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No. 18241

^l]5 (!I^Jntm^m&Je^IItl| of A^S2i^lcl]usctts

REPORT

OF THE

ATTORNEY GENERAL

FOR THE

Year Ending June 30, 1997

oiON OF THIS Document Approved by Philmore Anderson hi, State Purchasing Agent.

JPRINT-lO/98-7000044 Estimated Cost Per Copy 5.00

Printed on Recycled Paper

State Library of Massachusetts

r>A-.x^ I I

_ —J.

Commonwealth of Massachusetts

In accordance with the provisions of Section 1 1 of Chapter 12 of the Massachusetts
General Laws, I hereby submit the Annual Report for the Office of the Attorney General. This
Annual Report Covers the period from July 1, 1996 to June 30, 1997.

Respectfully Submitted

Scott Harshbarger
Attorney General

Fiscal Year 1997

OFFICE OF THE ATTORNEY GENERAL

ATTORNEY GENERAL
SCOTT HARSHBARGER

FIRST ASSISTANT ATTORNEY GENERAL
Thomas H. Green

CHIEF OF STAFF
William P. Lee

Assistant Attorneys General;

Jonathan Abbott
Ann Ackil 5
Richard Allen
Dorothy Anderson
David Andrews 21
Barbara Anthony
Luz Arevalo
Frederick Augenstem
Lori Balboni
Thomas Bamico
Jason Barshak
Christopher Barry-Smith 23
Judith Beals
Thomas Bean
Annette Benedetto 2
John Benzan 57
Anne Berlin 61
Edward Berlin
Cynthia Berliner 75
John Bigelow
Crispin Bimbaum
Edward Bohlen
Barbara Boden 63
John Bowen
John Bowman
Kevin Brekka
Matthew Brock 1 7
Douglas Brown
William Brownsberger

Brian E. Burke 66
Brian P. Burke
David Bums
Eric Carriker
James Caruso, Jr.
R. Michael Cassidy 64
Pamela Castrucci
Eileen Cenci 10
John Christin 1 5
John Ciardi
Peter Clark
Jeffrey Clements
Edward Colbert
Richard Cole
Joanna Connolly
Scott Cooper 50
Patricia Correa 26
Pierce Cray
John Crimmins 1 8
Michael Cullen
Maurice Curmingham
William Daggett
Michael Dash 13
Leslie Davies
Ed DeAngelo
George Dean
Linda DelCastilho
Stephen Dick
Michael Dingle

Elizabeth DiTomassi
J.LeibDodell 75
William Duensing
Henry Eaton 14
Deborah Ecker
Stanley Eichner
F.Henry Ellis 14
Judith Fabricant 56
Barbara Fain
Jeimifer Ferreira
Freda Fishman
Francis Flaherty, Jr.
Elizabeth Arm Foley 54
Mary Freeley
Cynthia Gagne
Rosemary Gale
Rosalyn Garbose
Suzaime Glick Gilfix
Gregory Gilman 3
Salvatore Giorlandino
I. Andrew Goldberg
Richard Gordon
Thomas Green
Leslie Greer
Mary Griffin
John Grossman
Irene Guild
Daniel Hammond
Charles Harak

Nancy Harper
Sarah Hartry
Katherine Hatch
EHzabethHart 54
Bennet Heart 62
Michael Hering
PhiHp Holmes
Audrey Huang
Amy Hudspeth 69
Pamela Hunt
Marsha Hunter
Carol lancu 30
Marcia Jackson
Patrick Johnston 22
Diane Juliar
Michelle Kaczynski
Judy Zeprun Kalman
Susan Kang
Glenn Kaplan
Jamie Katz 12
Sean Kealy
Margaret Kelley
Stephanie Kelly
Carolyn Keshian
Rosa Kim
Michael Kogut 3
Pamela Kogut
Karen Laufer
Andrew Lawlor
Ellyn Lazar
Angela Lee 1 1
Macy Lee 65
William Lee
Peter Leight 16
Martin Levin
Susarme Levsen 1 1
Darlene Luccio Jordan 68
Kara Lucciola
Glenn MacKinlay
Anita Maietta
David Marks
William Matlack
Laura Maslow-Armand
Gregory Massing
William M. McAvoy*

Thomas McCormick
Karen McGuire
Kristin Mcintosh
Frances Mclntyre 23
Gail McKenna 72
Beth McLaughlin
Paul McLaughlin
William Meade
Marianne Meacham
Elizabeth Medvedow
Joyce Meiklejohn
Pamela Meister 6
Ramon Melendez 24
Howard Meshnick
Nicholas Messuri
Holley Meyer 58
James Milkey
Daniel Mitchell
Helen Moreschi
Christopher Morog 55
Madelyn Morris 70
Susan Motika61
Mark Muldoon
Linda Murphy
Mary Murphy-Hensley
Kevin Nasca
Cathryn Neaves 23
Paula Fox Niziak 60
Jean O'Brien
Michelle O'Brien
Thomas O'Brien
Erin Olson 23
Dorma Palermino
Kathryn Palmer 4
William Pardee
Margaret Parks
Stephen Patemiti
Robert Patten 74
Anthony Penski
Djuna Perkins 71
Judith Phillips 11
Mary Phillips
Barbara Piselli 25
William Porter
Anne Powers

Frank Pozniak
Patricia Preziosa
Candies Pruitt 7
Robert Quinan 8
Elizabeth Reinhardt
Shelley Richmond
Benjamin Robbins
Beverly Roby
Anthony Rodriguez
Joseph Rogers
Deirdre Rosenberg
Stuart Rossman
Peter Sacks
E. Selena Samm
Ernest Sarason, Jr.
Pasqua Scibelli
Arlie Scott
Sharon Scott
Amy Sharff 9
Neil Sherring 1
Robert Sikellis
Jeremy Silverfme
Joanne Smith
Loretta Smith
Mark Smith
Johanna Soris
Leo Sorokin
Amy Spector
Richard Spicer 19
Susan Spurlock
Carol Starkey
James Stetson
Deborah Steenland
Walter Sullivan 59
Mark Sutliff
James Sweeney
Diane Szafarowicz
Pamela Talbot
Rosemary Tarantino
Neil Tassel
Shelly Taylor
Jane Tewksbury
Steven Thomas
Jean Thompson 5 1
Bruce Trager

Thomas Ulfelder 20
Margaret Van Deusen
Brett Vottero 14
Gina Walcott
Lucy Wall
Beverly Ward 52
George Weber
Mark Weber
Joseph Whalen, III
James Whitcomb
Douglas Wilkins
H. Gregory Williams 7
Jane Willoughby
Howard Wise
John Woodruff
Chi Chi Wu
Edward Wu 73
NorahWylie 53
Judith Yogman
Catherine Ziehl
Michael Zullas

Assistant Attorneys General Assigned To The Department of Employment & Training:

William Berman

Stacey Bloom 67

David Breen

Heidi Handler 28

Joshua Krell

Timothy McDonough 27

Philip McGovem

Vanessa Sanchez-Gasparro 29

Marie St. Fleur

APPOINTMENT DATE TERMINATION DATE

07/01/96

07/02/96

07/08/96

07/29/96

08/01/96

08/12/96

08/19/96

08/30/96

09/04/96

10.

09/09/96

11.

09/16/96

12.

09/17/96

13.

09/18/96

14.

09/23/96

15.

10/01/96

16.

10/21/96

17.

10/24/96

18.

11/01/96

19.

11/05/96

20.

12/01/96

21.

12/24/96

22.

01/01/97

23.

01/06/97

24.

01/28/97

25.

02/18/97

26.

04/28/97

27.

04/30/97

28.

05/05/97

29.

05/12/97

30.

06/23/97

50.

07/11/96

51.

07/15/96

52.

07/26/96

53.

08/13/96

54.

08/16/96

55.

08/23/96

56.

08/27/96

57.

09/02/96

58.

09/09/96

59.

09/13/96

60.

09/20/96

61.

10/18/96

62.

11/08/96

63.

1 1/22/96

64.

1 1/29/96

65.

12/06/96

66.

12/31/96

67.

02/28/97

68.

03/03/97

69.

04/04/97

70.

04/12/97

71.

05/02/97

72.

05/11/97

73.

05/20/97

74.

05/23/97

75.

06/06/97

Appointed since December 1 992

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BUSINESS AND LABOR PROTECTION BUREAU

Fiscal Year 1997 was the third year of operation by the Business and Labor Protection
Bureau since its creation in April, 1995. The Bureau consists of the Unemployment Fraud
Division (formerly known as the Division of Employment and Training), the Fair Labor &
Business Practices Division, the Insurance Fraud Division and the Medicaid Fraud Control Unit.
The benefits of combining these four divisions as part of a separate, yet coordinated. Bureau
continued to grow as an expanding synergy developed between the divisions.

Sharing common goals of eliminating fraudulent activities in the marketplace and
establishing a level playing field in the economic sector for businesses and individuals alike
resulted in better efficiency and productivity by each division. By tapping into the legal and
investigative resources available from all of it divisions, each of which are experienced in the
areas of fraud prosecution, the Bureau was able to maximize its overall impact and effectiveness
in combating the "fraud tax" which unfairly increases the costs and expenses of honest
businesses, insurance policy holders and tax payers in Massachusetts.

The Bureau maintains its own in-house educational and training programs to supplement
officewide efforts with sessions and materials specifically geared to the types of cases assigned to
its four divisions. A Legal Counsel and a Chief Prosecutor assist the Bureau Chief in adopting
and implementing consistent legal policies and procedures throughout the Bureau.

The number of inter-divisional investigations and prosecutions increased substantially,
highlighted, among others, by cases such as Anchor Tank Services (unemployment tax fraud,
prevailing wage and nonpayment of wage); O'Brien Excavating (prevailing wage and workers
compensation premium fraud); E & L Masonry Corp. (prevailing wage and workers
compensation premium fraud); Clans Cleaning (nonpayment of wages, workers compensation
premium fraud and unemployment tax fraud); Great Hyannis Tee Company (nonpayment of
wages, prevailing wage and unemployment tax fraud); Nascho Forms (prevailing wage and
unemployment tax fraud); and the Lincoln School (prevailing wage, unemployment tax and
workers compensation premium fraud) featured in the following pages.

The Bureau maintains its primary offices at 200 Portland Street, Boston and 165 Liberty
Street in Springfield.

UNEMPLOYMENT FRAUD DIVISION

The Unemployment Fraud Division ("UFD") is comprised of eleven staff members: a
chief, managing attorney, four assistant attorneys general, two investigators, an office manager,
an administrative assistant and an intern. Pursuant to its authority under Massachusetts General
Laws chapter 151 A, Section 42 A, the Division enforces the provisions of the Massachusetts
Employment Security Law. Actions involving employer tax fraud and larceny of unemployment
benefits are prosecuted in the District and Superior Courts.

The Division receives its referrals primarily from the Division of Employment and
Training ("DET"). Quarterly meetings are held between the management staff at DET and the
Unemployment Fraud Division. The ongoing rapport between DET and UFD remains a key
ingredient to UFD's success.

UFD also generates its own independent actions. Through the utilization of resources in
other divisions in the Business and Labor Protection Bureau, UFD targets complex and
sophisticated schemes involving various combinations of employment security fraud, prevailing
wage, and workers' compensation violations. This interdisciplinary effort has been instrumental
in UFD's investigation and successful prosecution of egregious violators.

During fiscal year 1997, staff at UFD addressed 832 cases in District courts throughout
the Commonwealth and recovered $2,124,019.20 in restitution owed to DET. This reflects an
increase of $1,169,177.20 over the amount collected in fiscal year 1996.

HIGHLIGHTED EFFORTS

SIGNIFICANT ACTIVITIES

I. EMPLOYMENT SECURITY FRAUD;

L Commonwealth v. Arthur and Eleanor Gagnon. Boston Municipal Court

Arthur and Eleanor Gagnon failed to pay unemployment contributions totaling
$38,849 for their company. Reliable Employment Services, Inc. The defendants filed
a motion to dismiss challenging the constitutionality of the Unemployment Fraud
statute. The motion was denied. Subsequently, the defendants admitted to sufficient
facts and the matter was continued without a finding for three years. They were also
ordered to pay $38,000.00 in restitution.

Commonwealth v. Susan O'Donnell.

Commonwealth v. Paul Lupo. Brockton Superior Court

Susan O'Donnell, a former employee of the Division of Employment and
Training, was indicted on seven counts of a continuous scheme of Grand Larceny,
two counts of forgery, five counts of uttering, and one count of conspiracy. Paul
Lupo, of Franklin, was indicted on four counts of grand larceny and one count of
conspiracy.

They were both arraigned in Brockton Superior Court on April 24, 1997 on
charges of stealing over $60,000.00 in state unemployment benefit checks. On June
30, 1997 both defendants were found guilty and sentenced to five years probation,
ordered to pay $61,417.00 in restitution, and perform 500 hours of community
service each.

3. Commonwealth v. Thomas Brennan. Wobum District Court

Thomas Brerman plead guilty in Wobum District Court to 33 counts of
unemployment fraud for collecting unemployment benefits from May of 1 992
through February, 1993, while at the same time working for Merrimack Valley
Recovery Services.

Mr. Brennan was sentenced to one year in the House of Correction, suspended
for three years, and was ordered to pay $8,834.00 restitution to the DET.

4. Commonwealth v. Barbara Kalen, Lynn District Court

On August 2, 1996, Barbara Kalen of Salem pled guilty to 37 counts of
unemployment fraud in Lynn District Court. She admitted to collecting $10,000.00
in unemployment benefits despite holding two jobs as a Registered Nurse. Kalen
was sentenced to one year in the House of Correction, suspended for two years, and
was also ordered to pay full restitution to DET.

5. Commonwealth v. Keith Thornton. Boston Municipal Court

On July 26, 1 996 Keith Thornton was found guilty of fraudulently collecting
$2,653.00 of unemployment benefits while working at Wendy's. He was sentenced
to 15 months in the House of Correction to run concurrently with a 6-10 year
sentence that he is currently serving at MCI-Cedar Junction.

6. Commonwealth v. Lane Foreman. Salem District Court

Foreman, a local Disc Jockey, admitted to fraudulently collecting $6,432.00 in
unemployment benefits while working. Despite an objection by the Commonwealth,

the Court continued the matter without a finding for two years and ordered that
restitution be paid to the DET.

7. Lincoln Elementary School Construction Brookline

Thirty-four indictments were returned by a Suffolk County Grand Jury against
five companies and seven corporate officers involved in the construction of the
Lincoln Elementary School in Brookline between 1992 and 1994. The indictments
allege fraud in a number of areas including unemployment tax, workers
compensation, and failure to furnish accurate payroll records. The companies
indicted were Quinn Construction Co., of Brockton, Jeffrey Construction Inc., in
Wellesley, H. M. Horton Co., of Walpole, Davidson Form Construction Corp., of
Rowley, and LaFazia Concrete Floors and Pumping, Co., of Cranston, Rhode
Island.

IL SPECIAL PROJECTS

A. DEFAULT SWEEP:

With assistance provided by the State Police Unit attached to the Office of the
Attorney General, ten defendants with active felony larceny charges were targeted for
arrest. UFD secured the presence of four defendants before the Court.

B. CASE EVALUATIONS:

Each of UFD's 1311 cases in inventory was reviewed and evaluated by the
staff Cases have either moved forward in the criminal process or are being returned
to DET pursuant to the Memorandum of Understanding between DET and UFD.
UFD currently has 888 cases in inventory.

III. DIVISION STATISTICAL SUMMARY:
COURT APPEARANCES

Disposed

July, 1996

August

September

October

114

November

December

January, 1997

121

February

March

133

155

April

May

June, 1997

Totals

MONIES COLLECTED

July, 1996 $ 73,509.62

August

209,416.06

September

67,480.40

October

102,035.75

November

116,674.04

December

156,031.75

January, 1997

153,910.91

February

154,543.25

March

82,235.31

April

121,492.18

May

152,287.90

June, 1997

127,402.32

Total

$2,124,019.20

CASES PENDING AS OF JUNE 30. 1997

Criminal Employee Claims 386

Criminal Employer 457

Other* 45
Total Pending Cases M|

* Includes employer tax and/or employee fraudulent claims cases independently developed
and/or specially referred.

CASES ON DEFAULT AS OF JUNE 30. 1996;

Criminal Employees Claims 193
Criminal Employer US

Total Defaults 331

CASES CLOSED AND RETURNED TO PET;

Criminal Employee Claims 395

Criminal Employer 130

Other* _4

Totals 529

COMPLAINTS ISSUED:

Criminal Employee Claims
Criminal Employer
other
Totals

42 (1068 counts)
29 (328 counts)
J_ ( 4 counts)
22 (1400 counts)

INDICTMENTS RETURNED:

Total

FAIR LABOR & BUSINESS PRACTICES DIVISION
(FLBP)

The Fair Labor & Business Practices Division ("FLBP") is charged with the responsibility
of enforcing the state's labor standards and applicable safety laws, child labor laws, and resolving
public bid disputes. It does so in the criminal forum and, in some circumstances, in civil forums
and office conferences.

FLBP ADVISORY COMMITTEE

The FLBP Advisory Committee was reconstittited to include a more diverse representation.
Broad based representation included participants from the business, labor, employee, educational,
legal, religious, family, and government communities. The Committee was divided into five
separate subcommitties for greater effectiveness. The Advisory subcommittees are: Public
Bidding, Child Labor, Prevailing Wage, Safety and Wage and Hour. Over 1 50 individuals
attended the opening session of the Advisory Commitee in November, 1996.

The Bid Unit Committee addressed the issues of availability of bid protest decisions and
the issue of restricted filed sub-bid questions. The Committee's work resulted in a process
whereby all bid decisions are now available to the public in the Attorney General's Library and
decisions are also sent to various trade and construction organizations. In addition, general
contracting and subcontracting groups are working with this Office to develop a policy in order
to resolve the issues concerning restricted filed sub-bids.

The Child Labor Committee addressed issues of education and outreach and hazardous
occupations for minors. The Committee's response led to four public hearings across the state
to update the classificafion of hazardous occupations.

The Prevailing Wage Committee addressed the issues of Awarding Authorities failing to
include wage sheets in public contracts, and the failure of Awarding Authorities to require the
submission of payroll records for review. The Committee endorsed FLBP's Central Register
iniUative to provide information concerning prevailing wage compliance to Awarding
Authorities and public contractors through the mailing of letters and brochures to each public
project filer at the Central Register. It represents a hefty effort at curtailing the problem.

The Safety Committee addressed issues of prevention of injuries and interaction among
regulatory agencies that respond to workplace fatalities. A compilation of names and
responsibilities of each responding agency was prepared.

The Wage and Hour Committee addressed various wage enforcement policy questions
including the use of the private right of action remedy and whether to regulate at home data entry
as Industrial Homework.

Each Advisory Subcommittee shall continue to meet and the Advisory Committee will
convene a fiill meeting in the fall of 1998.

PUBLIC INTAKE UNIT

The Division's Intake Unit services the FLBP "hot line" and maintains the case files for the
Division.

The statistical report for the fiscal year demonstrates that the Division has received and
processed 4,505 new complaints and disposed of 5,035 cases.

The Intake Unit also has a staff dedicated to a hot line number to assist constituent and

other callers with questions related to labor standards. The daily number of calls approximates
450. A substantial effort is expended by the Division in wage loss replacement work

which is conducted by the legal and inspectional staff; and processed by the intake staff.
Total amount recovered for complainants by the Division

for FY97: $2,124,531.00

Total amount recovered for complainants by the Division
since creation of Division in October, 1993:
$7,624,634.00

FINANCIAL INVESTIGATIONS & AUDITS

The Division's Financial Investigators conduct audits and investigations which include
non-payment of wages, non-payment of overtime pay and prevailing wage violations. During
fiscal year 1997, they have processed a total number of one hundred thirty -three cases, they have
made a total of ninety site visits to various entities throughout the Commonwealth. They have
conducted a total of ninety-five audits in the enforcement areas of prevailing wage, non-payment
of wages, and overtime violations. Of the one hundred thirty three cases processed, they have
closed a total of ninety seven cases, and are in the process of preparing computations and /or
gathering financial records for audit on the remaining cases. The Investigators have collected
and forwarded to budget for dispersement a total of $347,592.70 in gross payroll monies due
employees as a result of their audits. Additionally, they have identified through audits a total of
$555,397.33 in wages due employees.

These Financial Investigators are often called upon to assist other BLPB divisions and
other OAG persormel.

LEGISLATION

The Division continues to propose legislation to support efficiency and reasonableness in
carrying out its responsibilities. In addition to various pieces of general remedial legislation, the
Division has proposed legislation to accommodate jurisdictional challenges. The Division has
also initiated regulatory changes in areas in which the Division has regulatory authority.
Substantive legislation includes the Child Labor bill, discussed elsewhere in this report;
legislation to extend whistle blower protection to the private sector; legislation to significantly
increase the penalties for organizations convicted of assault and battery and manslaughter; and
legislation to provide a civil alternative to the criminal enforcement of the Commonwealth's
wage and hour laws.

The belief of the Division is that an extension of protection from retaliation to workers in
the private sector who report dangerous work places will go a long way toward the elimination of
many unhealthful situations confronting the Commonwealth's labor force. Increasing penalties
for common law criminal negligence offenses against corporations will also serve as a deterrent
to dangerous or unhealthy conditions in the work place.

The Division views the civil citation process as a means to fairly, effectively, and
efficiently deal with a significant number of complaints in the areas of prevailing wage, non-
payment of wages, minimum wage and overtime: allowing the Division to leave only the most
egregious violations for prosecution in the criminal court system.

BID UNIT

The Attorney General, pursuant to G.L. c. 149, § 44H, is charged with the enforcement of
the public bidding laws (Le,, G.L. c. 7, § 38C-38N, c. 30, § 39M, and c. 149, §§ 44A-44J). The
Attorney General's main enforcement efforts are undertaken by its Bid Unit and include: (I) the
receipt and resolution of filed bid protests, and (ii) the education of public contract participants
with respect to the applicable bidding laws.

Fiscal Year 1997 saw an increase in the number of bid protests received and resolved by
the Division. While such an increase may be attributed to a number of factors, including the
overall increase in public construction projects, it also reflects the construction industry's
increasing confidence in the Attorney General's ability to resolve public bidding disputes. The
Attorney General's Office serves to provide a fair and accessible forum for the resolution of bid
protests and, with the participation and assistance of public contracting authorities, the process
can quickly and competently determine the merits of a bid protest. As a result, in many cases, the
Attorney General's involvement facilitates the efficient completion of public works projects.
During Fiscal Year 1997 the Division considered bid protests on public projects ranging in cost
from $1 1,000.00 to over $20 million.

The education of public contracting participants (i.e., contractors, public contracting
authorities, municipal counsel) is the other major thrust of the Division's enforcement efforts
with respect to the public bidding laws. The Bid Unit's educational initiative has included: (I) the
receipt of, and response to, telephone calls and all correspondence requesting information
concerning the bidding laws; (ii) the presentation of industry seminars throughout the
Commonwealth; and (iii) the compilation and dissemination of the Division's bid protest
decisions.

During Fiscal Year 1997 over 4,600 telephone calls concerning public contracting were
received and answered by the Division. The amount of phone calls received and answered is an
increase from last year and reflects the industry's acceptance and utilization of the Attorney
General's Office as a source for procurement information. By providing telephone support, the
Division has become an important informational resource to contractors, architects and awarding
authorities. The information provided may also prevent subsequent noncompliance with the
bidding laws or potential bidding protests.

By the same token, the seminars sponsored by the Division provide the substantive and
procedural information necessary to solicit bids or submit bids in the public contracting arena.
As such, the Division presented seminars to architectural groups, contracting groups and
municipal counsel. In addition, the Bid Unit also participates in industry seminars.

The bid protest decisions of the Division also serve an educational function, because the
decisions analyze the bidding laws with respect to the specific fact patterns presented by the
protested project. To assist those interested in researching the Office's existing bid protest
decisions, efforts were undertaken during Fiscal 1997 to increase the accessibility of bid protest
decisions. The decisions are now available at the Attorney General Library, and all decisions are
now issued to designated trade and industry groups for dissemination to their members. The bid
protest decisions have become an important industry reference to determine Office precedent and
policy of the public bidding laws.

The Public Bid Advisory Subcommittee, addressed elsewhere in this report, was well
received and generated useful recommendations.

WAIVERS

The Fair Labor and Business Practices Division is charged with reviewing requests to
waive certain requirements of the labor laws under circumstances which warrant it. Some
measure of investigation is required before a waiver is granted.

The Division granted waivers during the fiscal year as follows:

Type of Waiver

Amount

7-Day Continuous Operations

Meal Break Exemptions

Seasonal Overtime Exemptions

Theatrical Performances - Minors

Minors - Working Late Hours 2

Sheltered Workshops 6

Public Works Projects/Extended Hours 1

3-Hours Daily Minimum Rule 10

Special Student Worker License 98

TOTAL WAIVERS GRANTED: 298
TOTAL AMOUNT COLLECTED: $24,400.00
CHILD LABOR

Child Labor Site Inspections Conducted 1 75
Child Labor Violations Cited 367

Child Labor Task Force

A Task Force was convened to update the Commonwealth's Child Labor Laws. The Task
Force comprised of representatives of labor, business, education and public agencies. The two
main areas of discussion were the number of hours minors are allowed to work and the process of
obtaining employment permits. The Task Force's recommendations were set forth in an
Executive Report issued in the spring of 1997 and incorporated into a proposal that was
submitted to the Legislature by the Attorney General's Office in December 1996. The Joint
Committee on Commerce and Labor heard public testimony in May, 1 997.

Child Labor Advisory Sub-committee

The Child Labor Subcommittee met twice in the FY 1997. The agenda included:
a) education and outreach, and b) public hearings to solicit input on updating the list of
hazardous occupations for minors. The Child Labor Laws permit the Division to determine that
certain occupations are hazardous following a hearing. Public hearings were held in Fall River,
Springfield, Lowell, and Boston throughout April and May of 1997. Approximately 50
responses were received.

INDUSTRIAL HOMEWORK

Pursuant to M.G.L. Ch. 149, Sec. 147E, the Division undertook to promulgate a set of
Industrial Homework Regulations that supersede any existing Industrial Homework Regulations.
The proposed regulations set forth the requirements imposed upon employers of those engaged in
the manufacture of work at home or work upon materials or articles for an employer, exclusive of
the domestic service. The regulations require that not less than minimum wage be paid to
industrial homeworkers; require the payment of time and one-half the regular hourly rate of pay
for industrial homeworkers for all time worked over forty hours in one week; mandate
appropriate written tracking of piece work compensation for work performed by industrial
homeworkers; propose annual permitting and certification processes, and require a minimum
record keeping procedure to be followed by all employers of industrial homework.

The following statistics reflect the activity for permits and certificates issued for this Fiscal
Year.

Certificates 238

Permits 12

Monies Collected $8,250.00

The FLBP Advisory Committee's subdivision for Wage and Hour issues addressed the
issue of regulating at home data entry work. The matter is under review.

WORKPLACE SAFETY

The safety program investigated the following in FY97:
Injuries - Temporary Agencies 29

Injuries - Service Industries/Child Labor 68

Injuries - Construction 12

Fatalities 04

Safety Advisory Sub-committee

The Safety Subcommittee members met for their second meeting in January, 1997. The agenda
included a discussion of the interaction among regulatory agencies for workplace safety and
health, and intervention strategies for reducing injuries.

Workplace Violence Task Force

An inter-divisional task force addressing workplace violence was established to produce
increased public awareness of the hazards of violence at work. The initial project for the Task
Force was the preparation of an informational brochure for employers and employees concerning
rights and responsibilities with regard to workplace violence is being distributed by the Office.

REGIONAL OFFICES

In a continued attempt to service the workers and employers of the entire Commonwealth,
the Division has three satellite offices. In addition to the Boston and Springfield regional
locations, the Division maintains satellite offices in Pittsfield, Worcester, and Fall River on a
part time basis.

SPRINGFIELD OFFICE

The Springfield Office services Western Massachusetts.

