FORMER SOFTWARE SALESMEN WHO TESTIFIED AGAINST DiMASI AND McDONOUGH SENTENCED ON CORRUPTION CHARGES
Joseph Lally Sentenced
Boston - Today in federal court, Chief Judge Mark L. Wolf sentenced JOSEPH LALLY to 18 months in prison for his role in a scheme involving former House speaker SALVATORE F. DiMASI. LALLY’s sentence will be followed by three years supervised release and a $50,000 fine.
On March 8, 2011, LALLY pleaded guilty to conspiring to deprive Massachusetts citizens of DiMASI’s honest services and extortion under color of official right involving the payment of bribes to DiMASI and kickbacks to co-defendant RICHARD McDONOUGH and RICHARD VITALE.
Pursuant to his plea agreement, LALLY, of North Reading, testified at the trial of DiMASI, McDONOUGH, and VITALE over the course of three days. At the end of the six-week trial, on June 15, 2011, a federal jury convicted DiMASI and McDONOUGH of one count of conspiracy, three counts of honest services mail fraud and three counts of honest services wire fraud and one count of extortion under color of official right (Hobbs Act). VITALE was acquitted of all charges.
DiMASI was sentenced to eight years in prison, two years of supervised release following his prison sentence and ordered to pay $65,000 in forfeiture. McDONOUGH was sentenced to seven years in prison, two years of supervised release following his prison sentence and ordered to pay $250,000 in forfeiture and a $50,000 fine.
LALLY was an Area Vice-President of Sales for the State and Local Government Division of Cognos ULC, a Canadian software company that sold business intelligence and performance management software and related services which targeted Massachusetts government agencies as potential customers. LALLY left Cognos and formed his own company, Montvale Solutions, LLC, which was licensed to resell Cognos software to agencies in Massachusetts. McDONOUGH was a lobbyist hired by LALLY and a close friend of DiMASI.
When DiMASI became Speaker of the House in 2004, income from his outside law practice decreased significantly. In December 2004, McDONOUGH, DiMASI and LALLY arranged to have money funneled to DiMASI through a law associate of DiMASI’s, Steven Topazio, with whom DiMASI had a fee sharing arrangement. Over the next two years, although Topazio was given no work nor asked to perform any services, he was paid $5,000 per month by Cognos as arranged by the defendants.
Through this sham arrangement, DiMASI was paid $65,000 over the course of the two-
year period in exchange for taking official actions that would benefit Cognos, LALLY and McDONOUGH. Such actions included securing legislative funding for two Cognos software contracts with the Commonwealth of Massachusetts worth $17.5 million.
The evidence also showed that DiMASI lobbied Massachusetts Governor Deval Patrick, and members of his administration, in an effort to get the Cognos contract executed. After the Boston Globe wrote a series of articles in 2008, questioning the Cognos contracts, DiMASI suggested that Topazio “lose his check register” that showed the Cognos payments. DiMASI also lied to his press secretary about his knowledge of the Topazio payments from Cognos and LALLY’s connection to Cognos.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office made the announcement today. The case was investigated by the FBI with assistance from the Massachusetts Inspector General’s Office. The case was prosecuted by Assistant United States Attorneys S. Theodore Merritt and Anthony E. Fuller of Ortiz’s Public Corruption Unit and Kristina E. Barclay of Ortiz’s Economic Crimes Unit.
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