Galanis, 44, was described in the 38-count indictment as the "undisclosed principal" who "controlled" a series of business entities and associations set up to carry out the alleged fraud.
Indicted along with Galanis were Anthony Marchese, 46, of Southport, Conn., Daniel S. Brier, 57, of Pound Ridge, N.Y.; Ronald G. Williams, 36, of Dallas; Samuel Rosengarten, 66, of Armonk, N.Y., and Laurence H. Klusky, 38, of San Diego.
Galanis, formerly of Greenwich, Conn., and Del Mar, Calif., is being held on Riker's Island in New York on state conspiracy and fraud charges in the sale of limited partnerships for the now defunct Boardwalk Marketplace project in Atlantic City. Galanis did not make $10 million bail in that case.
Galanis was arrested May 12 after he was indicted on the Boardwalk Marketplace charges by a New York state grand jury and named in a federal complaint regarding the limited-partnership deals for oil and gas.
The federal indictment announced yesterday expanded on the federal complaint that originally named Galanis and three others - Brier, Marchese and Transpac Oil & Gas Co. president John F. Landon, 39, of Park City, Utah.
The fact that Landon was not named in the indictment yesterday led to speculation among several law enforcement sources familiar with the investigation that he is cooperating with the U.S. Attorney's Office. Two other top Galanis aides have entered guilty pleas in the case and have been providing investigators with information.
Of those indicted with Galanis yesterday, Brier and Klusky were accountants; Marchese, a financial consultant and former banker; Williams, a Texas lawyer who helped set up Transpac Oil & Gas Co., and Rosengarten, a salesmen who coordinated the sales of the limited partnerships for Galanis.
Klusky and Rosengarten have already been charged with Galanis and Louis Rosen, 60, of University Heights, Ohio, in the Boardwalk Marketplace investigation.
Those indicted yesterday were charged with racketeering, tax fraud and securities fraud in the syndication of the Transpac Drilling Venture program. They were also charged with the bribery of officials at one New York state bank and the fraudulent takeover of a Salt Lake City bank.
The Transpac program was a series of limited-partnership tax shelters sold to an estimated 2,500 investors between 1982 and 1984.
As in each of the Galanis-linked tax-shelter deals now under investigation, investors in the Transpac programs were promised easy financing and lucrative tax write-offs of two or three times their investment.
In its charge, however, the U.S. Attorney's Office alleges that the Transpac deals included a "fictitious financing scheme," that investors were defrauded of about $40 million and that "fictitious business expenditures" were used to defraud the IRS. Assistant U.S. Attorney Vincent L. Briccetti, who is coordinating the investigation, said in a statement released yesterday that "more than $172 million in fraudulent partnership losses were passed on to approximately 2,500 investors" in the Transpac deals.
The oil- and gas-drilling ventures were the first in a series of multimillion-dollar limited-partnership offerings linked to Galanis that are under investigation by the U.S. Attorney's Office, the FBI, the IRS, the federal Securities and Exchange Commission and the District Attorney's Office in New York's Manhattan Borough.
The probe also is focusing on real estate syndications, including Atlantic City's failed Boardwalk Marketplace project that was promoted in 1985, and luxury condominium projects in Florida, Utah, Arizona and California that were sold to investors in 1984.