Total Number of Complaints Received: 1 ,07 1

Cases Closed

1,018

Total Monies Collected

$377,944.69

Preconstruction Conferences

Child Labor Site Visits

Overtime Site Visits

Fair Labor Complaints

Prevailing Rate Site Visits 140

Safety Inspections 47

Accident Investigations 12

Bid Law Complaints 6

Court Appearances 28

PTTTSFIELD OFFICE

The Pittsfield Office serves the Berkshire County community.

Walk Ins Referred 171

Walk In Complaints 230

Complaint Forms Mailed 72

Complaint Forms Received 113

Phone Calls 535

Amounts Received:

Prevailing Rate Wages $1 5,572.43

Non-payment of Wages $68,444.97

WORCESTER OFFICE

The Worcester office services the Central Massachusetts region.

Informational telephone calls 1 536

Walk In 60

Complaint Forms mailed out 166

FALL RIVER OFFICE

Our Fall River office services the Southeastern region.

Walk-in Complainants 238

Complaint Forms Received or mailed 102

Telephone Calls 1003

SIGNIFICANT CASES

Tog Mold Tool & Die - Vacation pay was owed to 14 former employees of a tool
and die operation that went out of business. The case was continued without a
finding for five months and the defendant paid a total of $14,628.65 to the

victims.

JAG Landscaping - Wages were owed to three employees. The defendant pled
guilty to all charges, he received a total of 90 days, which was suspended for six
months, and was ordered to pay restitution totaling $2,915.00 and fines totaling
$1,875.00.

Anchor Tank Services/ Anchor Tank & Drilling - Defendants were debarred from
public works for six months for failure to pay the prevailing wage rate,
nonpayment of wages, and failure to register with DET. Defendants were ordered
to pay $7,336.00 in restitution and a $2,500.00 fine.

E & L Masonry Corporation - Louis Maiani - Ettore Bonfini - Defendant
Corporation pled guilty to failure to pay prevailing wages, failure to provide true
and accurate payroll records, and failure to provide workers" compensation. The
corporation, its president, and the agency of the president were debarred from
public works for six months. All three were held responsible for the full
restitution of $4,500.00, and were assessed a $500.00 fine for the prevailing wage
violations and a $1,500.00 fine for the workers' compensation violation. Both
individual defendants were placed on probation.

Control Building Series. Inc. - New Jersey corporation admitted not having paid
wages to five employees, agreed to pay full restitution in the amount of $2,007.75
and a $3,000.00 fine. The company also agreed to provide complete payroll
records for the months of April, May, and June of 1997 to ensure fiiture
compliance. The charges were continued for six months.

Mary J. Smith - Defendant ordered to pay wages owed to the claimants.
Defendant paid a total of $1 1,400.00 which represents partial payment. Case was
put on file for six months to verify payment and for defendant to provide further
proof of her financial situation.

Clans Cleaning Corporation - The defendant pled guilty to charges of failure to
pay wages, failure to keep true and accurate payroll records, and failure to obtain
workers' compensation insurance. The company was ordered to pay full
restitution to the employees of $3,400.00, $2,000.00 to the Department of
Employment and Training, and a $1,000.00 fine.

Vining Disposal Service. Inc. -Superior Court declaratory judgment decision
interpreting Section 27F of Chapter 149 to include work performed by trash
haulers.

Waste Management of Massachusetts. Inc. -Superior Court declaratory judgment
decision prohibiting the inclusion of vacation fund, uniforms, safety boot and
personal time in the calculation of the prevailing wage rate.

Wayne Stone d/b/a Great Hyannis Tee Company - Non-payment of wages, failure
to obtain workers' compensation and failure to pay unemployment tax
contributions; continued without a finding for one year; ordered to pay fixll
restitution of $2,200.00 and a $1,500.00 fine.

Cur-Ron Environmental - Ronald Jackson/Curtis Blanks - Non-payment of
wages, failure to provide pay stubs. The defendant was found guilty (15 counts).
Two years probation, $1,000.00 in restitution.

P & H Construction - Failure to pay the prevailing wage rate and failure to
provide true and accurate payroll record. The defendant was found guilty, six
month debarment, $30,000.00 in restitution.

Cruwys Electrical Contractions - Stanley Cruvyys - Failure to pay the prevailing
wage rate (4 counts), guilty, 6 month debarment for corporation and 6 month
voluntary debarment for individual. Failure to provide true and accurate payroll
records.

B & M Concrete Construction - Failure to pay the prevailing wage rate (three
counts)guilty all counts, six month debarment, $8,000.00 in restitution ordered.

Nascho Forms - Thomas Nashawatv - Company was found guilty of failing to pay
the prevailing wage rate; failing to provide true and accurate records; and
unemployment ft-aud: six month debarment and one year probation.

O'Brien Excavating - Company was found guilty of failing to pay the prevailing
wage rate; failing to provide true & accurate payroll records; insurance premium
avoidance; larceny: debarred for six month, $34,000.00 in restitution ordered.

Just Grind It - Company pled guilty to six counts of failing to pay prevailing wage
rates and one count of failing to provide records: debarred for six months.
Company president, Mr. Bandano, admitted to sufficient facts to not paying the
prevailing wage rate, non-payment of wages, and failure to provide true and
accurate records: Continued without a finding until 6/16/97, $12,000.00 in
restitution ordered.

Carr Leather - Court action was initiated by Regulated Industries Division for
unpaid medical insurance claims. Company paid $50,876.52 in wage restitution
in addition to monies owed for insurance claims.

Riverbend Concrete Company. Inc. - Karen Thomas - The company was found
guilty of failing to pay the prevailing wage rate and failing to provide true and
accurate payroll records: debarred for six months. The complaint against Karen
Thomas was continued without a finding until October 5, 1999 and she was
debarred for six months.

• A.J. Desjardins Roofing Company. Inc. - Failure to pay the prevailing wage rate:
Continued without a finding for three years, $5,000.00 in court costs for company
and $5,000.00 in court costs for president (total $10,000.00).

• Perfection Auto Service - Non-payment of wages: Continued without a finding
for one year: $500.00 in restitution, $35.00 in victim witness fees, and $125.00 in
court costs.

• Ajax Construction Co.. -Benjamin Watkins & Alphonse Morel - The corporation
pled guilty to failing to pay the prevailing wage rate: debarred for six months.
The two individual defendants were also debarred for six months and ordered to
pay $9,476.24 in restitution and a $10,000.00 contribution to the SCORE
program.

• Fiore Construction Company. Inc./Iron Construction Company, Inc.. and Walter
Fiore as President. R 133 Nashua Street, Leominster, MA 01453 -

Has agreed to a voluntary debarment for a period of four months beginning
January 1, 1997 through April 30, 1997.

• Boston Computer Exchange. 210 South Street, Boston, MA 021 11 - debarred for
a period of three years beginning August 27, 1996 through August 27, 1999.

• Inacom. 1 08 1 0 Famum Drive, Omaha, NH 68 1 54 - debarred for a period of three
years beginning August 27, 1 996 through August 27, 1 999.

• Moniz Company. Inc. Joseph M.R. Moniz. President. 42 Avon Street, Taunton,
MA 02780 - debarred for a period of six months beginning April 9, 1997 through
October 9, 1997.

DIVISION EDUCATIONALS

Members of the staff have worked with a wide range of constituent group leaders to both
initiate and participate in a variety of educational seminars and panels. These include trainings to
the Mass. Building Trades, the Association of Building Contractors, Volunteer Lawyers Project;
and presentations at construction industry, retail, municipal, legal, labor, and business
conferences. Chief Moreschi has met with a full range of FLBP Division users across the state
building and rebuilding vital relationships in order to receive and suggest helpful input.

INSURANCE FRAUD DIVISION

The Insurance Fraud Division (IFD) currently includes ten Assistant Attorneys General,
one Special Assistant Attorney General, a paralegal and two support staff. The Division also
includes a District Court Unit that focuses on expediting investigations and prosecutions of fraud
cases that are appropriate for charging in district court. John L. Ciardi is Chief of the Division.
Michael Cullen, Jennifer Ferreira, David Marks, Brian Burke, Erin Olson and Jack Crimmins are
AAGs in the Division. Steven Thomas supervises the District Court Unit, which also includes
AAGs Sean Kealy, Joshua Krell and SAAG Darlene L. Jordan. Maria Blanciforte is the
Division's paralegal. Sheila Rosselli and Kim Pittore provide support for the Division.

The IFD investigates all types of insurance fraud allegations involving fraud against
insurers and against public entities, such as the Commonwealth, municipalities and state or
federal agencies. The IFD also works with other Divisions in the Attorney General's Business &
Labor Protection Bureau to investigate and prosecute insurance fraud that adversely effects
businesses or fair competition. The IFD's cases can vary widely, and have included: multi-
million dollar premium fraud cases, major conspiracies by professionals or firms, conspiracies
centered around auto repair businesses, false injury claims regarding staged motor vehicle
accidents, inflated claims against homeowner's policies, and false billing for insured services.

The IFD receives referrals from a number of sources. The largest source of referred cases is
the Massachusetts Insurance Fraud Bureau (IFB). The IFD also receives referrals from the Public
Employee Retirement Administration Commission (PERAC), the Governor's Auto Theft Strike
Force (GATSF), the Department of Industrial Accidents (DIA), the Workers' Compensation
Rating and Inspection Bureau (WCRIB), the National Insurance Crime Bureau (NICB), the
Social Security Adminisfration (SSA) as well as cities and towns, private attorneys, judges and
concerned citizens throughout the state. The IFD also generates cases internally.

HIGHLIGHTED EFFORTS

&
SIGNIFICANT ACTIVITIES

The IFD obtained charges in 54 new cases in FY97 and completed prosecutions in 61
cases. Cases included charges of workers' compensation fraud, motor vehicle insurance fraud,
premium avoidance, homeowner's insurance fraud, life insurance fraud, health insurance fraud,
as well as larceny and fraud by insurance agents, claims adjusters and damage appraisers. New
cases charged in FY97 include allegations that defendants obtained in excess of $1,068,088.54 in
fraudulent insurance payments. Closed cases resulted in orders requiring restitution payments in
excess of $958,778.45, and awards of fines and court costs of more than $95,700, amounting to
total orders of more than $1,054,478.45.

WORKERS^ COMPENSATION FRAUD

• Commonwealth v. McCarthy. Norfolk Superior Court

Brian McCarthy, 26, of Randolph, was indicted on one count of larceny over
$250.00, one count of insurance fraud, and one count of workers' compensation
fraud. McCarthy was assaulted in November of 1 991 while working as a security
guard for Straughter Associates. Gunshots were fired at him and his partner, but
neither received serious injury. McCarthy filed for workers' compensation
benefits as a result of the psychological toll which he alleged as a result of this
incident. He subsequently settled the case for $15,000.00 plus medical expenses.
However, McCarthy had been working as a security guard for another company
during the period in which he was allegedly disabled from working. In March of
this year, McCarthy, who had been in default in this case since November 1993,
was located in Florida and arrested. He was brought back to Massachusetts, plead
guilty to the Larceny over $250 count and was placed on three years' probation.
He was ordered to pay $16,668 in restitution to the Liberty Mutual Insurance
Company. The other counts were filed by the Court.

• Commonwealth v. Hire. Dedham District Court

Carson Hire allegedly was injured while unloading packages on February 23,
1995 while in the employ of UPS. She claimed to have sustained a back injury
while lifting a package. She received temporary total disability payments through
August 15, 1995. During this period, however, Ms Hire was working at "Millis
Ice Cream Bam &, Mini Golf. On March 3, 1997 Ms. Hire plead guilty to
Workers Compensation fraud. Larceny Over $250 and Filing a False Insurance
Claim. She was sentenced to 2 years probation and ordered to pay $9000 in
resfitution to the insurance company along with a victim/witness fee of $50.

• Commonwealth v. Employee Staffing of America. Inc. Suffolk Superior
Court and Joseph Gall

Employee Staffing of America, Inc. (also known as ESA) is foreign corporation
located in Milford, Connecticut. From 1989 through June of 1992, ESA leased
employees to several small businesses in Massachusetts. These small businesses
paid workers' compensation premiums to ESA to provide coverage for these
leased workers. However, from April 1, 1991 through August 22, 1992, ESA had
obtained no workers' compensation coverage for these workers in accordance with
the laws of Massachusetts. Joseph Gall, president of ESA, created fraudulent
Certificates of Insurance to deceive these small businesses into believing that ESA
had actually secured this insurance coverage.

Additionally, from August of 1991 through June of 1992, ESA had a workers'
compensation policy through the Assigned Risk Pool (ARP) which was serviced
by American Policyholder's, Inc. of Wakefield. ESA procured this policy
fraudulently by failing to disclose the correct number of leased employees which
they had in Massachusetts.

The premium for ESA's policy with the Assigned Risk Pool was initially over
$600,000. However, when ARP became aware of ESA's true circumstances, the
premiums jumped to over 5 million dollars, of which amount ESA had only paid a
fraction. ESA never paid the full premium and the policy was canceled.

Joseph Gall, was charged with 1 1 counts of Larceny over $250, 25 counts of
Forgery, 25 counts of Uttering a forged instrument, and one count of Failing to
Provide workers' compensation coverage. ESA was charged with eleven counts
of Larceny over $250, and one count of Failing to Provide workers' compensation
coverage. On April 3, 1997, Judge Garsh, of the Suffolk Superior Court issued
her findings following a four- week bench trial. The defendants were found guilty
of Workers' Compensation premium fraud of approximately $4.2 million, Failure
to Provide workers' compensation coverage. Forgery and Uttering. On April 17,
1997 Joseph Gall was sentenced to nine to ten years in State Prison, with an
additional four to five years suspended thereafter, and was ordered to pay $1,875
in fines. ESA was ordered to pay $33,125. Gall and ESA must also pay $681,347
in restitution. An appeal was filed by the defendants and is currently pending.
These verdicts represent the largest workers' compensation case ever prosecuted
in Massachusetts, as well as the first workers' compensation premium fraud case
tried in Superior Court.

• Commonwealth v Gerald Labonte. Springfield District Court

Gerald Labonte was injured while working at Rocky's Hardware Store in
Springfield, and began receiving workers' compensation benefits. Subsequently,
he began working at a local video store while continuing to collect weekly total
disability benefits. Mr. Labonte fraudulently collected more than $24,000 in
benefits without disclosing his video store employment. He was charged with
Workers' Compensation fraud and Larceny over $250. On March 13, 1997, he
was found guilty on both counts by Judge Turcotte and sentenced to two years in
the House of Correction, suspended for five years, and ordered to pay $15,000 in
restitution to the American Hardware Insurance Company.

MOTOR VEHICLE INSURANCE FRAUD

• Commonwealth v Williams and Ward. Chelsea District Court

In 1994 Quinton Williams and his sister, Mary Ward, were traveling in Virginia
when their car broke down and caught fire. The defendants had the vehicle towed
to a local Virginia garage and left it there to return to Massachusetts. Later,
Williams reported to the Burlington Police Department, and subsequently, to
Commercial Union Insurance Company, that the car had been stolen from the
Burlington Mall. Commercial Union paid $10,650 in settlement of the claim.
However in August, 1995, the Williams' vehicle was recovered by the Virginia
State Police, who reported the matter to Commercial Union. Mr. Williams and
Ms. Ward were both charged with one count of Motor Vehicle Insurance Fraud,
Larceny, Conspiracy and Perjury. On March 11, 1997, they both plead guilty

before Judge Peter Agnes and were sentenced to three years of probation. In
addition, they were ordered to pay $12,830 in restitution to the insurance
company.

Commonwealth v. Anthony J. Gonsalves. Bristol Superior Court
On May 6, 1997, N4r. Gonsalves of New Bedford was sentenced by Judge Phillip
Rivard-Rapoza to two and one-half years in the House of Correction after
pleading guilty to nine counts of Larceny over $250, nine counts of Motor Vehicle
Insurance Fraud, seven counts of Conspiracy, two counts of Attempted Larceny
over $250 and two counts of Making False Statements to the Department of
Public Welfare. Gonsalves was also sentenced to five years of probation to begin
after his release and ordered to pay $25,000 in restitution. From March 1990 to
October 1991, using aliases, false birth dates and false social security numbers,
Gonsalves submitted nine separate fraudulent automobile accident claims to
insurance companies. In each instance, he claimed to have injured his right
shoulder and sought treatment from a different doctor. Because an earlier injury
had left him with a slight shoulder deformity, he was able to convince doctors that
he had actually been injured in the claimed accidents and that his supposed injury
kept him from working. Mr. Gonsalves sought compensation for lost wages and
submitted false documents to support his claims. Two of his nine claims were
denied. On the seven remaining claims, insurance companies paid a total of
approximately $49,000.

In addition to the insurance fraud, Gonsalves also pled guilty to welfare fraud
charges. During the time he committed insurance fraud under his various aliases,
Gonsalves collected several thousand dollars more in welfare benefits and food
stamps under his true name on the grounds that he was totally disabled due to a
back injury.

• Commonwealth v Nicholas K. Karellas. Middlesex Superior Court

On January 2, 1997, Nicholas Karellas of Belmont plead guilty to charges
stemming from his having fraudulently filed two false motor vehicle accident
claims. Mr. Karellas received more than $6800 from two insurance companies by
reporting the same damage to his car on three separate occasions. As a result of
his plea to two counts each of Larceny over $250, motor Vehicle Insurance Fraud
and Conspiracy, Judge Chemoff sentenced Mr. Karellas to two and one-half years
in the House of Correction, six months to be served on an electronic bracelet, with
the balance to be suspended for two years. He has also been ordered to pay
restitution of $6800, fined $5000, and ordered to complete 50 hours of community
service.

• Commonwealth v Osmor Bello. West Roxbury District Court

On April 3, 1994 Mr. Bello reported to the Boston Police and his insurance
company, National Grange Insurance Company, that his Volkswagen van had

been stolen from his home in Roshndale. However, investigation revealed that
Mr. Bello had actually shipped the van to Lagos, Nigeria nearly one month
earlier. National Grange denied his claim based on this information. In January,
1997, Mr. Bello plead guilty to Motor Vehicle Insurance Fraud, Attempted
Larceny, Concealing a Motor Vehicle and Filing a False Police Report. Judge
Sarah Singer sentenced Mr. Bello to one year in the Suffolk Coimty House of
Correction and suspended the sentence for two years. Mr. Bello was also ordered
to pay a $2500 fine and perform 100 hours of community service.

OTHER INSURANCE FRAUD CASES

Commonwealth v Ellis and Ellis. Worcester Superior Court
In March 18, 1997 a Worcester County Special Grand Jury returned a total of 82
indictments against the Ellis brothers James, Jr., and Nicholas, together with
former clients Harry Markarian, James Economou, Ronald D'Auteuil, Federico
Williamson and David Formoso, a/k/a Denis Milan. A sixth Ellis 8c Ellis client,
Frank G. Harwood, Jr,. was indicted and plead not guilty in early March to
charges of insurance fraud and larceny over $250. Mr. Harwood's case is
pending.

The indictments allege that the Ellis brothers, whose firm has more than 40 offices
throughout the state, reaped more than $70,000 in fees by overseeing sophisticated
insurance fraud schemes that resulted in more than $300,000 worth of insurance
payments to clients Markarian, Economou, D' Ateuil, Formoso, Williamson and
Harwood alone. Markarian, Economou and D'Ateuil were workers'
compensation clients of James N. Ellis, Jr., who were employed by the firm at the
same time they were collecting total disability payments from various insurers.
Their employment at the firm was either partially or totally concealed from the
insurance companies in an alleged effort to inflate their workers' compensation
claims. In the cases of Formoso and Williamson, attorneys Ellis and Ellis
allegedly pursued simultaneous, overlapping injury claims that they knew to be
fraudulent, and that included the use of aliases and false social security numbers.
Harwood allegedly used forged documents to make it appear that he was working
several jobs at the time of his injury, which made him eligible for higher benefits.
These schemes allegedly resulted in more than $380,000 in benefits and legal fees.

Commonwealth v Sbordone. Dessin. Jerome. Khalsa and Jacques.
Middlesex Superior Court

In April 4, 1997 a Middlesex County Grand Jury returned a total of 33 indictments
involving multiple counts of Insurance Fraud, Larceny and Conspiracy against:
Celies Dessin of Somerville, owner of St. Moses Auto Driving School; Dr. Gary
Sbordone of Topsfield, owner of Sbordone Chiropractic of Melrose; Dr. Hari
Narayan Karta Singh Khalsa of Millis, owner of Khalsa Chiropractic of
Cambridge; Dr. Emilio Jacques, Jr., of Arlington, owner of Cambridge
Orthopedic Office, and William Jerome of Saugus, an attorney with a law office

in Somerville. The multiple indictments allege that the defendants failed to
inform insurance carriers of any previous accidents, similar injuries or treatments
relating to claimed injuries, accidents or conditions. As a result, seven insurance
companies were allegedly defrauded and made payments in excess of $78,000.

• Commonwealth v. Paul Christian. Newburyport Superior Court

Following trial, Paul Christian of Tyngsborough was sentenced by Judge Robert
Barton to serve 9 to 1 0 years in state prison for his role in the sale of stolen
construction equipment to three customers in Haverhill and Andover. Christian
and Anthony Pergakis of Lowell were indicted in October of last year in Essex
Superior Court on multiple counts of Receiving Stolen Property and Conspiracy.
Pergakis plead guilty in February 1997 and is serving a two-year jail term. This
prosecution resulted from the theft a number of "Bobcat" style front-end loaders in
Massachusetts and New Hampshire. One of these loaders was recovered in
Lawrence after the defendants sold it to a local man. Two more loaders were later
identified as having been sold by the defendants. Each loader was valued at
approximately $20,000.

• Commonwealth v Sandra Gil. Lynn District Court

Sandra Gil, a/k/a Sandra Minaya, has been charged with eight counts of Larceny,
six counts of Forgery and six counts of Falsifying a Certificate of Registration.
Between 1993 and 1995, Gil allegedly represented herself as an agent of the
Metropolitan Insurance Company and improperly accepted premiums on its
behalf Rather than forward these payments to the company, she allegedly
deposited them to her own accounts. Apparently, she was never authorized to
write premiums or accept money on behalf of Metropolitan, and manufactured a
fake insurance stamp to appear to be more legitimate. Allegedly, Ms. Gil stole in
excess of $3750 by this scheme. She was arraigned on January 8, 1997 and awaits
ftirther pretrial conference.

• Commonwealth v Adele Doucette. Plymouth Superior Court

Adele Doucette, a former insurance agent from Brockton, was charged with an on-
going series of thefts from her insurance agency's customers of their down-
payments towards the purchase of automobile, general liability, medical
malpractice, and other insurance coverage. These larcenies took place over the
course of more than two years and involved over two dozen customers and four
insurance companies. In total, Ms. Doucette stole over $15,000 from customers
and insurance companies. She was charged with 1 9 separate Larceny indictments
and six (6) Forgery counts. On March 27, 1997, Adele Doucette plead to the
charges and received two years in the House of Correction, suspended for two
years. She was also ordered to perform one hundred hours of community service
and to pay $10,000 in restitution, plus a $60 VictimAVitness fee.

• Commonwealth v Mark S. Donoghue. Greenfield District Court

In July, 1 992, approximately $6000 in bar receipts relating to a barroom called

"Taylor's Tavern" were stolen from the office of Donoghue's Realty in Greenfield.
Both businesses were owned by Mr. Donoghue at the time. After discovering that
he had no insurance coverage for this type of loss on his barroom insurance
policy, Mr. Donoghue claimed that the stolen money was received as real estate
rental income and filed for compensation under a business policy held by another
company. Mr. Donoghue was charged with one count of Filing a False Insurance
Claim. On March 11,1 997, Mr. Donoghue admitted to sufficient facts and was
placed on probation by Judge Michael Ripps for one year. Further, he was
ordered to pay $9880 in restitution to the St. Paul Marine and Fire Insurance
Company and to speak to the local Chamber of Commerce about the unlawfulness
of lying to insurance companies.

Commonwealth v Anil Mohammed. Quincy District Court
Anil Mohammed and Vindra Mohammed, husband and wife, defaulted at their
arraignment for charges involving Insurance Fraud, Attempted Larceny, and
Conspiracy for filing a fraudulent lawsuit for personal injury and a fraudulent
stolen property claim. In 1991, Anil Mohammed brought a civil lawsuit against
Hanover Insurance Company claiming that he had slipped and fallen in a puddle
of water in his apartment building laundry room. Mr. Mohammed allegedly
suffered a broken ankle. After investigation, however, Hanover discovered that
Mr. Mohammed had allegedly broken his ankle while playing basketball, and that
after returning home, Mr. Mohammed and his wife conspired to stage the injury.
In a second insurance claim, Mr. and Ms. Mohammed filed a claim with
Commerce Insurance for property valued at $10,000 that was allegedly stolen
from their apartment. An investigation showed that the property claimed actually
belonged to the Mohammed's ex-roommate and that she was still in possession of
the property. A default warrant has issued.

DIVISION STATISTICAL SUMMARY

CASES

New Cases Charged in FY97 54

- Motor Vehicle Ins. Fraud 25

- Workers' Compensation Fraud 1 5

- Property Fraud 5

- Multiline 4

- Other Insurance Fraud 5

Cases Closed in FY97 61

- Motor Vehicle Ins. Fraud 25

- MA^ + Property Fraud 1

- Insurance Fraud 12

- Property Fraud 8

- Workers' Compensation 12

- Other Insurance Fraud 3

COURTS

Superior Court

(Essex, Middlesex, Norfolk,
Plymouth, Suffolk, Worcester, Bristol)

District Court

(Attleboro, Boston Municipal Court, 1 15

Brockton, Brookline, Cambridge, Chelsea,
Chicopee, Dedham, Dorchester, Edgartown,
Framingham, Greenfield, Leominster, Lowell,
Lynn, New Bedford, Plymouth, Quincy, Roxbury,
Salem, Springfield, Taunton, Wareham, Wrentham,
West Roxbury, Northampton, Westborough)

TRAINING & OUTREACH PROGRAMS

• Speech to AIG Claims Group

AAG Jennifer Ferreira addressed a group of investigators and adjusters of the
A.I.G. Claims Group, a large insurance company that provides workers'
compensation insurance in Massachusetts. The presentation concerned effective
methods of accident investigation, detection of fi-aud and preparation of case files
for referral to prosecutors.

•DRI Insurance Fraud Seminar

On October 24 and 25, 1996 the Defense Research Institute conducted a seminar
at the Copley Marriott on insurance fraud and suspicious insurance claims. AAG
John Ciardi spoke to the conference on how to develop a relationship with
criminal prosecutors, how to prepare cases for referral and how to set up internal
procedures to foster detection and prosecution of fraud cases. The DRI is a
national organization of insurance companies, in-house and outside counsel,
insurance defense attorneys and state officials.

• "Fraud Fighter of the Year" Awards

On April 9, 1997 AAGs David Marks and Michael Cullen were selected to
receive the Association of Certified Fraud Examiners Boston Chapter's "Fraud
Fighter of the Year" Awards. This honor was in recognition of their significant
work in securing indictments in the Ellis and Ellis case.

•Occupational Health Center at Deaconess -Glover Hospital

In April AAG John Ciardi spoke at the Grand Opening of the Occupational
Health Center at Deaconess -Glover Hospital. The event was the last of a string
of programs designed to introduce the new Center to the Deaconess-Glover
affiliates as well as the local hospital and business communities.

•Massachusetts Municipal Workers' Compensation Group

On April 1 1, 1997 AAGs John Ciardi and Michael Cullen spoke before the
Massachusetts Municipal Workers' Compensation Group.

•Workers' Compensation Premium Avoidance Seminar

On May 2, 1997 AAG Jennifer Ferreira spoke at a seminar in Needham,
Massachusetts presented by the OAG and the IFB and Office of the U. S. Attorney
relative to premium avoidance investigation and detection.

•Investigation of Automobile Glass and Body Shops Seminar

On November 8, 1996 AAGs Brian Burke and Kevin Brekka spoke in Taunton,
Massachusetts at a seminar presented by the OAG and the IFB relative to
automobile repair fraud.

•Automobile Glass and Body Shops Task Force

AAGs Brian Burke and Kevin Brekka have formed a task force composed of
representatives from the IFB, insurance industry, and automobile body and glass
repair companies relative to automobile repair fraud. The task force meets
periodically to develop proposals by which to improve motor vehicle claims
adjustment procedures.

