Former San Diegan John Landon has pleaded guilty in federal court in New York City to three felony counts of mail fraud and conspiracy to commit bank, tax and securities fraud in connection with Transpac Drilling Venture of Utah, a bogus tax shelter operation Landon headed that allegedly bilked 2,500 investors out of $50 million.
Landon, a member of a socially prominent San Diego family who was voted "Most Likely to Success" by his Point Loma High School Class of 1966, entered the plea June 18. He is cooperating with federal officials in their investigation of John Galanis, a convicted swindler and alleged Transpac mastermind who was arrested at his beachfront home in Del Mar on May 12, Assistant U.S. Atty. Vincent Briccetti said Monday.
Landon will be sentenced in New York on Oct. 29 and faces up to 15 years in prison and fines of up to $252,000 for his part in the alleged scam which the government claims cost the Internal Revenue Service $172 million in fraudulent tax write-offs.
Civil Suit Involved
Landon's connection with Galanis is also at the heart of a civil suit filed earlier this month by the trustee for Nashua Trust Co., a now-bankrupt New Jersey investment company that federal investigators say was controlled by Galanis. Nashua ostensibly was set up to sell partnerships to finance the development of non-casino hotels and shops in a three-square block of Atlantic City, N.J.
The civil suit, filed by trustee Jack Birnberg in a U.S. bankruptcy court in New Jersey, alleges that Nashua illegally transferred $755,000 to Landon's bank account and that Landon in early 1986 used the money to acquire Chilton Private Bank in Chilton, Texas.
Additionally, the suit claims that an additional $300,000 was transferred from Nashua to Landon "with actual intent to hinder, delay or defraud (Nashua's) creditors."
According to Texas Department of Banking Commissioner Kenneth Littlefield, whose office took over the failed bank in May after the Galanis arrest caused a run on deposits, more than half of Chilton's $6 million in assets were eaten up in overdrafts to Galanis' wife, Chandra, and in loans to Landon and his business ventures.
Birnberg also succeeded this month in halting the foreclosure sale of Galanis' Del Mar home until late July, claiming that Nashua was never repaid $1.5 million that Galanis borrowed to buy the house.
Peace Corps Volunteer
The 39-year-old Landon, a Stanford University graduate and former Peace Corps volunteer, turned himself to authorities in New York May 13. He is free on $400,000 bail, security for which was pledged by his parents, Mr. and Mrs. Morris Landon of San Diego.
The senior Landon is a former commodore of the San Diego Yacht Club and currently is senior vice president of M.H. Golden Co. general contractors.
Although the younger Landon's address is listed as Park City, Utah, he has maintained strong ties to San Diego and keeps his 70-foot racing yacht, the Kathmandu, docked at San Diego Yacht Club. According to a former associate, Landon may have convinced Galanis to move to San Diego two years ago from his former base of operations in Connecticut.
Landon was unavailable for comment Monday. Briccetti declined to disclose his whereabouts.