'Porn's New King' loses bail over alleged tribal fraud case

By Nate Raymond

NEW YORK (Reuters) - A U.S. judge on Tuesday revoked the bail of a California man once dubbed "Porn's New King" after authorities brought charges against him over his alleged role in a scheme targeting investors and a Native American tribe.

Federal prosecutors in Manhattan had argued for Jason Galanis' bail to be revoked after accusing him of running the scheme after being arrested in September on separate charges of stock fraud.

Galanis, 45, is awaiting a Sept. 12 trial to face charges that he engaged in a pump-and-dump swindle that cost investors in the reinsurer Gerova Financial Group Ltd nearly $20 million. He has pleaded not guilty.

U.S. authorities last Wednesday accused Galanis of enlisting six others to defraud clients who invested in over $60 million in bonds issued by the Wakpamni Lake Community Corp, an affiliate of the Oglala Sioux Nation in South Dakota.

Rather than invest the proceeds, Galanis and his accomplices spent the money on other investments, support for a technology company's initial public offering, and luxury goods at retailers such as Gucci and Prada, authorities said.

U.S. District Judge Kevin Castel ordered Galanis' $10 million bail revoked.

"It's a danger to have somebody commit the crime of conspiracy to commit securities fraud while on release," he said of Galanis, who in 2004 was dubbed Porn's New King by Forbes magazine after buying the nation's largest processor of credit card payments for Internet pornography.

The cases in U.S. District Court, Southern District of New York, are U.S. v. Galanis, No. 15-cr-00643, and U.S. v. Galanis, No. 16-mj-02978.

(Reporting by Nate Raymond in New York; Editing by Andrew Hay)