Former Operative of Boston “Boiler Room” Convicted by Jury of Fraud and Conspiracy Charges
BOSTON – A former Boston resident was convicted yesterday in U.S. District Court in Boston in connection with his participation in a fraudulent “boiler room” operation that misled investors and caused over $4 million in losses.
Jonathan Fraiman, 36, was convicted following an 11-day trial of conspiracy to commit mail and wire fraud and mail fraud. U.S. District Court Judge F. Dennis Saylor, IV scheduled sentencing for March 10, 2015.
In December 2007, Fraiman joined Envit Capital LLC (Envit), a company which, with its various related entities, purported to invest in and manage a hedge fund and private equity funds. Envit was originally operated in Boston, and later opened an office in Boca Raton, Fla. Upon joining Envit, and through August 2009, Fraiman conspired with Envit’s CEO and Chairman, co-defendant Edward Laborio, to solicit investments, by, among other things, making fraudulent misrepresentations about the historical rate of return of certain Envit entities and falsely promising certain investors quarterly fixed dividends on their investments. As part of the scheme, Fraiman purported to act as some investors’ investment adviser, a position he exploited to convince his clients to invest monies, including retirement assets and trust monies, in Envit through bogus promises of guaranteed dividends and false assurances regarding the financial health of the company. As part of the conspiracy, Fraiman and Laborio periodically rolled out new Envit “offerings,” which invariably were based on deceptive representations about the company, to both existing and new investors in order to raise more funds for Envit, from which they both personally profited. Investors lost over $4 million through their investment in Envit and its related entities.
Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain earlier this year.
The charging statutes each provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
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. The U.S. Attorney’s Office also acknowledges the valuable assistance provided by the U.S. Securities and Exchange Commission, Boston Regional Office. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis and Eric P. Christofferson of Ortiz’s Criminal Division.