MEDICAID FRAUD CONTROL UNIT

The Attorney General's Medicaid Fraud Control Unit is comprised of experienced
prosecutors and highly trained investigators, including auditors, pharmacists, registered nurses,
and computer analysts. The Medicaid Fraud Control Unit investigates and prosecutes healthcare
providers for defrauding the Commonwealth's 3.6 billion dollar Medicaid program. The Unit
also prosecutes those caretakers that abuse, neglect, mistreat or financially exploit the elderly and
the disabled in long term care facilities. One of 47 such units nationwide, the Medicaid Fraud
Control Unit is certified aimually and receives 75% of its operating budget from the federal
government.

During fiscal year 1997, the Medicaid Fraud Control Unit initiated several criminal and
civil enforcement actions as it sought to have a significant deterrent impact on the healthcare
provider community. As reported below, the Medicaid Fraud Control Unit brought criminal and
civil actions against a variety of healthcare providers, including physicians, dentists,
psychiatrists, pharmacies and nursing homes. In addition to recovering nearly $1 .7 million in
criminal and civil fines and restitution, the Attorney General's Medicaid Fraud Control Unit
obtained 28 convictions against health care providers, and nursing home caretakers that abused,
misfreated or neglected elderly residents in long term care facilities.

HIGHLIGHTED EFFORTS

SIGNIFICANT ACTIVITIES

PHYSICIANS

• Lynn Doctors - Two doctors who practiced medicine in Lynn were sentenced
pleading no contest to charges that they illegally dispensed drugs to undercover
state police troopers who posed as drug addicts.

One doctor was sentenced to six months in the House of Correction suspended for
two years. The other doctor was sentenced to 30 days in the House of Correction,
suspended for two years. As a condition of probation, both doctors were ordered
to resign from the practice of medicine in the Commonwealth.

The State Police Diversion Investigative Unit and the Medicaid Fraud Control
Unit (MFCU) began investigating both doctors when they were contacted by
several pharmacies in the Lynn area, as well as physicians, social workers and
local police, about the unusually high number of abusable drugs the doctors were
prescribing to drug addicts in Eastern Massachusetts. (August 1 996)

• Jamaica Plain Psychiatrist - A Jamaica Plain psychiatrist pleaded guilty to three

counts of illegal prescribing of a Class C controlled substance, three counts of
filing false medicaid claims and one count of larceny over $250. The doctor also
pleaded guilty to similar charges in Norfolk County as part of the investigation in
October of 1996.

The defendant was sentenced in Norfolk County to a two-year House of
Correction term, one year to be served, with the balance suspended. The judge
ordered him confined to his home and monitored by an electronic bracelet. The
balance of the sentence was suspended for three years. The judge in Suffolk
County ordered the same sentence. The sentences will run concurrently. In
addition, the defendant was ordered to pay $75,000 in restitution to the Medicaid
program. As a condition of his probation, the defendant must permanently
surrender his license to practice medicine in Massachusetts.

He must also undergo alcohol treatment, counseling and urine checks. If the
defendant does not stay drug and alcohol fi-ee, he will be imprisoned for two
years.

Following an extensive investigation by the Medicaid Fraud Control Unit, the
Massachusetts State Police Drug Diversion Unit, the Federal Drug Enforcement
Administration and the Boards of Registration in Medicine and Pharmacy, the
defendant was indicted in Suffolk County in August, 1995 on a variety of charges,
and indicted again in Suffolk County in December, 1995 on additional charges.

The State Police Drug Diversion Unit along with MFCU coordinated an
imdercover sting operation on the doctors practice, sending patients to the
defendants office seeking drugs that weren't medically necessary. The defendant
then prescribed a variety of addictive drugs.

Evidence later seized by State Police indicated that the doctor was providing
drugs to more than 700 patients and billing the state, federal government and
private insurers between $30,000 and $40,000 each month. In addiUon, an
unknown amount of cash was given to the doctor by drug seeking patients.
(December 1996)

Lawrence Psychiatrist - A Lawrence psychiatrist was sentenced to a two-year
House of Correction suspended sentence and was placed on supervised probation
for three years after pleading guilty to grand larceny and filing false medicaid
claims. In his guilty plea, the defendant admitted to fi-audulently upgrading
services billed to Medicaid and its mental health and substance abuse contractors,
the Massachusetts Behavioral Health Partnership and Mental Health Management
of America.

The psychiatrist billed for twenty-four or more hours of service per day on
seventy-seven separate days for time based office visits. He also billed Medicaid

DENTISTS

for a procedure known as a "Medication Visit" for which, under the program
regulations, a medical doctor must spend approximately thirty minutes with each
patient. Contrary to those regulations, the doctor spent only a few minutes with
each patient.

Following the doctors guilty plea, he was ordered to pay $240,68 1 in restitution to
Medicaid and $25,000 in criminal fines. Additionally, the defendant will pay
$30,000 in civil penalties, costs and damages to the Commonwealth.

Under the following special conditions of probation, the defendant was ordered to
surrender his license to practice in Massachusetts to the Board of Registration in
Medicine for a three year period, as well as suspension from the practice of
medicine anywhere in the United States. The defendant was also ordered to
perform eleven hours of community services each week of his three year
supervised probation.
(March 1997)

Hyannis Physicians - Two Hyannis physicians and their group practice agreed to
pay $30,000 to settle allegations of over billing the State's Medicaid program.
The Medicaid Fraud Control Unit reached a civil settlement with the two
physicians and their professional corporation which resolved allegations of billing
for allergy injections and office visits on the same date of service.

The Medicaid Fraud Control Unit's investigation focused on a period between
1994 and 1995 when associates in the practice were allegedly billing for an allergy
injection and an office visit for Medicaid patients being treated for allergies.
Medicaid regulations permit a physician to bill only for the allergy injection when
it is the primary purpose of the doctor's office visits. (March 1997)

Quincy Dentist - A Quincy dentist pleaded guilty in Suffolk Superior Court to
charges of submitting false claims worth approximately $20,000 to the State
Medicaid program. The Quincy dentist fraudulently billed Medicaid for dental
services and restorations that he did not provide on various dates in 1994. A
Suffolk Superior Court Judge ordered the Quincy dentist to pay a $12, 500 fine
and placed him on probation for two years. The Court also ordered the dentist to
pay $20,000 in restitution to the states Medicaid program. (December 1 996)

Charlestown Dentist - A Charlestown dentist agreed to pay $123,000 in civil
penalties and $62, 000 in restitution to settle allegations of Medicaid fraud and
abuse in his billing practices.

MFCU filed the settlement agreement and consent judgment against the
Charlestown dentist in Suffolk Superior Court. This dentist allegedly fraudulently
billed Medicaid for dental services to patients.

The dentist allegedly fraudulently billed for cosmetic dental services, billed for
services not covered by Medicaid and billed for services to patients who w^ere not
yet Medicaid eligible between April 1992 to July 1996. (July 1996)

Boston Dentist - A Boston dentist was the subject of a complaint, settlement
agreement and consent judgment in Suffolk Superior Court alleging that over a
four-year period he fraudulently billed Medicaid for more expensive dental
services than he actually performed on patients.

The Boston dentist resigned from the Medicaid program and agreed to pay
$75,000, which constitutes fiall payment of the alleged overcharges and penalties
to the Medicaid program (October 1996)

PHARMACIES

New Bedford Pharmacy - A New Bedford pharmacy was ordered to pay $40,000
after pleading guilty to Medicaid fraud charges of falsely inflating its prices for
products billed to the state's Medicaid program.

The New Bedford Pharmacy pleaded guilty in Suffolk Superior Court to five
counts of Medicaid fraud. The company overbilled Medicaid 245 times for items
delivered to five patients over a two and one-half year period.

A Superior Court Judge ordered the company to pay a $15,000 fine and $25,000
in restitution to the state's Medicaid program. The pharmacy's owner was placed
on a pre-trial probation for six months.

Under the terms of the guilty plea, the pharmacy's owner agreed to never become
a Medicaid or Medicare provider and to never obtain an ownership interest in any
company that bills Medicaid or Medicare for health care services, medicines or
equipment. (January 1997)

Supermarket Chain - A regional supermarket and pharmacy chain agreed to
voluntarily reimburse $35,232 to the Massachusetts Medicaid program to correct a
computer software installation error that resulted in overbilling the Medicaid
program.

The supermarket chain agreed to the payment as part of a settlement with the
state's Division of Medical Assistance, which administers the Medicaid program.
The settlement marks the first time a pharmacy vendor has voluntarily disclosed a
billing error. In June 1995, an outside confractor upgraded the supermarket
chain's computer billing program. The pharmacy software program that was
installed caused the supermarket chain to bill at a higher than customary rate for
particular prescriptions. (October 1996)

Cambridge Pharmacy - A Cambridge pharmacy agreed to reimburse the state's

Medicaid program $40,000 for allegedly billing for services it did not provide and
for wrongful collection of funds.

The Medicaid Fraud Control Unit filed a civil complaint, consent judgment, and
agreement for judgment in Suffolk Superior Court against the Cambridge
pharmacy.

The complaint alleges the pharmacy billed Medicaid for more expensive products
than it actually provided to recipients and solicited cash from Medicaid recipients
for goods that were reimbursable by Medicaid. The complaint further alleges the
pharmacy submitted false bills to Medicaid for goods and services provided to
individuals who were paying cash during their spend-dovm period. In addition,
the complaint alleges that the pharmacy failed to maintain proper documentation
for insulin and other drugs that require written prescriptions. Pursuant to the
settlement, the pharmacy will pay $40,000 in civil restitution to the Division of
Medical Assistance and submit a compliance billing plan. (May 1997)

New Jersey Pharmaceutical Company - A New Jersey-based pharmaceutical
company will provide the Massachusetts Medicaid program with $75,000 worth
of a patented method of insulin delivery to resolve allegations that it denied access
to Medicaid patients.

The pharmaceutical company reached a civil settlement with the Medicaid Fraud
Control Unit and will distribute its insulin delivery system free of charge to
Medicaid recipients and other indigent patients at the Joslin Diabetes Center,
Children's Hosptial Diabetes Clinic and Massachusetts General Hospital. The
distribution effort will account for an approximate $75,000 savings to the state's
Medicaid program.

MFCU alleged that the pharmaceutical company was making its program
available only to cash-paying patients and those insured by private companies,
while denying the program to Medicaid patients.

The insulin delivery system developed by the pharmaceutical company, consists
of a pen-like device housing an insulin cartridge and a disposable needle. Insulin
dosages are quickly and accurately set with an easy-to-read dial on the barrel of
the pen.

The agreement ensures Medicaid patients across the state will have access to the
program, and Medicaid patients nationwide will continue to have access to the
pharmaceutical company's diabetes educational materials. (March 1997)

Norwood Pharmacy - A Norwood pharmacy paid $100,000 to settle allegations
that the pharmacy illegally billed the state's Medicaid program and was involved
in illegal financial arrangements with several South Shore nursing homes.

The Medicaid Fraud Control Unit filed a complaint and settlement agreement in
Suffolk Superior Court against the Norwood pharmacy. The pharmacy provides
pharmaceutical and non-pharmaceutical supplies to Medicaid recipients residing
in long-term care facilities.

The settlement resolves allegations that the pharmacy was involved in illegal
financial arrangements with several Massachusetts nursing homes by providing
them with discoimts, rebates, equipment and other services.

The complaint further alleged that the pharmacy wrongfully billed Medicaid for
dispensing, billing and receiving payment for drugs without first obtaining an
authorized written prescription. The pharmacy also allegedly billed Medicaid for
certain items at prices higher than the usual and customary prices that it charged to
non-Medicaid customers. (May 1997)

HEALTH CARE COMPANIES

• Clinical Lab Company - A national health care company with offices in
Massachusetts agreed to repay $277,000 to the Commonwealth for alleged
Medicaid abuses. The payment was part of a $6.6 million nationwide settlement
with a clinical laboratory company to be shared by 27 states.

The clinical laboratory company provided blood testing services to doctors, clinics
and health care providers in a majority of the United States.

Prior to August 1993, the company had Massachusetts offices in Andover,
Attleboro and Westwood. The payment of $277,000 settles allegations that the
company conspired to defiraud Medicaid and Medicare by bundling three different
exotic tests with certain ordinary blood panels, causing doctors to order tests that
were not medically necessary. (December 1996)

• Rockland Mental Health Center - A South Shore mental health center alleged to
have improperly billed Medicaid for psychotherapy services to nursing home
residents agreed to repay $125,000 to the state Medicaid program.

In a civil lawsuit filed in Suffolk Superior Court, MFCU alleged that the company
overbilled Medicaid for psychotherapy services to nursing home patients fi-om
July 1992 to January 1997.

In a settlement agreement, the company agreed to repay $125,000 to the state's
Medicaid program, $25,000 of which will be used for uncompensated care to
under-insured elders. (February 1 997)

NURSING HOMES

• Brockton Nursing Home - A Brockton nursing home agreed to a civil settlement

to resolve allegations that the facility mismanaged patient funds.

The nursing home paid more than $25,000 in restitution and penalties to correct
discrepancies found in the patients' personal need allowance account.

The Medicaid Fraud Control Unit discovered instances where the nursing home
allegedly did not fimd the patients' personal needs allowance account, effectively
resulting in a interest-free loan to the nursing home.

Under the terms of the settlement the patients' personal needs allowance account
will be reimbursed a total of $15,780. The owners also agreed to pay $10,000 in
civil penalties, fines and investigative costs.

In addition, the agreement required that the nursing home hire an independent
certified public accountant to review the patients' account every three months for
the next two years. The quarterly reports must be sent to the Attorney General's
office until the end of 1998. (December 1996)

Swansea Nursing Home - A Swansea nursing home that allegedly fraudulently
billed the state Medicaid program for reimbursement agreed to pay $40,000 in
restitution.

The Medicaid Fraud Control Unit filed the settlement agreement in Suffolk
Superior Court. According to the complaint the nursing home violated state
Medicaid regulations for long-term care facilities by billing the Medicaid program
for services that were never rendered to its residents.

An investigation by MFCU showed that from 1990 through 1995, a no-show
employee was paid for work that was never performed and the employee's salary
was included on claims filed with the Division of Medical Assistance for
Medicaid reimbursement. In addition to the $40,000 restitution, the nursing home
agreed to frilly comply with all federal and state laws, regulations and rules
applicable to its participation in the Medical Assistance Program; maintain
complete and accurate records; file accurate and true operating cost reports with
the Massachusetts Rate Setting commission; and continue to provide quality
services to its residents. (August 1996)

ELDER ABUSE

Saugus Nurses Aide - A Saugus woman pleaded guilty in Lynn District Court to
charges that she struck an 80-year-old woman in the face at a local nursing home.
The former nurses aide admitted to sufficient facts on two counts of patient abuse
and one count of assault and battery.

The defendant was a certified nurses aide at a Saugus rehabilitation and nursing
center when she struck the female patient across the face. The patient, who suffered

from dementia and a seizure disorder, suffered bruised arms and shoulders and cuts
in the assauh. Another nursing home employee witnessed the incident and notified
the nursing supervisor. Thedefendant was fired as a result of the report. The
defendant was placed on probation and the case was continued without a finding for
eighteen months over the Commonwealth's objection. (May 1997)

Rhode Island Nurses Aide - A Rhode Island man pleaded guilty in Attleboro District
Court to sexually abusing an elderly patient at an Attleboro nursing home. The
defendant pleaded guilty to one count of indecent assault and battery. He was
sentenced to one year in the House of Correction, suspended for eighteen months,
with eighteen months of supervised probation. He was also ordered to submit to a
psychological evaluation, imdergo counseling, turn in his nurses aide license, and
stay away from the victim. The defendant is also prohibited from accepting a paid or
volunteer position in the health care field in Massachusetts. In addition,
Massachusetts law required that the defendant register as a sex offender with the
local police departments where he works and resides.

The defendant was a nurses aide at a nursing and rehabilitation center in Attleboro
when a visitor witnessed him fondling the breast of an eighty-one year older female
resident as he kissed her on the mouth. The witness reported the incident to the
management of the facility and notified the Department of Public Health. (May
1997)

Lowell Maintenance Worker - A Lowell man pleaded guilty in Lowell District Coiul
to one coimt each of patient abuse and indecent assault and battery. The defendant
was sentenced to one year in the House of Correction, suspended for two years with
two years supervised probation. As a special condition of the probation, the
defendant is prohibited from working in any capacity for a health care facility or
agency that provides care to patients or long-term residents.

The defendant was employed as a maintenance worker at a nursing and rehabilitation
center in Lowell and was allegedly observed by a certified nurses aide fondling the
groin area of a 35-year-old female patient within the closed privacy curtains of her
room. The patient, who suffers from Huntington's disease, was partially clothed and
asleep at the time. (December 1 996)

Easthampton Nurses Aide - A former certified nurses aide at an Easthampton nursing
home who admitted to abusing an elderly dementia resident was barred from
providing direct patient care for one year. The former nurses aide admitted to
sufficient facts for a guilty finding in Northampton District Court on one count each
of patient abuse and assault and battery. Over the Commonwealth's objecfion, the
judge continued the matter without a finding for one year on the condition that the
aide be precluded from providing direct patient care during the period. The former
aide admitted to assaulting a ninety-six year-old female dementia resident while
feeding her breakfast. The aide admitted to roughly handling the resident and using
profanity. (July 1996)

DIVISION STATISTICAL SUMMARY

STATISTICAL SUMMARY

Formal Investigations Initiated 48

Investigations Completed and Closed 45

Individual Indictments 1 7

Corporate Indictments 6

Individuals Convicted 12

Corporations Convicted 2

PATIENT ABUSE/NEGLECT CASES

Abuse & Neglect Referrals 739

Abuse & Neglect Investigations 1 96

Total Criminal Complaints & Indictments 6

Prosecutions Completed and Closed 7

Individuals Convicted 5

Pending Prosecutions 14

CIVIL/CRIMINAL FINANCIAL RECOVERIES

Number of Civil Recovery Cases 1 7

Civil Recovery $ 1 ,2 1 6,470.25

Number of Criminal Recovery Cases 9

Criminal Recovery $468,42 1 . 1 1

Total Recovery $ 1 ,684,89 1.36

Training, Enforcement, Education and Outreach Initiatives

The Medicaid Fraud Control Unit continued to ensure that its staff emphasize current
healthcare fraud investigative techniques. Some of the seminars and conferences attended by the
MFCU staff included: The National Anti-Fraud Association Annual Conference and Training
Seminar; The National Association of Medicaid Fraud Control Units Annual Conference and
Training Seminar; The Federal Law Enforcement Training Program for MFCU investigators; The
New England Drug Diversion Conference and The Attorney General's Comprehensive In-Service
Investigators Training.

Recognizing that the vast majority of healthcare providers are eager to provide quality
healthcare, the Medicaid Fraud Control Unit has continued to educate the provider commimity
regarding Medicaid Program Regulations, their applications to fraud alerts, and the use of effective
corporate compliance plans.

In pursuit of those providers that operate outside legal boundaries, the Attorney General's
Medicaid Fraud Control Unit has developed several enforcement associations as reported below:

The National Association of Medicaid Fraud Control Units rNAMFCU) - The
Medicaid Fraud Control Unit's directors meet regularly to discuss emerging trends in
fighting healthcare fraud. In consant with the federal Department of Justice,
NAMFCU brought several prosecutions against healthcare corporations that resulted
in millions of dollars returned to the Medicare and Medicaid programs nationwide.
The Association also contributed to Attorney General's Elder Summit Conference
which brought together experts nationwide to profile innovative ideas for protecting
the elderly from a variety of common scams, neglect, abuse and exploitation.

The Northeast Healthcare Law Enforcement Association fNHLEA) - Consisting of
chief investigators from New England MFCUs, including New York and New Jersey,
the Massachusetts State Police Diversion Investigative Unit and federal law
enforcement agencies including the Drug Enforcement Administration (DEA), the
Federal Bureau of Investigations (FBI), the Internal Revenue Service (IRS) and the
Office of Inspector General (OIG), this group shares investigative strategies and
develops joint state/federal health care fraud investigations and prosecutions. The
Association also sponsors quarterly training programs such as this years Computer
Investigations in a Healthcare Environment and Durable Medical Equipment
Invoicing Fraud.

Drug Diversion Issues - MFCU representatives, along with the Federal Drug
Enforcement Agency and the Board of Registration in Medicine and Pharmacy work
with various state and federal agencies concerning drug diversion investigation issues
including the sharing of investigative resources to develop comprehensive
prosecutions. In June of 1997 the Attorney General and his Medicaid Fraud Control
Unit were recognized for outstanding contributions to the drug enforcement effort in
Massachusetts with a distinguished service award from the Federal Drug
Enforcement Administration. The award is the result of an on-going relationship
v^th the Drug Enforcement Agency, the Federal Bureau of Investigations, and the
Massachusetts State Police in the coordination of white collar crime investigations.

Metra Health Association - Representatives from the New England MFCUs, the
Office of Inspector General, FBI and Medicare meet with the Association of Survey
Utilization Review Systems to discuss the latest trends in analyzing and packaging
utilization data for successftil prosecutions.

Bureau of Special Investigations - The Medicaid Fraud Control Unit meets with
representatives from the Bureau to discuss welfare fraud, referrals and inter-agency
investigations involving Medicaid recipients.

Division of Registration - Health Care Fraud Unit - The Medicaid Fraud Control Unit
meets with representatives from the Division's Health Care Fraud Unit which brings
complaints against health care professionals before various professional licensing
boards.

Department of Public Health - The MFCU meets regularly with the officials from the

Department of Public Health to discuss issues affecting the monitoring and policing
of instances of elder abuse, neglect, and mistreatment in long term care facilities.

I
Pharmacy Program - The MFCU's Pharmacy Coordinator lectures regularly to the I

state's registered pharmacists to instruct and educate on The MFCU's pharmacy

enforcement program and the latest trends, laws, and regulations affecting the

pharmacy community.

New England Anti-Fraud Association - The MFCU meets quarterly with the New
England Anti-Fraud Association which consists of private insurance health care fraud
investigators. The MFCU has lectured the group on the importance of investigative
cooperation between private and public health care enforcement to identify
fraudulent providers.

Division of Medical Assistance - The MFCU meets monthly with the Division of
Medical Assistance, the agency that administers the state's Medicaid program, to
discuss effective fraud review programs, referrals, and the development of health
care fraud investigations.

CRIMINAL BUREAU ANNUAL REPORT

The Criminal Bureau provides the citizens of the Commonwealth with a multi-dimensional
approach to law enforcement in the Commonwealth of Massachusetts. Trial prosecutors, appellate
prosecutors, and prosecutors who specialize in urban violence comprise the legal staff of the
Bureau. Additionally, there are financial investigators, a victim/witness advocate, a paralegal,
environmental police officers, members of the Massachusetts State Police, and a volunteer attorney
in the Bureau.

The trial prosecutors represent the Commonwealth in criminal prosecutions throughout the
state, primarily in the areas of economic crime, public corruption, envirormiental crimes, and
narcotics violations. The appellate staff conducts post-conviction proceedings, including
representing the Commonwealth in appeals of criminal convictions, defending against federal
habeas corpus challenges to state criminal convictions, and appearing on behalf of state officials,
members of the judiciary, prosecutors, and other law enforcement agents named as defendants in
state and federal civil suits generated by prisoners. Assistant attorneys general in the Bureau fiirther
serve the public by responding to inquiries and complaints on myriad issues fi-om citizens,
reviewing extradition documents firom executive officers of the fifty states, and sponsoring and
participating in training programs on criminal justice issues.

The organizational structure of the Bureau reflects five discrete practice areas: the Appellate
Division, the Economic Crimes Division, the Environmental Crimes Strike Force, the Narcotics and
Special Investigations Division, and the Public Integrity Division. Each division is supervised by a
division chief In addition to these five divisions, there is a Criminal Investigation Division,
comprised of Massachusetts state troopers and investigators who investigate crimes throughout the
state, and a Financial Investigation Division, established to assist prosecutors in investigating
financial crime, including larceny, public corruption, tax evasion, campaign financial violations, and
fraud. The financial investigators also maintain the accounting for forfeited funds seized by the
Narcotics and Special Investigations Division, as well as provide assistance to the Asset Forfeiture
Unit in searching titles of forfeited property.

Lastly, the Bureau spearheads the Safe Neighborhood Initiative (SNI), a collaborative effort
with the Boston Police Department, the Boston Mayor's Office, the Suffolk County District
Attorney's Office, the U.S. Attorney's Office, and community residents to reduce crime, increase
economic stability, and improve the quality of life in designated urban neighborhoods. The SNI
operates on a commimity prosecution model now in place in Dorchester, Roxbury, Chelsea and
Brockton.

Currently, there are 35 prosecutors, eight financial investigators, nine support staff, a
paralegal, a victim witness advocate, a program coordinator for the Safe Neighborhood Initiative,
and a volunteer attorney in the Criminal Bureau. In addition, 32 members of the Massachusetts
State Police are assigned to the Bureau to investigate alleged criminal conduct in the
Commonwealth.

The Chief of the Criminal Bureau is Frances A. Mclntyre, who oversees all Bureau acfivities.
Deputy Chief Susan Spurlock directs the Safe Neighborhood Initiative, and Deputy Chief Mark

Smith manages the Htigation in the Bureau. The division chiefs are: Pamela Hunt, Appellate
Division; Carol Starkey, Economic Crimes; Martin Levin, Environmental Crimes Strike Force;
Robert Sikellis, Narcotics and Special Investigations Division; and Jeremy Silverfme, Public
Integrity Division. Paul Stewart, CFE, directs the Financial Investigation Division and
Massachusetts State Police Captain John Kelly heads up the Criminal Investigations Division.

There are also two Bureau Attorneys in the Criminal Bureau. Mary A. Phillips, Bureau
Attorney for Training and Administration, coordinates the grand jury process throughout the
Commonwealth, develops training programs for the Criminal Bureau, serves as Chair of the
Training Committee for the Office of the Attorney General, and advises the Bureau Chief on
administrative and budgetary matters. Elisabeth J. Medvedow, Bureau Attorney for Policy and
Legislation, develops and coordinates criminal justice initiatives, reviews and drafts legislation
affecting the criminal justice system, writes amicus briefs in cases of statewide significance, and
edits the Law Enforcement Newsletter, a publication distributed to judges, prosecutors and police to
keep the law enforcement community apprised of recent developments in criminal law.

As with any organization, members of the staff leave to seek new professional opportunities.
One significant loss in FY97 was R. Michael Cassidy, who resigned as Chief of the Criminal
Bureau, a position he had held since 1993, to assume the position of Associate Dean for
Administration at Boston College Law School.

APPELLATE DIVISION

The Appellate Division handles a wide variety of criminal, federal habeas corpus, state habeas
corpus and other civil cases which impact criminal prosecutions and the criminal justice system.
The Division's attorneys represent the Commonwealth in appeals and post-conviction matters in
criminal cases prosecuted at the trial level by the Attorney General's office, defend against habeas
corpus petitions filed in federal court challenging Massachusetts convictions, and appear on behalf
of the Commonwealth in cases involving parole surrenders, civil commitments and renditions,
appeals in the First Circuit Court of Appeals from the grant or denial of habeas corpus relief; and
convictions of criminal contempt. In addition, the Division also engages in civil litigation defending
judges, clerks, probation officers and other court personnel. District Attorneys, Assistant District
Attorneys and other prosecutorial persoimel sued civilly in state or federal court for actions taken
during the criminal justice process. The Assistant Attorneys General in the Division defend the
constitutionality of criminal statutes and challenges to statutes, court rules, practices and procedures
concerning all aspects of the criminal justice system, represent the interests of prosecutors when
subpoenaed to testify or provide documents in civil cases, supervise agency staff attorneys handling
litigation involving the Department of Correction and the Parole Board, and handle all appeals and
federal court litigation concerning the Parole Board.

In the last six years, the Appellate Division has experienced a marked increase in its caseload
due, in part, to an expanded assumption of responsibility for representing the interests of the state's
prosecutors in both the criminal and civil arenas. Through centralization in the Appellate Division
of all litigation concerning the state's prosecutors, the Division's involvement in cases affecting the
validity of convictions or which impact the criminal justice system, creative use of the Anti-SLAPP
statute, its amicus brief program and participation in other criminal justice initiatives, the Division
has been able to make full use of its expertise in criminal law and procedure.

