Date: Dec. 5, 2024 Contact: newsroom@ci.irs.gov BOSTON — The manager of a real estate agency was sentenced today in federal court in Boston in connection with a multi-year scheme to defraud his clients by engaging in fraudulent short sales of government and bank-owned properties to straw buyers acting at the direction of the defendant. James Macchio of Glastonbury, Conn., was sentenced by U.S. District Court Judge Leo T. Sorokin to 42 months in prison and two years of supervised release. Macchio was also ordered to forfeit $621,579 and to pay at least $2,567,154 in restitution. In May 2024, Macchio pleaded guilty to one count of conspiracy to commit wire fraud. Macchio and another real estate agent, Sheldon Haag, used straw buyers to acquire properties owned by the clients of Macchio’s brokerage, which included banks, federal agencies, bankruptcy trustees and other mortgage holders. The straw buyers included a shell company set up by a co-conspirator as a purported construction company. Macchio and his co-conspirators hid their involvement as the de facto buyers of short sale properties from their clients, the owners of the properties, and used their inside knowledge as the owner’s broker to minimize sale prices in order to maximize their gain from later “flipping” the properties. While perpetrating the “flipping scheme,” Macchio and his co-conspirators further defrauded clients by submitting fraudulent renovation bids from contractors to their own clients, including from a fake construction company they controlled through a co-conspirator. Once their clients accepted a fraudulent bid, Macchio and his co-conspirators hired different contractors at much lower cost and pocketed the difference between the fraudulent bid and the actual cost of the property repairs. During the COVID-19 pandemic, Macchio and co-conspirators defrauded the Small Business Administration by obtaining pandemic relief loans to fund their ongoing real estate fraud scheme. Sheldon Haag previously pleaded guilty to his role in the conspiracy and, in October 2024, was sentenced to one year and one day in prison to be followed by supervised release. United States Attorney Joshua S. Levy; Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS-CI), Boston Field Office; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office made the announcement today. The United States Department of Housing and Urban Development provided valuable assistance. Assistant U.S. Attorney Kriss Basil, Deputy Chief of the Securities, Financial & Cyber Fraud Unit prosecuted 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.
