Registry Of Motor Vehicle Officials And Service Station Owner Charged With Extortion And Fraud
Allegations of selling motor vehicle safety inspection licenses and equipment for profit
BOSTON – A Massachusetts Registry of Motor Vehicle (RMV) project manager, an RMV senior inspector, and an owner of two motor vehicle service stations have been charged with scheming to extort other service station owners who wanted to obtain a license to conduct motor vehicle safety inspections.
Simon Abou Raad, 50, of Tyngsboro, and Mark C. LaFrance, 51, of Braintree, and David P. Gaw, 70, of Wakefield, were charged in U.S. District Court with conspiracy to extort money under color of official right in exchange for an official license to conduct Massachusetts motor vehicle safety inspections and with participating in a scheme to commit mail fraud and honest services mail fraud. Gaw was indicted by a federal grand jury, while Abou Raad and LaFrance were charged by Information, having previously been arrested on March 11, 2013.
According to the indictment, LaFrance, project manager for vehicle safety and compliance services at the RMV, had oversight responsibilities for the entire motor vehicle inspection program within Massachusetts. Abou Raad owned service stations in Tewksbury and Tyngsboro. Gaw was a senior inspector working out of Lawrence whose duties included inspecting service stations applying for licenses. In Massachusetts, applications to obtain a license to conduct motor vehicle safety inspections are intended to be granted off a waiting list with consideration given to geographic location. An applicant for a vehicle inspection license must pay a $100 fee and the actual equipment costs about $2,500. Because the inspection network was at its capacity, the RMV was not granting new licenses off the waiting list.
It is alleged that LaFrance, Abou Raad and Gaw operated what was essentially “a black market” for such licenses through the use of LaFrance’s and Gaw’s official positions. LaFrance provided Abou Raad with a list of vehicle inspection stations that had a low volume of inspections and/or were planning to surrender their license and sell the inspection equipment. Abou Raad then contacted the service station owner and offered to buy the inspection license and equipment for prices usually in the range of $5,000 to $6,000. Abou Raad then sold such licenses and equipment to service station owners desirous of acquiring a license, often identified by Gaw, for prices between $50,000 to $75,000. Abou Raad then arranged the transaction to appear as if the service station owners selling and buying the license were merging as a new business entity or with a change in ownership. Abou Raad submitted forged documentation to the RMV, ostensibly on the part of the seller, falsely representing that there had been a bona fide merger. Or he caused the applicant to falsely list the seller as a corporate officer on filings with the RMV. Although he was aware that these purported mergers were not bona fide, LaFrance either approved the issuing of a new license or permitted others in the RMV to approve the new license. After the fraudulent transaction resulting in the issuance of a vehicle inspection licenses was completed and payment was made to Abou Raad, he would split the illegal proceeds with LaFrance and would pay Gaw a kickback as a finder’s fee if Gaw had supplied the buyer or conducted a site inspection for the new owner. Through this illegal scheme, Abou Raad sold at least 10 inspection licenses and/or machines for approximately $657,000.
During the investigation, which involved the interception of electronic communications, Gaw and Abou Raad are alleged to have discussed service station owners who were likely to sell their inspection machine and license. In one particular transaction where Gaw located the potential buyer, Gaw was intercepted asking Abou Raad, “how much you got for me?” and Abou Raad responded, “two grand.”
The maximum sentence under the extortion and mail fraud statutes is 20 years in prison, a fine of $250,000 or twice the gain or loss, whichever is greater, three years supervised release, restitution, and forfeiture.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys S. Theodore Merritt and Robert Fisher of Ortiz’s Public Corruption Unit.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.