Date: January 26, 2023 Contact: newsroom@ci.irs.gov BOSTON — A former Stoneham police officer and his brother, an owner of an electrical contracting company, were charged in a superseding indictment today with an alleged bribery and kickback scheme that netted them millions of dollars in Mass Save contracts. Joseph Ponzo, of Stoneham, and Christopher Ponzo, of North Reading, were originally charged by a federal grand jury in April 2022 in a 13-count indictment with one count of wire fraud conspiracy and 12 counts of wire fraud stemming from a bribery-kickback scheme with a Mass Save vendor that dated from 2013 to 2017. The superseding indictment includes 12 additional wire fraud counts alleging that the Ponzos' bribery scheme continued after 2017 through as recently as March of 2022, with the Ponzos paying thousands of dollars in cash bribes to another former employee of a Mass Save lead vendor company to obtain millions more in lucrative Mass Save contracts. The superseding indictment also charges Joseph Ponzo with four counts of causing false tax returns to be filed with the IRS from 2016 to 2019. Joseph Ponzo and Christopher Ponzo were also each charged with one count of making false statements to government officials. A date for the defendants' arraignment in federal court on the new charging document has not yet been scheduled. 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. 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 the lead vendor with Mass Save funds. Joseph Ponzo, a former full-time Stoneham police officer, and his brother, Christopher Ponzo, the owner of an electrical contracting company, allegedly 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. It is alleged that 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 allegedly from Joseph Ponzo for his part in the bribery scheme. In return for these payments, Associate 1, among other things, allegedly 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. It is further alleged that Joseph Ponzo put his spouse's name on Air Tight incorporation documents and contracting licenses in order to conceal his involvement. 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 allegedly 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, it is also alleged that 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, 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. It is alleged that in reality, 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. The superseding indictment also alleges that in April 2022, both Joseph 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. The 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. The charges of aiding in filing false tax returns each provide for a sentence of up to three years in prison, up to three years 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. United States Attorney Rachael S. Rollins; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigations in Boston; and Joseph Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation in Boston made the announcement today. Assistant U.S. Attorneys Elysa Wan and Dustin Chao of Rollins' Public Corruption & Special Prosecutions Unit are prosecuting the case. The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
