OIG Annual Report 2021: Audit, Oversight and Investigations Division

Part V of the Office of the Inspector General's 2020 Annual Report

As previously discussed, the Audit, Oversight and Investigations Division (Investigations Division) investigates the misuse of public funds and property and recommends improvements to operational and financial controls. The Investigations Division also reviews potential waste and abuse of public funds and assets. As part of its work, the Investigations Division manages the Office’s general hotline with assistance from other divisions in the Office. 

For decades, the Investigations Division has developed civil and criminal cases that lead to large financial recoveries for the Commonwealth and other government entities. Since 2012, the Investigations Division has pursued cases that included restitution and settlement agreements of more than $33 million in public funds. For example:

• In 2012, an investigation into the financial relationship between Merrimack Education Center (MEC), a private non-profit organization, and the Merrimack Special Education Collaborative (MSEC), a public entity, resulted in MEC refunding $8.49 million to MSEC.
• In 2013, an investigation into a contract with Honeywell International, Inc. (Honeywell), to provide energy management services to the city of Quincy resulted in Honeywell paying the Commonwealth $4 million.
• In 2016, an investigation into construction oversight on Plum Island by CDM Smith Inc., a Boston-based engineering firm, led to a $5.5 million settlement with the firm. 
• In 2017, an investigation into the company providing janitorial supplies to the Massachusetts Port Authority resulted in the company repaying $2.36 million to the Commonwealth.

When the Investigations Division identifies potential criminal misconduct, it works with prosecutors to bring those responsible to justice. Since 2012, the division’s work has resulted in criminal charges or indictments against 42 individuals. This includes charges against the executive directors of two different non-profit organizations, the former mayor of Fall River, the executive director of a regional refuse disposal district, a buyer for the MBTA, a district chief of the Boston Fire Department, a lobbyist and the executive director of a housing authority.

Over the last decade, reports and letters issued by the Investigations Division have also resulted in policy and personnel changes at the state and local levels as well as the identification of different types of fraud, waste and abuse. For example:

• In 2013, an investigation into Michael McLaughlin, the executive director of the Chelsea Housing Authority, led to legislative changes in the way housing authorities operate in Massachusetts.
• In 2015, a review found that the Boston Redevelopment Authority (BRA) did not exercise due diligence in property transactions in the Fenway Park area and failed to negotiate sufficient sale prices. The Office recommended that the BRA adopt clear written policies and procedures governing future property transactions.
• In 2016, a review concluded that Mohammed Khan served simultaneously for many years as the administrator of the Montachusett Regional Planning Commission (MRPC) and executive director of Montachusett Regional Transit Authority (MART). The Office concluded that Mr. Khan was violating the state retirement laws concerning excess earnings, was receiving an inflated pension and that MRPC and MART circumvented a state ethics ruling prohibiting his dual employment. 

The Investigations Division also led a legislatively mandated review of the Transitional Aid to Families with Dependent Children program that resulted in the Legislature’s creation of a unit within the Office dedicated to examining health and human services programs throughout state government. In addition, the Investigations Division has repeatedly shed light on costly issues like sick leave abuse and time fraud that do not often draw public scrutiny. 

In 2021, the Investigations Division worked on many investigations that are not yet public. The work of the Investigations Division spanned many areas of government, including administration, education, housing, public benefits and public safety. Additionally, the Investigations Division continued to review numerous cases related to potential misuse of federal pandemic funding. Below is a summary of the Investigations Division’s work from 2021 that has become public through indictments, settlements, public letters and public recommendations for corrective measures.

I. Housing

A. Former CEO of Non-Profit Organization

The Investigations Division conducted a joint investigation with the Attorney General’s Office that led to indictments against Manuel Duran, the former CEO of Casa Nueva Vida, Inc. (CNV), for allegedly embezzling nearly $1.5 million from the organization between 2012 and 2021. The September 2021 indictments charged Mr. Duran with larceny over $1200, perjury and false entries in corporate books.

CNV is a non-profit organization that operates shelters to aid families experiencing homelessness, specializing in services and programs for single Latina mothers and their children. The indictments allege that Mr. Duran, using multiple schemes, stole nearly $1.5 million from CNV, which receives almost all of its funding through contracts with the Commonwealth. In one scheme, the indictments allege that Mr. Duran leased a shelter using a shell corporation and then sublet the shelter to CNV at an inflated cost. Using this scheme, Mr. Duran allegedly diverted more than $1.1 million in CNV funds to himself between 2014 and 2021. 