Federal habeas corpus litigation accounts for a significant portion of the Division's caseload.
The passage by Congress of the 1996 amendments to the federal habeas corpus statute, which for
the first time created a one-year statute of limitations for bringing federal habeas corpus petitions,
has resulted in a substantial increase in petitions filed by Massachusetts prisoners. The Appellate
Division has been particularly successful in defending against habeas corpus challenges. Since
1991, of the more than 500 federal habeas cases resolved, only two were ultimately unsuccessful.

During FY97, the following assistant attorneys general were assigned to the Appellate
Division for part or all of the year: Annette Benedetto, William Duensing, Ellyn Lazar, Susanne
Levsen, Gregory Massing, Gail McKenna, William Meade, Cathryn Neaves, Djuna Perkins, and
Pamela Hunt. The division has a paralegal, Katherine DiGennaro, and two secretarial support staff
In addition, several other Criminal Bureau attorneys handled Appellate Division cases during this
fiscal year: Michael Cassidy, Elisabeth Medvedow, Molly Parks, and Robert Sikellis.

The Division handled approximately 715 cases during the course of the year. Three hundred
forty-three (343) new cases were opened in FY97, and 370 were closed.

In addition to their case work. Division attorneys participate in and present training programs
both for the Criminal Bureau and office-wide, as well as provide assistance to other Criminal
Bureau attorneys on a variety of matters, including investigations, motions, trials, post conviction

proceedings, and single justice actions. The Division also works closely with the District Attorneys'
offices, especially their Appellate Divisions, in identifying and acting as a clearinghouse on criminal
law issues of statewide importance and interest. In addition, Assistant Attorney General Gail
McKenna participated in the Urban Violence program for seven months prosecuting cases in the
Brockton District Court.

I. APPELLATE DIVISION CASE STATISTICS

A. Cases Handled

Cases Opened

Cases Disposed

Total Cases Handled

A. Federal Habeas

116

215

B. Federal Civil

C. State Civil

108

209

D. State Habeas Corpus

E. Criminal

117

F. 211, §3 and Other
Single Justice Cases

G. Other

TOTALS

370

343

715

The following is a comparison of case activity for the Appellate Division for the last seven

years:

FY
1997

FY
1996

FY
1995

FY
1994

FY
1993

1992

FY
1991

TOTAL CASES OPENED

343

344

341

307

351

222

161

TOTAL CASES DISPOSED

370

406

515*

213

282

206

N/A

TOTAL CASES HANDLED

715

778

747

652

649

428

N/A

*Includes 125 old cases.

This fiscal year, Appellate Division attorneys handled 715 cases, slightly fewer than FY96
and 95, but more than 67% greater than the number of cases handled in FY92. Three hundred
seventy cases (370) were resolved during the year. Since FY92, there has been a 49% increase in
federal habeas corpus cases, 69% increase in federal civil cases, 37% increase in state habeas corpus
cases, 63% increase in state civil cases, 12% increase in cases brought before the single justice
session of the Supreme Judicial Court, and a 333% increase in criminal cases.

The number of new cases opened by the Appellate Division has remained relatively constant
for the last five years, despite the fact that increasing numbers and types of cases have been referred
to agency counsel to handle under the supervision of the Appellate Division. In FY97, 159 cases
were referred by the Appellate Division to agency counsel at the Department of Correction or the
Parole Board in their capacity as Special Assistant Attorneys General, to the District Attorneys, or to
the various sheriffs departments.
B. Appellate Briefs Filed

Court

1997

FY
1996

FY
1995

FY
1994

FY
1993

FY
1992

U.S. Supreme Court

U.S. Court of Appeals
(First Circuit)

Supreme Judicial Court

MA Appeals Court

TOTALS

* includes 2 bankruptcy
appeals

52*

Case Tvpe

FY
1997

FY
1996

FY
1995

FY
1994

FY
1993

FY
1992

Criminal

Federal Habeas

All Other Civil/
State Habeas

Fifteen briefs were filed in the United States Court of Appeals; three in habeas corpus cases
and ten in federal civil or removal actions. The Division was successful in all cases decided.

A brief filed in the United States Supreme Court was written upon the request of the Court
in opposition to a petition for certiorari in a state criminal case raising an issue whether double
jeopardy barred the state ft-om both prosecuting a person for dnmk driving and suspending the
person's license for failing the breathalyzer. After briefing, certiorari was denied.

This year, 1 1 briefs were filed in the Supreme Judicial Court. Seven were filed in criminal
cases and four were filed in civil, state habeas corpus, and G.L. c. 21 1, § 3 matters, addressing
subjects such as the circumstances under which police officers executing a search warrant in a place
of business may use civilian experts to assist them in identifying items to be seized; the
constitutionality of the vagrancy statute prohibiting begging in public places; how a state court
should conduct proceedings to extradite an individual to another state where the person is alleged to
be incompetent; the continued vitality of the common law crime of obstruction of justice; and the
method of criminally enforcing campaign finance laws.

The Division wrote 32 briefs which were filed in the Appeals Court, 21 in criminal cases,
and ten in civil matters in all areas affecting the criminal justice system. The Division enjoyed
success in all but one case decided by the Appeals Court; that case is now pending on further review
to the Supreme Judicial Court.

The Division continued its efforts to file amicus briefs on behalf of the Attorney General in
cases having broad impact and importance to the criminal justice system, consistent with the
Attorney General's statutory responsibilities as the chief law enforcement officer of the

Commonwealth. Toward that end, Division attorneys wrote two amicus briefs during FY97. In the
first amicus, which addressed the question of whether double jeopardy principles preclude the
government from both prosecuting criminal offenses and imposing civil or administrative sanctions
upon an offender, the Division argued that double jeopardy does not prevent both the prosecution of
prison inmates for assaults on guards and the ability of correctional authorities to impose prison
discipline for those assaults. The Supreme Judicial Court agreed with the arguments advanced in
the amicus. The second amicus brief was filed on behalf of the Attorney General and the
Commissioner of Probation in a case in which a criminal defendant, after his conviction, sought
discovery which would have required the Probation Department to review all its files in order to
compile statistical profiles of probationers. That case is pending.

In an important case decided this year, the Supreme Judicial Court adopted the legal
analysis presented in the joint amicus brief of the Attorney General, the Governor, and the District
Attorneys as to the rights of sexual assault victims when a criminal defendant seeks access to their
counseling records.

C. Renditions

Attorneys fi-om the entire Criminal Bureau, at the request of the Governor's office, render
opinions to the Governor on the legal sufficiency of applications for Governor's warrants sought by
other states as well as requests by Massachusetts District Attorneys, the Department of Correction
and the Parole Board to rendite fugitives to Massachusetts. From July 1, 1996, through June 30,
1997, 151 cases were reviewed. Criminal Bureau attorneys also handle the habeas corpus cases
brought by an individual challenging the validity of a Governor's warrant in the state and federal
trial and appellate courts, and coordinate extradition of the ftigitive to the requesting state.

II. FY97 CASE HIGHLIGHTS

A. Federal Habeas Corpus

Representing the Commonwealth's interests in federal habeas corpus cases which challenge
state criminal convictions and custody is one of the Appellate Division's primary missions. These
cases represent approximately 30% of the Appellate Division's caseload but occupy a substantially
greater percentage of the attorneys' time. During the course of the fiscal year, the Appellate
Division carried an all-time high of 215 federal habeas cases. A record number, 116 new cases were
opened, and 93 were resolved. Ten years ago, in FY87, the Division handled only 30 habeas corpus
cases.

Division attorneys work closely with the District Attorneys offices that handled the
prosecutions in state court. Most cases require the filing of lengthy and complex memoranda which
are the equivalent of ftall appellate briefs. On occasion, cases require evidentiary hearings in federal
court. During this fiscal year, evidentiary hearings were conducted in two cases: one involving a
claim of "actual innocence" fi-om a 1977 murder conviction, and the second addressing a challenge
to the state's computation of a release date of a defendant who had forfeited good time credits
because of disciplinary infractions. After an evidentiary hearing in another case, involving a 1979
murder, a magistrate judge recommended the writ be issued because the court concluded the trial
prosecutor did not provide a written plea agreement to the defense. The Division's objections to
that recommendation are pending.

Most of the Appellate Division's federal habeas corpus cases have involved the
interpretation and application of the substantial revisions of the federal habeas corpus statute. In
one case, (Martin) the Court of Appeals for the First Circuit asked for special briefing and argument
on the question of the applicability of the new statute to petitions that had been filed before the
effective date of the statute, as well as on the meaning and application of the new standard of
review. As similar issues were being argued before the United States Supreme Court this year, the
Division consulted extensively with assistant attorneys general fi^om other states as well as with
members of the National Association of Attorneys General and attended a Federal Judicial Center
seminar. One Division attorney was invited to participate in a national moot court in preparation for
a Supreme Court argument on the applicability of the new habeas law to pending cases. As a result
of the newly enacted one-year statute of limitations for the filing of federal habeas corpus actions,
prisoners filed a large number of petitions challenging convictions which occurred long ago in order
to comply with the limitations period.

Many of the cases handled by the Division are challenges to first-degree murder convictions.
In one habeas corpus case (Brewer), involving the conviction of a police officer for raping a 15-year
old teenager while on duty, the U.S. District Court ordered the writ to issue on the ground that
peremptory challenges may have been improperly exercised. The Division was successful in
obtaining a stay of the release order pending appeal and in convincing the First Circuit to reverse the
decision of the District Court to grant the writ.

B. Federal Civil Cases

The Appellate Division handled 71 federal civil matters, which primarily involved civil
rights actions brought against state judges, prosecutors, clerks, probation officers, the Parole Board,
and other criminal justice officials. In most of these cases, despite the variety of defendants and
claims, the Division attorneys were successfiil in obtaining dismissals prior to any time-consuming
and burdensome discovery. Several other cases involved representation of prosecutors who have
been subpoenaed to testify or to produce their investigative or trial files, or cases where the integrity
of state criminal prosecutions were at issue.

C. State Civil/State Habeas Cases

During FY97, the Appellate Division handled 63 state habeas corpus actions filed by
prisoners seeking immediate release fi-om confinement in such matters as challenges to the validity
of Governor's warrants and extradition, challenges to criminal convictions, claims that parole or
probation surrenders were imlawful, and attacks on commitments to the Treatment Center for the
Sexually Dangerous.

The Appellate Division's civil caseload of 209 cases included appeals fi-om the denial of
petitions for release fi-om the Treatment Center, and appeals in all cases handled at the trial court
level by agency counsel at the Parole Board, but the large majority of state civil cases involve
representation of prosecutors, judges, public defenders, and other court personnel sued for actions
taken in their official capacity.

Although the District Attorneys generally represent their own interests when subpoenaed to
testify or produce their case and investigative files in state court civil litigation, the Appellate
Division continues to provide assistance in these cases and represents the state's prosecutors in

federal court proceedings. Additionally, the Division actively seeks to prevent collateral attacks on
criminal convictions in cases where defendants bring civil actions against prosecutors, courts, and
witnesses for their actions relating to prosecutions, and has intervened to stay civil proceedings until
related criminal cases are concluded. In one case handled by the Division, the Supreme Judicial
Court upheld an order that declared the vagrancy statute unconstitutional (Benefit). In several other
cases, attorneys in the Division were able to resist efforts of criminal defendants who were seeking,
in the nature of replevin, before the commencement of their criminal trials, the return of money or
other items seized from them.

The Appellate Division's work on Parole Board matters has included a number of cases
which involve the question of counsel at parole revocation hearings and other cases challenging
Parole Board practices, policies and decisions on granting or revoking parole, including one case in
which the Supreme Judicial Court ruled that the Board could deny parole if the prisoner failed to
accept responsibility for his crime.

The Appellate Division has taken advantage of the authority in the anti-SLAPP statute for
the Attorney General to intervene in civil lawsuits that are alleged to have been brought to chill or
retaliate against for the exercise of the right to petition government, and has argued that the statute
operates to require dismissal of civil cases brought by criminal defendants against victims and
witnesses. Both cases in which the Attorney General intervened were lawsuits brought by convicted
defendants against individuals who either provided information to police or prosecutors, testified
before the grand jury or at trial, or otherwise cooperated with police and prosecutors in criminal

D. Criminal Cases

The majority of criminal cases handled by the Appellate Division are appeals fi-om criminal
convictions in prosecutions initiated by the trial divisions of the Attorney General's Criminal
Bureau. The number of cases handled this year, 117, continues to reflect the volume of Criminal
Bureau trials and convictions. The Division also represents the Commonwealth when a defendant
petitions the United States Supreme Court for a writ of certiorari.

During FY97, the Division handled criminal appeals fi-om convictions or from the denial of
motions for new trial in a variety of cases; narcotics, arson, armed robbery, tax evasion, rape,
campaign finance violations, larceny and obstruction of justice cases, including convictions of a
police chief for rape of a child and of another police chief for obstruction of justice, and of a
physician convicted of numerous counts of larceny and being a common and notorious thief.

In a case where a defendant was fined after his conviction for a lead paint violation, but
failed to either pursue his appeal or pay the fines, the Appellate Division was instrumental in getting
the court to declare that the defendant did not diligently pursue the appeal and willfully failed to pay
the fines despite an ability to do so. As a result, the defendant was incarcerated for three months
and paid $50,000 in fines to the Commonwealth.

Convictions in a masked armed robbery case were reversed and the Supreme Judicial Court
affirmed the dismissal of a larceny indictment brought against a police officer on the ground the
chief of police had given the defendant immunity from prosecution. In addition, the Supreme

Judicial Court rejected the position taken in an amicus brief filed by the Attorney General and the
District Attorneys and held that whenever the Commonwealth exercises its right to appeal from
dismissal of indictments or suppression of evidence, the defendant's costs and attorney's fees must
be paid by the prosecutor's office that takes the appeal. Another case, involving the procedure to
follow in a trial of more than one defendant where one defendant seeks to waive trial by jury, is
pending on further review.

In a criminal prosecution of a court clerk by a District Attorney's office, the Division
appeared on behalf of the Trial Court to protect the interests of the Trial Court's internal operations.
In another case, on behalf of the Commissioner of Probation, the Division argued against the
expungement of a domestic violence conviction that under the Brady Law would preclude the
defendant from obtaining a firearm license. The Division was also instrumental in developing with
the Appeals Court and the Committee for Public Counsel Services the procedure to follow in cases
where the Court declines to appoint successor counsel because of the defendant's behavior toward
prior appointed counsel.

E. G.L. c. 21 1. § 3 and Other Single Justice Matters

The Appellate Division handled 28 cases in the single justice session of the Supreme
Judicial Court. These matters frequently involve representation of the courts and judges, or the
defense of some aspect of the criminal justice process or system. New rules of the Supreme Judicial
Court have eliminated the necessity of the Attorney General appearing on behalf of the courts in a
number of cases where all the interests are represented adequately by the parties to the underlying
case.

III. CRIMINAL JUSTICE INITIATIVES

Many of the attorneys in the Appellate Division work for the betterment of the legal
profession and are engaged in public service in a number of ways.

• Assistant Attorney General Pamela Hunt is a member of the Massachusetts Sentencing
Commission and serves as chairperson of the Commission's Committee on Intermediate
Sanctions. AAG Hunt is also a member of the Supreme Judicial Court's Standing Advisory
Committee on the Criminal Rules, and is on the National Association of Attorneys General
(NAAG) criminal law committee.

• Assistant Attorney General William Duensing serves on the NAAG committee on inmate
litigation.

• Assistant Attorney General William Meade is the Attorney General's representative to the
Criminal Justice Training Council and also is a member of the Editorial Board of the
Massachusetts Law Review.

• Assistant Attorneys General from the Appellate Division serve as the Attorney General's
representative to the Criminal History Systems Board.

• Assistant Attorney General Gregory Massing served as Public Records coordinator for the
Criminal Bureau.

• Assistant Attorney General Ellyn Lazar participated in the NAAG moot court program for
Supreme Court arguments.

• The Division provides information on behalf of the Attorney General to the Parole Board
relevant to its consideration of pardon, commutations, and parole decisions for those serving
parole-eligible life sentences.

IV. SAAG SUPERVISION

A. Parole Board

Agency counsel at the Parole Board are designated Special Assistant Attorneys General
(SAAG) to handle the Board's litigation in the state trial courts. Appellate Division attorneys work
closely with Board counsel in the defense of these matters, and handle all appeals in these cases. The
Appellate Division is also involved in the many Parole Board cases which require coordination with
the Department of Correction. Assistant attorneys general from the Appellate Division and the
Government Bureau defend all cases concerning the Parole Board in federal court.

B. Department of Correction

Department of Correction attorneys, under the direction and supervision of the Appellate
Division and the Government Bureau, handle civil and state habeas corpus litigation filed by
prisoners in a number of matters including challenges to conditions of confinement, prison
disciplinary matters, and calculation of sentence credits. During F Y97, upon the Department of
Correcfion's full assumption of the management and administration of the Massachusetts Treatment
Center, the Appellate Division transferred to the Department the responsibility to handle litigation
filed by inmates committed to the Treatment Center, including all sexually dangerous person (SDP) §
9 hearings in the Superior Court and on appeal.

The Appellate Division continues to defend cases which attack the validity of the original
SDP commitment or the underlying criminal conviction.

C. District Attorneys

Whenever a District Attorney has a conflict of interest in an appellate case or in a case
involving the Parole Board, the Commonwealth's interests are handled either by Assistant Attorneys
General or by an Assistant District Attorney who is designated a Special Assistant Attorney General
and is supervised by attorneys in the Appellate Division.

D. Commissioner of Probation

During FY97, agency counsel in the Office of the Commissioner of Probation, under the
supervision of the Appellate Division, were designated Special Assistant Attorneys General to handle
matters in which a motion to expunge probation and court records in criminal cases was filed. For
several years these cases were handled by Appellate Division attorneys who worked to develop and
settle the law concerning expungement and sealing.

CRIMINAL INVESTIGATIONS DIVISION

The Criminal Investigations Division continues to provide the Criminal Bureau with a corps
of veteran investigators who have a wealth of experience dealing with investigations on the state,
federal and municipal level, as well as diverse experiences from the private sector. The police and
civilian investigators assigned to the Division are experienced in matters such as organized crime,
narcotics trafficking, public corruption, firearms violations, money laundering, securities violations,
tax fraud, high tech crimes, crimes against the elderly, and environmental crime. The Division also
provides technical support and resources to other divisions within the Office of the Attorney General
and to municipalities within the Commonwealth. The Criminal Investigations Divisions has
developed outstanding cooperative working relationships with many law enforcement organizations
throughout the Commonwealth as well as throughout the country.

The State Police Unit assigned to the Criminal Bureau is commanded by Captain John D.
Kelly; Lieutenant Robert H. Friend serves as the executive officer. Sergeants Walter Carlson and
Dermot Moriarty are assigned to the Public Integrity and Economic Crimes Divisions; Sergeant
Thomas Greeley works with the Narcotics and Special Investigations Division and Sergeant Brian
Kennedy is assigned to the Springfield Office. Lt. Friend also supervises the High Tech Crimes Unit
which is a new initiative that will be targeting computer-related crimes and crimes that victimize the
high tech industry of the Commonwealth.Lieutenant Gail Larson of the Environmental Police
supervises environmental investigations.

The hallmark of the Division continues to be the cooperative investigations undertaken with
other law enforcement, governmental or regulatory agencies. Significant among these investigations
are the following:

The Narcotics and Special Investigations Division in conjunction with the Bristol County
District Attorney's Office and the Bureau of Alcohol, Tobacco and Firearms, investigated a subject
who was trafficking in stolen firearms in Suffolk and Norfolk counties. Undercover officers were
able to purchase 12 firearms from this individual and subsequently placed him under arrest for
trafficking in firearms. This arrest helped slow down the flow of illegal firearms to various street
gangs in the City of Boston.

The Public Integrity and Economic Crimes Divisions investigated the activities of a fraudulent
investment firm that targeted the Asian immigrant community. Total fraud to the community was in
excess of one million dollars with more than 200 victims. The investigation resulted in the
indictment and arrest of four individuals and the permanent closing of this corrupt business.

During FY97, the Criminal Investigations Division accomplished the following:

Investigations 288

Arrests 266

Search Warrants 100

Assists to other Agencies 495

Drug Money Seized 104,000

Background Investigations 1 ,420

ECONOMIC CRIMES DIVISION

The Economic Crimes Division investigates and prosecutes all types of private sector, white
collar and economic crime in state courts across the Commonwealth. The Division is charged with
stemming the serious and egregious effects of private sector white collar offenders within the state
through both pro-active prevention and aggressive prosecution. The impact of economic crime
travels through families, communities, and in some instances, throughout the state, forever changing
those affected. The victims of these crimes take many shapes, from the vulnerable elderly individual,
to the small business or large corporation.

Although the cases handled by the Division vary in size, from the $50,000 theft from a single
elderly victim, to the multi-million dollar theft from a large corporation, the intensity of harm is
treated with equal importance. Each year, the goal of the Division is not only to indict and convict
guilty felons from stripping their victims of their life savings, their businesses, or ultimately, their
personal futures, but also to assist the public and private sector in creating systemic change in order to
prevent fraud.

Massachusetts citizens annually incur hundreds of millions of dollars in losses. Just over the
past fiscal year, the Economic Crimes Division alleged more than $1 1 .5 million dollars in private
funds stolen. Since fiscal year 1995, the Economic Crimes Division obtained convictions and
dispositions totaling over $35.5 million dollars in private stolen funds from victims throughout the
Commonwealth. The statistics contained within this report demonstrate the success qualified
professionals are having in making offenders of private sector fraud accountable for their financial

Throughout the past year, the Economic Crimes Division focused on three priority areas:
lawyer fraud, tax crimes, and all types of financial crimes (including theft and securities fraud) which
victimize both vulnerable individuals and large corporations. Cases involving financial crimes
against the elderly are priority prosecutions for the Economic Crimes Division.

The Economic Crimes Division consists of seven attorneys, one special assistant attorney
general, and one secretary, in addifion to civilian financial investigators and state police officers. The
members of the division during part or all of FY97 consist of the following: Carol Starkey, Chief,
AAG; Molly Parks, AAG; Kevin Brekka, AAG; Stephanie Kelly, AAG; Sarah Hartry, AAG; Lori
Balboni, AAG; Stephen Patemiti, AAG; Andy Zaikis, SAAG; Olivia Blanchette, Secretary; James
McFadden, InvesUgator; Patrick Ormond, Invesfigator; Brad Chase, InvesUgator; and Kristen Vagos,
Investigator.

In Fiscal Year 1997, the Economic Crimes Division commenced more than 51 criminal
prosecutions against those individuals, entities, and corporations that had taken advantage of their
positions of power in the private sector to the detriment of the citizens of the Commonwealth. During
the same time, over 55 convictions were obtained against white collar criminals and corporations,
including defendants who were not charged within this fiscal year. The attached chart reflects the

statistics for the financial and tax prosecutions completed by the Division throughout the last three
fiscal years.

Private Sector Fraud: The Financial & Tax Prosecutions

Handled By The Economic Crimes Division jj

!|
A. The Financial Prosecutions

The Economic Crimes Division receives referrals fi^om both state and federal agencies, as well
as judges, attorneys, private parties, and police departments throughout the Commonwealth. The
Division continues to work closely with such offices and agencies as the Board of Bar Overseers, the
Criminal Investigations Bureau of the Department of Revenue, the F.D.I.C, the Secretary of the
Commonwealth, the United States Attorney's Office, and various District Attorneys' Offices across
the state.

The investigations initiated by the Division tend to be difficult, complex white collar cases
that involve the analysis and review of prolific documentation, tracing an economic crime through
exposing the "paper trail" of evidence left by the white collar criminal. In order to conduct a thorough
investigation of an economic fi-aud, extensive interviews and testimony must be obtained fi-om all
people involved or affected by the theft. In addition, most cases require the use of an expert witness
to aid an assistant attorney general or investigator in evaluating the perpetrator's handwriting, the
financial formula employed, or the mental state which enabled the individual to perpetrate the crime.

Some highlights of the financial crimes cases prosecuted by the Economic Crimes Division in
Fiscal Year 1997 include:

Commonwealth v. Jeffrey Gruber. Norfolk Superior Court

This case involves a former John Hancock agent and Sharon resident who plead guilty to pending
charges for stealing clients' money, many of whom were elderly, totaling approximately $200,000.
The charges included schemes between 1990 and 1991, where Gruber stole $194,000 fi-om four
elderly clients who had entrusted him to invest their money and manage their financial affairs. Two
of the clients were recent widows who had relied on their husbands to handle the family finances.
The defendant plead guilty to the Norfolk case and received a committed sentence of 40 months in the !
House of Correction, with a from and after sentence of three years probafion and $195,000 in
restitution.

Commonwealth v. Albert Levesque. Bristol Superior Court

This matter involved a former Metropolitan Insurance agent and financial advisor indicted for stealing
over $190,000 by allegedly coercing an elderly widow into transferring assets into trust accounts from
which he later embezzled. Levesque was indicted for three counts of fiduciary embezzlement, and if
convicted, faces a maximum ten-year sentence in state prison for each count.

Commonwealth v. William Gaines. Suffolk and Essex Superior Courts

This case involved a New Hampshire man sentenced to four to five years at MCI Cedar Junction for
posing as a Boston PoHce Officer and romancing several young women in order to steal their money
or credit. Gaines met one female victim in a Boston nightclub and convinced her that he was a Boston
police officer. The defendant gained the trust of the victim through stories about his dealings as a
police officer, displaying police-related paraphernalia and decals on his car. Among other schemes,
the defendant tricked a victim into signing a car loan, cashed forged checks from a victim's bank
account, and charged hundreds of dollars on a vicfim's credit card without her knowledge or consent.

Commonwealth v. Algie Urbonas. Essex Superior Court

This defendant, a former H.D. Vest broker and independent tax preparer, was indicted for allegedly
convincing elderly tax clients to invest their life savings in sham investments totaling approximately
$300,000. Urbonas was charged with ten counts of larceny over $250, ten counts of securities fraud,
and ten counts of offering the sale of unregistered securities. Upon conviction, Urbonas could face
multiple years of state prison time for these offenses.

Commonwealth v. Michael Daoud. Middlesex Superior Court

This matter involves a Weston man who plead guilty to two counts of larceny over $250, two counts
of fraudulent sales and purchases, and two counts of failure to comply with the investment adviser
registration requirement. Although he never registered with the state, Daoud posed as a registered
investment adviser to a woman from Newton and another from Waltham, took their money, and then
spent it on personal expenses such as Celtics season fickets, cash withdrawals at casinos, rent and
personal debts, all occurring over a two-year period. He was sentenced to two and one-half years in
the House of Correction, suspended for four years, one year of home confinement on the bracelet
program, supervised probation, restitution and community service.

Commonwealth v. Jeffrey Maniff. Norfolk Superior Court

This matter involves an Easton man charged with allegedly stealing more than $300,000 from an
elderly woman who lives in a nursing home. Maniff was indicted on 13 counts of larceny over $250,
and five counts of securities fraud. The indictments allege that Maniff, an accountant and
businessman who ran a luxury auto leasing operation, befiiended two elderly women, ages 97 and 90,
who currently live together in a Canton nursing home. He offered to perform tax work and banking
transactions for them. If convicted, Maniff faces a maximum five-year state prison sentence for each
larceny count, and a three-year state prison sentence for each securities fraud count.

B. Tax Prosecutions

Although each assistant attorney general in the Economic Crimes Division handles a caseload
including tax cases, one assistant attorney general, Lori Balboni, with the assistance of one special
assistant attorney general, Andy Zaikis, concentrates ftxU time on this subject area. In Fiscal Year
1997, the Tax Prosecution Unit litigated a significant number of cases in the criminal courts and
conducted several long-term investigations of suspected tax crimes. Many cases were referred to the

Office of the Attorney General by the Criminal Investigations Bureau of the Department of Revenue,
and investigators of that agency actively assisted the Tax Prosecution Unit in investigations and
prosecutions in FY97, particularly in the areas of analysis, documentation and witness interviews.
Additional cases were developed by the Tax Prosecution Unit as a result of referrals from other
agencies.

