BOSTON – A Shirley woman pleaded guilty today in federal court in Boston to stealing Social Security benefits.   

Shirley Daley, 84, pleaded guilty to one count of theft of public funds. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for May 6, 2020.  Daley was charged in April 2019. 

From June 2005 through December 2017, Daley received Spouse’s/Widow’s Benefits from Social Security using one name and Social Security number, while also receiving Retirement Benefits using a different name and a different Social Security number. When she applied for Retirement Benefits, Daley told the Social Security Administration that she had never been married and that she had never filed for benefits. In fact, Daley had been married and she had been receiving Spouse’s/Widow’s Benefits for four years. From June 2005 through December 2017, Daley stole approximately $319,076 in Social Security benefits.

The charge of theft of public funds provides for a sentence of up to 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Special Assistant U.S. Attorney Karen Burzycki of Lelling’s Major Crimes Unit prosecuted the case.

 

CLEVELAND – The United States Attorney’s Office for the Northern District of Ohio (USAO) has filed a civil complaint in forfeiture against 8,207,578 Tether (USDT) cryptocurrency, valued at more than $8.2 million. USDT is a virtual currency which are digital tokens of value circulated over the internet. Its transactions are publicly recorded on what is known as a blockchain.According to court documents, the FBI has identified 33 victims of an investment fraud scheme across the country, including a victim from Northeast Ohio residing in the city of Mentor. In total, victims lost approximately $4.9 million. Five more accounts have also been found to be affected and the FBI is attempting to identify the respective owners. The victims associated with the additional accounts have lost approximately $1,071,086.Investigators found that scammers initially contacted the victims through seemingly misdirected, or “wrong number,” text messages. The fraudster then gained the victim’s trust and affection using various manipulative tactics. Once trust was established with the victim, the fraudster would share how much success they, or someone they knew, had with investing in cryptocurrency. This personal testimonial lessened any uncertainties the victims may have had about virtual currencies and eventually had the intended effect to persuade the victim to proceed with the investment.The fraudster would then guide the victim, step-by-step, on how to open a legitimate cryptocurrency account, most often with a U.S. based virtual currency exchange such as Crypto.com or Coinbase. The scammer would walk the victim through the entire process of transferring money from their bank to the newly created cryptocurrency account. Next, the victim received instructions on how to transfer the purchased cryptocurrency assets to an online “investment platform,” which would turn out to be a fake site created by the fraudsters to look like a legitimate company. Information on the platforms promised lucrative returns which encouraged victims to invest further. However, once the victim transferred their funds to the “investment platform” they unknowingly handed over complete control and ownership of their funds to the scammer. The complaint also outlines that the perpetrators of such investment fraud schemes often allow victims to withdraw a portion of their “profits” early on in the scheme to build trust and reinforce their belief that the “investment platform” was legitimate. But as the scheme progressed, victims were unable to withdraw their funds and given excuses as to why they could not access their funds. For example, the fraudsters referred to a fake “tax” requirement, stating that taxes must be paid on the proceeds generated from the investment platform. Knowing that the scam would run its course soon, the fraudsters used last-ditch efforts to lie to victims that they had to pay a tax. Ultimately, victims were locked out of their account on the investment platform and lost their funds.A woman in Lake County, Ohio became the target of such a scam when she responded to a text on her phone from an unknown number in November 2023. She began sharing information via text with the person and the two bonded over topics such as hobbies and religion. Over a period of time, the victim followed instructions from her new “friend” and opened an account at Crypto.com and then transferred funds into the account. When the victim wanted to withdraw funds, her “friend,” relented and said additional payments were needed and she complied. When the victim no longer had any funds left after making additional payments, her “friend” began to threaten her that he would send his friends to “take care of” her friends and family. Having lost her entire life savings of approximately $663,352, including funds from her Roth IRA, the victim filed a complaint with the FBI’s Internet Crime Complaint Center to report the losses in June 2024. The FBI Cleveland Division subsequently initiated an investigation.Investigators conducted a blockchain analysis and determined that a portion of the funds stolen from victims were converted to USDT cryptocurrency and placed into three cryptocurrency addresses. Law enforcement officers executed a federal seizure warrant to recover 8,207,578 USDT tokens, in November 2024. Tether Limited then transferred these funds to a law-enforcement-controlled virtual currency wallet.By the Complaint in Forfeiture filed on Feb. 27, 2025, the United States seeks to forfeit the entire 8,207,578 USDT cryptocurrency. In the complaint, the United States alleges that the cryptocurrency accounts also contained additional funds above the victims’ traceable losses and, as proceeds of fraud, are also subject to forfeiture. Additionally, the complaint alleges that such other funds were involved in money laundering violations.     The claims asserted in the complaint are allegations only, and the United States must prove these allegations by a preponderance of the evidence at trial.If successful in this forfeiture action, the United States would seek to return the stolen funds to the victims.The FBI Cleveland Division is actively investigating cryptocurrency fraud schemes perpetrated on victims throughout the United States, including in the Northern District of Ohio. The United States is represented in this matter by Assistant United States Attorney James L. Morford. The USAO would like to acknowledge Tether for its assistance in this matter.If you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.