In another scheme, at various times between 2012 and 2020, Mr. Duran allegedly created fake invoices from three vendors, purportedly for renovations, lead abatement and asbestos abatement at properties that CNV owned or leased. The joint investigation revealed, however, that the vendors allegedly never performed the work. The indictments allege that Mr. Duran had CNV issue 16 payments to the purported vendors who never performed services for the amount paid. Using this scheme, Mr. Duran allegedly stole more than $242,000.

The indictments further allege that between 2014 and 2019, Mr. Duran stole approximately $140,831 from CNV by depositing directly into his own bank account paychecks issued to a seasonal maintenance employee for CNV who was in Puerto Rico when the paychecks were issued. 

In January 2022, moreover, Mr. Duran agreed to pay $6 million to settle a lawsuit brought by the Attorney General’s Office. The lawsuit alleged that Mr. Duran abused his position by improperly funneling CNV funds to himself and then he falsely certified compliance with regulations designed to detect selfdealing.

Mr. Duran is presumed innocent until proven guilty.

B. Former DDS Group Home Employee

The Investigations Division, along with the Bureau of Program Integrity, conducted an investigation regarding a supervisor of a Department of Developmental Services (DDS) group home based on a report submitted to the Office’s general hotline. The Office found evidence that the supervisor, Katelyn Sullivan, entered overtime shifts into DDS’s payroll that she did not work, thereby receiving over $38,000 in wages. Ms. Sullivan admitted to larceny and false claims following the Office’s investigation and a prosecution by the Attorney General’s Office. 

On February 5, 2020, a Superior Court judge continued the case without a finding and ordered Ms. Sullivan to complete three years of probation. On February 23, 2021, Ms. Sullivan was ordered to pay $11,500 in restitution in monthly increments of $500 throughout the probationary period. If Ms. Sullivan pays the restitution and completes the probationary period, the indictments will be dismissed.

II. Administration

A. Former Town Accountant 

The Office has previously reported on a joint investigation with the Attorney General’s Office that led to multiple indictments against Justin Cole for allegedly stealing more than $930,000 from the towns of Uxbridge, Monterey, Wenham and Millville between December 2012 and June 2018.

Mr. Cole worked as the town accountant for the town of Uxbridge and provided contracted accounting services to the towns of Monterey, Millville and Wenham through his company, Baystate Municipal Accounting Group, Inc. In July 2020, a statewide grand jury indicted Mr. Cole for allegedly embezzling more than $729,000 between December 2012 and June 2018 from the towns of Uxbridge, Monterey and Millville. Mr. Cole was indicted on five counts of larceny over $250, two counts of larceny over $1,200, four counts of presentation of false claims, four counts of unwarranted privilege by a municipal employee and one count of financial interest by a municipal employee. 

In March 2021, a statewide grand jury issued a second indictment, alleging that, between March 2014 and February 2017, Mr. Cole stole more than $200,000 from the towns of Uxbridge and Wenham. The second indictment brought the total Mr. Cole allegedly stole to $930,000. The additional charges were one count of larceny over $250 and one count of presentation of a false claim. 

Mr. Cole is presumed innocent until proven guilty. 

B. Former Mayor of Fall River and Co-conspirators

The Office has previously reported on the criminal cases involving the former mayor of Fall River, Jasiel F. Correia II, and his associates. In 2018, Mr. Correia was indicted for allegedly defrauding investors in a company called SnoOwl by using the funds on vacations, entertainment and other personal expenses. In 2019, moreover, a federal grand jury charged Mr. Correia with bribery, conspiracy to commit extortion, extortion, aiding and abetting, wire fraud and filing false tax returns. Several of the charges alleged he extorted more than $600,000 in cash and other benefits from individuals seeking to open licensed marijuana businesses in Fall River. The indictments were the result of a joint investigation by the Investigations Division, the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service and the U.S. Department of Housing and Urban Development.