In April, 1997, the Economic Crimes Division turned its collective efforts towards preparing
for and completing the annual "Tax Sweep" initiative with the Criminal Investigations Bureau of the
Department of Revenue. With the team work of the CIB investigators and the AAGs and SAAGs
working within the Economic Crimes Division, the Grand Jury presentations that comprised Tax
Sweep '97 was completed on April 4, 1997. The resulting efforts of both offices consisted of 86
counts of tax violations returned by the Grand Jury against 18 targets for a total of 8.5 million dollars
in unreported taxable sales or income.

This "Tax Sweep" year improved upon last year's efforts in the number of targets, the total
amount of tax liability, and the seriousness of tax cases charged. The targeted group of tax offenders
comprised a showing of one of the most diverse group of individuals and corporations ever pursued
for this annual effort, demonstrated by the backgrounds of the offenders, and the combined amount of
unreported taxes.

During this fiscal year, 28 new cases were charged in the Superior Courts throughout the
Commonwealth, with 26 pending cases being successfully prosecuted to completion. A few of the
tax cases prosecuted by the Division are highlighted below.

Commonwealth v. Stefan Solvell. Suffolk Superior Court

United States v. Lars Bildman. United States District Court

(State & Federal Tax Prosecution)

A joint prosecutorial effort, this matter involves a former president and CEO of Astra, U.S.A. Inc., an
international pharmaceutical company, and his second in command, for allegedly using company
money to pay for family vacations and personal expenses in excess of one million dollars. The !

schemes alleged by the government include billing the company for personal expenses of Bildman,
the CEO, such as renovations to personal real estate, extravagant family vacations, and the hiring of
prostitutes. Bildman also failed to report as income on his Federal and state tax returns amounts paid
by the company for which he benefitted personally.

Commonwealth v. Robert Lockwood. et. al. Suffolk Superior Court

This matter involved a Beverly Farms man, Robert Lockwood, indicted for multiple criminal tax
charges involving withholding and meals tax evasion, filing false meals tax and excise tax returns,
and failing to file corporate tax returns. The charges allege that over $6,000,000 dollars in taxable
meals and wages were not accounted for by Lockwood in which over $300,000 in taxes were owed to
the state.

Commonwealth v. Robert Parker. Suffolk Superior Court

After a month-long trial, this defendant was found guilty of 66 counts larceny and false claims to the
Commonwealth involving a tax scheme perpetrated from his prison cell. He was sentenced to four to
five years of committed time in state prison, to be served from and after his federal sentence.

Non-Case Related Initiatives of the Economic Crimes Division

National Association of Attorneys General Committee member on Elder Issues and Initiatives
(AAG Starkey)

Committee member of Attomev General's Task Force on Racial & Ethnic Bias in the Courts
(AAG Hartry)

Supervisor for Economic Crimes Division Interns (AAG Hartry)

Speaker/Lecturer for Office of the Attorney General training on Criminal Rules of Procedure
(AAG Starkey)

Panelist for the New England Bar Association's Conference on "The Unauthorized Practice of
Law" (AAG Starkey)

Speaker for the Association of Certified Fraud Examiners. Boston Chapter on "The
Prosecution of White Collar Crime" (AAG Starkey)

Speaker for Insurance Fraud Seminar on Auto Glass Fraud (AAG Brekka)

Committee Member, Women's Legal Defense Fund (AAG Hartry)

Speaker/Instructor for the Office of the Attorney General Training Committee on the topic of
"Direct Examination of Summary Witness" (AAG Starkey/Investigator Stewart)

Speaker at The Northeast Security Exchange on "Prosecuting White Collar Crime: How Can
The Small Banker Be Preventive?" (AAG Starkey)

Critiquer for the Office of the Attorney General's Trial Training Academy (AAG Starkey)

Speaker for the Braintree Knights of Columbus on "White Collar Crime: Prosecufion &
Prevention" (AAG Starkey)

Appointed Committee Member for the Supreme Judicial Court Committee On Lawyer
Advertising (AAG Starkey)

Compiled and wrote White Collar Crime Report for the Office of the Attorney General (AAG
Starkey)

Speaker for Delegation of Russian Law Enforcement Officials (AAG Starkey)

IV. CASES CHARGED BY THE ECONOMIC CRIMES DIVISION
FISCAL YEAR 1997

A. New Indictments and Complaints

Indictment
Date Case

7/96 Commonwealth v. William T. Gaines (Larceny Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: The defendant was indicted in multiple counties
for posing as a cop and romancing several woman in order to steal their money or
credit.

CHARGES: 1 Count Larceny Over $250; 1 Count Larceny by False Pretenses of
Credit; 1 Count Forgery; 1 Count Uttering

(AAG S. Patemiti)

8/96 Commonwealth v. Norman Leavitt (Tax Prosecution) - Suffolk County ■

DEFENDANT DESCRIPTION: This defendant, a self-employed retailer of i

furniture and appliances who operates out of his Bridgewater residence and j

customers' homes, is alleged to have stopped filing returns and paying sales taxes in j
1990, and not filing personal income tax returns for 4 years. Sales tax liability is
approximately $24,000 and income tax liability approximately $8,000 for periods
covered by indictments.

CHARGES: 4 Counts Willful Failure to File State Income Tax Returns; 5 Counts
Willfiil Failure to Account For & Pay Over Sales Taxes

(AAG L. Balboni)

8/96 Commonwealth v. Robert S. Zawadzki (Insurance/Larceny Prosecution) - Suffolk

County

DEFENDANT DESCRIPTION: This defendant is a Boston Police Officer who has
been suspended without pay as a result of an alleged insurance scam he perpetrated.

CHARGES: 1 Count Larceny; 1 Count Motor Vehicle Insurance Fraud; 1 Count
Attempt to Commit a Crime

(AAG K. Brekka)

Commonwealth v. Osbert Baker (Larceny Prosecution) - Middlesex County

DEFENDANT DESCRIPTION: Defendant, Osbert Baker, the alleged boyfriend of
defendant Karen Freeman noted below, assisted her in instigating the necessary steps
to allegedly steal $68,000 through a check scheme from Filene's Basement.

CHARGES: 1 Count Uttering a Forged Instrument; 1 Count Conspiracy; 1 Count
Attempt to Commit a Crime

(AAG K. Brekka)

Commonwealth v. Karen Freeman (Larceny Prosecution) - Middlesex County

DEFENDANT DESCRIPTION: Defendant Freeman is a former accounts payable
supervisor for Filene's Basement, who, along with Osbert Baker, allegedly instigated
and took the necessary steps to set up fictitious names and maildrops for the issuance
of fraudulent checks.

CHARGES: 1 Count Larceny; 1 Count Conspiracy; 1 Count Attempt to Commit a
Crime

(AAG K. Brekka)

Commonwealth v. William T. Gaines (Larceny Prosecution) - Essex County

DEFENDANT DESCRIPTION: As noted above, the defendant was indicted in
multiple counties for posing as a cop and romancing several woman in order to steal
approximately $20,000 in money or credit.

CHARGES: 2 Counts Larceny Over $250; 1 Count Credit Card Fraud; 5 Counts
Forgery; 5 Counts Uttering

(AAG S. Patemiti)

Commonwealth v. Sharon M. Mills (Insurance Fraud Prosecution) - Norfolk
Coimty

DEFENDANT DESCRIPTION: This defendant and her SOMBWA-certified
asbestos removal corporation, Zam-Tek, Inc., allegedly committed workers'
compensation fraud by providing false records understating her payroll to an
insurance company auditor in two successive years, thus avoiding paying over
$65,000 in insurance premiums.

CHARGES: 1 Count Larceny Over $250; 1 Count Workers' Compensation Fraud

(AAG M. Parks)
10/96 Commonwealth v. Zam-Tek. Inc. (Insurance Prosecution) - Norfolk County

DEFENDANT DESCRIPTION: See Sharon Mills entry above.
CHARGES: 1 Count Larceny Over $250; 1 Count Workers' Compensation Fraud
(AAG M. Parks)

10/96 Commonvyealth v. Michael Daoud (Securities Fraud/Larceny Prosecution) -

Middlesex County

DEFENDANT DESCRIPTION: This defendant was indicted for converting
approximately $130,000 from several victims, some of whom were elderly.

CHARGES: 2 Counts Larceny Over $250; 2 Counts Failure to Register; 2 Counts
Fraudulent Sales & Purchases

(AAG S. Hartry)

1 1/96 Commonwealth v. Algie Urbonas (Securities Fraud/Larceny Prosecution) - Essex ;

County

DEFENDANT DESCRIPTION: This defendant, a former H.D. Vest broker and
independent tax preparer, was indicted for allegedly convincing elderly tax clients to
invest in sham investments totalling approximately $300,000.

CHARGES: 10 Counts Larceny Over; 10 Counts Offer of Sale of Unregistered
Securities; 10 Counts Securities Fraud

(AAG S. Kelly)

1 1/96 Commonwealth v. Maria Cavalho (Larceny Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This defendant was a former employee of Blue
Cross Blue Shield who was indicted for allegedly manipulating the computer system
to issue fraudulent benefit checks totalling $89,000.

CHARGES: 3 Counts Larceny Over $250; 2 Counts forgery; 2 Counts Uttering

(AAG S. Kelly)

Commonwealth v. Priscilla Martin (Receiving Stolen Property Prosecution) -

Suffolk County

DEFENDANT DESCRIPTION: This defendant was indicted for allegedly
receiving the stolen money obtained by co-defendant Cavalho from Blue Cross/Blue
Shield.

CHARGES: 1 Count Receiving Stolen Property

(AAG S. Kelly)

Commonwealth v. Lorraine Mclver (Receiving Stolen Property Prosecution) -

Suffolk County

DEFENDANT DESCRIPTION: This defendant was also indicted for allegedly
receiving the stolen money obtained by co-defendant Cavalho fi-om Blue Cross/Blue
Shield.

CHARGES: 1 Count Receiving Stolen Property

(AAG S. Kelly)

Commonwealth v. Robert Gatta. Jr. (Larceny and Insurance Fraud Prosecution) -

Middlesex County

DEFENDANT DESCRIPTION: This defendant is alleged to have deliberately
inflicted damage to his truck by pulling a beam from a ceiling and causing a roof to
collapse on top of it, then filing a $10,000 insurance claim.

CHARGES: 1 Count Larceny Over $250; 1 Count Malicious Destruction of
Property Over $250; 1 Count Fraudulent Insurance Claim

(AAG S. Hartry)

Commonwealth v. George Tsengas (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This defendant was president of Art-in-Stone,
Inc., which sold decorative stone both at wholesale and retail. During the years 1990
through 1994, the company allegedly collected over $22,000 in sales tax on retail
sales of over $440,000, but never filed returns or paid the money to the DOR.

CHARGES: 15 Counts Willful Failure to Account for and pay Over Sales Taxes

(AAG M. Parks)

1/97

3/12/97

3/13/97

Commonwealth v. Art-in-Stone (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: See George Tsengas entry above.

CHARGES: 1 5 Counts Willful Failure to Account for and pay Over Sales Taxes

(AAG M. Parks)

Commonwealth v. Albert Levesque (Embezzlement Prosecution) (ELDERLY
VICTIMS) - Bristol County

DEFENDANT DESCRIPTION: This case involves a former Metropolitan
Insurance agent and financial advisor indicted for stealing over $190,000 by allegedly
coercing an elderly widow into transferring assets into trust accounts from which he
allegedly then embezzled for his own personal use.

CHARGES: 3 Counts Fiduciary Embezzlement

(AAG S. Kelly)

U.S. V. Lars Bildman (Tax Prosecution) (State & Federal Prosecution) - Federal
District Court of Massachusetts

DEFENDANT DESCRIPTION: A joint prosecutorial effort, this matter involves a
former president and CEO of Astra, USA, Inc., an international pharmaceutical
company. The defendant defrauded the company of an excess of $1 million dollars.
The schemes alleged by the government include billing the company for personal
expenses of Bildman, such as renovations to personal real estate, extravagant family
vacations, and the hiring of prostitutes. Bildman also failed to report as income on
his Federal and state tax returns amounts paid by the company for which he benefitted'
personally.

CHARGES: 35 Coimts including: Conspiracy; Mail Fraud; Wire Fraud; False Tax
Returns; Interstate Travel in Furtherance of an Illegal Activity Prostitution

(AAGs L. Balboni/C.Starkey)

Commonwealth v. Stefan Solvell (Tax Prosecution) - Suffolk Coimty

DEFENDANT DESCRIPTION: Related to prosecution of Lars Bildman, this
former Senior Vice President of Astra, USA, Inc. Company was defrauded into
paying for personal expenses of Solvell for which he failed to report on his
Massachusetts income tax return.

CHARGES: 1 Count Filing False State Income Tax Return

(AAGs L. Balboni/C.Starkey)

Commonwealth v. Jeffrey Maniff (Larceny Prosecution) - Norfolk County

DEFENDANT DESCRIPTION: Former tax preparer and financial adviser who
allegedly stole $345,000 from two elderly woman.

CHARGES: 13 Counts Larceny Over $250

(AAGs S. Kelly/S. Patemiti)

Commonwealth v. Paul Cacchiotti (Extortion/Tax Prosecution) - Middlesex
County

DEFENDANT DESCRIPTION: This case involves a CPCS attorney who
attempted to extort money from indigent defendants while being paid by the
Commonwealth for legal services he provided. In addition, he allegedly failed to
report on his income tax returns legal fees that he had earned from private clients.

CHARGES: 4 Counts Attempted Extortion; 1 Count Larceny Over; 3 Counts Tax
Evasion; 3 Counts Filing False Income Tax Returns

(AAGs L. Balboni/A. Lawlor)

Commonwealth v. Arthur Stephen Lane (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Arthur Stephen Lane, 47, of Groton was indicted
on 5 counts of Willful Filing of False Income Tax Returns for the years 1991 through
1995. It is alleged that Lane filed false tax returns with the state for each of these
years during which he made over $547,000 in income, owing over $32,000 in state
taxes.

CHARGES: 5 Counts Willftal Filing of False income Tax Returns

(SAAG A.Zaikis)

Commonwealth v. Paul M. MacDonald (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Paul MacDonald, 59, of Wobum was indicted on
5 counts of Willfril Filing of False Income Tax Returns for the years 1991 through
1995. It is alleged that MacDonald filed false tax returns with the state for each of
these years during which he made over $373,000 in income, owing over $19,000 in
state taxes.

CHARGES: 5 Counts of Willftxl Filing of False Income Tax Returns

(SAAG A.Zaikis)

3/3 1 191 Commonwealth v. Paul E. Hardy (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Paul E. Hardy, 58 of Andover was indicted on 3
counts of Willful Filing of False Income Tax Returns for the years 1991 through 1993
and 2 counts of Failing to File State Income Tax Returns for the years 1994 and 1995
It is alleged that Hardy either filed false tax returns with the state or failed to file any
return at all for each of these years during which he made over $115,000 in income,
owing over $7,000 in state taxes.

CHARGES: 3 Counts of Willful Filing of False Income Tax Returns; 2 Counts of
Failing to File State Income Tax Returns

(SAAG A.Zaikis)

3/3 1/97 Commonwealth v. Carroll Lowenstein (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Carroll Lowenstein, 67, of Arlington was indicted
on 5 counts of Failure to File State Income Tax Returns and 2 counts of Willful
Failure to File Corporate Excise Tax Returns. It is alleged that Lowenstein failed to
file income tax returns for each of the years 1990 through 1994 during which he made
over $210,000 in income, owing over $12,000 in state taxes. He is also alleged to
have failed to file corporate tax returns for two corporations that he was involved
with, the BOMO Corporation and Fairway Fvmding Services, Inc.

CHARGES: 5 Counts of Failure to File State Income Tax Returns; 2 Counts of
Willful Failure to File Corporate Excise Tax Returns

(SAAG A.Zaikis) '

3/31/97 Commonwealth v. Robert E. Lock wood (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Robert E. Lockwood, 48, of Beverly Farms was
indicted on multiple criminal tax charges involving withholding and meals tax
evasion, filing false withholding and excise tax returns, failing to file corporate excise
tax returns and failure to file income tax returns. It is alleged that Lockwood, who
operates a number of corporations, failed to pay over collected meals taxes on
restaurants that he owned, failed to pay over withholding wages that he paid
employees, failed to file corporate excise tax returns for many of his companies and
that he filed, or aided and assisted in the filing of false tax documents. According to
the Attorney General's Office, over $6,000,000 dollars in taxable meals and wages
were not accounted for by Lockwood in which over $300,000 in taxes were owed to
the state.

CHARGES: 1 Count Willful Attempt to Evade and Defeat Withholding Taxes; 1
Count Willful Failure to Account For and Pay Over Withholding Taxes; 1 Count
Willful Failure to Account For and Pay Over Meals Taxes; 1 Count Willful Filing of
False Excuse Tax Returns; 1 Count Aiding and Assisting in the Willful Filing of
False Withholding Tax Returns; 3 Counts Willful Failure to File State Income Tax
Returns; 5 Counts Wilful Failure to File Corporate Tax Returns

(SAAG A.Zaikis)

3/31/97 Commonwealth v. Robert J. Kelley (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Robert J. Kelley, 59, of Wellesley was indicted on
multiple criminal tax charges involving withholding and meals tax evasion, filing
false withholding and excise tax returns, and failing to file corporate excise tax
returns. It is alleged that Kelly, who worked as an accountant for Robert Lockwood
and his various corporations, failed to pay over collected meals taxes from
restaurants, failed to pay over withholding on wages that were paid to employees,
failed to file corporate excise tax returns for many of these companies and that he
filed false tax documents with the state.

CHARGES: I Count Willful Attempt to Evade and Defeat Withholding Taxes; I
Count Wilful Failure to Account For and Pay Over Withholding Taxes; 1 Count
Willful Failure to Account For and Pay Over Meals Taxes; 3 Counts Willful Failure
to File Corporate tax Returns

(SAAG A.Zaikis)

3/31/97 Commonwealth v. 33 Dunster Street. Inc. (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willful Failure to Account For and Pay Over Withholding
Taxes; I Count Willful Filing of False Excise Tax Return; 1 Count Willful Failure to
File Corporate Tax Returns

(SAAG A.Zaikis)

3/31/97 Commonwealth v. BOMO Corporation (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willftil Failure to Account For and Pay Over Meals Taxes; 1
Count Willful Failure to File Corporate Tax Returns

(SAAG A.Zaikis)

3/3 1/97 Commonwealth v. Employment Leasing Inc. (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willful Failure to Account For and Pay Over Withholding
Taxes; 1 Count Willful Failure to File Corporate Tax Returns

(SAAG A.Zaikis)

3/31/97 Commonwealth v. Tel Cel Corporation (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willful Failure to Account For and Pay Over Withholding
Taxes; 1 Count Willful Failure to File Corporate Tax Returns

(SAAG A.Zaikis)

3/3 1/97 Commonwealth v. Liquidators Corporation (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willful Failure to Account For and Pay Over Withholding
Taxes; 1 Count Willful Failure to File Corporate Tax Returns

(SAAG A.Zaikis)

3/31/97 Commonwealth v. National Communications. Inc. (Tax Prosecution) - Suffolk

County

DEFENDANT DESCRIPTION: Indictments were returned against corporation for
its involvement in the various schemes charged in the Robert Lockwood
investigation.

CHARGES: 1 Count Willful Failure to Account For and Pay Over Withholding
Taxes; 1 Count Willful Filing of False Withholding Tax Returns

(SAAG A.Zaikis)

Commonwealth v. Christopher M. Butler (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This defendant allegedly failed to file income tax
returns for the years 1990 through 1994, while earning a substantial income.

CHARGES: 5 Counts Willful Failure to File State Income Tax Returns

(AAG S. Hartry)

Commonwealth v. Eric H. Thomson (Tax Prosecurion) - Suffolk County

DEFENDANT DESCRIPTION: This Defendant was a construction industry
lobbyist with income ranging from $35,000 - $47,000 per year for each of the years
1990-1996, as documented by filings with the Secretary of State's office. He has filed
no tax returns since 1 979. The tax liability alleged for the indicted years is
approximately $13,000.

CHARGES: 6 Counts Willful Failure to File a State Income Tax Returns

(AAG M. Parks)

Commonwealth v. Joseph Jaskulski (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This Partner in business engaged in a retail sale of
computers and computer accessories. Sales tax returns filed with DOR reported zero
gross sales and zero tax due. Gross Massachusetts sales are alleged to be in excess of
$100,000.

CHARGES: 1 Count Failure to Account For and Pay Over Sales Tax; 4 Counts
Filing False Sales Tax Returns

(AAG L. Balboni)

Commonwealth v. Donald Pratt (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This President and treasurer of three Subway
sandwich shops in New Bedford area allegedly charged and collected meals taxes
from customers, yet failed to pay over to DOR the meals taxes he collected. The
defendant also allegedly withheld state income taxes from employee wages, yet failed

to pay to DOR taxes withheld. Finally, over a three year period, the defendant
allegedly failed to file corporate excise tax return for each corporation.

CHARGES: 3 Counts Failure to Account For and Pay Over Meals Tax; 3 Counts
Failure to Account For and Pay Over Withholding Taxes; 3 Counts Failure to File
Corporate Excise Tax Returns

(AAG L. Balboni)

Commonwealth v. Subway Dartmouth. Inc. (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This Corporation operated a Subway sandwich
shop in New Bedford area and allegedly failed to file Corporate excise tax returns for
multiple years.

CHARGES: 1 Count Failure to File Corporate Excise Tax Returns

(AAG L. Balboni)

Commonwealth v. Southeastern Food Management. Inc. (Tax Prosecution) -
Suffolk County

DEFENDANT DESCRIPTION: This Corporation operated a Subway sandwich
shop in New Bedford area and allegedly failed to file Corporate excise tax returns for
multiple years.

CHARGES: 1 Count Failure to File Corporate Excise Tax Returns

(AAG L. Balboni)

Commonwealth v. Subway Rockdale. Inc. (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This Corporation operated a Subway sandwich
shop in New Bedford area and allegedly failed to file Corporate excise tax returns for
multiple years.

CHARGES: 1 Count Failure to File Corporate Excise Tax Retums

(AAG L. Balboni)

Commonwealth v. Joseph Haven (Tax Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: The defendant, while collecting workers
compensation payments, allegedly continued to work for his old company for two
years while failing to report any of the under the table wages he was receiving.

CHARGES: 2 Counts Willful Filing of False Income Tax Returns

(SAAG A. Zaikis)

Commonwealth v. Edward B. Kaiser (Tax Prosecution) - Suffolk County
DEFENDANT DESCRIPTION: The defendant is a dentist and self proclaimed tax
protester who has not filed tax returns for the last 3 years.

CHARGES: 3 Counts Wilful Failure to File State Income Tax Retums

(SAAG A. Zaikis)

U.S. V. Lars Magnusson (Conspiracy Prosecution) - Federal District Court of
Massachusetts

DEFENDANT DESCRIPTION: As a consultant to Lars Bildman, the former
president and CEO of Astra, USA, an international pharmaceutical company, this
defendant allegedly conspired and assisted Bildman in defrauding the company of in
excess of $1 million.

CHARGES: 1 Count Conspiracy to Commit Mail Fraud

(AAG L. Balboni)

Commonwealth v. Joseph Murray (Larceny Prosecution) - Middlesex County

DEFENDANT DESCRIPTION: This defendant was indicted in multiple counties
for several freight pick-ups which he allegedly completed through false
representations.

CHARGES: 2 Counts Larceny Over $250

(AAG S. Kelly)

Commonwealth v. Joseph Murray (Larceny Prosecution) - Suffolk County

DEFENDANT DESCRIPTION:This defendant was indicted in multiple counties
for several freight pick-ups which he allegedly completed through false
representations.

CHARGES: 2 Counts Larceny Over $250

(AAG S. Kelly)

Commonwealth v. Joseph Murray (Larceny Prosecution) - Norfolk County

6/12/97

6/25/97

DEFENDANT DESCRIPTION: This defendant was indicted in multiple counties
for several freight pick-ups which he allegedly completed through false
representations.

CHARGES: 1 Count Larceny Over $250

(AAG S. Kelly)

Commonwealth v. Edwin Kaplan (Insurance Fraud Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: Defendant was an affluent property owner who
allegedly presented and assisted others in pursuing phony disability claims.

CHARGES: 10 Counts Insurance Fraud; 6 Counts Larceny over $250

(AAG M. Parks)

Commonwealth v. Adam Kessler (Insurance Fraud Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This defendant was the son-in-law of Edwin
Kaplan, above, who under Kaplan's tutelage, allegedly presented phony disability
claims.

I
CHARGES: 1 Count Motor Vehicle Insurance Fraud I

(AAG M. Parks)

Commonwealth v. Joseph Dutra (Larceny Prosecution) - Bristol County

DEFENDANT DESCRIPTION: This case involves an insurance agent who
allegedly embezzled premiums, effectively canceling his clients' coverage. The
defendant also failed to return premium refund checks to customers. The total
amount of the larceny is approximately $22,000.

CHARGES: 7 Counts Larceny Over $250

(AAG S. Hartry)

Commonwealth v. Frank Bush (Receiving Stolen Property Over $250) - Middlesex
County

DEFENDANT DESCRIPTION: This case, a referral to this office by Digital
Equipment Corporation, involves the theft of five computer memory boards worth
$80,000 each totalling $400,000 which the defendant received, knowing them to have
been stolen, and then sold them for profit.

CHARGES: 5 Counts Receiving Stolen Property Over $250

(AAG S. Hartry)

6/3/97 Commonwealth v. David Brock (Larceny Prosecution) - Suffolk County

DEFENDANT DESCRIPTION: This defendant, a former employee of Putnam
Investments, is alleged to have entered a Putnam facility in Quincy and transferred
$50,000 from a client account into his own account, then attempting to wire $40,000
of the money to his Shawmut Bank account.

CHARGES: 1 Count Larceny Over $250

(AAG S. Patemiti)

V. CASES DISPOSED FISCAL YEAR 1997

A. Convictions & Dispositions

Conviction

Date Case Description

7/96 Commonwealth v. Robert A. Russo (Tax Prosecution) - Suffolk Superior Court

(AAG L. Balboni)

JUDGE: Borenstein REFERRAL: DOR

CHARGES: 8 Counts Willful Filing Of False Income Tax Return; 7 Counts
Larceny Over $250; 1 Count Attempted Larceny

SENTENCE: The defendant plead guilty to all charges and was sentenced to 2
years committed in the HOC. $50 Victim/witness fee.

7/96 Commonwealth v. Mark Gauthier (Larceny Prosecution) - Middlesex Superior

Court (AAGs S. Kelly/S. Patemiti)
JUDGE: Houston REFERRAL: N/A

CHARGES: 1 Count Larceny Over $250 Obtaining Signatures by Obtaining
Signatures by False Pretenses; 2 Counts False Pretenses Obtaining Signatures by
False Pretenses; 1 Count Forgery; 1 Count Uttering

SENTENCE: The defendant was found guilty on all counts after a jury trial and was
sentenced to 18 months in the HOC, 6 months to serve, balance suspended for 5
years. $30,000 Restitution also ordered. $60 Victim/witness fee.

7/96 Commonwealth v. Nancy Gondii (Larceny Prosecution) - Middlesex Superior

Court (AAG S. Kelly)
JUDGE: Neel REFERRAL: N/A

CHARGES: 1 Count Larceny Over $250; 15 Counts Forgery; 15 Counts Uttering; |
1 5 Counts False Entry in Corporate Books

SENTENCE: The defendant was sentenced to 3 months in the HOC committed,
$ 1 ,000 restitution per year for 1 0 years, with 1 0 years probation on and after she
served her committed sentenced. Drug evaluation, treatment, testing, and periodic
sworn financial statements to be submitted to probation. $60 Victim/witness fee.

Commonwealth v. David Porter (Tax Prosecution) - Suffolk Superior Court (SAAG

A. Zaikis)

JUDGE: Lauriat REFERRAL: DOR

CHARGES: 8 Counts Willftil Failure To Account For 8c Pay Over Withholding

Taxes.