BOSTON – A former executive of a global pharmaceutical company was sentenced today in federal in Boston for earning more than $250,000 by trading on material non-public information.Dishant Gupta, 41, of Hillsborough, N.J., was sentenced by U.S. District Court Judge Julia E. Kobick to two months in prison to be followed by one year of supervised release. Gupta was also ordered to pay a fine of $20,000 and forfeiture of $260,078. In October 2024, Gupta pleaded guilty to one count of securities fraud.Gupta worked as the Director of Strategy and Operations in the Boston office of a global pharmaceutical company (Company A). In the spring of 2022, during the course of his employment at Company A, Gupta learned that Company A was negotiating to acquire certain assets of a smaller pharmaceutical company based in Boston (Company B), including its leading cancer drug, and that Company A later agreed to acquire Company B outright.While in possession of this material non-public information, and in violation of his fiduciary duties to Company A, Gupta acquired shares of Company B in his own and his wife’s brokerage accounts – in an effort to profit from the eventual public announcement of the transaction. Gupta purchased more than 300,000 shares of Company B over approximately two and a half months. Gupta then sold all the shares he had acquired after Company A announced the acquisition of Company B, earning more than $250,000.The Securities and Exchange Commission filed a civil complaint against Gupta alleging violations of the securities laws.      United States Attorney Leah B. Foley and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigations, Boston Division made the announcement. Assistant U.S. Attorney Benjamin A. Saltzman of the Securities, Financial & Cyber Fraud Unit prosecuted the case.

BOSTON – The owner and operator of three restaurants in Salem, Peabody and Seabrook (N.H.) was sentenced yesterday in federal court in Boston for defrauding the Internal Revenue Service of federal employment taxes and the Massachusetts Department of Revenue of state meals taxes over a six-year period.John Drivas, 66, of Hampton, N.H., was sentenced by U.S. District Judge Julia E. Kobick to one year and one day in prison, to be followed by one year of supervised release. Drivas was also ordered to pay restitution of $1,596,775 to the Massachusetts Department of Revenue and $439,341 to the Internal Revenue Service (IRS), in addition to a $20,000 fine. In September 2024, Drivas pleaded guilty to five counts of failure to collect and pay over employment taxes owed to the IRS and four counts of wire fraud for state meals taxes he collected from restaurant customers but failed to pay to the state Department of Revenue.Between January 2016 to October 2022, Drivas was the owner and operator of three restaurants: Red’s Sandwich Shop in Salem, Red’s Kitchen and Tavern in Peabody and Red’s Seabrook in Seabrook, N.H. He was the sole shareholder of the Salem restaurant until he sold it to an employee in September 2022. He was the 100% owner of the Peabody restaurant with his wife and the 52% owner of the Seabrook restaurant with his children.From at least January 2017 to June 2022, Drivas paid “under-the-table” wages of $1,496,417 to multiple restaurant employees and did not report those wages to the IRS or pay employment taxes on them. Federal tax law requires employers to withhold from any employee wages an amount for income taxes and other amounts for Social Security and Medicare taxes. Drivas caused more than $439,000 in employment tax losses.Drivas also collected the state and local “meals taxes” paid by restaurant customers, which he failed to pay over to the state as required by law. In Massachusetts, all owners and operators of restaurants and bars are required to collect 6.25 sales taxes on meals.  Salem and Peabody also require restaurants and bars to collect an additional 0.75% local option meals excise tax. Although Drivas collected the taxes from restaurant customers, he intentionally withheld $1,596,775 of those taxes from monthly reports and payments owed to the Massachusetts Department of Revenue.    United States Attorney Joshua S. Levy, Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office and Katherine Mulligan, Chief of Investigations for the Insurance Fraud Bureau of Massachusetts made the announcement. Valuable assistance was provided by the Massachusetts Department of Revenue’s Criminal Investigations Bureau. Assistant United States Attorney Victor A. Wild of the Securities, Financial & Cyber Fraud Unit prosecuted the case.    