Following a three-week trial, a federal jury convicted Mr. Correia on May 14, 2021, on 21 of 24 counts, including extortion, extortion conspiracy, wire fraud and filing false tax returns. During sentencing hearings in September 2021, the presiding U.S. District Court judge dismissed guilty verdicts on 10 of the 21 counts, including several convictions for wire and tax fraud. The judge sentenced Mr. Correia to six years in prison on the remaining 11 criminal charges, including extortion and wire fraud. The judge also ordered Mr. Correia to forfeit $566,740 to the government and provide $311,340 in restitution to four individuals who invested in SnoOwl. 

In March 2022, Mr. Correia filed an appeal, asking the judge to either vacate his conviction or grant him a new trial. 

On April 22, 2022, Mr. Correia began serving his sentence at a federal prison in New Hampshire.

Also in 2019, charges were filed against three other individuals who had roles in extorting marijuana businesses. Hildegar Camara, David Hebert and Antonio Costa were charged separately with extortion conspiracy and extortion. Each was also charged with making false statements to federal agents. All three pleaded guilty to all charges in September 2019 and have cooperated with the government. 

On June 28, 2021, Mr. Costa was sentenced to three years of probation, with the first 15 months spent under home confinement with electronic monitoring. Mr. Costa was also ordered to forfeit $107,550 and pay a $10,000 fine. On July 21, 2021, Mr. Camara was sentenced to three years of probation and 150 hours of community service. 

Additionally in 2019, Mr. Correia’s former chief of staff, Genoveva Andrade, was indicted on charges of extortion conspiracy, extortion, bribery and making false statements. On December 14, 2020, Ms. Andrade pleaded guilty to all charges. Specifically, Ms. Andrade admitted to conspiring with Mr. Correia to extort $150,000 in cash from one businessman and to extort other benefits – including a Rolex watch – from a second businessman. Ms. Andrade also admitted to illegally providing half her city salary to Mr. Correia for the first nine months of her employment as his chief of staff. She also admitted to making false statements to federal agents investigating Mr. Correia. 

In June 2021, a U.S. District Court judge rejected Ms. Andrade’s guilty plea. In October 2021, federal prosecutors dropped two of the six counts against Ms. Andrade: one count of extortion conspiracy and one count of aiding and abetting extortion. Ms. Andrade’s trial began in December 2021 with jury selection, but it was delayed after a witness tested positive for COVID-19. In March 2022, Ms. Andrade pleaded guilty to lying to federal agents investigating Mr. Correia. The U.S. District Court judge sentenced Ms. Andrade to time served, one year of probation and a $50,000 fine.

C. Founders of Non-Profit Organization 

The Investigations Division conducted a joint investigation with federal agencies into a Taunton couple who allegedly filed fraudulent claims to obtain Pandemic Unemployment Assistance (PUA) funds, made false statements to obtain a mortgage and illegally diverted donations from a Boston-based nonprofit organization. 

The indictment charges Monica Cannon-Grant and Clark Grant with defrauding the Massachusetts Department of Unemployment Assistance by submitting false documents to obtain PUA benefits that they were not entitled to receive. The two defendants also allegedly conspired to defraud a mortgage company by submitting false documentation in support of a loan application.

PUA provided up to 79 weeks of unemployment benefits to individuals who were unable to work because of the COVID-19 pandemic. The PUA program began in March 2020 and ended in September 2021. The indictment also alleges that Mrs. Cannon-Grant and Mr. Grant, two founders of Violence in Boston (VIB), a Boston-based non-profit organization, illegally diverted VIB donations and grants and used the money for car repairs, groceries, a vacation and other personal expenses. The 18-count indictment charges Mrs. Cannon-Grant and Mr. Grant with 13 counts of wire fraud, 2 counts of wire fraud conspiracy, 1 count of conspiracy and 1 count of making false statements to a mortgage lending company. Cannon-Grant is charged with 1 count of mail fraud.

Founded in 2017, VIB’s stated purpose is to reduce violence and to raise social awareness about the causes of violence and the impacts it has on underserved communities. Mrs. Cannon-Grant is the founder and CEO; Mr. Grant is a founding director. According to the indictment, Mrs. Cannon-Grant and Mr. Grant concealed their criminal conduct from VIB’s donors as well as from VIB’s other officers and board members.

The charges are allegations. Mrs. Cannon-Grant and Mr. Grant are presumed innocent until proven guilty in court. 

The indictment resulted from a collaboration with the U.S. Attorney’s Office, the U.S. Postal Inspection Service, the U.S. Department of Labor’s Office of the Inspector General and the Internal Revenue Service's Criminal Investigations Division.

