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Flamboyant Financier in Fraud Case Known for Zest for the Good Life

May 14, 1987|TOM FURLONG | Times Staff Writer

John Peter Galanis, the San Diego County resident charged Tuesday in connection with massive tax shelter frauds, is a flamboyant financier known for extravagant parties, huge meals and his taste for $400 bottles of wine.

Curly haired and heavyset, with abundant charm, wit and sophistication, he is sometimes portrayed in media accounts and court documents as a crafty international swindler with few equals.

Galanis' business deals in recent years are portraits of investor partnerships gone sour on a variety of real estate and petroleum projects throughout the country. They have sparked lawsuits by angry investors, tarred the reputations of accounting and law firms, weakened several financial institutions and spawned a host of investigations by law enforcement agencies.

Galanis was in custody Wednesday and could not be reached for comment. However, in previous public statements, he and his attorneys have insisted that he is innocent of any wrongdoing. "I'm being made a patsy," he was quoted as saying last year. "It's as simple as that."

Served Prison Term

Galanis has always tried to stay out of sight, operating through a maze of companies run by relatives and longtime associates. But he still has plenty of problems with law enforcement authorities.

In the past two decades, Galanis has had run-ins with the Securities and Exchange Commission, served a six-month term in federal prison, fought off extradition to Canada and is currently fighting criminal charges in New York involving loans from Chase Manhattan Bank.

In the latest charges, Galanis and six associates face federal and state charges on the sale of allegedly fraudulent tax-shelter investments in real estate and oil-and-gas properties. Prosecutors estimate that the petroleum investments may have cost the government as much as $172 million in lost tax revenue.

The charges include the allegedly fraudulent takeover of a Utah bank, now in receivership, and the bribery of officials at a small bank in upstate New York. Rudolph W. Giuliani, U.S. attorney in Manhattan, said the allegations represent "one of the largest white-collar schemes the FBI has had."

Skis Barely Used

Despite his problems, Galanis has maintained a sumptuous life style that has included elegant homes in California, Connecticut and Utah. Known as "Big John" and "Fat John," Galanis is legendary among associates for his love of fine food, expensive wine and showy parties.

He once threw an Hawaiian-style luau in the ski resort town of Park City, Utah, where he trucked in the sand and plants for the party. The meal consisted of roasted pig and lobster flown in from Maine.

At one business dinner in Washington, Galanis "ordered about everything in the restaurant," said one of the diners, an attorney from California. After the meal, Galanis took his colleagues back to the Madison Hotel, where he ordered more food brought to his large suite.

"He brought in trays--no carts--of cheeses and fruits and more wine," the attorney said, his voice still tinged with amazement.

On another occasion, Galanis had a formal dinner party at a tony New York restaurant for the law firms that represent him. More than 100 attorneys, some from New York's finest firms, showed up.

One businessman who stayed at Galanis' luxurious home in Park City remembers that the house had a pair of $2,000 skis that were virtually unused. Galanis had apparently bought the skis, tried them once and decided he did not like them.

Furthermore, Galanis' wife apparently did not like the house, so the family usually stayed at a local lodge, running up huge bills, according to the businessman. Galanis was a favorite of the hotel staff because of his $100 tips.

The 44-year-old Galanis was born in Ipswich, Mass., where his father owned a local diner and ran a tourist motel along with his brothers. The younger Galanis went to prep school in New Hampshire and graduated from Syracuse University in 1965.

He tried law school for a year and then quit to work on Wall Street, where it was not too long before his troubles began, according to court documents and newspaper stories.

Galanis served six months in prison in the early 1970s for his role in looting a mutual fund. Twice, in 1972 and 1980, Galanis entered into consent decrees with the SEC that temporarily prevented him from promoting the sale of securities, including limited partnerships. He was also charged in connection with a $1.6-million fraud in Canada, but he successfully fought extradition in that case.

Galanis also has been charged in the Chase Manhattan case, in which it is alleged that fraudulent bank loans had been funneled into companies controlled by Galanis. The grand larceny charges in that case were dismissed last year, but charges of misapplication of bank funds are pending.

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