BOSTON — U.S. District Court Judge Allison D. Burroughs Thursday scheduled the sentencing of the former chief financial officer of the Boston Grand Prix for Feb. 15, after the one-time Ipswich resident pled guilty to defrauding equipment and small business financing companies, the U.S. Small Business Administration and the Internal Revenue Service.
John F. Casey, 57, pled guilty to 23 counts of wire fraud, three counts of aggravated identity theft, four counts of money laundering and three counts of filing false tax returns, according to an announcement by the U.S. Department of Justice.
He was indicted last September and faces decades in prison. Assistant U.S. Attorney Kristina E. Barclay of the Public Corruption & Special Prosecutions Unit is prosecuting the case.
In January of 2015, Casey became the CFO of the Boston Grand Prix, the now-defunct Boston Grand Prix, a proposed live IndyCar race in the middle of the Seaport District to be run on Labor Day weekend of 2016.
The event, the first of its type in Boston, never happened. It was canceled two weeks after it announced it had signed license agreements and a memorandum of understanding with the city of Boston and state agencies.
According to a release by the U.S. Justice Department, Casey was paid approximately $308,292 in 2015 and $601,073 in 2016, which he failed to include in the gross income he claimed on his personal tax returns.
The charges, outlined by the federal prosecutors, also included fraud committed by Casey at a Peabody ice rink he owned from October 2013 until he sold it in June 2016. Between October 2014 and October 2016, Casey obtained more than $743,000 in funds from equipment financing companies, purportedly for equipment purchases for the rink, when he did not own the rink for four months during this period.
In August 2016, more than two months after he sold the Peabody rink, Casey obtained more than $145,000 in small business loans for the rink. To secure the financing, Casey submitted false documents and information including fake invoices for the equipment, bank records for the Peabody rink, inflated personal and corporate tax returns and personal financial statements, falsely claiming ownership and the value of various assets, according to the federal authorities, the federal prosecutors said.
Casey also submitted a fake Deed of Sale containing a forged signature in support of one of his loan applications. Relying on Casey’s false statements, the financing companies provided funding to Casey in amounts and on terms they otherwise would not have made. Most of the funds provided by the victim companies were never repaid.
Even after the investigation of Casey had begun, Casey fraudulently sought funds from Covid-19 stimulus programs. Between March 2020 and at least May 2021, Casey submitted 14 loan applications to the SBA and intermediary lenders trying to obtain Economic Injury Disaster Loans and Paycheck Protection Program loans from the SBA and a Massachusetts Sector-Specific Relief Grant.
In January 2021, while awaiting trial for the financing fraud scheme, Casey applied for a $70,000 pandemic-related relief grant to the Massachusetts Growth Capital Corp. containing false information about the operating expenses of a company that was not in business in 2019 or 2020, the prosecutors said.
Between April 2020 and April 2021, approximately $676,552 in COVID-19 relief funds were deposited into bank accounts controlled by Casey. He used most of the funds for personal expenses, including a three-carat diamond ring, a six-month membership to Match.com, private school tuition, residential rent payments, living expenses, payments on personal credit card accounts, restaurant meals, car payments and luxury hotel stays.
Casey also pled guilty to laundering the proceeds of his fraud schemes and failing to include the income from the Peabody rink fraud scheme on his 2014, 2015 and 2016 personal federal tax returns.
When sentenced in February on the charges of wire fraud he could face a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of aggravated identity theft provides for a consecutive sentence of two years in prison, one-year supervised release and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of unlawful monetary transactions provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000 or twice the value of the criminally derived property, whichever is greater.
The charge of filing false tax returns provides for a sentence of up to three years in prison, one year of supervised release and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
During a bankruptcy hearing for the Boston Grand Prix in 2016, Casey testified that the company spent millions of dollars, raised from investors, sponsors and ticket buyers, with little or no oversight or traditional accounting.
Under oath, Casey testified that he used the race’s accounts to pay his own bills, including buying himself a Porsche, $6,000 for two business suits and $2,500 for Boston College Club membership. Casey also testified he paid $8,200 dollars on his personal home mortgage and a legal bill paid on his behalf to a Utah lawyer.
The company also paid off a debt for one of Casey’s other businesses, Laser Leasing, which had nothing to do with the race.
According to reports, the Boston Grand Prix spent nearly $20,000 on luxury boxes at the Boston Garden for a Bruins game and Bruce Springsteen concert, as well as money for junkets to Indy races in California and Florida.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
Anyone with information about alleged fraud involving COVID-19 programs can call the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.