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An aerospace company’s founder, an attorney and other executives lied about a venture to launch billions of dollars in satellites so they could rake in millions from investors, according to an indictment in D.C. federal court that also charges the founder with tax crimes. 

The five members of startup Theia Group Inc. had said they planned to launch more than 100 satellites around the world that would quickly detect events on Earth, from crimes to wildfires project they expected to cost at least $10 billion prosecutors said in charges unsealed Tuesday. 

Over the life of the company, from 2015 until it ended in receivership in 2021, they raised more than $250 million in loans and investments, mostly, if not completely, through fraud, prosecutors said. 

Theia’s founder, engineer Erlend Olson, hid his millions of dollars in assets and company earnings from the Internal Revenue Service, according to the indictment. Olson was helped by attorney John J. Gallagher, founder of Gallagher Law in Philadelphia, who served on Theia’s board of directors and also as its executive vice president, prosecutors said. 

Together, they controlled a holding company for their Theia ownership interests but never filed a corporate income tax return for the company, according to the indictment. Olson used its bank account to buy himself condos in Las Vegas, a private jet membership and a Land Rover, prosecutors said. 

Olson, who was arrested Monday in Albuquerque, New Mexico, also used the holding company’s account to pay for more than $700,000 in late child support payments through an account at Gallagher’s law firm and to pay a tax penalty for failing to report overseas bank accounts, the indictment said. 

The tax charges against Olson accuse him of failing to file returns for 2018 through 2020 and evading taxes for three years before he started Theia. Olson had participated in an IRS amnesty program for taxpayers who failed to report offshore accounts but was kicked out for failing to comply with the program’s requirements, prosecutors said. 

The IRS said he owed $574,000 in taxes and more than $600,000 in interest and penalties for 2009 through 2011, according to the indictment. 

Many of the fraudulently obtained loans and investments to Theia came from about 200 friends and family members, with Olson and Gallagher using their personal and business contacts to drum up money, prosecutors said. 

The others indicted in the scheme are Stephen Buscher, Theia’s top financial officer; Jamil Swati, who was in charge of strategic investments; and engineer Joseph Fargnoli. All five men are charged with wire fraud and conspiracy to commit wire and mail fraud and, according to the U.S. Department of Justice, have been arrested. 

The group lied to investors about Theia’s technical abilities and about having contracts with the U.S. government and foreign states, the indictment said. They claimed the Theia Satellite Network, with its continuous remote sensing data that would cover the globe simultaneously, “would be invaluable to government and commercial clients,” prosecutors said. 

“According to Theia, the data obtained from the TSN and the speed with which it could be processed by Theia would transform human ability to detect and respond to events, such as earthquakes, wildfires, crime, and global warming, as well as identify certain natural resources under the earth’s surface,” prosecutors said. 

While they said they aimed to launch the satellites as early as 2022, they sought money to prove their concept by equipping aircraft with their remote sensors to generate data. 

In an email to two investors referred by another investor they had met at a high school soccer game, Olson claimed Theia needed $25 million because the company “had ‘been asked to fly aircraft producing specialized analytic results from combined sensor technologies for the U.S. government,’ prosecutors said. 

Olson said Theia already had one aircraft flying on contract with the U.S. and needed money to build two more “immediately,” prosecutors said. 

“In reality, Theia did not have an aircraft ‘flying on contract‘ and never had any revenue-producing contract with the U.S. government,” prosecutors said. 

The two investors made nearly $1.4 million in investments in Theia, according to the indictment. 

Much of the fraud described in the indictment involved claims that Theia had raised billions of dollars from foreign nations that had paid an upfront fee for data and analysis from Theia’s planned satellite network in exchange for using it in perpetuity. 

Theia claimed $6 billion from the nations was already in escrow, and Gallagher’s relative, also an attorney, vouched for the escrow after being shown a fake bank statement at a meeting with Gallagher and Olson, prosecutors allege. Gallagher was a signatory on the actual account, which contained less than $1 billion, according to the indictment. 

Gallagher was released on $500,000 bail Tuesday by a Pennsylvania district court. 

A representative from Gallagher Law declined to comment. According to the firm’s website, Gallagher has practiced law for 45 years and has been admitted to practice before the U.S. Supreme Court. He specializes in issues involving “nuclear energy, oil and gas, space and satellite technology and equipment transfer,” and he chaired the U.S. Industry Coalition, helping the U.S. Department of Energy with programs related to nuclear nonproliferation, according to the website. 

“Recently, John has devoted his efforts to representing clients in the commercialization of space through the expansion of large satellite platforms,” the website says. 

Michael Diamondstein, an attorney for Gallagher, told Law360 that they were still reviewing the indictment but that Gallagher “has honorably served his clients, community and country for his entire life.” 

“He is a patriot, and we intend to vigorously defend his good name,” Diamondstein said. 

The U.S. Department of Justice, Tax Division, declined to comment. 

Olson, Buscher, Fargnoli and Swati could not be reached for comment. 

The U.S. government is represented by Joshua Adam Gold and Rebecca G. Ross of the U.S. Attorney’s Office for the District of Washington, and by Alexis Hughes of the U.S. Department of Justice, Tax Division. 

Gallagher is represented by Michael Diamondstein of Michael J. Diamondstein PC. 

Counsel information for the other defendants wasn’t available. 

The case is U.S. v. Olson et al., case number 1:25-cr-00069, in the U.S. District Court for the District of Washington.