime show, American Greed. Religious fraud is a type of affinity fraud, in which the perpetrator target members of identifiable groups, with shared commonalities like race, age, and religion. The FBI has been investigating affinity fraud instances amounting to billions of dollars in projected losses. Additionally, the true prevalence of affinity fraud cannot be fully counted as group members tend to not report the activity to authorities for proper legal redress, especially within religious communities. In some states, like Utah, affinity fraud is so common that the legislature has an online white-color crime register. Fraudsters often target religious communities because of the members’ shared trust, even without the relevant facts. Religious investors are at an even higher risk when the fraudster intertwines their religious values with their deceitful sales pitch, as seen in the activity alleged here.
According to the SEC complaint, Gallagher allegedly raised at least $19.6 million from investors while pretending to be a licensed professional, despite that no longer being the truth. Gallagher allegedly offered an investment product that could provide returns that ranged between 5% and 8% each year. The complaint details that the investment product was supposed to be comprised of U.S Treasury Securities, publicly-traded stock, fixed-index annuities, life settlements, and mutual-fund shares, but Gallagher only purchased a single $75,000 annuity. It further alleges that instead of making genuine investments, Gallagher is alleged to have used $5.8 million to repay investors and $3.2 million for his own personal expenses. As of January 31, 2019, Gallagher allegedly depleted nearly all of the millions provided by his elderly victims who ranged in age between 62 and 91 years old. Our investor fraud team finds it to be in particularly devastating that victims of alleged Gallagher’s Ponzi Scheme are unlikely to re-earn their stolen funds.
Gallagher allegedly reached his targeted demographic by hosting three weekly retirement-planning radio shows and making a lot of religious references. On his company website, Gallagher wrote that his mission was to “be a vehicle of God’s peace and comfort to as many people as possible, helping first with their financial peace of mind, then also with their spiritual, emotional, and family well-being”. Furthermore, Gallagher published a book called “Jesus Christ, Money Master: Four Eternal Truths that Deliver Personal Power and Profit” in August 2016. Nevertheless, Gallagher’s alleged activity reflects the antithesis of this promise. His book summary claims to “take your finances and place them in the hands of the true money master, Jesus Christ”. The unfortunate reality is that solicited investor funds might have actually been taken and put into his own hands.
The only silver lining is that the SEC has apparently been able to temporarily put a hold on Gallagher’s activity and freeze his assets with an appointed receivership. However, the alleged investor victims might not be able to recollect their losses. There are securities laws and FINRA rules designed to help victims of affinity fraud recover losses. Our securities lawyers can help victims of Ponzi Schemes and other investment fraud recover their losses under FINRA-registered broker-dealers. Securities attorney Jenice Malecki has extensive knowledge on affinity frauds, having provided her insight on a religious-based Ponzi Scheme to CNBC’s white-collar crime show, American Greed. For more information about affinity fraud, call to have a free consultation with one of our highly rated securities attorneys.