Bail revoked for man dubbed Porn's New King in money case

AP News
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Posted: May 17, 2016 7:16 PM

NEW YORK (AP) — Bail was revoked Tuesday for a Los Angeles man once dubbed Porn's New King after prosecutors said he violated bail conditions in a financial case and sent threatening text messages to a one-time friend he erroneously believed was cooperating with the government, calling him a "weasel" and warning him to "sleep tight and be worried."

U.S. District Judge Kevin Castel ordered Jason Galanis imprisoned after he traveled to New York to face charges announced last week alleging he conspired with others to cheat a Native American tribe and investors out of $60 million. Galanis had been free on $10 million bail since he was arrested last fall in a separate financial fraud.

The judge said there was probable cause to believe Galanis committed securities fraud when he reassured a South Dakota tribe its money was safe.

Prosecutors had said that Galanis and others lied to the Oglala Sioux tribe from March 2014 through April about how proceeds from its bonds would be invested. They said the dealings occurred with the Wakpamni Lake Community Corp., an economic development corporation arm of the Oglala Sioux tribe of the Pine Ridge reservation.

The government alleges Galanis and the others spent most of the proceeds on homes, cars, travel and jewelry.

Assistant U.S. Attorney Brian Blais said Tuesday that Galanis sent threatening text messages to a one-time friend accusing him of being a "weasel" and promising payback because he incorrectly thought the man had been disloyal to his wife and was cooperating with the government.

"Sleep tight and be worried" was among a series of messages laced with vulgarities, the prosecutor said.

Attorney Marion Bachrach, representing Galanis, said the messages were sent by her client when he was drinking alcohol on an airplane.

"It's terrible language," she said. "They now call it drunk texting."

The judge made no mention of the texts as he concluded a letter sent to tribal representatives in February was enough to show Galanis likely was continuing to commit crimes.

"Mr. Galanis is unlikely to abide by any conditions of release," the judge said. "It is a danger to have somebody committing the crime of conspiracy to commit securities fraud while on release."

Outside court, Bachrach said she's considering appealing her client's detention order.

Forbes magazine labeled Galanis Porn's New King in 2004 after he bought the nation's biggest payment processor for Internet porn.

In a release last week, the Securities and Exchange Commission said Galanis had a checkered past dating from a 2005 accounting fraud case the SEC brought against him during his days as a major Penthouse International shareholder.

The regional director of the SEC's New York office, Andrew M. Calamari, said as the SEC brought civil charges against Galanis that he persisted in the "brazen and complex" scheme involving the Indian tribe even after he was arrested by criminal authorities and charged by the SEC in a different case.