III. Education

A. Former METCO Director

The Office has previously reported on a joint investigation with the Essex County District Attorney’s Office into spending by a former director of the Marblehead METCO program.⁷ The investigation found evidence that the former director, Francois Fils-Aime, stole approximately $20,000 from a fund that was intended to benefit students. In particular, the investigation found evidence that Mr. Fils-Aime used a bank account referred to as “the Marblehead METCO Sunshine Fund” for his personal benefit, including for restaurant meals. The account was funded by METCO parents’ yearly dues, as well as by donations from individuals and organizations.

Following the joint investigation, a grand jury indicted Mr. Fils-Aime on two counts of larceny. In March 2021, Mr. Fils-Aime admitted to sufficient facts for a guilty finding on both larceny charges. Mr. Fils-Aime received a year of unsupervised probation and he must complete 100 hours of community service. He must also pay $10,000 in restitution to the Marblehead Public Schools. The case was continued without a finding subject to Mr. Fils-Aime repaying the $10,000 and successfully completing his probation.

IV. Public Pensions

A. Hampden County Regional Contributory Retirement System 

An audit of the Hampden County Regional Contributory Retirement System by the Public Employee Retirement Administration Commission (PERAC) revealed that the retirement board had paid for website-related services it had never received. PERAC found that over five years the retirement board paid more than $235,000 to more than 50 different entities claiming to provide services such as “search engine optimization” or “online directory listings.” The audit identified 119 fraudulent invoices, many of which claimed to be from a collection agency or legal department and that demanded “immediate action.” 

The Investigations Division learned that, often, an individual from the supposed “service provider” would call the retirement board’s executive director and threaten her if she did not send an immediate payment. For example, callers would tell the executive director that the retirement board had entered a contract with them, that they had provided services and that they would send the sheriff to arrest her if she did not pay the bill. At that point, the companies would fax a fake invoice that she would present for payment at the next board meeting.

In December 2021, the Office issued a fraud alert providing the following precautions and tools to help other jurisdictions from falling victim to such scams:

• Employees should be aware of phone and invoice scams and should know that high-pressure tactics and threats are red flags for fraud.
• Employees should report harassing phone calls to their supervisors. Supervisors should report the calls to the entity’s legal counsel, the local police and the Federal Trade Commission.
• Agencies should research any company that sends an unexpected invoice. Often a quick web search will reveal that the company name, website or phone number is fake.
• Agencies should keep updated and organized records of all current contracts. Agencies should not pay any invoices unsupported by a valid contract. Even if the vendor’s name is familiar, employees should check it against the contract to make sure the account number on the invoice matches the account number on the contract.
• Employees should never pay an invoice without first confirming with the right person in the organization that the services, materials or supplies have been ordered and received.
• If an agency receives invoices for products or services it did not purchase, the agency should contact the Office’s confidential hotline at [phone] or [e-mail]. All telephone calls and emails are treated confidentially, and individuals may choose to remain anonymous.

B. MBTA Transit Police Retirement Plan 

The Investigations Division, working with the Internal Special Audit Unit (Transportation Unit), examined allegations that the Massachusetts Bay Transportation Authority (MBTA) Police Association Retirement Plan (Retirement Plan) overpaid supplemental and disability retirement benefits to several retirees. During its investigation, the Office found that the Retirement Plan had overpaid 24 retirees more than $470,000 between 2005 and 2018. The plan overpaid retirees because it had poor internal controls and no system to terminate payments when retirees were no longer eligible for the benefits.

In its letter, the Office recommended that the Retirement Plan:

• Attend a training on the fiduciary duties and responsibilities of public boards and commissions.
• Document all internal controls in writing.
• Conduct a more robust annual audit to examine its internal controls.

When the new executive director of the Retirement Plan discovered the overpayments, she put controls in place to ensure the plan pays the correct retirement benefits going forward. The Retirement Plan also entered into repayment plans with the retirees who received the overpayments by permanently reducing the monthly benefit. Because of this, the Retirement Plan considers the overpayments paid back.

V. Public Safety

A. Methuen Police Department

The Office previously reported on its review of two police department contracts that the former mayor and the Methuen City Council approved in 2017. The contracts provided large raises for the department’s superior officers – its sergeants, lieutenants and captains – as well as for the department’s longtime chief, Joseph Solomon. 

