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Gallison Sentenced to 51 Months in Federal Prison for Fraud, Identity Theft

Saturday, June 17, 2017

 

Ray Gallison to serve 51 months in federal prison

Former Rhode Island House Finance Chairman Raymond Gallison Jr. has been sentenced to 51 months in federal prison for orchestrating fraudulent and deceptive schemes to steal private money and to hide his misuse of public money. 

Gallison was ordered by Chief Judge William E. Smith to self-surrender to begin serving his term of imprisonment by July 10, 2017.

Gallison was also ordered to serve three years supervised release and do 100 hours of community service, upon completion of his person sentence.

Gallison’s Guilty Plea 

Gallison pleaded guilty on March 9, 2017 to four counts of mail fraud; one count of wire fraud; one count of aggravated identity theft; one count of aiding the filing of a false tax document; and two counts of filing a false tax return.

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.

The Investigation

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.

 

Related Slideshow: Ten Things to Know About Gallison Scandal

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#1

Mattiello Says Cancelled Fundraiser Was Tip-Off That Something Was Up

While rumors had been mounting recently at the State House regarding Gallison’s ties to a prostitution scandal, Speaker of the House Nicholas Mattiello told reporters on Tuesday that he was first tipped off to something being amiss after learning last Thursday that Gallison canceled an upcoming fundraiser on short notice.  

According to campaign finance reports, Gallison had just under $10,000 cash on hand as of the last filing period. He ran unopposed in both the Democratic primary and General Election in 2014. 

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#2

Mattiello and Gallison Met on Sunday — at Newport Creamery

Mattiello said that he met with Gallison on Sunday at the Newport Creamery in Cranston, to discuss the beleaguered [now former] legislative leader’s legal issues - and ultimately his resignation from his elected position.

Also present at the Sunday meeting was Mattiello’s Chief-of-Staff Leo Skenyon; the official resignation letter from Gallison to Mattiello made public on Tuesday, and was dated Tuesday May 3. 

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#3

Recent Hometown Hero

Just last year, Gallison, a Bristol resident, had been the Bristol 4th of July Parade's Chief Marshal.  

The coveted position is an honor, as the parade is part of the oldest Independence Day celebration in the country (with the year Gallison served marking the 230th annual Independence Day celebration in Bristol.)

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#4

Gallison Had Been Previously Cited, Fined by Ethics, Board of Elections

In 2007, the Rhode Island Ethics Commission docked Gallison with a civil penalty of $6,000 after he failed to disclose his employment with The College Readiness Program.

Gallison was fined $1,600 by the state's Board of Elections earlier this year for misrepresention of campaign contributions.

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#5

Gallison’s Lawyer Tied to Corso - and Patriarca

As GoLocal reported on Tuesday, Gallison engaged the legal services of criminal defense attorney Anthony M.  Traini.

The same Traini has represented Michael Corso before the Secretary of State’s office regarding improper lobbying activity around 38 Studios and has represented at least one defendant with ties to the Patriarca crime family.

Read the story HERE

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#6

Mattiello Confirms Investigation --  State Police, U.S. Attorney’s Office Mum

On Monday, news broke that Gallison was going to be resigning from his post amidst criminal allegations.

Mattiello put rumors to bed on Tuesday by confirming on the House floor that a federal investigation into Gallison's affairs is indeed taking place (Mattiello stopped short of what sources are saying, and that is a federal grand jury is currently underway).

Top local law enforcement offices unsurprisingly were less than forthcoming on Tuesday, with both Jim Martin in the U.S. Attorney’s Office and Rhode Island State Police Superintendent Col. Steven O’Donnell telling GoLocal they had no comment on the matter at this time. 

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#7

Ethics Now Under Greater Scrutiny

Proponents for an ethics amendment in the state — to restore oversight of General Assembly members to the State Ethics Commission — are touting this week’s latest developments as prover proof for the need for action to be taken this year. 

“All fifty states outlaw legislators’ conflicts-of-interest, but Rhode Island is one of a small number where citizens cannot file complaints against state representatives and senators for specific conflicts. Seven years ago, the state Supreme Court immunized members of the General Assembly against prosecution for their 'core legislative duties.' This huge loophole prevents the Ethics Commission from investigating or prosecuting 113 state legislators. Meanwhile, thousands of other public officials across Rhode Island remain accountable and subject to fines up to $25,000 for each specific violation,” said historian and author H. Philip West Jr. who is the former head of Common Cause RI.  

Democratic State Senator James Sheehan, who has been pushing for legislation to pass this session, weighed in on Tuesday.

“I think that Rhode Island has been ripe. Public and elected officials have been working hard to improve the state's economy, and what goes hand in glove with that is a government's responsibility to maintain a level playing field,” said Sheehan. “The public needs to feel their elected officials are playing the rules.  We need to restore the public's trust.  What's disconcerting is it's human nature that we need to follow rules.  In an atmosphere without rules you'll see a disintegration of conduct."

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#8

Mattiello to Closely Scrutinize Legislative Grants

Gallison lists being on staff of Alternative Educational Programming Inc., a mentoring program that over the past ten years has gotten hundreds of thousands of dollars through community service grants from the House Finance Committee (which he had chaired up until this week.)

In the wake of Gallison’s resignation, Mattiello said he will be reviewing the grant process - and possibly cutting out small community groups that lack a sufficient “administration” capacity.

“Right now we’re doing an audit of them,” said Mattiello on Tuesday.  “Some of the smaller organizations that don’t have the necessary administrative systems, I have concerns with. You’ll see grants being cut out, the smaller ones I might get rid of.”

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#9

Major Shake-ups

On Monday, GoLocal reported that Rep. Marvin Abney would be assuming the chairmanship of the House Finance Committee after Gallison resigned. 

On Tuesday, House Speaker Mattiello announced over a half dozen appointments, with Abney being just one.

* Rep. Patricia Serpa, Chairwoman, Oversight Committee

* Rep. Deborah Ruggiero, Chairwoman, Small Business Committee (Vice, Rep. Serpa)

* Rep. Robert Jacquard, Speaker Pro Tempore

* Rep. Gregory Costantino, Deputy Majority Leader (Vice, Rep. Jacquard)

* Rep. Raymond Johnston, Deputy Majority Leader (Vice, Rep Abney)

* Rep. Michael Morin, Member, House Finance Committee (Vice, Moren, HEW)

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#10

Seat Stays Empty 

Because Gallison is stepping down when he is, there will be no special election to replace him prior to November. 

If the vacancy occurs after the first Monday in February in the second year of the biennial period for which a general assembly was chosen, no warrant shall be issued for a special election to fill the vacancy.

So under state law, there will not be a special election to fill Gallison’s seat because he is resigning after the first Monday in February of an election year. All 113 General Assembly seats will be on the ballot in November.

 
 

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