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Money Manager Accused Of Taking Millions
CINCINNATI, Ohio (WKRC-TV) A Walnut Hills money manager will no longer trade stocks and will not transfer money or assets as he faces a federal investigation and two lawsuits claiming he duped investors out of as much as $300,000,000.
Glen Galemmo operated the Queen City Investment Fund out of his Walnut Hills office building for years. Last month, his clients received an email from him saying he was no longer in business and could not have contact with them. The IRS is investigating Galemmo for wire and mail fraud and money laundering.
"Some people have lost their entire savings," said attorney James Cummins, who represents some of the investors. Galemmo ran his Queen City Investment Fund out of an office building in Walnut Hills from 2002 until last month.
The lawsuit filed by Cummins claims approximately 200 people invested and Galemmo used the money to create a "cookie jar". A second lawsuit claims Galemmo operated an "elaborate Ponzi scheme."
"There's evidence that we have that the defendant particularly, Mr. Galemmo, used funds that were supposed to be invested in stocks and bonds for his own personal investments or his own benefit," Cummins said.
Cummins said Galemmo showed his clients documents that led them to believe they were investing in a conservative hedge fund with high rates of return. They received monthly letters detailing their balance and how much they had made. But, the letters did not tell clients in what stocks and bonds their money was invested. Some investors were somewhat experienced- others were not. "It was slick," Cummins added.
Meanwhile, the U.S. Attorneys Office filed a civil claim in U.S. District Court seizing nine of Galemmo's bank accounts that contain $330,000 and the Walnut Hills property.
Galemmo's attorney, Ben Dusing, says his client moved out of his East Walnut Hills home Wednesday for his own safety.
"Mr. Galemmo has cooperated with authorities in this investigation and shall continue to do so. This cooperation has included agreeing to certain requests by prosecutors and investigators," Dusing said. Dusing said Galemmo is staying out of state with relatives and has surrendered his passport so he is not a flight risk. Galemmo also owns Midwest Hoops Sports Complex in Florence, KY.
Meanwhile, attorneys for Galemmo's investors say at least two considered him a close, personal friend. Their feelings toward him have changed.
"We're telling the clients that this could be a hard fight and it may take some time. But there are enough strategies that we think we can employ to get some of these funds back," Cummins said.
A case management conference will be held September 17 in Hamilton County Common Pleas Court.