BOSTON – The former Chief Financial Officer (CFO) of the Boston Grand Prix was sentenced today in federal court in Boston in connection with multiple schemes to defraud equipment and small business financing companies as well as the Small Business Administration (SBA) and the Internal Revenue Service.

John F. Casey, 58, formerly of Ipswich, was sentenced by U.S. District Court Judge Allison D. Burroughs to four years in prison and three years of supervised release. Casey was also ordered to pay $1,998,097 in restitution and ordered to forfeit $1,570,399. On Oct. 21, 2021, Casey pleaded guilty to 23 counts of wire fraud, three counts of aggravated identity theft, four counts of money laundering and three counts of filing false tax returns.

Casey became the CFO of the Boston Grand Prix in January 2015. The Boston Grand Prix organization made payments to, or on behalf of, Casey totaling approximately $308,292 in 2015 and $601,073 in 2016 which Casey failed to include in the gross income he claimed on his personal tax returns for those years.

Casey also owned an ice rink in Peabody from October 2013 until he sold it in June 2016. Between October 2014 and October 2016, Casey obtained over $743,000 in funds from equipment financing companies, purportedly for the purchase of equipment for the ice rink, when in fact he no longer owned the rink for four months during this period. In addition, in August 2016, more than two months after he sold the Peabody rink, Casey obtained over $145,000 in small business loans for the rink business. In order to secure the financing, Casey submitted false documents and information including fake invoices for the equipment, bank records purporting to show deposits into Casey’s accounts related to the Peabody rink, inflated personal and corporate tax returns and personal financial statements falsely claiming ownership and value of various assets. Casey also submitted a fake Deed of Sale containing a forged signature in support of one of his loan applications. Relying on Casey’s false statements, the financing companies provided funding to Casey in amounts and on terms they otherwise would not have made. Most of the funds provided by the victim companies were never repaid.

In addition, between March 2020 and at least May 2021, Casey orchestrated a scheme to fraudulently obtain Economic Injury Disaster Loans and Paycheck Protection Program loans from the SBA and a Massachusetts Sector-Specific Relief Grant – available under the Coronavirus Aid, Relief, and Economic Security Act – by submitting false applications for companies he created and controlled and by improperly using the fraudulently obtained loan and grant funds for personal expenses. Specifically, Casey submitted at least 14 loan applications to the SBA and intermediary lenders which contained false information concerning, among other things, the gross revenues of the companies during the year prior to the COVID-19 pandemic, the average monthly payroll of the companies and the existence of some of the companies.

In the course of his pandemic assistance fraud, Casey stole the identities of two women and used their personal identifying information to file fraudulent applications. Finally, in January 2021, while awaiting trial for the financing fraud scheme, Casey submitted an application for a $70,000 pandemic-related relief grant to the Massachusetts Growth Capital Corporation containing false information about the operating expenses of a company that was not in business in 2019 or 2020. Between April 2020 and April 2021, approximately $676,552 in COVID-19 relief funds was deposited into bank accounts controlled by Casey, and he used the vast majority of the funds for personal expenses, including a three-carat diamond ring which was ordered forfeited, a six-month membership to Match.com, private school tuition, residential rent payments, living expenses, payments on personal credit card accounts, restaurant meals, car payments and luxury hotel stays.  

