US Attorney Announces Recovery of More Than $880,000 for Victims of Real Estate Fraud Scheme | USAO-MA
BOSTON – The United States Attorney’s Office announced today that $884,755 recovered from the confiscated assets of Scott J. Wolas will be distributed to his victims. The United States Attorney’s Office specifically requested permission to directly apply the confiscated assets for restitution to the victims, which was granted by the Department of Justice.
Wolas, who had been a fugitive for more than 20 years before his arrest in April 2017, was convicted in 2018 of seven counts of wire fraud, one count of aggravated impersonation, a count of misuse of a social security number and count of indictment. tax evasion in a $1.9 million real estate investment fraud scheme in Quincy.
“My office will diligently pursue the financial recovery of our victims of crime – even years after someone has been convicted and sentenced, we will continue our pursuit,” said U.S. Attorney Rachael S. Rollins. “These ill-gotten gains have finally been recouped and our efforts send an important message that crime does not pay.”
In January 2019, Wolas was sentenced by U.S. District Court Chief Judge F. Dennis Saylor IV to 81 months in prison, three years of supervised release and ordered to pay $1,949,813 in restitution to the victims of his fraudulent scheme. . CJ Saylor also ordered Wolas to pay $69,768 in Social Security and Medicare restitution, $318,266 in IRS restitution, and entered a forfeiture judgment of $1,949,813. .
From 2009 to at least 2016, Wolas, as Eugene Grathwohl, operated a real estate business known as Augmentation Fortune Inc. and worked as a licensed realtor for Century 21 in Quincy. From 2014 to 2016, he solicited investment for the development of the Beachcomber Bar property on Quincy Shore Drive and for the construction of a single-family home on the adjacent property. He raised more than $1.9 million from at least 24 investors and promised each of them a significant return on investment. He further promised to donate at least 125% of the profits related to the construction of single-family homes. However, Wolas used the money mainly for personal expenses unrelated to the development of the real estate projects.
Law enforcement then discovered that Grathwohl was actually Wolas, a former attorney on the run since 1997 after being charged with fraud and robbery in New York. The real Eugene Grathwohl resided in Florida and was known to Wolas.
On November 17, 2016, law enforcement officers interviewed Wolas’ ex-wife, Cecily Sturge, of Delray Beach, Florida, who said she had not been in contact with her ex. husband for approximately 15 years, since their divorce in 2001. Further investigation determined that this was untrue and that Wolas had stayed in a rented condo under the Sturge name five days prior to his interview with law enforcement. Sturge later pleaded guilty to making a material false statement to a federal agent and was sentenced in May 2018 to one year of probation.
Prior to his sentencing, Sturge filed a petition in a Florida court in February 2017 to vary the 2001 divorce decree to obtain the contents of Wolas’ retirement account. At the time Sturge filed the petition, Wolas’ retirement account had a balance of about $647,000 from the law firm where he worked before he was indicted in 1997 by New York authorities. Sturge previously attempted to obtain the retirement account claiming Wolas was dead, but in 2016 Wolas suggested changing the divorce decree to gain access to the account. Law enforcement has determined that Wolas drafted the petition to vary the divorce decree to transfer the contents of Wolas’ retirement account to Sturge. The petition written by Wolas and signed by Sturge falsely stated that Sturge did not know where Wolas was. After Wolas was arrested, he and Sturge continued to discuss the transfer of the retirement account during jail calls and using thinly veiled code words.
After the Florida court allowed Sturge’s motion, but before the account was transferred to him, the US Attorney’s office blocked the retirement account and decided to forfeit it. Sturge opposed the forfeiture, claiming ownership of the retirement account. In February 2021, Chief Justice Saylor released a 39-page memorandum and order finding that the transfer of the retirement account to Sturge was a fraudulent transfer and granted the government’s motion to deny its ownership claim. As a result, the retirement account was liquidated and $884,755 was remitted to the United States. The United States Attorney’s Office then requested authorization to apply the confiscated assets for restitution to the victims, which was granted by the Money Laundering and Asset Recovery Section of the Department of Justice in January 2022.
United States Attorney Rollins; Joseph R. Bonavolonta, special agent in charge of the Federal Bureau of Investigation, Boston Division; Joleen D. Simpson, special agent in charge of criminal investigation for the Internal Revenue Service in Boston; John Cremonini, Acting Special Agent for Social Security Administration, Office of the Inspector General, Bureau of Investigations, Boston Field Division; and Quincy Police Chief Paul Keenan made the announcement today. Assistant U.S. Attorney Carol E. Head, head of Rollins’ Asset Recovery Unit, handled the forfeiture litigation.