Former CEO Agrees to Plead Guilty to Embezzlement and Tax Crimes
For Immediate Release
U.S. Attorney's Office, District of Massachusetts
BOSTON – The former CEO and co-founder of a Boston-based mobile phone music streaming service, has agreed to plead guilty in connection with a scheme to embezzle hundreds of thousands of dollars from his employer and to file false tax returns.
David John, 56, who recently changed his name from David John Fondots, was charged by information with one count of wire fraud and one count of filing false tax returns. A plea hearing has not yet been scheduled. In June 2019, the defendant was arrested and charged by criminal complaint under the name David Fondots. According to court records, in June 2018, the government learned that the defendant changed his name from David John Fondots to David John but did not inform Pretrial Services.
According to the court documents, Fondots misappropriated company funds which he used for his personal benefit. From 2014 to 2016, Fondots caused his company to pay significant sums of money directly to himself, to a family member, and to companies controlled by a family member. Fondots used the embezzled funds to pay personal expenses for himself and his family, including car payments, legal fees, and travel, among other things. Fondots is also charged with failing to report the illegal income to the IRS over the period of his embezzlement scheme.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, restitution, and forfeiture. The charge of filing false tax returns provides a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities & Financial Fraud Unit is prosecuting the case.
Updated September 25, 2019