FEDERAL AGENTS ARRESTED Fall River Mayor Jasiel Correia early Thursday morning and charged him with defrauding investors in a company he started as a teenager, then using the money to “pay for a lavish lifestyle” that included a Mercedes, jewelry for himself and a former girlfriend, air travel, and trips to casinos and adult entertainment venues, according to US Attorney Andrew Lelling.
“This is not about poor accounting or mistakes,” Lelling said at a press conference following the arrest. “He knew exactly what he was doing.”
Correia, who was scheduled to be arriagned Thursday afternoon, was arrested in Bridgewater at a woman friend’s home following a two-year investigation after federal officials received a tip that he was allegedly misusing funds. The 13-count indictment handed down last week charges the 26-year-old mayor with wire fraud in bilking investors out of more than $360,000 for his start-up app called SnoOwl and then letting the company flounder while he spent more than two-thirds of the money on himself.
In addition, Lelling said when Correia learned of the probe, he filed bogus amended tax returns that tried to cover-up his actions, resulting in getting a tax refund he did not deserve. Correia faces up to 23 years in prison if convicted on all charges.
“[Fall River’s] mayor was far from honest, selling out his friends…using investor funds as his own personal ATM, systematically looting almost a quarter of a million dollars,” said Harold Shaw, the special agent in charge of the FBI’s Boston office, who was also joined by IRS and Housing and Urban Development officials as well as Massachusetts Inspector General Glenn Cunha. “He has brought undeserved shame on the city of Fall River.”
It is unclear what is happening with the administration of the city. Calls to the city clerk as well as several city councilors were not immediately returned. The city’s new charter calls for any city elected official to be removed from office if convicted of a felony and also lays out a succession plan if the mayor is temporarily unable to serve because of absence or disability. But there is no clear plan for what happens in the case of an indictment if the mayor is out on bail and able to serve.
The case revolves around the app SnoOwl that Correia created to connect people with businesses while traveling. According to the indictment, the then-19-year-old convinced at least seven people to invest between $10,000 and $80,000 in his company, claiming he had already developed and sold another successful technology platform. Correia told investors as well as people who helped him start the company neither he nor they would receive salaries to start, thought he associates were given equity in the firm. Officials say those claims were untrue and it was the beginning of Correia allegedly piling lie on top of lie to keep the scam going.
When investors and associates asked for financial documents, Correia either provided false positive updates or refused to turn over financial records, according to the indictment. Lelling said as SnoOwl, which was a real innovation, began to take on water, Correia, then a city councilor, turned his attention to running for mayor and touted his stewardship of SnoOwl as a qualification. He also used some of the investor funds to further his political campaign.
In addition to the extravagant personal purchases, Correia allegedly used $46,000 to pay off his student loans. Lelling said none of the money has been recovered so far and none of the investors received any payback
“Mr. Correia did little to keep SnoOwl a viable business and as SnoOwl floundered, he launched his political career,” said Lelling. “The company was, first and foremost, a clever way to defraud investors.”
The second-term mayor, one of the youngest in the state, acknowledged last year that he was the subject of the investigation but insisted it was manufactured by his enemies, including a nonprofit economic development group he was fighting with.
“To put it in perspective, when I started SnoOwl I was 19,” Correia said in an interview with CommonWealth earlier this year. “The first investor came before I could drink. It was no criminal enterprise. It was some young ambitious kids.”
Correia has also come under scrutiny for a defense fund he started to help him pay for his legal fees surrounding the investigation. Among the donations was a $20,000 contribution from a prospective marijuana retailer just four days after Correia signed a host community agreement with the company.