BOSTON — A former Stoneham police officer will serve time in federal prison for a bribery and kickback scheme that netted millions of dollars in Mass Save contracts, the U.S. Attorney said.
Joseph Ponzo, 51, of Stoneham, was sentenced to more than two years, or 27 months, in prison, to be followed by two years of supervised release, U.S. Attorney Leah Foley said in a statement on Friday.
Ponzo was also ordered to pay $115,528 in restitution and a $100,000 fine. U.S. District Court Judge Nathaniel Gorton handed down Ponzo’s sentence in federal court in Boston.
“Joseph Ponzo was a sworn officer, who pledged an oath to uphold the law, not violate it. However, he chose greed over integrity,” Foley said. “Joseph Ponzo’s greed came at the cost of consumers who were left paying the bill. A prison sentence is the price he will now pay for taking bribes and kickbacks.”
In November, Joseph Ponzo pleaded guilty to one count of conspiracy to commit honest services wire fraud; 24 counts of honest services wire fraud; one count of making false statements to government officials; and four counts of causing false tax returns to be filed with the Internal Revenue Service from 2016 to 2019.
Joseph Ponzo was indicted by a federal grand jury in January 2023 along with his brother, Christopher Ponzo of North Reading.
“When an officer shrugs off his sworn oath and breaks the law to pad his paycheck like Joseph Ponzo did, he betrays the people of his community – and all of us who wear a badge,” Jodi Cohen, Special Agent in Charge of the FBI’s Boston Division, said in a statement.
“Every year, Massachusetts homeowners spend millions of dollars to fund energy conservation projects for consumers. Joseph Ponzo and his brother cheated them by shelling out hundreds of thousands of dollars in a steady stream of bribes and kickbacks to an insider who steered contracts their way, ignoring all ethical boundaries,” Cohen said.
The Ponzo brothers were arrested on the charges in April 2022.
Last month, Christopher Ponzo was sentenced to 27 months in prison, to be followed by two years of supervised release. Christopher Ponzo was also ordered to pay a $300,000 fine.
Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office, said in a statement that Joseph Ponzo’s sentencing “demonstrates IRS-CI’s commitment to routing out corruption from all levels of the government.”
“Ponzo orchestrated an elaborate kickback scheme to improperly obtain contracts from a government backed program designed to aid the citizens of the Commonwealth of Massachusetts,” Demeo said. “Programs like Mass Save are designed to help all citizens of Massachusetts, especially the less fortunate, who otherwise would not be able to afford these upgrades to their homes.”
After the brothers were arrested in April 2022, then-U.S. Attorney Rachael Rollins called the fraud scheme “corruption at its core.”
“Virtually every Massachusetts resident who uses energy is surcharged and pays for Mass Save,” then-U.S. Attorney Rachael Rollins said in a statement at the time.
“These payments are mandatory and amount to hundreds of millions of dollars,” Rollins said at the time. “Defrauding the Mass Save program for millions of dollars means we are all left paying the bill. It is corruption at its core and will not be tolerated.”
From 2013 to 2022, the brothers conspired to bribe associates of a Mass Save lead vendor company that netted the pair millions of dollars in Mass Save contracts, prosecutors said.
Mass Save is a program that is designed to help Massachusetts residents manage their energy and utility costs.
Under the program, utility companies pick 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 company with Mass Save funds.
Prosecutors said the Ponzo brothers paid vendor company employees in home bathroom fixtures, a computer, free electrical work, and a John Deere tractor in addition to weekly cash bribes ranging anywhere from $1,000 to $10,000. In exchange, the brothers received a procurement of millions in Mass Save contracts with the vendor company.
From 2013 to 2017, Christopher Ponzo paid one associate $1,000 in cash on a weekly basis, prosecutors said. At times, Christopher Ponzo paid that associate $5,000 to $10,000 in cash, telling the associate that the extra money was from Joseph Ponzo for his part in the bribery scheme.
In return for these payments, the associate helped Joseph Ponzo set up a shell company, Air Tight, to do insulation work and get approved as a lead vendor contractor under the Mass Save program. Prosecutors said Joseph Ponzo put his spouse’s name on Air Tight incorporation documents and licenses to hide his involvement in the corruption.
Joseph Ponzo collected over $7 million under the Mass Save program, despite having no professional experience in residential insulation work, prosecutors said.
When that associate left the company in 2017, prosecutors said the Ponzos recruited another associate to the bribery-kickback scheme, paying them thousands of dollars in cash from approximately 2018 to 2022, and also hiring a relative of the second associate as part of the ongoing scheme.
Joseph Ponzo also filed false tax returns from 2016 to 2019 by claiming hundreds of thousands of dollars in false business deductions, prosecutors said.
To disguise personal expenses as business deductions, Joseph 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 stores were business-related, prosecutors said. In reality, Joseph Ponzo used the company credit card at those stores to buy gift cards that he and his spouse then used to make thousands of dollars in personal purchases.
In April 2022, both Joseph Ponzo and Christopher Ponzo lied to federal agents when they denied making bribe payments to any company employees, prosecutors said.
This is a developing story. Check back for updates as more information becomes available.
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