Defendant used investor funds to pay for lavish lifestyle, political campaign and student loans
BOSTON, Ms. – Jasiel F. Correia II, the Mayor of Fall River, was arrested this morning and charged with wire and tax fraud in connection with a multi-year investment fraud scheme.
Correia, 26, was indicted on nine counts of wire fraud and four counts of filing false tax returns. Correia was arrested this morning and will appear in federal court in Boston this afternoon.
As alleged in the indictment, in 2012, Correia founded SnoOwl, an app designed to connect local businesses with their target consumer market. In approximately January 2013, Correia began seeking investors who were willing to provide investment money for SnoOwl in return for equity in the company. In order to incentivize potential investors, Correia falsely represented that he was a successful tech entrepreneur who previously sold another app for a large profit, that investment funds would be used to develop the app, and that he would not take a salary or otherwise draw compensation from SnoOwl.
According to the indictment, seven individuals invested a total of $363,690 in SnoOwl. However, rather than using the investment funds to develop the app as Corria certified in signed agreements with investors, it is alleged that Correia used at least $231,447 – approximately 64% of the money invested – to fund his own lavish lifestyle, burgeoning political career and other business ventures.
Specifically, the indictment alleges that Correia used the investment funds to purchase tens of thousands of dollars of luxury items, including a Mercedes, jewelry and designer clothing; to pay for personal travel and entertainment, including tens of thousands of dollars on airfare, hotels, restaurants, casinos, and adult entertainment; to pay down personal student loan debt; to fund his political campaign; and to make charitable donations in his own name.
As alleged in the indictment, Correia concealed the theft of funds from investors by providing false positive updates on SnoOwl’s status and refusing to provide the company’s financial records, which would have revealed his fraud. In addition, Correia concealed his ill-gotten gains from the IRS when filing his 2013 and 2014 individual tax returns.
In the spring/summer of 2015, Correia announced his candidacy for mayor of Fall River. Notwithstanding the facts that he had fraudulently taken hundreds of thousands of dollars of investor money and that SnoOwl was floundering, Correia touted his stewardship of SnoOwl to Fall River voters as one of his primary qualifications for mayor.
By May 2017, Correia was aware that SnoOwl was the subject of a federal investigation, and instructed an accountant to file amended 2013 and 2014 personal tax returns. Because the accountant relied on false information from Correia, the amended returns classified SnowOwl as a sole proprietorship, instead of a partnership, a critical distinction for tax purposes. As a result, Correia was not assessed any tax liability for any of the investor money that he took for himself, and he actually received a refund from the IRS in June 2017.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, up to three years of supervised release, a fine of up to twice the loss involved and restitution. 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Glenn A. Cunha, Massachusetts Inspector General, made the announcement. Assistant U.S. Attorneys Zachary Hafer, Chief of Lelling’s Criminal Division, and David Tobin, of Lelling’s Major Crimes Unit, are prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
SOURCE: news provided by JUSTICE.GOV on Thursday, October 11, 2018.