Casey also laundered the proceeds of his fraud schemes and failed to include the income from the Peabody rink fraud scheme on his 2014, 2015 and 2016 personal federal tax returns. 

United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of Rollins’ Public Corruption & Special Prosecutions Unit prosecuted the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

MISSOULA — A Butte woman who admitted distributing methamphetamine after being arrested multiple times and found to be in possession of the drug, large amounts of cash and firearms was sentenced today to 10 years and one month in prison, to be followed by five years of supervised release, U.S. Attorney Jesse Laslovich said.The defendant, Jeri Angeline Phillips, 36, pleaded guilty in July to possession with intent to distribute meth.Chief U.S. District Judge Brian M. Morris presided.“Phillips is responsible for flooding Butte with a staggering amount of meth and routinely possessed firearms while trafficking drugs. As part of our case, she is forfeiting her cash, drugs, and guns. It’s appropriate and necessary that her freedom was forfeited, too,” U.S. Attorney Laslovich said.The government alleged that between October 2021 and March 2023, officers working with the Drug Enforcement Administration stopped Phillips on three separate occasions and seized a total of approximately $58,000 in cash and distribution quantities of meth. In addition, law enforcement seized a total of five firearms from Phillips’ vehicle and her residence. On one of the occasions, law enforcement observed Phillips distribute meth to a customer in Rocker. When law enforcement stopped Phillips’ vehicle, they located about 85 grams of meth, approximately $37,000 cash and a handgun in her purse and a digital scale in the trunk. A witness reported Phillips intended to use the cash to purchase approximately 17 pounds of meth in Washington. Law enforcement monitoring Phillips learned that during this period, Phillips had made multiple trips out of state to resupply her drug distribution cache. The government attributed approximately 11.8 kilograms, or nearly 25 pounds and about 94,079 doses, of meth to Phillips.The U.S. Attorney’s Office prosecuted the case. The DEA, Montana Highway Patrol and Montana Division of Criminal Investigation conducted the investigation.XXX

BOSTON – A Lynnfield woman pleaded guilty today in federal court in Boston to filing false tax returns, on which she claimed, among other things, more than a $370,000 mortgage interest deduction, even though the loan was in default and property had gone into foreclosure.

Karyn M. Ingram, 51, pleaded guilty to three counts of filing false tax returns for tax years 2011, 2012 and 2013. Ingram was arrested and charged in January 2018. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Nov. 29, 2018.

Ingram filed tax returns in which she reported false and inflated Schedule A deductions and in one year, a Schedule C business loss, in order to reduce her overall tax liability. For example, for tax years 2010 and 2011, Ingram filed returns claiming mortgage interest deductions of $45,072 and $371,427, but she had not made any mortgage payments since 2008; in fact, the loan had defaulted, and the property had gone into foreclosure. She also claimed real estate tax deductions in those same tax years, when, in reality, the real estate taxes had been paid by the mortgage lender and not by Ingram. By falsifying the deductions and losses, Ingram fraudulently reduced her tax liability by more than $126,000.

The charge of filing false tax returns provides for a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors. 

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. Assistant U.S. Attorney Sandra S. Bower of Lelling’s Criminal Division is prosecuting the case.

BOSTON – A former New Bedford seafood wholesaler was indicted yesterday for failing to file tax returns and filing a false tax return for his business’ income.

 

George F. Estudante, 57, formerly of Marion, Mass., was charged with two counts of failing to file tax returns and one count of filing a false income tax return.

 

According to court documents, Estudante failed to file an income tax return for 2010, even though his business, Basic Fisheries, received approximately $1,418,629 in payments. He also failed to file a tax return for 2011, although his business received approximately $1,607,726 in payments that year. Furthermore, Estudante falsely swore on his 2012 tax return that he had received approximately $533,078 in gross receipts when his bank account reflected that he had received over $740,000.

