Former financier John Lakian sentenced to prison term for fraud

By Globe Staff 

A Brooklyn, N.Y., federal judge Friday sentenced once-wealthy Massachusetts financier John R. Lakian, whose promising 1982 gubernatorial candidacy imploded over phony resume claims, to a 55-month sentence on charges he stole $15.6 million of funds invested with him — despite requests for leniency.

Lakian, who had pleaded guilty to the charges in February 2016, was ordered to pay restitution to the victims, whose money he stole in two investment schemes between 2009 and 2013.


His business partner, Diane Lamm, who is his companion as well, also had pleaded guilty in 2016 to two counts of securities fraud and is scheduled to be sentenced on Jan. 25.

“While Lakian and his codefendant were living in the lap of luxury, those who invested not only their money with him, but their faith in him, were unwittingly funding this lavish lifestyle,” said William F. Sweeney, the FBI’s assistant director-in-charge, in a statement released by the US attorney’s office for the Eastern District of New York.

US District Judge Frederic Block handed down the sentence after listening to the 74-year Lakian, a Worcester native, make a plea for a light sentence, according to an observer in the courtroom who requested anonymity.

Lakian spoke of his humble roots growing up in Massachusetts, the early death of his World War II veteran father, and pointed to his charitable work in a hospital emergency ward, according to the observer. It’s not clear his plea had an impact but the judge’s sentence was below sentencing guidelines, which call for a minimum of 72 months. Lakian will start his prison term in eight weeks.

The prosecutors, in 2015 indictments, claimed Lakian and Lamm directed the money into their own pockets — to a restaurant business they controlled and to pay Lakian’s home mortgage. In one scheme, they defrauded more than 100 investors when liquidating a North Carolina-based investment fund.


In addition, the indictment alleges Lakian and Lamm submitted fake tax returns, bank statements, and other documents to banks in Brooklyn to obtain more than $8 million in loans. The forged documents overstated their income and assets by millions of dollars.

“They lied, cheated, and stole,’’ said an FBI official when the Justice Department announced the indictments in 2015.

Lakian’s problems with false representations first emerged in 1982 when he ran for the Republican nomination for governor. He seemed to have the perfect profile — a self-made millionaire, Harvard graduate, and a Vietnam veteran who was given a battle-field promotion. With his rise from working-class roots in Worcester to reaching enormous financial success, he had all the appearance of a fresh face that the then-stumbling state GOP sorely needed.

But a Globe investigation of his background destroyed his candidacy.

The investigation revealed he never attended Harvard or was ever awarded a “battle-field promotion,” as he had claimed. He also had said that his father died of wounds suffered in World War II, when in fact his father was killed when he ran his car into the back of a trolley in Worcester.

Lakian’s candidacy quickly collapsed. He sued the Globe for libel but lost on all counts. He came in second in a three-way race trailing a little-known Holbrook state representative, Andrew Card, and the winner, John Sears, who went on to be crushed by Michael Dukakis.


He reappeared in 1994 to run for the US Senate to replace Edward M. Kennedy, claiming to have changed and offering apologies for his phony resume claims a dozen years early.

He spent $3 million of his own money. But the state GOP rallied another financier, Mitt Romney, who won the nomination with 80 percent of the vote.

Frank Phillips can be reached at