Admitted to wide-ranging schemes to steal private money & mask his misuse of public funds
PROVIDENCE – Former Rhode Island House Finance Chairman Raymond E. Gallison, Jr., 65, of Bristol, R.I., was sentenced today to 51 months in federal prison for orchestrating fraudulent and deceptive schemes to steal private money and to hide his misuse of public money.
U. S. District Court Chief Judge William E. Smith also ordered Gallison to serve 3 years supervised release upon completion of his prison term, to include 100 hours of community service. Gallison pleaded guilty on March 9, 2017, to four (4) counts of mail fraud; one (1) count of wire fraud; one (1) count of aggravated identity theft; one (1) count of aiding the filing of a false tax document; and two (2) counts of filing a false tax return.
At the time of his guilty plea, Gallison admitted to the court that he stole funds from the estate of a deceased individual to which he was appointed executor; stole funds from a Special Needs Trust established to protect the long-term welfare of a disabled individual to which he was appointed trustee; provided false information on tax documents, including vastly inflating the number of students assisted by a non-profit organization funded by public money while failing to disclose amounts paid by that organization to him; and that he failed to pay taxes on income derived from his criminal actions.
Gallison’s sentence is announced by Acting United States Attorney Stephen G. Dambruch; Rhode Island Attorney General Peter F. Kilmartin; Harold H. Shaw, Special Agent in Charge of the FBI Boston Division; Joel P. Garland, Special Agent in Charge, Internal Revenue Service Criminal Investigation; and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police.
At the time of his guilty plea, Gallison admitted:
As executor of an estate of an individual from Barrington, R.I., who passed away in February 2012, he devised and executed various schemes to steal or transfer to his own name and bank accounts, cash, checks, stocks and real property belonging to the deceased person and/or his estate, valued at a total of $677,454.10. Gallison admitted that he fraudulently used the name and social security number of the deceased person to execute a scheme to cause the liquidation of certain stocks belonging to the deceased person;
He caused the filing of a false tax document on behalf of Alternative Education Programming (AEP), a non-profit organization which provided educational programs to students who may need assistance with course work, and/or minority and/or disadvantaged students who may need financial or other assistance to gain an education, and of which Gallison was listed as Assistant Director. The tax document listed that $77,957 in tuition and related fees and expenses were paid for 47 students from July 1, 2012, through June 30, 2013. In fact, on behalf of AEP, Gallison paid only $3,137.29 to assist 2 students during that year and paid approximately $64,575 to himself and another person in wages and consulting fees for no work undertaken on AEP’s behalf;
As trustee for a disabled person’s Special Needs Trust, he defrauded the Trust by writing a check from the Trust account for $8,900, which he deposited into an AEP account. Gallison then wrote a check for $8,800 from the AEP account to pay an outstanding bill at the Community College of Rhode Island; and
He failed to claim a total of $622,286.17 in income on joint IRS tax returns for tax years 2012 and 2013, and, as a result of his relevant conduct from 2012-2015, Gallison failed to pay a total of $226,332.31 in taxes.
During the course of the investigation, law enforcement recovered more than $515,000 in assets stolen by the defendant from the estate for which he served as executor. On the date of his guilty plea, the court was provided a check in the amount of $162,063.95, reflecting the balance of restitution due to the estate.
Restitution due to the IRS in the amount of $226,332.31 has not been paid.
Gallison was ordered by Chief Judge William E. Smith to self-surrender to begin serving his term of imprisonment by July 10, 2017.
The case was prosecuted by Assistant U.S. Attorneys Dulce Donovan and William J. Ferland, and Special Assistant U.S. Attorney James R. Baum of the Rhode Island Department of the Attorney General.
The matter was investigated by the United States Attorney’s Office, FBI, Internal Revenue Service Criminal Investigation, Rhode Island Department of the Attorney General, and the Rhode Island State Police.