 

The charge of failing to file an income tax return provides for no greater than one year in prison, one year of supervised release and a fine of $25,000. The charge of filing a false income tax return provides for three years in prison, one year of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

 

Acting United States William D. Weinreb and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Stephen P. Heymann of Weinreb’s Economic Crimes Unit is prosecuting the case.

 

The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

LAS VEGAS – United States Attorney Jason M. Frierson today announced awards totaling $31,746,860 in Department of Justice grants to support public safety efforts in the District of Nevada. The grants were awarded by the Department’s Office of Justice Programs.“These grants are a nearly $32 million dollar investment in our state that will be used to assist local governments and Tribal communities; fund law enforcement services, resources, and trainings; and support survivors,” said U.S. Attorney Frierson for the District of Nevada. “I thank the Office of Justice Programs for awarding this critical funding that will help us build trust with and keep communities safer in Nevada.”The following organizations received funding:Bureau of Justice AssistanceNational Council of Juvenile and Family Court Judges – $1,500,000BJA FY24 Extreme Risk Protective Order and Firearm Crisis Intervention Training and Technical Assistance Initiative- Invited to ApplyCity of Henderson – $782,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramReno-Sparks Indian Colony – $1,865,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants Program – $265,000FY24 U.S. Department of Justice Coordinated Tribal Assistance Solicitation – $1,600,000County of Lander– $563,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramCity of Reno – $1,500,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramDiphrent Inc. – $963,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramCounty of Washoe – $996,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramCity of North Las Vegas – $1,620,000BJA FY24 Invited to Apply- Byrne Discretionary Community Project Grants/Byrne Discretionary Grants ProgramNevada Department of Public Safety – $2,103,677BJA FY24 Residential Substance Abuse Treatment for State Prisoners Program Formula Grant Solicitation – $348,149BJA FY24 Byrne State Crisis Intervention Program Formula Solicitation – $1,755,528County of Elko – $512,976BJA FY24 Justice and Mental Health Collaboration ProgramClark County Parent – $1,000,000BJA FY24 Second Chance Act Pay for Success ProgramTe-Moak Tribe of Western Shoshone – $150,000FY24 U.S. Department of Justice Coordinated Tribal Assistance SolicitationNevada State – $65,292BJA FY24 John R. Justice (JRJ) Formula Grant ProgramNational Institute of JusticeNational Council of Juvenile and Family Court Judges – $2,000,000NIJ FY24 National Juvenile Court Data ArchiveOffice for Victims of CrimeNoah’s Animal House Foundation – $81,710OVC FY24 Technical Assistance for Emergency and Transitional Pet Shelter and Housing Assistance Grants - Invited to ApplyEighth Judicial District Court – $800,000OVC FY24 Byrne Discretionary Community Project Grants/Byrne Discretionary Grants Program - Invited to ApplyDivision of Child and Family Services – $9,959,406OVC FY24 VOCA Victim Assistance Formula Grant – $7,597,406OVC FY24 VOCA Victim Compensation Formula Grant – $2,362,000Inter-Tribal Council of Nevada – $396,816OVC FY24 Tribal Victim Services Set-Aside Formula Program - Invited to ApplyFallon Paiute Shoshone Tribe – $229,973OVC FY24 Tribal Victim Services Set-Aside Formula Program - Invited to ApplyPyramid Lake Paiute Tribe – $229,973OVC FY24 Tribal Victim Services Set-Aside Formula Program - Invited to ApplyReno-Sparks Indian Colony – $229,973OVC FY24 Tribal Victim Services Set-Aside Formula Program - Invited to ApplyOffice of Juvenile Justice and Delinquency PreventionNational Council of Juvenile and Family Court Judges – $600,000OJJDP FY24 National Youth Justice Training and Technical Assistance - Invited to ApplySMART OfficeShoshone-Paiute Tribes – $343,966SMART FY 2024 Support for Adam Walsh Act Implementation Grant ProgramNevada Department of Public Safety –$175,000SMART FY 2024 Support for Adam Walsh Act Implementation Grant ProgramBureau of Justice StatisticsNevada Department of Public Safety – $3,079,098BJS FY24 NICS Act Record Improvement Program NARIP – $2,413,463BJS FY24 National Criminal History Improvement Program – $665,635The awards announced above are being made as part of the regular end-of-fiscal year cycle. More information about these and other OJP awards can be found on the OJP Grant Awards Page.About the Office of Justice ProgramsThe Office of Justice Programs provides federal leadership, grants, training, technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime; advance equity and fairness in the administration of justice; assist victims; and uphold the rule of law. More information about OJP and its program offices – the Bureau of Justice Assistance, Bureau of Justice Statistics, National Institute of Justice, Office of Juvenile Justice and Delinquency Prevention, Office for Victims of Crime, and SMART Office – can be found at www.ojp.gov.###  

