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Justice News

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

Thursday, February 18, 2016

Chelsea Produce Distributor Sentenced for Filing False Insurance Claims

BOSTON – A Chelsea produce distributor was sentenced in U.S. District Court today for defrauding his insurance companies by submitting bogus claims.

John S. “Yanni” Alphas, 56, of Weston was sentenced by U.S. District Judge Douglas P. Woodlock to 15 months in prison to be followed by three years of supervised release.  He was ordered to pay $160,876 in restitution and a fine of $60,000.  Alphas pleaded guilty to one count of wire fraud in August 2014.

Alphas is the president of The Alphas Company, a wholesale distributor of produce that operates out of the Chelsea Produce Market in Massachusetts.  Between 2007 and 2011, Alphas submitted ten fraudulent insurance claims for produce shipments that he said had been lost en route, had been stolen, or had arrived spoiled, frozen, or in otherwise unusable condition.  In most instances, however, Alphas had suffered no losses at all; his produce had arrived in usable condition.  On the other occasions, Alphas inflated his actual losses, sometimes by tens of thousands of dollars. 

In total, the Court found Alphas sought insurance payments that exceeded his actual losses by approximately $450,000.  Of that amount, his insurers paid him approximately $178,000, although he had only suffered approximately $19,000 in legitimate losses on the relevant insurance claims.

When imposing sentence, the Court also took into account a separate false statement that Alphas made during the course of the sentencing proceedings.  While proceedings were underway, Alphas submitted a license application to the United States Department of Agriculture in which he falsely certified that he had never been convicted of a felony in federal court.  The Court found that this misrepresentation to a government agency merited an additional three months of incarceration beyond what the Court would have imposed for the underlying insurance fraud.

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  Assistance was provided by the Massachusetts Insurance Fraud Bureau.  The case is being prosecuted by Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.

Financial Fraud
Updated February 18, 2016