Winthrop Insurance Advisor Sentenced To Over Eight Years For Investment Fraud SchemeSeven Million Dollar Loss Over 10-year Period
BOSTON - A Winthrop man was sentenced late yesterday in federal court for his role in a $7 million fraud scheme that centered on steering clients into investments in “life settlements.”
United States District Court Judge Nathaniel M. Gorton sentenced Joseph Gennaco, 68, of Winthrop and Jupiter, Fla., to 100 months in prison to be followed by three years of supervised release for 27 counts of mail and wire fraud. He was ordered to pay $7 million in restitution to 40 victims. In February 2013, Gennaco pleaded guilty to all counts in the indictment. Gennaco has been held in custody since November 2011, when his bail was revoked because, among other things, he continued to defraud people even after he had been charged.
From 2001 through 2011, Gennaco defrauded customers of his insurance business by claiming that their money would be invested in various insurance-based instruments. Instead Gennaco diverted the customers’ 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 told 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. In reality, Gennaco took investors’ funds for his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold policies that had been purchased as investments. By continually reassuring investors that their money was safe, and by offering a variety of phony excuses for the delay in repaying investors, Gennaco strung along many of his victims for years.
United States Attorney Carmen M. Ortiz; Kevin M. Niland, Inspector in Charge of the United States Postal Inspection Service in Boston; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Suffolk County District Attorney Daniel Conley’s office; Secretary of the Commonwealth’s Securities Division; the Commonwealth’s Office of Consumer Affairs and Business Regulation, Division of Insurance; and the United States Trustee’s Office in Boston also provided assistance in the investigation. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.