BOSTON – A Florida woman pleaded guilty today in federal court in Boston to defrauding a Massachusetts housing agency where she worked in 2022, along with defrauding the U.S. Small Business Administration (SBA) in connection with the pandemic Paycheck Protection Program (PPP).Alihea Jones, 51, of Brandon, Fla., pleaded guilty to five counts of wire fraud. U.S. District Court Judge Patti B. Saris scheduled sentencing for Jan. 16, 2025.In 2022, Jones worked remotely for the Massachusetts Department of Housing and Community Development (DHCD) for six months where she worked with the Residential Aid to Families in Transition (RAFT) program, which provides funds to assist low-income Massachusetts residents facing eviction and other housing emergencies. Immediately after she was terminated, Jones, who was still logged into the RAFT database, accessed the files of four RAFT program participants and authorized electronic payments to their landlords in the amounts of $7,500, $8,800, $6,925 and $10,000. However, Jones changed the routing and bank account numbers from the landlords’ accounts to four unauthorized accounts in Georgia: an account in the name of Jones’s business, Beauty Concepts by Alihea, LLC (Beauty Concepts); Jones’s personal account; and the accounts of persons identified in the charging document as “Friend A” and “Friend B” – all without knowledge or permission from DHCD. After these transfers went through, Friend A and Friend B each paid Jones a $2,000 kickback.Earlier, in 2021, Jones also fraudulently obtained a $187,000 PPP loan from a Massachusetts lender, which the SBA later forgave.Under the PPP, authorized lenders issued SBA-guaranteed loans to small businesses during the COVID pandemic to help keep workers employed. If a business spent the money on payroll and other permissible business expenses, the SBA forgave the loan.Jones submitted a PPP loan application to a Massachusetts lender falsely stating that Beauty Concepts had 17 employees and an average monthly payroll expense of $74,800. In fact, Beauty Concepts did not employ anyone. Unaware that Jones’s information was false, the SBA agreed to guarantee a $187,000 loan to Beauty Concepts. The lender transmitted the loan proceeds to the Beauty Concepts account in Georgia. Jones later applied to have her loan forgiven. Again, she included false employee count and payroll information. Unaware that Jones’s representations were false, the SBA forgave the loan principal and accrued interest.In total, Jones caused a loss of $222,074, with $33,225 payable to the DHCD and $188,849 payable to the SBA.The charge of wire fraud provides for a sentence of up to 20 years in prison; three years of supervised release; and a fine of $250,000 or twice the gain or loss, whichever is greater; restitution; and forfeiture.Acting United States Attorney Joshua S. Levy; Massachusetts Inspector General Jeffrey S. Shapiro; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division made the announcement today. Assistant U.S. Attorney Christine Wichers of the Public Corruption Unit is prosecuting the case.

BOSTON – The owner of Esther’s Fashion Paradise was sentenced yesterday in federal court in Worcester for defrauding the SNAP benefits program and selling counterfeit merchandise.

