Former Massachusetts police officer, contractor brother plead guilty in Mass Save fraud scheme
A former Stoneham Police officer and his brother, an owner of an electrical contracting company, have pleaded guilty to a criminal bribery and kickback scheme that netted them millions of dollars in Mass Save contracts , the U.S. Attorney said Thursday.
Joseph Ponzo, 51, of Stoneham and Christopher Ponzo, 50, of North Reading, pleaded guilty to one count of conspiracy to commit honest services wire fraud and 24 counts of honest services wire fraud, and one count of making false statements to government officials, Acting U.S. Attorney Josh Levy said in a statement.
Joseph Ponzo also pleaded guilty to four counts of causing false tax returns to be filed with the Internal Revenue Service from 2016 to 2019. U.S. District Court Judge Nathaniel Gorton scheduled sentencings for February 2025.
The brothers were arrested on the charges in April 2022.
"Virtually every Massachusetts resident who uses energy is surcharged and pays for Mass Save," then-U.S. Attorney Rachael Rollins said in a statement following their arrests in April 2022.
"These payments are mandatory and amount to hundreds of millions of dollars," Rollins said at the time. "Defrauding the Mass Save program for millions of dollars means we are all left paying the bill. It is corruption at its core and will not be tolerated."
From 2013 to 2022, the brothers conspired to bribe associates of a Mass Save lead vendor company that netted the pair millions of dollars in Mass Save contracts, prosecutors said.
Mass Save is a program that is designed to help Massachusetts residents manage their energy and utility costs.
Under the program, utility companies pick lead vendors to approve and select contractors to perform energy improvement work for residential customers. This contracting work – performed by contractors at no-cost or reduced cost to the customer – is then paid for by the lead vendor company with Mass Save funds.
Prosecutors said the Ponzo brothers paid vendor company employees in home bathroom fixtures, a computer, free electrical work, and a John Deere tractor in addition to weekly cash bribes ranging anywhere from $1,000 to $10,000. In exchange, the brothers received a procurement of millions in Mass Save contracts with the vendor company.
From 2013 to 2017, Christopher Ponzo paid one associate $1,000 in cash on a weekly basis, prosecutors said. At times, Christopher Ponzo paid that associate $5,000 to $10,000 in cash, telling the associate that the extra money was from Joseph Ponzo for his part in the bribery scheme.
In return for these payments, the associate helped Joseph Ponzo set up a shell company, Air Tight, to do insulation work and get approved as a lead vendor contractor under the Mass Save program. Prosecutors said Joseph Ponzo put his spouse's name on Air Tight incorporation documents and licenses to hide his involvement in the corruption.
Joseph Ponzo collected over $7 million under the Mass Save program, despite having no professional experience in residential insulation work, prosecutors said.
When that associate left the company in 2017, prosecutors said the Ponzos recruited another associate to the bribery-kickback scheme, paying them thousands of dollars in cash from approximately 2018 to 2022, and also hiring a relative of the second associate as part of the ongoing scheme.
Joseph Ponzo also filed false tax returns from 2016 to 2019 by claiming hundreds of thousands of dollars in false business deductions, prosecutors said.
To disguise personal expenses as business deductions, Joseph Ponzo used his company credit card to make hundreds of thousands of dollars in purchases at The Home Depot, Lowes, and Staples, claiming to his tax preparers that charges at those stores were business-related, prosecutors said. In reality, Joseph Ponzo used the company credit card at those stores to buy gift cards that he and his spouse then used to make thousands of dollars in personal purchases.
In April 2022, both Joseph Ponzo and Christopher Ponzo lied to federal agents when they denied making bribe payments to any company employees, prosecutors said.
The charges of wire fraud conspiracy and wire fraud each provide for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000.
Charges of false statements provide for a sentence of up to five years in prison, up to three years of supervised release and a fine of up to $250,000.
Charges of aiding in filing false tax returns each provide for a sentence of up to three years in prison, up to one year of supervised release, and a fine of up to $100,000.
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