Date: Nov. 7, 2024 Contact: newsroom@ci.irs.gov BOSTON — A former Stoneham Police Officer and his brother, an owner of an electrical contracting company, pleaded guilty to a bribery and kickback scheme that netted them millions of dollars in Mass Save contracts. Joseph Ponzo of Stoneham and Christopher Ponzo of North Reading, pleaded guilty to one count of conspiracy to commit honest services wire fraud and 24 counts of honest services wire fraud, and one count of making false statements to government officials. Joseph Ponzo also pleaded guilty to four counts of causing false tax returns to be filed with the Internal Revenue Service from 2016 to 2019. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencings for February 2025. Massachusetts law requires utility companies to collect an energy efficiency surcharge on all Massachusetts energy consumers. These funds, which amount to hundreds of millions of dollars each year, are to be disbursed by the utility companies to fund energy efficiency programs and initiatives in Massachusetts. Mass Save is a Massachusetts public-private partnership sponsored by various gas and electric utility companies that disburses these energy efficiency funds through funding energy conservation projects for consumers. Under the Mass Save program, the utility companies select lead vendors, like Company A, to approve and select contractors to perform energy improvement work for residential customers. This contracting work – performed by contractors at no-cost or reduced cost to the customer – is then paid for by Company A with Mass Save funds. Joseph Ponzo and Christopher Ponzo conspired to pay, and did pay, tens of thousands of dollars in cash bribes, kickbacks, and other in-kind benefits, including a John Deere tractor, a computer, home bathroom fixtures, and free electrical work, among other things, to Company A employees (Associates 1 and 2) in exchange for the Associates’ assistance in getting the defendants millions of dollars in Mass Save contracts. On a weekly basis, from 2013 to 2017, Christopher Ponzo paid Associate 1 $1,000 in cash. At times, Christopher Ponzo paid Associate 1 $5,000 to $10,000 in cash, telling Associate 1 that the extra money was from Joseph Ponzo for his part in the bribery scheme. In return for these payments, Associate 1, among other things, helped Joseph Ponzo set up a shell company, Air Tight, to do insulation work and get approved as a Company A contractor under the Mass Save program. Joseph Ponzo put his spouse’s name on Air Tight incorporation documents and contracting licenses in order to conceal his involvement in his corrupt side business. Despite having no professional experience in residential insulation work, Joseph Ponzo collected over $7 million under the Mass Save program. After Associate 1 left Company A in 2017, Christopher Ponzo and Joseph Ponzo recruited Associate 2 to the bribery-kickback scheme from approximately 2018 to 2022, paying Associate 2 thousands of dollars in cash and hiring a relative of Associate 2 as part of the ongoing scheme. During the course of the bribery-kickback scheme, Joseph Ponzo aided in the filing of false tax returns from 2016 to 2019 by claiming hundreds of thousands of dollars in false business deductions. To disguise personal expenses as business deductions, Joseph Ponzo used his company credit card to make hundreds of thousands of dollars in purchases at The Home Depot, Lowes, and Staples, claiming to his tax preparers that charges at those establishments were business-related. In reality, Joseph Ponzo used the company credit card at those stores to purchase gift cards that he and his spouse then used to make thousands of dollars in personal expenditures. In April 2022, both Joseph Ponzo and Christopher Ponzo falsely denied making bribe payments to any Company A employees when interviewed by federal agents. The charges of wire fraud conspiracy and wire fraud each provide for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Charges of false statements provide for a sentence of up to five years in prison, up to three years of supervised release and a fine of up to $250,000. Charges of aiding in filing false tax returns each provide for a sentence of up to three years in prison, up to one year of supervised release, and a fine of up to $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. Acting United States Attorney Joshua S. Levy; Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS-CI) in Boston; and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation in Boston made the announcement today. Assistant U.S. Attorneys Lauren Maynard and Dustin Chao of the Criminal Division are prosecuting the case. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