Esther Acquaye, 31, of Worcester, was sentenced by U.S. District Court Judge Timothy S. Hillman to eight months in prison, three years of supervised release, and ordered to pay $285,075 in restitution. In December 2017, Acquaye pleaded guilty to one count of conspiracy to acquire, possess, and redeem SNAP benefits in an unauthorized manner, and to convert public money; one count of SNAP fraud; and one count of trafficking in counterfeit goods.

On numerous occasions between November 2013 and April 2016, Acquaye, the owner of Esther’s Fashion Paradise in Worcester, accepted EBT cards from SNAP recipients wishing to exchange their SNAP benefits for cash. Specifically, Acquaye passed the EBT cards through a point-of-sale terminal causing the full value of the SNAP benefits to be electronically transferred to her business, and then provided less than the full value of the SNAP benefits in cash to the SNAP recipients. In total, Acquaye caused approximately $282,541 in fraudulent EBT transactions and SNAP benefits to be transacted at Esther’s.

In addition, on at least four occasions between November 2015 and March 2016, Acquaye accepted an EBT card from an undercover investigator as payment for counterfeit retail goods. Acquaye sold the investigator two counterfeit Michael Kors purses, one counterfeit Gucci purse, one counterfeit The North Face jacket, and one counterfeit Michael Kors wallet.

United States Attorney Andrew E. Lelling; Bethanne M. Dinkins, Special Agent in Charge of the U.S. Department of Agriculture, Office of Inspector General, Office of Investigations, Northeast Region; and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Michelle Dineen Jerrett of Lelling’s Worcester Branch Office prosecuted the case.

 

BOSTON – A Hampton, N.H. man pleaded guilty on Sept. 6, 2024 to defrauding the Internal Revenue Service regarding federal employment taxes and the Massachusetts Department of Revenue regarding state meals taxes over a six-year period. Defendant owned and operated three restaurants: in Salem, Mass.; Peabody, Mass.; and Seabrook, N.H. 

John Drivas, age 66, pleaded guilty to five counts of failure to collect and pay over employment taxes owed to the IRS and four counts of wire fraud for state meals taxes he collected from restaurant customers but failed to pay to the state Department of Revenue. U.S. District Judge Julia E. Kobick scheduled sentencing for Dec. 5, 2024.  

Between January 2016 to October 2022, Drivas was the owner and operator of three restaurants: Red’s Sandwich Shop in Salem, Mass., Red’s Kitchen and Tavern in Peabody, Mass. and Red’s Seabrook in Seabrook, N.H. He was the sole shareholder of the Salem restaurant until he sold it to an employee in September 2022. He was the 100% owner of the Peabody restaurant with his wife and the 52% owner of the Seabrook restaurant with his children.

Drivas paid wages to numerous employees of the restaurants partly by payroll checks and partly in cash. He did not report the cash wages to the IRS or pay employment taxes on them.  Federal tax law requires employers to withhold from any employee wages an amount for income taxes and other amounts for Social Security and Medicare taxes. Drivas caused employment tax losses of $439,341.

Drivas also collected more than $1.5 million in state meals taxes paid by restaurant customers which he failed to pay over to the state as required by law. In Massachusetts, all owners and operators of restaurants and bars are required to collect 6.25 sales taxes on meals.  Salem and Peabody also require restaurants and bars to collect an additional 0.75% local option meals excise tax. Although Drivas collected the taxes from restaurant customers, he intentionally withheld $1,596,775. of those taxes from monthly reports and payments owed to the Massachusetts Department of Revenue.   

 

The charge of failure to pay over taxes carries a maximum potential sentence of five years in prison, three years of supervised release, , a fine of $250,000 or twice the gross gain or loss and restitution. Each wire fraud charge is punishable by up to 20 years in prison, supervised release for three years, a fine of $250,000 or twice the gross gain or loss, and restitution. Sentences are imposed by the federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Joshua S. Levy, Harry Chavis, Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office and Katherine Mulligan, Chief of Investigations for the Insurance Fraud Bureau of Massachusetts made the announcement today. Valuable assistance was provided by the Criminal Investigations Bureau of the Massachusetts Department of Revenue. Assistant United States Attorney Victor A. Wild of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.