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Two federal fraud convictions linked to Amherst Ponzi scheme upheld

The conspiracy and mail-fraud convictions of Ian Campbell Gent and James F. Lagona, both linked to the former M-One Financial and Watermark Financial Services Group of Amherst, were upheld by the U.S. Court of Appeals for the 2nd Circuit in New York City, the Buffalo-based U.S. Attorney’s Office of the Western District of New York announced Monday.

The appeals tribunal rejected the claims of the two that there was insufficient evidence that they had an intent to defraud and knowledge of the Ponzi scheme run by Guy W. Gane.

Lagona, now 53, has been serving an 11-year prison term since 2011. Gent, now 72, is serving an eight-year term that began in 2011. Gent’s sentence was sent back to the U.S. District Court in Buffalo on sentencing guideline issues that the New York City court held needed further clarification.

Gane, now 59, was convicted in December 2010 and sentenced to 13 years in prison for what federal authorities denounced as a Ponzi scheme that cheated 90 victims, many retired, in Amherst until May 2008, when federal agents and the Securities and Exchange Commission raided the firm, which was linked to a criminal scheme involving the promise of high returns on “debenture” investments or “promissory notes.”

The appeals court found that Gent and Lagona had intent to defraud and knew of Gane’s illegal scheme, citing Lagona’s work “actively” preparing debenture papers after becoming aware that payments to investors of previously issued debentures were due but could not be paid as promised.

The New York court also cited Gent’s knowledge that Gane’s firm was “bleeding money” in its last years and paying new investors back with prior investors’ money. The trial of Gent and Lagona was handled by Assistant U.S. Attorney Gretchen L. Wylegala and the government was represented before the New York City appeals court by Assistant U.S. Attorney Joseph J. Karaszewski. Attorneys for Gent and Lagona could not be reached to comment about a last-ditch appeal to the U.S. Supreme Court.