December 28, 2024 | JacobiJournal.com — Stolen COVID Relief Funds: The city of West Haven, Connecticut, has secured more than $1 million in reimbursement from its insurance provider after two city employees embezzled federal pandemic relief funds three years ago.
The recovery effort comes after lengthy investigations and multiple prosecutions that exposed how federal CARES Act money, intended to support local communities during the pandemic, was diverted for personal gain. This reimbursement marks a critical step toward restoring public trust and alleviating the financial burden placed on taxpayers.
Swift Action Leads to Recovery of the Stolen COVID Relief Funds
Former state Rep. Michael DiMassa and John Bernardo orchestrated a scheme that defrauded West Haven taxpayers of $1.2 million. In response, Mayor Dorinda Borer acted swiftly to recover the stolen COVID-19 funds, which resulted in a $1.2 million settlement with The Hartford Financial Services Group.
According to The Hartford’s fidelity crime claims division, after subtracting the $79,177.98 received in court-ordered restitution and a $100,000 deductible, the insurance will cover a net loss of $1,037,363.82. “This is a huge victory for our taxpayers,” Mayor Borer stated.
Details of the Fraud
Authorities arrested DiMassa, 32, on October 20, 2021, and he pleaded guilty on November 1, 2022, to three counts of conspiracy to commit wire fraud. In May 2023, a court sentenced him to 27 months in prison, followed by five years of supervised release. Additionally, he must perform 100 hours of community service and pay $856,844.45 in restitution.
Similarly, Bernardo pleaded guilty on June 14, 2022, to one count of conspiracy to commit wire fraud. By March 2023, he received a 13-month prison sentence and was ordered to pay $58,927.25 in restitution.
How the Schemes Unfolded
DiMassa, serving as an administrative assistant to the West Haven City Council, had the authority to approve COVID-19 relief funds for reimbursement. Between July 2020 and September 2021, West Haven received $1,150,257 in CARES Act funds. Exploiting this role, DiMassa submitted fraudulent invoices for services and goods that were never provided.
One scheme involved Compass Investment Group, LLC, a company DiMassa formed with Bernardo. They fraudulently billed the city $636,783.70 for consulting services that were never performed. Court documents revealed that DiMassa withdrew large sums of cash from the Compass account, which he used for gambling at Mohegan Sun Casino.
Moreover, DiMassa conspired with his wife, Lauren DiMassa, to submit fake invoices for a youth violence prevention program. Lauren collected $147,776.10 for services she never delivered. She pleaded guilty on July 14, 2022, and received a six-month prison sentence along with a restitution order for the full amount.
In another scheme, DiMassa partnered with John Trasacco, using fraudulent invoices from two companies, L&H Company and JIL Sanitation Services. They received $431,982 for bogus services, including work on a vacant school building. A jury found Trasacco guilty in December 2022, and he was sentenced to 96 months in prison with a restitution order of $143,994.
Investigation and Legal Outcomes
The Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development led the investigation. Attorneys from the office of Vanessa Roberts Avery, U.S. Attorney for the District of Connecticut, prosecuted the case.
Read the official release here.
FAQs: Stolen COVID Relief Funds
How did West Haven recover the stolen COVID relief funds?
West Haven secured reimbursement through an insurance settlement with The Hartford Financial Services Group, which covered over $1 million of the stolen COVID relief funds.
Who was involved in embezzling the stolen COVID relief funds in West Haven?
Former state Rep. Michael DiMassa, his wife Lauren DiMassa, John Bernardo, and John Trasacco all played roles in the schemes that diverted stolen COVID relief funds from the city.
What penalties were issued in connection with the stolen COVID relief funds case?
Sentences included prison terms ranging from 6 months to 96 months, supervised release, community service, and restitution orders tied directly to the stolen COVID relief funds.
Why is the West Haven stolen COVID relief funds case significant?
The case demonstrates how oversight failures in federal relief programs can lead to fraud, and it highlights the importance of accountability in managing stolen COVID relief funds.
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