Boston - A Winthrop man was convicted today in federal court of mail and wire fraud in connection with a 10 year scheme that centered on investments in “life settlements,” by which he defrauded more than 20 victims of at least $4.5 million.
Joseph Gennaco, 68, of Winthrop, Mass. and Jupiter, Fla., pleaded guilty before U.S. District Judge Nathaniel M. Gorton to 11 counts of wire fraud and 16 counts of mail fraud.
Had the case proceeded to trial the Government’s evidence would have proven that from 2001 through 2011, Gennaco defrauded customers by falsely representing that their money would be invested in various insurance-based instruments, when instead he diverted the funds for his own personal and business purposes. Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust, and Crescent Management Group. Gennaco’s scheme centered on misrepresentations to investors that their funds would be invested in one or more life insurance policies - or “life settlements” - and that the investments would be repaid with a guaranteed profit from the sale of those policies. Instead, Gennaco diverted investors’ funds to his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold the policies. By this scheme Gennaco obtained at least $4.5 million from more than 20 victims.
Judge Gorton scheduled sentencing for May 23, 2013. Gennaco pled guilty pursuant to a binding plea agreement that, if accepted by the Judge, would require a sentence between 92 and 100 months, to be followed by three years of supervised release, together with fines and restitution to victims.
United States Attorney Carmen M. Ortiz; Kevin Niland, Inspector in Carge of the U.S. Postal Inspection Service; and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division made the announcement today. The Suffolk County District Attorney’s Office, Massachusetts Securities Division, Massachusetts Division of Insurance, and the U.S. Trustee’s Office in Boston also provided assistance in the investigation. The case is being prosecuted by Assistant U.S. Attorneys Mark J. Balthazard and Jeremy M. Sternberg of Ortiz’s Economic Crimes Unit.