Criminal Justice News

Monday, October 01, 2012

Massachusetts Man Sentenced to 36 Months for Investment Fraud Scheme

ALEXANDRIA, VA—Antonio Zappa, 50, of Lynn, Massachusetts, was sentenced to 36 months in prison, followed by three years of supervised release, for engaging in a fraudulent foreign investment scheme that defrauded at least 20 victims of more than $6.9 million.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.

Zappa pled guilty on July 11, 2012, to one count of conspiracy to commit wire fraud. According to a statement of facts filed with his plea agreement, from September 2005 through April 2008, Zappa conspired with James W. Massaro, 70, of Boxford, Massachusetts, and others to engage in a fraudulent scheme that required investors to pay a fee that would be used to secure large letters of credit through European financial institutions. Investors were told the initial payment was a commitment fee necessary to secure a multi-million-dollar letter of credit and that they would receive a percentage monthly return on the total amount of the letter of credit. Each investor entered into an escrow agreement with Massaro’s business, Tracten Corporation, which stated that the fee would be wired to an escrow attorney, who would, in turn, disburse the fee to Tracten after the escrow attorney received a commitment letter from the foreign bank on behalf of the investor.

Zappa admitted that in 2005, he and Massaro made multiple trips to Rome, Italy, to meet with bank officials to pitch the letter of credit program. Despite the bank’s refusal to participate, Zappa secured an Internet domain name to set up an e-mail account that would appear to come from a bank representative and created fraudulent bank letterhead that also appeared to come from the bank. Zappa, Massaro, and others used the e-mail account and letterhead to forge commitment letters purporting to be from bank officials that would be provided to escrow attorneys. Pursuant to the escrow agreement, the escrow attorneys relied on these fraudulent commitment letters to disburse the fees to Massaro.

According to the plea agreement, Zappa defrauded at least 20 investors who had together paid $6,936,985 in fees as part of the letter of commitment investment program

Massaro pled guilty to the same charge on July 3, 2012, and was sentenced to 87 months in prison on September 21, 2012.

The investigation was conducted by FBI’s Washington Field Office and the U.S. Postal Inspection Service’s Washington Division. Assistant U.S. Attorney Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia’s Financial Crimes and Public Corruption Unit is prosecuting the case on behalf of the United States.

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