SENTENCE: Following a week-long trial, the defendant was found guilty on four
of the eight counts. He was placed on probation for a period of 1 8 months.

Commonwealth v. Leonard Amaral (Tax Prosecution) - Suffolk Superior Court

(AAG L. Balboni)

JUDGE: Quinlan REFERRAL: DOR

CHARGES: 4 Counts Willftil Failure to File State Income Tax Returns

SENTENCE: Sentence imposed on guilty plea to all counts of 9 months HOC,

suspended for 5 years probation with the following conditions: (a) defendant must

provide to probation department a copy of income tax return filed with DOR by April

16th of each year during probationary period; (b) $50 victim/witness fee; and (c) $45

per month probation supervision fee.

Commonwealth v. Steve Button (Tax Prosecution) - Suffolk Superior Court (AAG

L. Balboni)

JUDGE: Quinlan REFERRAL: DOR

CHARGES: 5 Counts Willftil Failure to File State Income Tax ReUims; 1 Count
Willful Failure to Account For & Pay Over Sales Taxes
SENTENCE: Unagreed plea recommendation before Judge Quinlan. Sentence
imposed on guilty plea to 3 years probation, with the following conditions: (a) 500
hours of community service to be determined by probation (b) $5,000 criminal fine
(can be converted to community service at discretion of probation department)
payable within 3 year probationary period (c) $60 victim/witness fee and (d) $45 per
month probation supervision fee. Guilty plea to 5 counts of Willful Failure to File
State Income Tax Returns placed on file.

Commonwealth v. Demetrios Kostantopoulos (Tax Prosecution) - Suffolk Superior

Court (SAAG A. Zaikis)

JUDGE: Volterra REFERRAL: DOR

CHARGES: 33 Counts Willftil Filing of False Meals Tax Returns; 3 Counts Willftil

Filing Of False Income Tax Returns

SENTENCE: The defendant plead guilty to the 3 counts of filing false income tax
returns and was placed on probation for 1 year, given 3 months of house arrest and
ordered to pay a $5,000 fine. $50 Victim/witness fee.

Commonwealth v. Carole Caron (Tax Prosecution) - Suffolk Superior Court

(SAAG A. Zaikis)

JUDGE: Connolly REFERRAL: DOR

CHARGES: 1 Count Willful Failure to Account For And Pay Over Sales Taxes
SENTENCE: The defendant plead guilty to the charges and was placed on 18
months of probation, ordered to pay a criminal fee of $5,000 and further ordered to
perform 300 hours of community service at a local nursing home during her probation
period. $50 Victim/witness fee.

Commonwealth v. Scott Sutherland (Tax Prosecution) - Suffolk Superior Court

(AAG S. Kelly)

JUDGE: Volterra REFERRAL: DOR

CHARGES: 2 Counts Evasion; 1 Count Failure to Account For and Pay Over Sales
Tax; 4 Counts Filing False Tax Returns

SENTENCE: The defendant was sentenced to 1 year HOC suspended for 2 years,
with 2 years of probation, and a $12,000 fine - $3,000 surfine. Sentence concurrent
on all counts. Order to cooperate with DOR Civil Audit and Recovery. $60
Victim/witness fee.

Commonwealth v. John M. Burgess (Larceny Prosecution) - Norfolk Superior

Court (AAG M. Parks)

JUDGE: Grabau REFERRAL: N/A

CHARGES: 12 Counts Larceny Over $250; 3 Counts Conspiracy
SENTENCE: Defendant sentenced to 3.5 years - 3.5 years + 1 day MCI Cedar
Junction, committed, followed by 5 years probation with restitution.

Commonwealth v. Michael Avella (Larceny Prosecution) - Suffolk Superior Court

(AAG S. Hartry)

JUDGE: Lauriat REFERRAL: N/A

CHARGES: 13 Counts Larceny Over $250

SENTENCE: The defendant was sentenced to 2 years in the HOC, 6 months to

serve, balance suspended for 2 years on Count 1 . On Count 2 he was sentenced to 2

years in the HOC, suspended for 3 years probation, alcohol/psychological counseling,

and $25,000 restitution to the Museum of Fine Arts. Covmts 3-1 3 are to run

concurrent with Count 1 . $60 Victim/witness fee.

Commonwealth v. Harriet J. Roberts (Larceny/Tax Prosecution) - Norfolk Superior
Court (AAG M. Parks)

JUDGE: Chemoff REFERRAL: N/A

CHARGES: 4 Counts Larceny Over $250; 4 Counts Wilftil Filing False Income Tax

Return

SENTENCE: The defendant was sentenced to 2.5 years in the HOC, suspended for t

years; Conditions of probation to be the following: 6 months Home Confinement,

Restitution in amount to be determined by the Probation Department. $60

Victim/witness fee.

Commonwealth v. Manuel Reposa/Commonwealth v. L.H. Burlingame. Inc. (Tax
Prosecution) - Suffolk Superior Court (AAG L. Balboni)
JUDGE: Borenstein REFERRAL: DOR

CHARGES: 1 Count Willful Failure to Account For & Pay Over Withholding
Taxes; 1 Count Willful Failure to Account For & Pay Over Sales Taxes; 1 Count
Failure to File Corporate Excise Tax Returns (Reposa and corporation)
SENTENCE: The defendant plead guilty to all indictments before Judge Quinlan on
an unagreed plea. Greatly reducing the Commonwealth's recommendation, the court
sentenced the defendant to 3 years probation concurrent on all counts, $60
Victim/witness fee, $40 probation supervision fee. Guilty plea on behalf of
corporation placed on file. $60 Victim/witness fee.

Commonwealth v. Robert Parker (Tax Prosecution) - Suffolk Superior Court
(SAAG A. Zaikis) \

JUDGE: Doerfer REFERRAL: N/A I

CHARGES: 6 Counts Larceny Over $250; 1 Count Conspiracy; 16 Counts
Attempted Larceny; 22 Counts Presentation of A False Claim; 22 Counts Forgery
SENTENCE: The case went to trial on October 7th before Judge Doerfer in Suffolk
Superior Court. After one mistrial, the case continued towards completion for the
better part of the month. After 3 days of deliberations, the jury came back with guilty
verdicts on the 66 counts for which the defendant stood trial. He was sentenced to 4-
5 years in state prison on and after his federal sentence. $50 Victim/witness fee.

Commonwealth v. Clinton Pina (Insurance/Larceny Prosecution) - Bristol

Superior Court (AAG M. Parks)

JUDGE: Brassard REFERRAL: IFB

CHARGES: 2 Counts Larceny Over $250; 3 Counts Automobile Insurance Fraud
SENTENCE: 1 8 months HOC, suspended for 2 years; conditions of probation are as
follows: (a) restitution of $2,864.70. $60 victim/witness fee.

Commonwealth v. Michael Daoud (Larceny Prosecution) - Middlesex Superior

Court (AAG S. Hartry)

JUDGE: Chemoff REFERRAL: N/A

CHARGES: 2 Counts Larceny Over $250; 2 Counts Sales and Purchases; 2 Counts

Registry Requirement; 2 Counts Registry Requirement

SENTENCE: Defendant was sentenced to 2 years in the HOC, service to be done on

bracelet program, restitution of $47,534.99 paid forthwith to the victim, $5,000 fine

on each larceny count. A further sentence of 2 years in the HOC, suspended, with 3

years probation, from and after the above charges, was ordered along with 200 hours
of community service, refraining from any occupation requiring the sales and
purchases of securities or investment advice, and undergoing evaluation for
coimseling, if necessary, on all other counts. $50 Victim/witness fee.

Commonwealth v. London & Global (Larceny Prosecution) - Suffolk Superior

Court (AAG K. Brekka)

JUDGE: Connolly REFERRAL: N/A

CHARGES: 1 Count Larceny Over $250; 1 Count Bucketing; 1 Count Securities
Fraud; 1 Count False Corporate Records; 1 Count Conspiracy
SENTENCE: On October 3, 1996, the defendant was sentenced to restitution of
$1,100,460.79. The Commonwealth seized $146,162.20 on November 8, 1996, and
the money was submitted to Department of Probation for distribution to the victims.

Commonwealth v. Constance Spares (Larceny Prosecution) - Bristol Superior

Court (AAGs C.Starkey/S. Kelly)

JUDGE: Healy REFERRAL: Bristol D.A.'s Office

CHARGES: 2 Counts Larceny Over $250; 4 Counts Forgery; 5 Counts Failure to

File Tax Returns

SENTENCE: The defendant was sentenced to 2 years HOC, 6 months to serve

balance suspended for 4 years; $50,000 restitution to be paid in compliance with

detailed restitution schedule. $60 victim/witness fee. Defendant was also given a

Stay Away order and order to cooperate with DOR. $60 Victim/witness fee.

Commonwealth v. Edward Dwyer (Larceny Prosecution) - Brockton Superior

Couurt (AAG K. Brekka)

JUDGE: DelVecchio REFERRAL: N/A

CHARGES: Larceny Over $250

SENTENCE: The defendant, in violation of probation, was surrendered to a 4-5

year committed sentence.

Commonwealth v. Michael Daoud (Larceny Prosecution) - Middlesex Superior

Court (AAG S. Hartry)

JUDGE: Chemoff REFERRAL: N/A

CHARGES: 2 Counts Larceny Over $250; 2 Counts Sales and Purchases;
2 Counts Registry Requirement; 2 Counts Registry Requirement
SENTENCE: Defendant sentenced to 2.5 years HOC, suspended for 4 years,
1 year home confinement with the bracelet program, supervised probation, and 200
hours of commimity service. He was also ordered to refrain from any occupation
requiring sales and purchases of securities or investment advice, evaluation for
counseling, with frill restitution. All other charges received concurrent sentences.
$60 Victim/witness fee.

Commonwealth v. Donald Constant (Tax Prosecution) - Suffolk Superior
Court (AAG L. Balboni)

JUDGE: Ball REFERRAL: DOR

CHARGES: 4 Counts Willful Attempt to Evade Income Taxes; 3 Counts Filing
False Tax Returns; 5 Counts Willful Failure to Account For and Pay Over
Withholding Taxes

SENTENCE: The defendant was sentenced after unagreed guilty plea to 5 counts
of failure to account for and pay over withholding taxes, 6 months HOC suspended,
with 6 months probation. Condition of probation: 6 months home confinement
monitored by electronic bracelet, cost of bracelet to be paid by defendant. Evasion
and false filing indictments placed on file without change of plea. $50 victim
witness fee.

12/96 Commonwealth v. Zam-Tek. Inc. (Insurance Fraud Prosecution) - Norfolk

Superior Court (AAG M . Parks)

JUDGE: Barrett REFERRAL: IFB

CHARGES: 1 Count Larceny Over $250; 1 Count Workers' Compensation Fraud

SENTENCE: Defendant sentenced to 2 years probation, $66,000 restitution;

larceny filed without change of plea.

12/96 Commonwealth v. Sharon M. Mills (Insurance Fraud Prosecution) - Norfolk

Superior Court (AAG M.Parks)

JUDGE: Barrett REFERRAL: IFB

CHARGES: 1 Count Larceny Over $250; 1 Count Workers' Compensation Fraud
SENTENCE: Defendant sentenced to 2 years pretrial probafion, $20,000 court
costs, community service; larceny filed without change of plea.

1 2/96 DiPietro v. Coalter (Appeals Case) - First Circuit Court of Appeals

(AAG M.Parks)
JUDGES: Cyr, Stahl, Lynch

CASE: Appeal of Dismissal of Writ of Habeas Corpus. Petifioner's motion for a
certificate of appealability to the First Circuit was denied, thus precluding any
fiirther appeal by petitioner of the dismissal of his writ of habeas corpus.

12/96 Commonwealth v. Domingo Pena and Domingo's Olde Restaurant

(Tax Prosecution) - Suffolk Superior Court (AAG K.Brekka)
JUDGE: Ball REFERRAL: DOR

CHARGES: 1 Count Willfiilly Evading Meals Taxes; 1 Count Failure to Pay
Meals Taxes

SENTENCE: Defendant sentenced to 2 years HOC, 6 months to serve through
home confinement, balance suspended for 1 8 months. He also was ordered to be on
supervised probation, with full cooperation with the DOR regarding financial
penalties.

1 2/96 Commonwealth v. Norman Leavitt (Tax Prosecution) - Suffolk Superior Court

(AAG L. Balboni)
JUDGE: Ball REFERRAL: DOR

CHARGES: 4 Counts Willful Failure to File State Income Tax Returns;

5 Counts Willful Failure to Account For & Pay Over Sales Taxes
SENTENCE: Defendant plead guilty to all counts. He received 1 year in the HOC,
suspended, with 1 year supervised probation. Conditions of probation were the
following: 1 month of 24 hour home confinement monitored by electronic bracelet,
cost of bracelet to be paid by defendant. $10,000 criminal fine, $60 victim witness
fee and probation supervision fee to be determined by probation.

Commonwealth v. Arthur Stephen Lane (Tax Prosecution) - Suffolk Superior

Court (SAAG A. Zaikis)

JUDGE: Ball REFERRAL: DOR

CHARGES: 4 Counts Willful Failure To File State Income Tax Returns
SENTENCE: The defendant plead guilty to all charges and was ordered to pay a
criminal fine of $15,000 and was placed on probation pending his payment of the
fine in full.

Commonwealth v. Richard J. Shaer (Tax Prosecution) - Suffolk Superior

Court (AAG S. Hartry)

JUDGE: Quinlan REFERRAL: DOR

CHARGES: 4 Counts Wilful Failure To Pay Income Tax

SENTENCE: On an unagreed upon plea. Defendant plead guilty and was

sentenced to 3 years probation, $8,000.00 fine, and 80 hours of community service.

$60 victim/witness fee.

Commonwealth v. Stephen White (Larceny/Tax Prosecution) - Suffolk Superior

Court (SAAG A. Zaikis)

JUDGE: Quinlan REFERRAL: DOR

CHARGES: 1 Count Willftil Filing of False Income Tax Returns; 1 Count
Larceny; 1 Count Attempted Larceny; 1 Count Presenting False Claim
SENTENCE: Defendant plead guilty to 4-2 years state prison, 24 months to serve,
1 year probation. All other counts were guilty filed.

Commonwealth v. Betty Lee Wing (Public Corruption Prosecution) -

Suffolk Superior Court (AAG S. Kelly)
JUDGE: Lopez REFERRAL: PID

CHARGES: 1 Count Larceny; 3 Counts False Written Reports
SENTENCE: This defendant was sentenced to 2 years HOC, suspended for 2
years, with $26,000 restitution, and $16,000 in fines. Defendant was also ordered to
pay a victim/witness fee, order to cooperate with Retirement Board to effectuate
assignment/pledge of retirement and deferred compensation monies to satisfy
restitution and fines imposed by court.

United States v. Stephen Perrv (Mail and Wire Fraud) (ELDERLY VICTIMS) -

Federal District Court (AAG S. Kelly)

JUDGE: Steams REFERRAL: SOS

CHARGES: 1 Count Mail Fraud; 3 Counts Wire Fraud; 2 Counts Interstate

Transportation of Stolen Property

SENTENCE: The defendant was sentenced to 6 months of committed

incarceration with judicial recommendation that he serve community service, attend

community treatment center, with 36 months supervised probation, $108,357

restitution, and ordered not to handling the solicitation of investment funds. $300

Victim/witness fee.

2/97 Commonwealth v. Scott F. Sidell (Tax Prosecution) - Suffolk Superior

Court (SAAG A. Zaikis)
JUDGE: Quinlan REFERRAL: DOR

CHARGES: 4 Counts Willful Failure to File State Income Tax Returns
SENTENCE: The defendant plead guilty to all of the charges and was ordered to
pay a criminal fine of $12,000 and was placed on probation for 3 years. In addition,
the defendant is still liable for the payment of all back taxes along with civil fines
and penalties. $60.00 Victim/witness fee.

2/97 Commonwealth v. Jeffrey Gruber (Larceny Prosecution) - Norfolk Superior

Court (AAGs S. Patemiti/M. Dingle)
JUDGE: Neel REFERRAL: N/A

CHARGES: 5 Counts Larceny; 1 1 Counts Forgery; 1 1 Counts Uttering
SENTENCE: Defendant was sentenced to 40 months HOC, 3 years probation from
and after, with $195,000 restitution. $60.00 Victim/witness fee.

2/97 Commonwealth v. Avino Resende (Insurance Fraud Prosecution) - Brockton

District Court (AAGs K. Brekka/S. Hartry)
JUDGE: Dineen REFERRAL: IFB

CHARGES: 1 Count Filing False Motor Vehicle Insurance Claim; 1 Count
Attempt to Commit a Crime

SENTENCE: This matter was continued without a finding for 6 months, with
court costs, over the Commonwealth's objecfions. $35.00 Victim/witness fee.

2/97 Commonwealth v. Jose Araujo (Insurance Fraud Prosecution) - Brockton

District Court (AAGs K. Brekka/S. Hartry)
JUDGE: Dineen REFERRAL: IFB

CHARGES: 1 Count Filing False Motor Vehicle Insurance Claim; 1 Count
Attempt to Commit a Crime

SENTENCE: This matter was continued without a finding for 6 months, with
court costs, over the Commonwealth's objections. $35.00 Victim/witness fee.

3/97 Commonwealth v. William T. Gaines (Larceny Prosecution) - Suffolk Superior

Court (AAG S. Patemiti)
JUDGE: Quinlan REFERRAL: Suffolk D.A.'s Office

CHARGES: 1 Count Larceny Over $250; 1 Count Larceny by False Pretenses of
Credit; 1 Count Forgery; 1 Count Uttering

SENTENCE: The defendant plead guilty to all of the charges and was sentenced to
4-5 years MCI Cedar Junction committed forthwith, with 2 years probation from
and after. $60.00 Victim/witness fee.

Commonwealth v. James Sardina. Jr. (Narcotics Prosecution) - Norfolk Superior

Court (AAG S. Hartry)

JUDGE: Dortch-Okara REFERRAL: N/A

CHARGES: 1 Count Trafficking in Cocaine

SENTENCE: Defendant plead guilty and was sentenced to 5 years state prison.

Victim/witness fee waived. Commonwealth's objection made.

Commonwealth v. William Gaines (Larceny Prosecution) - Essex Superior

Court (AAG S. Patemiti)

JUDGE: Kratsley REFERRAL: Suffolk D.A.'s Office

CHARGES: 2 Count of Larceny Over $250; 3 Counts Uttering;

1 Count Credit Card Fraud; 12 Counts Uttering; 5 Counts Forgery

SENTENCE: The defendant plead guilty to all of the charges and was sentenced to

4-5 years MCI Cedar Junction concurrent with Suffolk County sentence, plus

$ 1 ,200 restitution. $ 1 20.00 Victim/witness fee.

Commonwealth v. Paul DeRoche (Tax Prosecution) - Suffolk Superior

Court (AAG S. Kelly)

JUDGE: Quinlan REFERRAL: DOR

CHARGES: 4 Counts Willftil Failure to File State Taxes

SENTENCE: Brendano Motion allowed, with 2 years probation, 400 hours

community service, $6,000 in costs of prosecution probation supervision fee.

Commonwealth v. Stefan Solvell (Tax Prosecution) - Suffolk Superior

Court (AAG L. Balboni)

JUDGE: Volterra REFERRAL: DOR

CHARGES: 1 Count Willful Filing of False State Income Tax Retum
SENTENCE: Joint recommendation imposed of 24 months HOC at South Bay
suspended, 2 years unsupervised probation, $4,000 fine, $1,000 surfine. $60
Victim/witness fee.

Commonwealth v. George Tsengas (Tax Prosecution) - Suffolk Superior

Court (AAG M. Parks)

JUDGE: Volterra REFERRAL: DOR

CHARGES: 1 Count Failure to Account For and Pay Over Sales Tax
SENTENCE: Defendant sentenced to 2 years HOC, suspended for 2 years.
Defendant also ordered to pay $8,000 fine plus $2,000 surfine, with order to pay all
taxes, assessments, and penalties due to the Department of Revenue. Count 2-14:
Guilty filed. $60 Victim/witness fee.

4/97 Commonwealth v. Art-in-Stone (Tax Prosecution) - Suffolk Superior

Court (AAG M. Parks)

JUDGE: Volterra REFERRAL: DOR

CHARGES: 14 Counts Failure to Account For and Pay Over Sales Tax
SENTENCE: Guilty filed.

5/97 Commonwealth v. Lorraine Mclver (Larceny Prosecution) - Suffolk

Superior Court (AAG S. Kelly)
JUDGE: Ball REFERRAL: N/ A

CHARGES: 1 Count Receiving Stolen Property

SENTENCE: Defendant sentenced to 3 months HOC, suspended for 1 year of
probation, with $3,800.00 in restitution. $60.00 Victim/witness fee.

5/97 Commonwealth v. Anthony J. Gonsalves (Larceny Insurance Fraud Prosecution)

Suffolk Superior Court (AAGs M. Parks/L. Balboni)
JUDGE: Rivard-Rapoza REFERRAL: IFB

CHARGES: 9 Counts Larceny Over $250; 9 Counts Motor Vehicle Insurance
Fraud; 7 Counts Conspiracy; 2 Counts Attempted Larceny; 2 Counts Making False
Representation in the Department of Public Welfare to procure support
SENTENCE: The defendant plead guilty and was sentenced to 2 1/2 years in the
HOC committed, with 5 years probation from and after his release. Special
conditions of his probation are $25,000 restitution, drug and alcohol counselling,
and that he not work in the insurance industry during the period of his probation.
$60 Victim/witness fee.

5/97 Gerald Femandes v. Commonwealth (Petition for Writ of Habeas Corpus) -

Plymouth Superior Court (AAG S. Hartry)

JUDGE: O'Brien

SENTENCE: Judge O'Brien denied the petitioner's writ of habeas corpus.

5/97 Commonwealth v. Jason S. Roberts (Larceny/Tax Prosecution) -Norfolk Superior

Court (AAG M. Parks)

JUDGE: DelVecchio REFERRAL: N/ A

CHARGES: 4 Counts Larceny Over $250; 4 Counts Wilftil Filing of False Tax

Returns

SENTENCE: This defendant was sentenced to 2 years in the HOC, committed, with

5 years probation, and an order of restitution in an amount to be determined by the

probation department, consistent with defendant's ability to pay. All other counts

were guilty filed. $60 Victim/witness fee.

5/97 Commonwealth v. Priscilla Martin (Larceny Prosecution) - Suffolk Superior Court

(AAG S. Kelly)

JUDGE: Chemoff REFERRAL: N/ A

CHARGES: 1 Count Receiving Stolen Property

SENTENCE: Defendant plead guilty. Sentencing is scheduled for September 19,

1997.

Commonwealth v. Linda Bell (Insurance Fraud Prosecution) - New Bedford
Superior Court (AAG M. Parks)

JUDGE: Rivard-Rapoza REFERRAL: IFB

CHARGES: 3 Counts Larceny Over $250; 3 Counts Motor Vehicle Insurance

Fraud; 1 Count Attempted Larceny; 5 Counts Conspiracy

SENTENCE: Defendant ordered to serve 1 year in the HOC suspended, with

probation for 2 years, and conditions of (1) restitution in the amount of $2,750.00 and

(2) that she not work for an insurance agent, broker or company during the period of

her probation. $60 Victim/witness fee.

Commonwealth v. Dorothy Duarte (Insurance Fraud Prosecution) - New Bedford
District Court (AAG M. Parks)

JUDGE: Leonard REFERRAL: IFB

CHARGES: 1 Count Motor Vehicle Insurance Fraud

SENTENCE: This matter was continued without a finding for 6 months, with 85

hours community service. Victim/witness fee waived by Judge.

Commonwealth v. Wayne Charpentier (Insurance Fraud Prosecution) - New
Bedford District Court (AAG M. Parks)

JUDGE: Leonard REFERRAL: IFB

CHARGES: 1 Count Motor Vehicle Insurance Fraud

SENTENCE: Defendant sentenced to 1 year probation after a guilty finding.

Victim/witness fee waived by Judge.

Commonwealth v. Maria Carvalho (Larceny Prosecution) - Suffolk Superior Court
(AAG S. Kelly)

JUDGE: Chemoff REFERRAL: N/A

CHARGES: 3 Counts Larceny; 2 Counts Forgery; 2 Counts Uttering
SENTENCE: Defendant sentenced to 2 years HOC, 6 months to serve, balance
suspended for 5 years. Defendant received concurrent sentences on all three counts.
$70,800 restitution condiUon of probaUon, and 1 year on the ankle bracelet also
ordered. Forgery/Uttering: 5 years probation fi-om and after committed time on
Larceny. $60.00 Victim/witness fee.

Commonwealth v. Ronald W. Amott (Larceny/Medicaid Fraud Prosecution) -

Suffolk Superior Court (AAG S. Hartry)

JUDGE: McDaniel REFERRAL: N/A

CHARGES: 4 Count Larceny Over $250; 5 Count Medicaid Fraud
SENTENCE: Stayed execution of original sentence and amended restitution
payments to $700 per month over the Commonwealth's objection.

Commonvyealth v. Eric H. Thomson (Tax Prosecution) - Suffolk Superior Court
(AAG M. Parks)

JUDGE: DelVecchio REFERRAL: DOR

CHARGES: 6 Counts Willful Failure to File State Income Tax Returns
SENTENCE: This matter was continued without finding for 3 years, with 3 years
supervised probation. Conditions: 250 hours community service, alcohol counselling;
cooperate with Department of Revenue re taxes.

Commonwealth v. Jason S. Roberts (Larceny/Tax Prosecution) - Suffolk Superior
Court (AAG M. Parks)

JUDGE: DelVecchio REFERRAL: N/A

CHARGES: 4 Counts Larceny Over $250; 4 Counts Wilfiil Filing False State

Income Tax Returns

SENTENCE: Defendant sentenced to 2 years in the HOC, suspended for 2 years,

with condition that defendant be under electronic monitoring throughout that 2-year

period. 5 years' probation after release with condition of restitution in amount

determined by probation department.

Note: The previous sentence of 2 years in the HOC, committed, was revised and
revoked by Judge DelVecchio over the Commonwealth's objection after Norfolk
County Sheriff flood rejected the defendant as a candidate for Norfolk's electronic
monitoring program based on (1) the nature of the offense, (2) the length of the
commitment, and (3) the fact that he lived with a convicted felon (his wife and co-
defendant, Harriet Roberts).

ENVIRONMENTAL STRIKE FORCE

The Massachusetts Environmental Strike Force, which operates out of the Criminal Bureau in
the Office of the Attorney General, is a collaborative effort of the Attorney General, the Secretary of
Environmental Affairs, the Department of Environmental Protection, Environmental Police, and State
Police to utilize available government resources in the service of enforcing the state's environmental
laws. In addition to state agencies, the Strike Force also worked with the U.S. Environmental
Protection Agency and U.S. Attorney's Office for the District of Massachusetts, pursuing joint
state/federal environmental crimes investigations and prosecutions.

During FY97, the Strike Force initiated criminal prosecutions against 1 8 individual and
corporate defendants, and resolved cases against 12 defendants, all of whom were convicted.
Significantly, the Strike Force successfully continued its use of crafting innovative environmental
sentences upon criminal convictions.

CRIMINAL CASE HIGHLIGHTS

A. Cases Initiated in Fiscal Year 1997

In two related cases of first impression. Commonwealth v. Consolidated Smelting and
Refining Corp. and Commonwealth v. Lowell Fiengold. a Sutton, Massachusetts smelting company
and its president were indicted for assault and battery by means of a dangerous weapon for allegedly
exposing employees to hazardous lead dust in the workplace. Indictments were also returned for air
pollution violations for alleged lead and cadmium emissions to the ambient air, and for several
hazardous waste handling violations. The cases represent the first time assault and battery charges
have been brought against an employer for exposing employees to hazardous materials.

In Commonwealth v. My Van Nguyen, the first prosecution brought jointly by the Strike
Force and the Boston Environmental Strike Team, the owner of a Boston triple-decker was indicted
for illegal disposal of hazardous waste and water pollution violations in connection with the alleged
discharge of home heating oil directly into the Boston sewer system. The discharge allegedly
occurred when the owner sought to drain two home heating oil tanks during property renovations.
The defendant was also indicted for air pollution violations in connection with the alleged illegal
removal of asbestos.

