CINCINNATI -- After a former Walnut Hills investment advisor pleaded guilty Wednesday to federal charges from running a massive Ponzi scheme, two big questions remained.
How many millions did Glen Galemmo rip off from his clients?
And, how much will those clients get back?
The answer to the first question is in dispute.
The answer to the second question looks like: Not much.
The plea agreement Galemmo signed in December said he cheated investors out of $7 million to $20 million, but the actual amount was higher, Assistant U.S. Attorney Ken Parker acknowledged Wednesday.
How much higher? Parker said he couldn't he say until the investigation is complete.
The plea agreement said Galemmo collected $116 million from clients.
But more than 160 investors suing Galemmo claim they lost up to $300 million.
Galemmo’s attorney, Ben Dusing, denied that.
“We’re not talking about $100 million put in his pocket in this case,” Dusing said. “There have been reports of a $300 million fraud and I’m still trying to figure out that math, but I can tell you that’s not what we’re talking about.”
Galemmo was ordered to turn over more than $1.7 million from personal investment and checking accounts, along with his office building at 2230 Park Ave., his two homes in Cincinnati and Florida and five vehicles. Some of the money and property are under the name of his wife, Kristine Galemmo.
“Any assets of the Gallemos have either been forfeited pursuant to this proceeding or are restricted pursuant to civil cases,” Dusing said.
But Kathy Engstrom, an IRS criminal investigator, said the government would keep looking for assets to seize.
“We cannot give a specific dollar amount at this time because we’re still looking into all of his assets and insuring that we are getting everything that were fruits of his crime,” Engstrom said.
"Once we get a final amount, we'll work with the victims and hopefully get a little bit of their money back."
Galemmo, 48, faces up to 40 years in prison (20 on each count), but he is likely to get between eight years and 16 years, according to sentencing guidelines.
Like any Ponzi scheme operator, Galemmo paid early investors to cover his tracks, Parker said. But he spent most of the money on himself and his family.
Galemmo's wife and five of their six children were in court Wednesday.
Galemmo also used the proceeds from his scam to pay his mortgage and private school tuition for his children and to operate two sports entertainment complexes, Midwest Hoops in Florence and Midwest Sportsplus in Cincinnati, the government said.
Parker said the government would also continue to look for more victims.
“We believe that there were approximately 200 investors that were defrauded,” Parker said. “It is our duty, working with the IRS, to continue to identify any victims."
Galemmo, who owned Queen City Investments, pleaded guilty to federal charges of wire fraud and money laundering. He lured clients with claims of more than 30 percent returns, Engstrom said.
Judge Herman Weber will sentence Galemmo on May 28. Weber ordered Galemmo not to travel except between Cincinnati and Greenville, S.C., where he moved his family after he was indicted.
RELATED: Read the plea agreement
The government said Galemmo operated his scheme between 2005 and July 2013.
Galemmo gained the trust of investors by targeting friends, parishioners and members of his social network, investors said in court filings.
Galemmo was a smooth operator, investor John Rush said.
Rush told WCPO in October that he met Galemmo at Maketewah Country Club. Rush said Galemmo found his investors through Maketewah, St. Mary parish in Hyde Park, the local AAU basketball community and Moeller High School.
In some cases, “investors were propositioned ... from the sidelines of their children’s athletic events,” one filing said.
“I had no reason to distrust him,” said Rush. “That’s part of the genius of Glen Galemmo. He was able to present himself in a way that you could trust him.”
Rush said he started with small investments that performed well but were not outlandish.
“I was getting anywhere from 8 percent to 21 percent,” Rush said. “Things started escalating in 2009 (but) the overall market was doing well.”
Rush took confidence in Galemmo’s casual remarks about how Goldman Sachs was investing with him, or JP Morgan, or how the Securities and Exchange Commission would audit him every year. That made Rush think his money was safe.
Galemmo bought his own office building and outfitted it with 10 large computer screens "to give investors the impression he was constantly monitoring the market," the government said.
He created "fictitious trading accounts from Goldman Sachs and Lightspeed Trading" and mailed or emailed fraudulent monthly statements to investors, multiplying the previous balance by "a fictitious percentage of return, consistent with the returns that Galemmo had promised."
Galemmo's scheme also included taking short-term loans from investors and setting up fake IRA and 401K accounts in their names, the government said.
In all, he received approximately $89 million in investments and $29 million in short-term loans, the government said.
When investors sued Galemmo in August, attorney James Cummins said the scheme “could be the largest financial fraud in Ohio.”
"I heard a story where a woman had put her life savings in it," said Cummins. "She was getting a monthly draw and she lived on it along with her Social Security supplement. That monthly draw cut off a couple of weeks ago. So there are a lot of people who are hurt.”
Co-counsel Richard Wayne was asked how a fraud could go on for so many years.
"As long as he keeps on continuing to fund it and people keep on bringing in money, the merry-go-round continues to work. It's fine till it stops,” Wayne said.
Galemmo notified investors July 17 that his business was shutting down. He and his family left their $600,000 house and moved out of state.
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