The Office found leadership failures at all levels of city government. Then-Mayor Zanni approved unprecedented changes to the superior officers’ contract without considering their potential financial impact. These changes significantly increased the superior officers’ total compensation. Mayor Zanni signed the contract without reading the entire document or asking the city’s solicitor or auditor to review the terms. City officials also did not review the final contract before presenting it to the City Council for approval. 

In addition, the Office found that the president of the superior officers’ union, Captain Gregory Gallant, revised the superior officers’ contract after the union had ratified it, making changes that city officials had not agreed to. The combination of the changes Mayor Zanni approved and Captain Gallant’s alterations resulted in 35% to 183% raises for superior officers. 

Furthermore, then-Chief Solomon knew about Captain Gallant’s changes and violated his obligations to the city when he remained silent about them. The changes also indirectly but substantially increased the chief’s salary, making him one of the highest paid police chiefs in the country. 

Unable to afford the raises in the superiors’ union contract (referred to as the 2017 contract), the city never implemented it. Instead, the city negotiated a memorandum of understanding (MOU) with the superior officers’ union, which was less expensive than the 2017 contract but more costly than the previous contract signed in 2014. In February 2019, the Office issued a public letter recommending that the City Council rescind the superior officers’ 2017 contract and questioning whether the MOU was enforceable. In response, the city reverted to paying the superior officers under their 2014 contract. 

After the Office issued its December 2020 report, Methuen’s new mayor, Neil Perry, immediately placed Chief Solomon and Captain Gallant on paid administrative leave. Shortly thereafter, in January 2021, Chief Solomon announced his retirement. 

After the city reverted to the 2014 contract, the union filed a grievance against the city, seeking to enforce the 2017 contract. In January 2022, an arbitrator agreed with the Office’s findings and ruled that the 2017 contract was not binding on the city, upholding the city’s decision not to pay the salaries set out in the contract. The union decided it would not appeal the arbitrator’s decision. City officials estimated that canceling the 2017 contract saved the city $3.7 million.

B. Former MBTA Transit Police Officers

The Investigations Division worked in collaboration with the Transportation Unit, the MBTA Transit Police Department and Suffolk County District Attorney’s Office to investigate allegations of time theft by three former MBTA police officers. Following the investigation, all three officers were charged with larceny. Two of the former officers have been placed on pre-trial probation and have paid approximately $12,000 in restitution to the MBTA in connection with receiving pay they did not earn. The third officer’s case is still pending.

In July 2021, Kenneth Berg, a former police lieutenant, was charged in Boston Municipal Court (BMC) with larceny over $250 in connection with receiving $8,460.97 in pay for hours he had not worked. Evidence gathered during the investigation revealed that between June 23, 2014, and June 16, 2015, Mr. Berg did not work portions of 26 regular shifts and 39 overtime shifts, despite claiming to have worked those entire shifts. On December 22, 2021, a BMC judge ordered Mr. Berg to repay the MBTA $8,460.97 and to serve three months of pre-trial probation.

Also in July 2021, Jason Morris, a former police sergeant, was charged with larceny over $250 in connection with receiving $4,354.55 in pay for hours he never worked. Evidence revealed that between October 2, 2015, and December 24, 2015, Mr. Morris did not work portions of 16 regular shifts and 16 overtime shifts, despite claiming that he had worked those entire shifts. On December 10, 2021, a BMC judge ordered Mr. Morris to repay the MBTA $4,354.55 and placed him on three months of pre-trial probation.

Former MBTA Transit Police Sergeant Michael Adamson was also charged with larceny for allegedly collecting pay for hours he did not work. Mr. Adamson’s case is still pending.

Mr. Adamson is presumed innocent until proven guilty.

Additional Resources

OIG 2021 Annual Report

⁷ The Department of Elementary and Secondary Education describes the METCO program as follows:

The METCO Program is a grant program funded by the Commonwealth of Massachusetts. It is a voluntary program intended to expand educational opportunities, increase diversity, and reduce racial isolation, by permitting students in certain cities to attend public schools in other communities that have agreed to participate. 

METCO, DEPT. OF ELEMENTARY AND SECONDARY EDUC. (last viewed March 16, 2022).

Date published:	April 29, 2022