In Commonwealth v. William Potter, the president of a deftmct Winchendon manufacturing
company was indicted for storage of hazardous waste in a manner which could endanger human
health, safety, welfare and the environment, storing hazardous waste without a license, and engaging
in activity which could have resulted in the discharge of a pollutant to groundwater. The defendant
allegedly closed his company, leaving behind large quantities of uncontrolled hazardous wastes and
other pollutants.

B. Case Dispositions in Fiscal Year 1997

In Commonwealth v. Roland Parenteau. the president of a New Hampshire tree surgery
company was convicted in Essex Superior Court of knowing disposal of hazardous waste without a
license or manifest. The defendant hired an unlicensed transporter to remove his company's
hazardous wastes. The wastes were illegally disposed of in a field in Salisbury, Massachusetts. The
defendant was sentenced to two years in the House of Correction, suspended, with two years
probation. He was also ordered to pay $21 ,092.67 in restitution to the Commonwealth for the cost of
cleaning up the wastes, and was fined an additional $12,500.

The case of Commonwealth v. Alan P. Stevens capped a joint state/federal prosecution.
There, the defendant was convicted in federal court of wire fraud in connection with environmental
testing and disposal of hazardous waste. Stevens purported to contract on behalf of laboratories to
provide collection, testing and waste disposal services, knowing that such services would not be
provided as represented and that resulting reports would be false and fraudulent. Drums of waste oil
(including PCBs) collected by the defendant in connection with his scheme were dumped on
unoccupied property in Peabody, Massachusetts. The defendant was sentenced to a year and a day in
federal prison, and ordered to pay $7,467 in restitution to the victims of his fraud.

In Commonwealth v. Ralph Worsencroft. the defendant was convicted of air pollution
violations in connection with the illegal removal and storage of asbestos at several residential and
commercial properties in the North Shore area. The defendant was sentenced to two years in the
House of Correction, suspended for three years with probation, ordered to pay $4,000 in restitution to
property owners who incurred additional costs because of the illegal removal, and ordered to pay for
the legal disposal of 80 bags of asbestos waste which he illegally stored in a trailer.

In Commonwealth v. Vermeer Sales and Service. Inc.. a Raynham landscaping company i|
was convicted in Taunton District Court of failure to notify the Department of Environmental I

Protection of an oil spill at its premises, and violating the Clean Water Act. When the company
discovered that about 300 gallons of oil had leaked from a company tanker, it failed to notify DEP
and covered up the spill with fresh soil. Some of the oil then ran into a stream and adjacent wetlands.
The company, which cleaned up the spill after it was discovered by DEP, was ordered to pay a $6,250
fine, and to perform community service by providing $18,000 worth of tree care equipment to the
Bristol County Agricultural School.

INNOVATIVE SENTENCING

The Strike Force continues to be successful in its efforts to obtain innovative sentences
intended to maximize the human health and environmental benefits of environmental law
enforcement generally in the nature of requiring companies that commit environmental crime to pay
for their acts in a manner beneficial to the public. In addition to forcing cleanups and obtaining
restitution for cleanups paid for by the public or by innocent victims whose property was illegally
polluted, sentences included the provision of tree care equipment to an agricultural school and
community service involving cleanup and maintenance at a state park.

Past creative sentencing efforts also continue to have beneficial effects. H.C. Starck, Inc.,
convicted in FY96 of illegal treatment of hazardous waste, completed its year-long environmental and

occupational safety audits, and substantially implemented corrective measures intended to bring the
Newton manufacturer into compliance with all local, state, and federal environmental and
occupational safety laws. The company trained its entire workforce in the safe handling of ignitable
and reactive hazardous materials, and carried out management training in the effective
implementation of environmental and safety standards. All of these activities were pursuant to
Starck's sentence, and were subject to the review of the Strike Force.

The Work Environment Justice Fund, created as a result of the Strike Force's 1994
prosecution of a Somerville lead smelting company, granted its third annual awards to seed projects
for improving workplace health and safety among low income workers. A total of $99,988.74 was
awarded to 12 non-profit agencies across the state.

FINANCIAL INVESTIGATION DIVISION

The Financial Investigation Division provides the Criminal Bureau with experienced civiiia
investigative professionals who investigate and assist in the prosecution of white-collar criminal
cases, particularly larcenies, public corruption, campaign finance violations, tax fi-aud and all other
white collar frauds. There are nine investigators who bring to the Division multiple years of
experience investigating cases in local, state, federal and private sector venues. Staff includes three
Certified Fraud Examiners, two Certified Public Accountants, three lawyers, and one former
securities investigator.

The investigators assigned to this group work closely with Criminal Bureau prosecutors and
also Massachusetts State Police assigned to the Criminal Investigations Division. Investigators may
also be required to work on a case-by-case basis with investigative or audit personnel fi-om referring
agencies such as the Securities Division of the Secretary of State's Office, the Board of Bar
Overseers, the Criminal Investigations Bureau of the Department of Revenue, and the Office of the
State Auditor.

All invesfigators are responsible for designing and implementing investigative plans which
assess allegafions of criminal conduct. To that end, investigators conduct interviews, analyze records
obtained, and provide summary witness testimony before special grand juries and in trial settings.
The investigators utilize a wide array of informational databases to track and profile potential subject!
of criminal investigations.

In addition to their acfive investigative caseloads, each investigator is responsible for
screening some portion of the hundreds of inquiries and complaints received annually to ascertain
whether the matter meets the guidelines of a respecfive division necessary to trigger an investigation.

Financial Investigation Division staff work primarily with the Economic Crimes Division,
the Public Integrity Division and the Narcotics and Special Investigations Division in the Criminal
Bureau. The members of the Division for all or part of FY97 were: Brad Chase, Esq.; Peter Darling,
Esq.; Ted Goble, Esq.; Bill Frugoli, CFE; Jim McFadden, CFE; John O'Connor, CPA; Michael
O'Neil, CPA; Patrick Ormond, CPA; Kristen Vagos; and Paul Stewart, CFE, the Division's Director.

NARCOTICS AND SPECIAL INVESTIGATIONS DIVISION

The Narcotics and Special Investigations (NSI) Division coordinates and prosecutes
complex, multi -jurisdictional criminal cases targeting non-traditional organized criminal entities and
career criminals. Additionally, the NSI Division investigates and prosecutes large-scale drug
trafficking operations and individuals, as well as individuals involved in the illegal sale or possession
of firearms. The Division further aids in the drafting of narcotics-related legislation and the
development and implementation of community education and outreach programs.

j Among the general categories of crimes the NSI Division investigated and prosecuted during

"fiscal year 1996-1997 were the following: armed robbery, solicitation to commit murder, carjacking,
arson, child pornography, weapons trafficking, narcotics trafficking, inducing a minor to distribute
narcotics, prostitution, breaking and entering, larceny, receiving stolen property, assault and battery
and uttering. During F Y97, the NSI Division initiated 1 1 8 criminal cases and disposed of 73 criminal
cases.

The Asset Forfeiture Unit, a subdivision of the NSI, pursues civil and criminal forfeiture and
nuisance actions of property related to the sale, distribution and facilitation of drug-related offenses.
Funds recovered by the Unit are disbursed in accordance with the Commonwealth's forfeiture laws.
; A percentage of the amount forfeited is used for community-based drug awareness and education
programs.

In FY97, the Division's responsibilities greatly expanded. Specifically, two new major
initiatives, one in the area of high technology crimes and the other in the area of arson prosecution,
were launched.

HIGH TECHNOLOGY CRIME UNIT

In April of 1997, Attorney General Scott Harshbarger announced the formation of the High
Technology Crime Unit. The Unit, one of the first of its kind in the country and the first in the
Northeast, is a joint effort with the Office of Public Safety, and is housed in the NSI Division and
staffed by prosecutors and State Police.

The Unit has two primary objectives. First, working in conjunction with a task force
comprised of state and local law enforcement officers, the Unit acts as a resource to the law
enforcement community, providing investigative, legal, and technical support on computer-related
criminal investigations, including computer forensics and searches and seizures involving computers.
Second, the Unit collaborates with members of the high tech industry in this Office's efforts to
identify, investigate and prosecute those individuals who are committing high tech crimes.

Since its inception in April of 1997, the Unit has already been involved in a number of
significant undertakings. For example, a recent investigation resulted in the execution of a search
warrant and the seizure of more than 1 ,000 illegal cable converting devices. Records seized as a
result of the search establish that the suspect sold over 30,000 of these devices last year.

Conservative estimates place the loss to the cable industry from these sales at more than 16 million
dollars.

In addition, the Unit has also been called upon to provide forensic and technical assistance i
a number of investigations by local police departments. These have ranged from a bomb threat sent
via the Internet to providing forensic assistance in the analysis of computerized records seized
following a prostitution and child sexual assault investigation.

ARSON INITIATIVE

In 1 996, the Attorney General's Office launched a new initiative aimed at strengthening fire
prevention efforts and identifying and prosecuting arsonists. Working out of the NSI Division, the
Unit has focused on the investigation, indictment, and prosecution of several significant arson-for-
profit cases.

One such case involved the City of Lawrence. In January 1994, a fire at the Townhouse Pub
in Lawrence caused damage estimated at $100,000.00. A subsequent investigation by the Lawrence
Fire and Police Departments, as well as the Bureau of Alcohol, Tobacco, and Firearms (ATF),
determined that the fire had been deliberately started. The case was referred to the NSI Division and
ultimately resulted in two employees being convicted of arson and conspiracy.

Training also plays a significant role in the Unit. Toward that end, in April, the Office of the
Attorney General hosted a two-day seminar on Arson Investigation and Prosecution with the State
Fire Marshal's Office, which attracted more than 300 investigators and prosecutors from throughout
the Commonwealth. The Unit has also participated in training seminars sponsored by the National
Fire Academy, Massachusetts Fire Academy, Metro Arson Investigators and ATF, lecturing on a
broad range of topics, including search and seizure issues at fire scenes, fire code enforcement
methods, arson laws and trial advocacy. Finally, the Unit is working with the State Fire Marshal to
develop and execute fire code enforcement programs across the Commonwealth.

OPERATION CLEAN SWEEP

During the past year, the NSI Division continued with Operation "Clean Sweep." This
initiative, which targets repeat drug offenders and persons distributing drugs in the vicinity of schoolj
and/or playgrounds, was launched during FY95. The operation, first initiated in the City of Waltha
during the spring of 1995, has continued to be successfril.

This year, the NSI Division conducted its largest "Sweep" operation to date in the Town of]
Framingham. A collaborative effort between undercover state police officers assigned to the NSI
Division and the Framingham Police Department resulted in drug-related charges being brought
against 51 individuals ranging from trafficking in cocaine to distributing controlled substances withir
a school zone. Nearly 3,000 grams of cocaine, as well as heroin and marijuana, were seized as a
result of the investigation. In addition, five area bar owners received notificafion of drug activity in
their establishments with warnings that forfeiture proceedings would be instituted if inmiediate
corrective measures were not taken.

OPERATION TAKE BACK

The NSI Division also continued with its efforts in "Operation Take Back", a program
'designed to assist property owners in eradicating drug problems in designated properties which are
the site of repeated drug violations. The Division's Asset Forfeiture Unit pursues forfeiture actions
against owners who are unwilling to take corrective measures.

Of the numerous accomplishments this year in Operation Take Back, two merit special
mention. The first involved the forfeiture of a Lowell drinking establishment, the site of repeated
serious criminal activity. A civil forfeiture action filed against the bar and its owners by the NSI
Division's Asset Forfeiture Unit resulted in the closure of the bar to the substantial benefit and
appreciation of the surrounding neighborhood.

The second involved another drinking establishment located in the Town of Hudson. The
bar was also the site of persistent criminal activity, including numerous sales of narcotics and
repeated drunk driving incidents, including multiple vehicular homicides. As a result of a lawsuit
brought by the Asset Forfeiture Unit the bar was closed and the property foreclosed.

LANDLORD TRAINING PROGRAMS

As a component of Operation Take Back, the Division's Asset Forfeiture Unit conducts
landlord training seminars. These seminars are designed to educate landlords about their rights and
responsibilities with respect to tenants who are utilizing the property as a drug distribution site.
Four such trainings were conducted during FY97, two in Lawrence, one in Waltham, and one in
New Bedford.

WEAPONS INITIATIVE

The NSI Division also continued in its efforts to apprehend and prosecute violent criminals
by targeting individuals involved in the illegal sale and possession of firearms, as well as other
firearms-related offenses, often in conjunction with agents assigned to the Bureau of Alcohol,
Tobacco and Firearms.

I One of the more significant weapons cases investigated and currently being prosecuted by

the Division involves a Quincy resident who was arrested after he sold 1 6 guns to an undercover State
Trooper. Among the weapons sold were a Tech 9 semi-automatic that was being converted into a
automatic weapon, as well as several 9 millimeter handguns. The investigation revealed that this
individual was supplying various Boston gang members with weapons, as well as training them on
how to use the weapons. Search warrants executed in relation to this investigation resulted in the
seizure of a number of additional loaded handgims with obliterated serial numbers, armor-piercing
bullets, over 40 pounds of ammunition, a bullet-proof vest, empty gun magazines and other gun-
related material.

LAW ENFORCEMENT SUPPORT

Attorneys and investigators assigned to the NSI Division work with and provide support to
other federal, state and local law enforcement agencies including the Federal Bureau of Investigation,
Bureau of Alcohol, Tobacco and Firearms, United States Customs Service, Drug Enforcement
Administration, Internal Revenue Service, United States Postal Service and various state and local
police departments throughout New England. These joint undertakings ranged from investigations of
major money laundering organizations to a solicitation over the Internet to kidnap and rape a Vermont
woman.

OUTREACH

An important area of focus for the Division this fiscal year has been to contribute to the
development of more effective approaches for addressing substance abuse among criminal
offenders. Division staff participated in drafting of legislative proposals in this area and also
developed working relationships with a number of key system professionals interested in these
issues. The Division's effort culminated in June with an interbranch conference on drug testing
jointly sponsored with the Supreme Judicial Court, the Commissioner of Probation and Harvard
University's Mind/Brain/Behavior Initiative.

Members of the Division also participated in a number of outreach training programs and
speaking engagements in addition to those already mentioned. AAGs Djuna Perkins, Robert
Sikellis and Brett Vottero served as panelists at the Campus Law Enforcement Conference held in
February, 1997. AAG William Brownsberger, along with Suffolk County District Attorney Ralph
Martin, addressed students and faculty at the Harvard School of Public Health on community-
based approaches to prevention of drug abuse. AAGs William Brownsberger, Linda Nutting
Murphy, and Robert Sikellis spoke at this year's Law Enforcement Coordinating Corrmiittee
meeting. AAG Brett Vottero organized and conducted a mock trial for arson investigators at the
International Association of Arson Investigators, and presented the keynote address at the Chief
Fire Officers Training at the Massachusetts Firefighters Academy. AAG Linda Nutting Murphy
spoke about computer search warrants and other high technology crime issues at a conference
sponsored by the New England State Police Intelligence Network.

NSI DIVISION ACTIVITIES FOR FY 97

A. Criminal Cases Initiated 118

B. Criminal Cases Disposed 73

TOTAL

PRE-TRIAL

AFTER TRIAL

CONVICTIONS

NOT GUILTY

MISTRIALS

DISMISSALS

TOTAL

Seizures

Cocaine

3,968.54 grams

Heroin

174.94 grams

Marijuana

11,336.60 grams

Prescription Pills

456

U.S. Currency

$187,259.00

Vehicles

Stolen Property
Recovered

$550,000.00

D. Drug Related Civil Forfeitures

Cases Initiated

Vehicles Forfeited

22 (forfeiture judgments in state court)

Forfeiture Judgments

$222,574.81 plus interest (forfeiture
judgments in state court)

Proceeds from Sale of Previously
Forfeited Property

$ 10,982.51

TOTAL

$233,557.32

Unclaimed Property Returned
to Treasurer

$21,079.30

PUBLIC INTEGRITY DIVISION

In FY97, the Public Integrity Division (PID) investigated and prosecuted public
corruption and conflict of interest cases throughout the Commonwealth, convicting those
individuals and businesses that attempted to profit in violation of the ethical and criminal laws of
the Commonwealth. The Division currently consists of five Assistant Attorneys General, several
financial investigators and a team of Massachusetts State Police officers.

During this year, PID commenced approximately 35 criminal prosecutions against public
officials and other individuals who violated the public trust, ranging from crimes of bribery by
attorneys and their associates to conflicts of interest and bribery allegedly committed by a
Middlesex Clerk-Magistrate to the illegal trafficking of Massachusetts lottery coupons. During the
same time period, more than 20 criminal prosecutions were resolved.

The Public Integrity Division works closely with other divisions of the Criminal Bureau.
As one example, this past year, the Public Integrity Division combined resources with the Tax
Prosecution Unit of the Economic Crimes Division to successfully prosecute and convict a number
of public officials and business entities for violations of the criminal tax laws of the
Commonwealth.

The Division continues to coordinate the Attorney General's Public Integrity Advisory
Group, which brings together representatives from the various executive branches of state
government to discuss joint efforts to detect fraud, waste and abuse by government employees.
Many of the prosecutions initiated by the Public Integrity Division which resulted in convictions
originated from referrals by members of the Advisory Group.

The Division also continues to work in conjunction with the Attorney General's Central
Artery Tunnel (CAT) coordinator to monitor that project's adherence to the law. The Division
continued to successfully collaborate with state and federal law enforcement officials, including
the Public Corruption and Special Prosecutions Unit of the United States Attorney's Office and the
Internal Revenue Service.

Criminal Case Highlights

A. Some Highlights of Cases Initiated in Fiscal Year 1997

A North Shore attorney working under contract with the Committee for Public Counsel
Services was indicted by a Middlesex County Grand Jury on charges he extorted, and attempted to
extort, cash payments of up to $10,000 from indigent jailed defendants in exchange for his
services, even though he had been assigned by the court to act as their public defender. The
attorney was also indicted for larceny over $250 and tax evasion. These indictments arose out of
the attorney's receipt of $1,500 from family members of one of the defendants. The attorney
submitted four bills to the state claiming he had performed work for the indigent defendant with
false certification that he had not received money for the work. As a result of the false bill, the
attorney was paid $2,250 by the state. Under the scheme to evade state income taxes on extra

income he was receiving, the attorney filed false tax returns for 1993, 1994, and 1995 that under-
reported his law practice receipts.

A Southeastern Massachusetts criminal defense attorney was indicted, along with his
business associate, on two counts of bribery and intimidation of a witness. This scheme involved
the attorney's attempts to pay crime victims in exchange for a recantation or failure to appear at the
criminal trial of his client.

A Clerk-Magistrate of the Cambridge Superior Court, Criminal Session, was indicted for
bribery, conflict of interest, and filing false statements of financial interest (SFI) with the State
Ethics Commission. The indictments allege that the Clerk-Magistrate accepted $6,000 in cash and
$4,000 in vacation benefits from a private investigator in exchange for assigning criminal cases to
five attorneys who regularly hired the private investigator. The private investigator was indicted
on charges that he paid $10,000 in bribes to the Clerk-Magistrate. The wife of the investigator was
also charged with tax evasion and failure to file tax returns pertaining to income received ft-om the
investigator's corporation.

The former Executive Director of the Dennis Housing Authority was charged with two
counts of embezzling approximately $5,000 fi-om the Authority. The former Executive Director
directed the Authority to make an unauthorized $2,400 payment to her in November 1993. In
December 1993, the former Executive Director directed the Dennis Housing Authority bookkeeper
to issue her a $2,500 payment for an unauthorized bonus in cormection with her development work
on a Housing Project. The payments were allegedly taken fi-om accounts designed to fund rental
assistance payments for low-income tenants.

A Middlesex Probate and Family Court probation officer was indicted for bookmaking
operations. The probation officer was indicted for two illegal gambling crimes: possession of
betting apparatus and using a telephone for gaming purposes. The probation officer ran the
operation out of his Winthrop home.

Sting investigations in Hampden, Worcester, Norfolk and Barnstable counties netted 1 1
individuals and companies on an illegal scheme to traffic in Massachusetts State Lottery coupons.
The kickback scheme consisted of individuals redeeming bundles of lottery coupons with certain
lottery vendors in exchange for a percentage of the face value of the coupons fi-om the vendors.
The lottery was crediting these vendors under the misassumption that customers were buying
tickets with these coupons. The investigation was conducted with the cooperation of the
Massachusetts Lottery Commission and the U.S. Postal Service.

A Massachusetts State Trooper and Boston Firefighter were indicted by a Plymouth
Grand Jury on larceny charges pertaining to illegal housing subsidies they received fi-om HUD.
The two filed false income verification reports that underreported their annual income which
enabled them to receive housing subsidies.

B. Some Highlights pf Case Dispositions in Fiscal Year 1997

A Springfield man plead guilty to one count of larceny of more than $250 for
participating in a scheme to buy and cash State Lottery coupons illegally. The defendant was
sentenced to one year in jail, suspended, with two years probation. In addition, he was ordered to
perform 100 hours of community service, pay $500 in restitution to the Lottery and pay a $1,000
fine. The defendant and six others were indicted last December for allegedly scheming to traffic
Lottery coupons illegally. The coupons, purchased in bulk at discounted prices fi-om undercover
State Police troopers, were redeemed at full value through the lottery. The charges were the result
of a cooperative effort between the AG's office, The Massachusetts State Lottery, and the U.S.
Postal Service.

A Revere man who screened applicants for an anti-homelessness program plead guilty to
welfare fi-aud and bribery. He was sentenced to three years of probation and six months of house
arrest, during which time he will not be allowed to leave his home except to go to work and
doctor's appointments. In addition, the defendant must pay $36,559 in restitution to the state. The
defendant, an employee of the Department of Transitional Assistance (DTA) whose
responsibilities included eligibility screening for emergency assistance, admitted he solicited and
accepted a $1,000 bribe from a Bradford woman. The woman was a property manager who
allegedly worked with the defendant to steal over $24,000 for tenants living in her property who
did not qualify for emergency assistance. Emergency assistance payments are part of an anti-
homelessness program designed to allow the DTA to pay rent directly to landlords. The defendant
has also plead guilty to charges of arranging for an additional $12,444 in fraudulent assistance
payments to landlords and mortgage holders.

A former veteran's agent for the towns of Swansea, Seekonk and Somerset plead guilty to
larceny charges pertaining to the embezzlement from three veterans and a veteran's widow. The
thefts included approximately $30,000 from the veterans and the deed to a house worth $66,000
from the veteran's widow. The veteran's agent was sentenced to a 20-day House of Correction
committed term, 500 hours of community service and was ordered to pay frill restitution.

The owner and president of Con-Rel, Inc. a general contracting firm, plead guilty in
Middlesex Superior Court to one count each of procurement fraud, making false claim to the state,
falsifying corporate books, and conspiracy. The charges came in connection with a state contract
to renovate the Roosevelt Towers public housing project in Cambridge. The defendant received a
two and a half year House of Correction sentence, ten days to be served, three years probation, and
a $5,000 fine. This case was referred by the Executive Office of Communities and Development.

The acting Director of the Wellfleet Department of Public Works plead guilty to charges
he sought and received free paving of his home's driveway from a contractor that had been hired to
pave roads in Wellfleet. The Director also obtained reimbursement from a neighbor at the same
time for pavement of a shared part of the driveway. The Director plead to two counts of larceny
over $250 and one count of conflict of interest. He was sentenced to two years probation, 96 hours
of community service, and restitution.

A former Department of Revenue (DOR) employee plead guilty to paying an illegal
gratuity to his supervisor in the Springfield DOR office. More than $53,000 in gifts were given to

the supervisor as part of a scheme in which the employee was allowed to remain unsupervised and
pursue other illegal endeavors. A sentence of two years in the House of Correction, one year
committed, with the balance suspended for two years, and probation was imposed.

Public Integrity Division Charges and Indictments
Date Defendant's Name

7/96 Lionel Morais

1 count of larceny (embezzlement by a fiduciary)
1 count of larceny over $250

1 count of illegal gratuity

8/96 Edward K. Bover

2 counts of bribery

2 counts of intimidation of a witness

8/96 Pedro Cumba

2 counts of bribery

2 counts of intimidation of a witness

8/96 Elizabeth Mills

1 count tax evasion

1 count failure to file tax returns pertaining to

income received from a corporation

9/96 Joseph Marshall

1 count of bribery

1 count of conflict of interest

2 counts of filing false SFI's with State Ethics
1 count illegal gratuity

1 count conspiracy

9/96 James Mills

1 count bribery
1 count gratuity
1 count conspiracy

9/96 Linda Rentz

1 count of perjury

9/96 Kevin O'Hara

1 count of false tax returns
I count of larceny over $250
1 coimt of unemployment fraud

10/96 Paul Nicewic7

100

2 counts of larceny

1 count of bribery

2 counts of welfare fraud

Ruth Carroll

1 count of bribery

1 count of larceny over $250

1 count of welfare fraud

Deno Vakas

1 count illegal gratuity
1 count bribery

James June

1 count bribery

1 count illegal gratuity

Russell Tillman

2 counts larceny over $250
1 count procurement fraud

1 count false corporate records

1 count tax evasion

Fred Hamlett

2 counts larceny over $250
1 count procurement fraud

1 count false corporate records

Rose Marie Hicks

1 count of larceny over $250
5 counts false claims

Paul Hicks

1 count of larceny over $250
5 counts of false claims

Charles Sillari

1 count possession of betting apparatus

1 count using a telephone for gaming purposes

Orchard Variety

1 count of larceny over $250
1 count of filing false claims

Eric Zepke

101

1 count of larceny over $250
1 count of filing false claims

12/96 Towers Convenience

1 count of larceny over $250
1 count of filing false claims

12/96 Sved Atta Rehman

1 count of larceny over $250
1 count of filing false claims

12/96 Tatnuck Square Getty

1 count of larceny over $250
1 count of filing false claims

12/96 Jihad Nassif

1 count of filing false claims

2 counts of conspiracy

1 count of attempting to commit larceny

12/96 Marline Geara

1 count of conspiracy

1 count of attempt to commit larceny

12/96 Joseph Geara

1 count of larceny over $250
1 count of filing false claims
1 count of conspiracy

12/96 Thomas Therrien

1 count of larceny over $250
1 count of filing false claims

12/96 Times Square Market

1 count of larceny over $250
1 count of filing false claims

12/96 Norman Carignan

1 count of larceny over $250
1 count of filing false claims

1/97 Lionel Torres

1 count of assault with intent to murder

1 count of assault and battery dangerous weapon

102

2/97 Luke Fox

2 counts larceny over $250

3/97 Paul Cacchiotti

4 counts of attempted extortion
1 count larceny over $250

3 counts tax evasion

3 counts false tax return

3/97 Glenn Essier

1 count of failure to appear

3/97 Norma Qrtega-Canerv

5 counts forgery

1 count larceny over $250

1 count conspiracy

5/97 Gerardo Rosario. Jr.

assault v^th dangerous weapon

armed robbery

assault with dangerous weapon with intent to rob

assault v^th dangerous weapon in a dwelling house

use of firearms while committing a felony

Home invasion

violation of Constitutional Rights

5/97 Marlene Hoev

2 counts embezzlement

Dispositions

7/96 Catherine Rogers

admitted to sufficient facts

received a continuance without a finding for 5 years and restitution $8,019.00

7/96 Rolando Schand

found not guilty

8/96 George Thibodeau

cases dismissed after defendant died of natural causes

10/96 Leon Bunk

103

received Pretrial Probation

1 1 /96 Lionel Morais

plead guilty to larceny

received a 20 day committed House of Correction sentence, 500

hours community service, and $96,000 Restitution

1 1/96 Joyce Camire

plead guilty

received 6 years probation

Restitution: $26,914., 100 hours community service

1/97 Bettv Lee Wing

plead guilty to larceny and false written reports

received a 2 year House of Corrections sentence suspended for 2 years, $26,000

restitution, $16,000 fine

1/97 Jacquelyn Mennitto

plead guilty to filing a false claim, false entries in corporate records, and conspiracy
received 1 year House of Correction, suspended for 2 years, and a $500 fine

2/97 Kevin O'Hara

plead guilty to 1 count larceny over $250, 1 count unemployment fi-aud,
1 count filing false returns

received a 6 month House of Correction term suspended for 2 years, $7,339
restitution, $1,000 fine, 300 hours of community service

3/97 Joseph Butler

plead guilty to 1 count procurement fraud, 1 count making false claim to the state, 1
count falsifying corporate books, and 1 count conspiracy
defendant received 2/4 year House of Correction, 10 days to be served, balance
suspended for 3 years, probation, and a $5,000 fine

4/97 Thomas Therrien

plead guilty to 1 count of larceny over $250, 1 count of filing a false claim

received 2 years probation, $1,204 restimtion, $2,408 fine, and 200 hours community

service

4/97 Claudio Ayala

plead guilty to 1 count of larceny over $250

received a sentence of 1 year House of Correction, suspended for 2 years,

probation, $5,500 fine, $1,375 surfine

4/97 Norma Ortega-Canery

defendant found not guilty

104

Luis Toribio

plead guilty to 1 count of larceny over $250, 5 counts of forgery, 5 counts of uttering,

1 count of conspiracy

received a sentence of 1 year House of Correction, suspended for 2 years,

150 hours community service, $2,078.41 restitution

Victor Martinez

admitted sufficient facts to 5 counts forgery

received a continuance w^ithout finding, 100 hours of community service

Eric Zepke

plead guilty to larceny over $250 and presentation of false claims
received a sentence of 1 year House of Correction, suspended for 3 years,
probation, fine of $6250, $2375 restitution, 300 hours of community service

Syed Rehman

plead guilty to 1 count of larceny over $250

received 1 year House of Correction, suspended for 2 years, probation, 100 hours

community service, $500 restitution, $1,000 fine

Paul Nicewicz

plead guilty to larceny over $250 and bribery

received a sentence of 3 years of probation, 6 months on a bracelet, $36,559

restitution

Luke Fox

plead guilty to 2 counts larceny over $250, 1 count of conflict of interest

received 2 years probation, 96 hours of community service, restitution to town

(to be determined), restitution of $350 to neighbor

Jihad Nassif

plead guilty

received 2 years probation, 300 hours community service, $5,000 restitution, $17,000

fines

105

SAFE NEIGHBORHOOD INITIATIVE

Established in February, 1993, by the Office of the Attorney General, the Suffolk Coun
District Attorney's Office, the Mayor's Office of the City of Boston and the Boston Police
Department, the Safe Neighborhood Initiative (SNI) is an effective coalition among community
residents, state and local government offices, law enforcement agencies and human service
organizations to stem violence and improve the quality of life in neighborhoods throughout the
Commonwealth. Successful SNI models have been established in Dorchester, Grove Hall,
Brockton, Chelsea and Uphams Comer.

