Stoneham Cop and Electrical Contractor Charged in $36M Fraud Scheme Involving Mass Savings Fund | USAO-MA

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BOSTON — A Stoneham police officer and his brother, an electric company owner, have been indicted by a federal grand jury for allegedly paying an employee of the Mass Save sales company tens of thousands of dollars in weekly kickbacks, kickbacks and other in- kind benefits – including a John Deere tractor, computer, home bathroom fixtures and free electrical work, among others – in exchange for purchasing over $36 million in Mass Save contracts with the provider company.

Joseph Ponzo, 48, of Stoneham, and Christopher Ponzo, 47, of North Reading, have been charged with one count of wire fraud conspiracy and 12 counts of wire fraud. The defendants were arrested this morning and will appear in federal court in Boston at noon today.

According to the indictment, Joseph Ponzo, a full-time Stoneham police officer, and his brother, Christopher Ponzo, an electricity company owner, conspired to bribe an associate employed by a major utility company. from Mass Save (Company A) in exchange for the associate’s help in securing Mass Save contracts that have earned the Ponzos millions of dollars in Mass Save contracts.

Specifically, from 2013 to 2017, the Ponzos allegedly paid the partner tens of thousands of dollars in kickbacks, kickbacks and other in-kind benefits. According to the indictment, from 2013 to 2017, Christopher Ponzo paid the associate $1,000 in cash on a weekly basis. At times, Christopher Ponzo allegedly paid the associate $5,000 to $10,000 in cash, telling the associate that the extra money came from Joseph Ponzo for his part in the bribery scheme.

In return for these payments, the associate is alleged to have, among other things: helped the Ponzos set up companies; helped get companies approved to serve as Mass Save contractors for Company A; helped secure Mass Save projects for Ponzo companies; and helped the Ponzos receive payments from Company A for completed projects. As a result of this scheme, Christopher Ponzo and Joseph Ponzo allegedly collected approximately $29 million and $7 million respectively in fraudulently obtained Mass Save funds.

In one such case, according to the indictment, the associate helped Joseph Ponzo set up a business, Air Tight, to do insulation work and be approved as a contractor for Company A in the under the Mass Save program. Joseph Ponzo put his wife’s name on Air Tight’s incorporation documents and contract licenses to conceal his involvement in his corrupt side business. Joseph Ponzo is alleged to have raised millions in funds for the Mass Save program through this contract, despite having no professional experience in residential insulation work.

“Virtually every energy-consuming Massachusetts resident is overcharged and paying for Mass Save. These payments are mandatory and amount to hundreds of millions of dollars. Frauding the Mass Save program for millions of dollars means we all have to foot the bill,” said US attorney Rachael S. Rollins. “As we claim, these defendants, motivated by greed, orchestrated a corrupt scheme to line their pockets with money fraudulently obtained from honest, paying energy consumers. energy efficiency projects for their own personal financial gain and, moreover, have done so through illegal preferential treatment.This is grassroots corruption and it will not be tolerated.

“Each year, Massachusetts homeowners shell out hundreds of millions of dollars to fund energy-saving projects for consumers — and today we arrested Joseph and Christopher Ponzo for allegedly tricking them into pouring a stream constant kickbacks and kickbacks to an insider running the contracts,” said Joseph Bonavolonta, special agent in charge of the Federal Bureau of Investigation in Boston. and are now accused of doing everything possible to cover up their bold and brazen plan. We’ve said it before and it bears repeating. If you are a victim of or witness to a public corruption scheme, it is never too late to take action. The FBI is here, we’re doing our job, and we want to hear from you.

“Mass Save is about providing consumers, who qualify in the Commonwealth of Massachusetts, with low-cost or no-cost energy efficiency projects for their homes,” said Joleen D. Simpson, Special Agent in Charge of Criminal Investigations for the Mass Saver. ‘Internal Revenue Service in Boston. “The fact that a member of law enforcement who was sworn to protect the community allegedly abused this program as a get-rich-quick scheme is particularly reprehensible. Today’s indictment opens way to ensure the integrity of this program and should serve as a clear warning to those who attempt to defraud it.

Massachusetts law requires utility companies to collect an energy efficiency surcharge from all energy consumers in Massachusetts. These funds, which amount to hundreds of millions of dollars each year, must be disbursed by utility companies to fund energy efficiency programs and initiatives in Massachusetts. Mass Save is a Massachusetts public-private partnership sponsored by various gas and electric utility companies that disburses these energy efficiency funds by funding energy-saving projects for consumers. Under the Mass Save program, utility companies select prime suppliers to approve and select contractors to perform energy retrofit work for residential customers. This outsourced work – done at no or low cost to the customer – is then paid for by major vendors with Mass Save funds.

The wire fraud conspiracy and wire fraud charges each carry a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on US sentencing guidelines and the laws that govern sentencing in a criminal case.

US Attorney Rollins, FBI SAC Bonavolonta and IRS SAC Simpson made the announcement today. Assistant U.S. Attorneys Elysa Wan and Dustin Chao of Rollins’ Criminal Division are prosecuting the case.

The details contained in the indictment are allegations. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt by a court.

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