The Safe Neighborhood Initiative enjoyed a year of significant successes and growth
during Fiscal Year 1997, receiving not only national recognition but also undergoing
unprecedented expansion regarding the amount of funding directed toward the initiative, the
number of projects managed, and the staff assigned to SNI projects.

SNI Advisory Coimcils, comprised of community residents, law enforcement agents and
government officials, have firmly established themselves as powerful partnerships, strong voices
for the community and viable governing bodies for SNI projects. SNI prosecutors at both the
Superior and District Court levels continued their collaboration with community residents, as well
as other law enforcement agencies, to improve the quality of life in SNI neighborhoods. The SNI
prosecutors recommend sentences and probation alternatives which will serve to both penalize and I
rehabilitate offenders.

One of the most significant achievements in FY97 was the establishment of a major new
initiative ~ the SNI Jobs for Youth Program. Begun in the fall of 1 996, the program provides
employment opportunities for more than 20 youths within their own neighborhoods in the SNI
communities of Uphams Comer, Fields Comer, Grove Hall, Chelsea, and Brockton.

Attorney General Harshbarger's emphasis on jobs for young people spurred U.S. Attomey
Donald Stem to spearhead a collaborative effort with the Office of the Attomey General, the
Suffolk County District Attorney's Office, the Mayor of Boston's Office, and the Boston Police
Department to establish a complimentary effort ~ the Boston Jobs Project. This project lead to a
successful grant application for $2.2 million from the Department of Labor which will be managed
by Mayor Menino's office and will provide employment and educational opportimities for
hundreds of young people from Orchard Park and South Boston.

The SNI has received numerous accolades for its success, including praise from President
Bill Clinton and United States Attomey General Janet Reno, and a noteworthy Boston Globe
editorial. President Clinton specifically highlighted Operation Night Light, a cooperative effort
between the Youth Violence Strike Force and the Massachusetts Department of Probation that
sends police officers and probation officers on nightly visits to the homes of youth on probation to
ensure compliance with the terms of their probation.

Rewards in the form of successful grant applications were also numerous this year:

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• The Grove Hall SNI received its first infusion of grant funding from the Edward J.
Byrne Grant Fund from the Massachusetts Executive Office for Public Safety ($30,000) and from
the Department of Justice, Executive Office for Weed and Seed ($125,000) in 1997. The funding
allowed the hiring of a Seed Coordinator who is responsible for prevention, intervention and
treatment projects and a Community-Court Liaison who bridges the law enforcement and judicial
efforts with the community for the project.

• The Brockton SNI was able to hire an AGO staff person to serve as program
coordinator through a grant from Christy's Convenience Store, and will benefit from receipt of a
significant grant from the Executive Office for Public Safety that will target youth violence.

• The amount of funding for the model SNI in Dorchester was scheduled to decrease but
the success of the model prompted the Executive Office for Public Safety to instead increase
funding for the project to $350,000.

In addition to grant funding, the fiscal year 1997 state budget allowed the hiring of two
additional SNI prosecutors: one to prosecute cases in the Bowdoin Street area in response to an
outbreak of violence there, and the second to serve the Uphams Comer area, allowing the SNI to
expand its efforts in Roxbury. In addition to the expansion into Uphams Comer, the SNI also
forged a strong relationship with a newly formed SNI in Taunton. The Abandoned Property
Project through which AGO staff members seek to obtain receiverships of abandoned housing to
help solve the problems associated with abandoned housing in inner-city communities further
expanded into the Chelsea and Brockton SNIs this year.

Due to the national attention the SNI and Boston's other crime-fighting efforts have
received, Boston is being seriously considered to receive Department of Justice funding to
establish a community court and enhance community justice initiatives.

SNI Jobs for Youth Program

Providing employment opportunities for young people is a critical component of creating
healthy communities. As a result of Attomey General Harshbarger's commitment to serving
neighborhood priorities, the SNI Jobs for Youth program began in the fall of 1996. Through this
program, youth are placed in jobs within their own community with the goal of enhancing
relationships between young people and merchants and demonstrating that young people are
indeed willing to work for positive change in their communities. Twenty-three young people were
placed in substantive jobs in the SNI communities of Chelsea, Brockton, Uphams Comer, Grove
Hall and Fields Comer from October, 1996 through June, 1997, with some sites being able to
extend the youth workers' placements through the summer months. Some examples of sites where
young people were placed are: Charlene's Hair Salon, a more than 20-year-old institution in Grove
Hall; a community television station in Chelsea; a Brockton Cape Verdean Association; and
neighborhood community centers.

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Dorchester SNI

The model SNI project — the Dorchester Safe Neighborhood Initiative (SNI) - continued
to make significant advances during Fiscal Year 1 997, including receiving increased funding from
the Executive Office of Public Safety. The SNI Advisory Council and Funding Subcommittee
continued to meet regularly throughout the year, focusing on ftindraising strategies since Fiscal
Year 1998 is slated to be the final year of funding from the Executive Office of Public Safety.

The subcontracted programs of the Dorchester Safe Neighborhood Initiative also
continued to make invaluable contributions to the health of the community:

• The Child Witness to Violence Project completed 687 patient visits for counseling
during FY 1997 and carried a caseload of 77 children and 55 families by the end of the fiscal year.
The Project also provided training for more than 20 police officers.

• The Dorchester Center for Adult Education-This Neighborhood Means Business!
graduated more than 30 people from its merchant education program ~ all of whom developed
business plans, relationships with local lending institutions, and mentoring relationships with area
graduate students.

• By the end of the year, Holland Community Center had reported a 70% increase in
attendance. AGO fiinding allows the center to remain open on weekends and provide classes in
the GED, Karate, Arts and Crafts, Aquatics and recreational opportunities for an average of 250
children and 50 adults each weekend.

• The Dorchester Youth Collaborative provided services for approximately 40 young
people per quarter and received national attention for its movie Squeeze which was bought by
Miramax. The film opened in New York, Los Angeles and at the Kendall Square Theater in
Cambridge in June and is the first film to address the subject of post-traumatic stress disorder in
teens who witness violence.

• Tram Tran who serves as the Vietnamese liaison for Boston Police Area C-1 1 provided
daily franslation services for walk-ins at Area C-1 1 and advocated for hundreds of Vietnamese
citizens in the area.

The Office of the Attorney General also joined with the community organization
"Neighbors In Deed" to organize the Dorchester SNI Community Health Fair in December.
Approximately 1 5 different organizations participated in the event, which made available to the
residents a diverse range of health-related information and services ranging from crimes against
the elderly to victim witness advocacy and blood-pressure screening.

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Dorchester SNI Prosecution Statistics

Total Cases Screened - 1699

District Court Cases Prosecuted - 2063

District Court Cases Disposed - 1058

District Court Defendants Sentenced to House of Correction - 78

District Court Juveniles Committed to Department of Youth Services - 10

District Court Defendants Receiving Probation Sentences - 78

Superior Court Cases Disposed - 47

Superior Court Defendants Incarcerated - 33

Grove Hall SNI

The Grove Hall SNI (GHSNI) made significant strides in developing its structure and
enhancing its outreach to the target community in 1997. A funding award from the Executive
Office for Weed and Seed was key to the project's progress as was the provision of a Byrne Grant
to hire a Community-Court Liaison for the GHSNI.

Hired in the fall of 1997, the Community-Court Liaison has been highly active in
neighborhood crime watch and association meetings in order to acquaint the community with the
SNI Community Prosecution component and has also been instrumental in stressing the
importance of community impact statements for effective prosecution efforts.

Developing the GHSNI Community Service Program was one of the GHSNI's major
accomplishments this year. Through this program, Grove Hall offenders who receive community
service as part of their sentence may be assigned to fulfill that obligation in the Grove Hall
community. The GHSNI Community Service Program serves as a vehicle for restorative justice
by requiring the offender to serve the community, and empowers residents and community
organizations to have input in the determination of the community service placements.

In January, a Seed Coordinator was hired and is responsible for the coordination of
intervention, prevention and treatment projects in the GHSNI. The Seed Coordinator has already
made significant progress in expanding outreach efforts into the targeted community.

Mini-grants were awarded to five community-based organizations to provide direct
service focused on the five quality of life issues identified as priorities by residents in the Grove
Hall area: prostitution/johns, violent crime against seniors, violations of restraining
orders/domestic violence, underage drinking, and motor vehicle violations on residential streets.

As the management body of the GHSNI, the Coordinating Council met monthly.
Attendees included key representatives from the principal offices of the Massachusetts Attorney
General, the Suffolk County District Attorney, the Boston Police Department, the Mayor's Office
of the City of Boston and the following community organizafions: Project R.I.G.H.T., Inc., the
Grove Hall Board of Trade, the Garrison Trotter Neighborhood Association and the Neighborhood
Development Corporation of Grove Hall.

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One particular initiative that demonstrates the partnerships of law enforcement and
community, and highlights the nontraditional role prosecutors play in the GHSNI, was the
collaborative efforts concerning a house at 10 Sunderland Road in the Grove Hall area that had
been the site of more than 300 arrests, three search warrants, an unsolved homicide and drug turf
battles between a local gang and the occupants of the house. Members of the Grove Hall SNI
District and Superior Court prosecution teams, in partnership with police and city officials,
diligently worked to expedite the process of shutting down the property. The team met with
community residents and merchants to obtain community impact statements pertaining to the
property, pointing out the negative effects of the building on law-abiding citizens of Grove Hall.
A permanent shutdown of the property appears imminent.

GHSNI Prosecution Statistics

District Court Cases Disposed - 577

District Court Defendants Sentenced to House of Correction - 75

District Court Defendants Receiving Probation Sentences - 225

Superior Court Cases Disposed - 60

Superior Court Defendants Incarcerated - 45

Superior Court Defendants Receiving Probation as Part of Sentence - 12

Brockton SNI

The Brockton SNI (BSNI) was founded on February 1, 1996, by Plymouth County
District Attorney Michael Sullivan, Brockton Police Chief Paul Studenski, Brockton Mayor John
Yunits and Attorney General Scott Harshbarger.

A coordinator for the Brockton SNI was hired this year. The Coordinator is an Office of
the Attorney General employee housed in the Plymouth County District Attorney's Office; the
position is funded in part by a grant from Christy's Convenience Store.

This addition to the Brockton SNI staff has proven invaluable to the project. Of
particular note was the Coordinator's assumption of a leading role in producing a proposal for
significant funding from the Executive Office of Public Safety which was approved late in the
fiscal year and is renewable for four years. This award is a significant testament to the important
work of the Brockton SNI. Funding will allow the project to target juvenile crime prevention and
provide overtime compensation for Plymouth County Massachusetts State Police CPAC Unit
working with the SNI. The BSNI operates a Peer Leadership Program and intends to develop a
Community Awareness Campaign that will create an even stronger presence for the SNI in
Brockton.

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Brockton SNI Prosecution Statistics
October 1, 1996 - June 30, 1997

District Court

Total Cases Screened - 460

Total Cases Prosecuted - 438

Total Cases Disposed - 333

Total Defendants Committed to House of Correction - 98

Total Defendants Receiving Probation - 200

Total Superior Court Indictments - 24

Total Defendants Receiving Fines - 7

Juvenile Court

Total Cases Screened - 163

Total Cases Prosecuted - 1 63

Total Cases Disposed - 1 1 3

Total Superior Court Indictments - 1 (juvenile transfer)

Total Youthful Offender Cases - 1

Total Juveniles Committed to DYS - 7

Total Defendants Receiving Probation - 42

Total Defendants Committed to House of Correction - 9

Superior Court

Total Cases Indicted - 30

Total Cases Disposed - 10

Total Defendants Committed to House of Correction - 4

Total Defendants Committed to State Prison - 6

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Uphams Corner SNI

On January 9, 1997, various community groups from the Uphams Comer area and
representatives from the Boston Police Department, the Office of the Attorney General and the
Suffolk County District Attorney's Office met to kick-off the Uphams Comer SNI, which has
prioritized anti-drug operations. Throughout the year, the prosecutor assigned to Uphams Comer,
met extensively with community groups including the Uphams Comer Dmg Task Force/Main
Street group, to discuss ways the community can participate in the coordinated law enforcement
efforts of the SNI.

The Brockton SNI collaborated with the Uphams Comer Police to implement a $125,000
State Community Policing Grant through which members of the Dmg Control Unit work to stem
dmg frafficking and abuse in the area. In addition, the first phase of a Boston Police operation
entitled Operation SCAT was launched in an effort to address dmg complaints from residents and
community organizations in the Uphams Comer area. The second phase of Operation SCAT
targeted auto theft which had become a significant quality of life problem in the area.

The commimity service program model developed for the Grove Hall SNI will be
replicated in the Uphams Comer SNI, requiring offenders who receive community service
sentences to perform that service in the Uphams Comer area

Uphams Corner SNI Prosecution Statistics
October 1, 1996 - June 30, 1997

Total District Court Cases Prosecuted - 156

Total District Court Cases Disposed - 74

Total Defendants Committed to House of Correction - 13

Total District Court Cases Receiving Probation - 28

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Chelsea SNI

The Chelsea SNI (CSNI) was founded m September of 1995 by Suffolk County District
Attorney Ralph Martin, Chelsea Police Chief Edward Flynn and Attorney General Scott
Harshbarger. Full CSNI operations, including the stamping and targeted prosecution of arrests out
of the CSNI area began on May 13, 1996. In the first year of the Chelsea SNI's operation, it
handled more than 400 cases and enjoyed a conviction rate of 92 percent.

Coordinated law enforcement efforts in Chelsea resulted in an official crime rate drop of
28 percent in 1996, with notable decreases from 1995 in robbery, burglary, auto vehicle thefts and
aggravated assaults. A joint federal and local task force effort in the spring led to the arrests of
three suspects on charges related to an alleged million-dollar counterfeit check operation. An SNI
sweep to stop prostitution in March led to the arrests of 16 Johns in Chelsea's Bellingham Square
neighborhood. In June, Chelsea Police were involved with Boston Police in a major sting
operation through which 60 people were arrested on outstanding warrants when they appeared for
what they believed to be an opportunity for a role as an extra in a farcical movie.

Safe Neighborhood Initiative Staff

Deputy Chief of the Criminal Bureau Susan Spurlock directs the Safe Neighborhood
Initiative. Staff members assigned to the SNI as of the end of FY97 are Assistant Attorneys
General Marcia Jackson, Neil Tassel, Katherine Hatch, Selena Samm, Shelley Richmond, David
Breen, Glenn MacKinlay, Trish Preziosa, and Audrey Huang; SNI Program Coordinator Lara
Ramey; Administrative Assistant Nancy Tavilla; Grove Hall Community-Court Liaison Cara
Henderson; and Brockton SNI Coordinator Christina Dilorio.

VICTIMAVITNESS ASSISTANCE PROGRAM

In January, 1994, Attorney General Scott Harshbarger identified the need for support
services for victims and witnesses throughout his entire office. At that time, he formally
introduced these services in the Criminal Bureau by appointing Kathy Morrissey to the position of
VictimAVitness Advocate. The VictimAVitness Assistance Program of the Attorney General's
Criminal Bureau was developed to meet the following goals: (1) to provide crisis assessment and
intervention to crime victims and witnesses to facilitate their emotional, psychological, physical
and financial recovery from victimization; (2) to reduce the level of secondary victimization
associated with victims' and witnesses' involvement in the criminal justice system and other
systems; and (3) to aid in the prosecution of criminal cases by ensuring that crime victims and
witnesses are provided with the rights and services mandated by the Victim Rights Law
(G.L. c. 258B).

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The Victim/Witness Advocate is responsible for providing victim advocacy and witness
management services on Criminal Bureau cases throughout the Commonwealth. The advocate
also provides ongoing training in the Bureau relating to victim/witness issues and assists the
prosecutors, investigators and state troopers by screening daily duty calls from the public where
specific victim/witness questions have been raised. White collar cases involving elderly victims of
fraud and witnesses with particular needs account for a significant percentage of services rendered.
The advocate also responds at times to cases in our Public Protection Bureau requiring preliminary
injunctions based on issues of gender, race or sexual orientation.

Due to the high volume of cases in FY97, a second Victim/Witness Advocate position
was added to the Criminal Bureau. Cheryl Watson joined the Criminal Bureau in December,
1996. Cheryl served with distinction as a Victim/Witness Advocate in the Essex County District
Attorney's Office and also worked as a Victim Advocate and Outreach Specialist at the
Massachusetts Office for Victim Assistance before joining the Office of the Attorney General.

During FY97, the program continued its momentum to focus on victim/witness needs.
Victim advocacy and witness management services were provided on 50 cases covering nine
counties across the Commonwealth. The nature of victimization stemmed from cases involving:
larceny; assault and battery with a deadly weapon; manslaughter; welfare fraud; bribery;
interference with a witness; deriving support from a minor prostitute; and probation and restitution
violations in white collar cases. In addition to witness management, scheduling and coordination
for complex cases going to trial, the victim/witness advocates also screened 55 additional cases
arising from duty calls and correspondence. The types of complaints or services sought included:
domestic violence; children witnessing violence; mental health issues for elderly victims;
probation and parole issues; witness protection program status; community crisis response; and
crises precipitated by civil lawsuits brought by convicted defendants against former
Commonwealth witnesses.

Training is also part of the victim/witness advocates' responsibility. Toward that end, the
victim/witness advocates conducted brown bag discussion groups with managers from the Public
Protection Bureau, the Business Labor and Protection Bureau and the Family and Community
Crimes Bureau to address the ongoing needs for victim/witness assistance on cases throughout the
office. Cheryl Watson also served as a panelist at a Campus Law Enforcement Police training held
at the College of the Holy Cross in Worcester. Cheryl addressed the dynamics of sexual assauU
and discussed the difficulty vicfims encounter in reporting sexual assaults on a college or
university campus.

Seasoned victim/witness advocates are also expected to provide community crisis
response as necessary. To enhance the skills of the advocates in the Criminal Bureau, they
attended two state-of-the-art community crisis response team frainings in Fiscal Year 1997: (1) the
Department of Mental Health's Disaster Crisis Counseling Training; and (2) the National
Organization for Victim Assistance National Community Crisis Response Team Training Institute.

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FAMILY AND COMMUNITY CRIMES BUREAU

The Family and Community Crimes Bureau develops and coordinates policy, programs,
legislation and training for law enforcement and other professionals and public education on behalf
of the Attorney General in the following major areas: family violence; juvenile justice and youth
violence prevention; and the protection, health and education of children. The Bureau also
continues to focus on the protection of elders, through the work of the Attorney General's Elderly
Protection Project. In addition, claims for compensation filed by victims of violent crime are
reviewed and approved through the Bureau's Victim Compensation and Assistance Division.

FAMILY AND DOMESTIC VIOLENCE

During FY'97, the Bureau continued to ftilfill the Attorney General's commitment to
providing ongoing training on domestic violence for law enforcement officers and others. In
October of 1996, the Bureau planned and presented the Attorney General's Sixth Annual Domestic
Violence Police Training Conference, which provided training on strategies for domestic violence
prevention and intervention to over 320 police officers from communities across the state.
Periodic training updates were provided during the year through the publication of the Domestic
Violence Update sections of the Attorney General's Law Enforcement Newsletter, and relevant
articles in the Bureau's Safe Schools Newsletter. Assistant Attorneys General assigned to the
Bureau made presentations on domestic violence and related issues at a number of area events,
including the Massachusetts Chiefs of Police Firearms Seminar, the Lowell Police Department's
Community Response to Domestic Violence Conference, the Statewide Prosecutors and
Advocates Domestic Violence Conference, the aimual conference of the Massachusetts Law
Enforcement Coordinating Committee, the Association of Family and Conciliation Court's
Northeast Regional Conference on Family Violence, the Massachusetts State Police sponsored
Domestic Violence Training Program for municipal police officers, a conference on domestic
violence at the University of Massachusetts Medical Center, and a joint State Fire
Marshal/ Attorney General training conference for arson investigators. In addition, the Bureau
continued its efforts, in collaboration with the Massachusetts District Attorneys Association and
the district attorneys offices across the Commonwealth, to publish a training manual for
prosecutors on domestic violence and sexual assault. This manual is scheduled for publication and
distribution to prosecutors across the state in the fall of 1997.

Bureau attorneys also continued to represent the Office of the Commissioner of Probation
in pending litigation involving legal challenges to the Statewide Registry of Civil Restraining
Orders. In that capacity, the Bureau successfiilly appealed one of these cases to the state's
Supreme Judicial Court, resulting in a decision which serves to preserve the integrity of the
Registry's record keeping system, and affirms the importance of that system to the protection of
victims of domestic violence.

The Bureau's work in the area of domestic violence continues to recognize the need to
enlist all segments of a cormnimity, in addition to the criminal justice system, to effectively
intervene in and uhimately prevent such violence. As part of that focus, in the spring of 1997, the
Bureau planned and presented, in conjunction with the Massachusetts Women's Bar Association, a
conference on sports and violence against women entitled, "The Rise of the Sports Hero: Tackling

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the Issue of Violence Against Women." This conference brought together educators, student-
athletes, attorneys, coaches and others to address the incidence of acts of violence against women
by male students and athletes on school campuses, and explored possible solutions to this problem,
including the enlisting of athletes and student leaders as positive role models for boys and young
men.

The Bureau also continued to work, in cooperation with area clergy leaders, on
development of an informational manual on family and domestic violence for clergy members ~ in
recognition of the fact that victims often may turn to their clergy for support and assistance.
Publication of this manual is also scheduled for the fall of 1997.

Through the work of Bureau staff in early 1 997, the Attorney General's Office became a
founding member of "Employers Against Domestic Violence," a growing group of Massachusetts
employers who have joined together, under the leadership of the Boston law firm, Mintz, Levin,
Cohen, Ferris, Glovsky and Popeo, to identify and institutionalize ways in which employers can
better protect and respond to the needs of victims of domestic violence.

As a member of the national Advisory Council on Violence Against Women, and
chairman of the Council's Law Enforcement Subcommittee, the Attorney General, with the support
and assistance of Bureau attorneys, participated in the development of "A Community Checklist:
Important Steps to End Violence Against Women." This manual, designed to provide helpful
information to all segments of a community, was jointly sponsored by the U.S. Department of
Justice and U.S. Department of Health and Human Services, and distributed throughout
Massachusetts by the Attorney General's Office in the fall of 1996.

As part of the ongoing effort to raise awareness and promote education on domestic
violence throughout a community and across the state, the Bureau supported and assisted in the
creation of the Massachusetts Silent Witness Exhibit — a traveling memorial to the women who
have died as a result of domestic violence. The exhibit was unveiled in May of 1997, and was the
result of the dedicated efforts of Partnership for Peace and Peace at Home - two Massachusetts
victim advocacy groups — as well as countless volunteers. Information was also provided to
school administrators and educators on teen dating violence and enforcing restraining orders
through publication of articles on these topics in the Bureau's Safe Schools Newsletter.

Providing vital information to domestic violence victims can be significantly hindered in
the face of language and cultural barriers. In order to help remedy this problem, the Bureau
helped produce an informational pamphlet on domestic violence, translated and available in seven
languages, entitled, "Answers to Common Questions." To date, hundreds of copies of the manual
have already been distributed to district attorneys offices, police departments, advocacy centers
and shelters across the state.

Children who live with or otherwise witness domestic violence are significantly impacted
by such experiences, and that impact often has deleterious consequences for a child's future. In
recognition of this fact, and in order to assist communities across the state in responding to this
problem, in FY '97 the Attorney General, through Bureau attorneys, and in conjunction with the

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Child Witness to Violence Project at Boston Medical Center, applied for and was awarded a
significant grant under the federal Violence Against Women Act to develop a statewide Child
Witness to Domestic Violence Program. This program, which will feature regional training
conferences and clinical training seminars, will provide training and assistance to police officers,
prosecutors, teachers, shelter workers, day care providers, guidance counselors, health care
professionals and mental health professionals and a means to implement, in their own community,
a system for identifying and effectively responding to children who are witnessing violence in their
own homes. Bureau staff also testified before the legislature in support of pending legislation to
presumptively preclude child custody awards to parents who commit acts of domestic violence.

Assistant Attorneys General in the Bureau continued to represent the Attorney General
on, and actively participate in the work of the Governor's Commission on Domestic Violence.
Bureau staff were members of several of the Commission's working subcommittees, including the
Uniform Enforcement, Legislative, Community Education, and Immigrant and Refugee
Subcommittees, as well as the Children's Working Group.

CHILDRENA^OUTH

During FY'97, the Bureau completed its series of luncheon discussions on youth violence
prevention, presented in conjunction with the Harvard School of Public Health. These final
sessions focused on such issues as developing early intervention strategies, building a safe school
environment and identifying youths' perspectives. The series culminated in a recommendations
session where recognized experts in the field had an opportunity to identify proposals for
implementing the prevention strategies identified throughout the series. A comprehensive report
on the series, consisting of major recommendations for communities, criminal justice agencies,
schools, state agencies and service providers is scheduled for release in the fall of 1997.

Assistant Attorneys General in the Bureau also re-drafted, filed and testified in support of
new Safe Schools legislation. This legislation is designed to promote a safer school environment
through a number of measures, including the establishment of gun-free zones, facilitating and
promoting increased communication between school administrators and local law enforcement,
increased penalties for assaults on teachers, and the removal of restrictions on the establishment of
student dress codes. The Bureau also continued to publish a semi-annual Safe Schools Newsletter,
providing school administrators with important and timely information on various topics related to
child welfare, violence prevention and school safety. The newsletter is now disseminated to all
elementary, middle and high school principals, school superintendents, and police chiefs across the
Commonwealth.

In order to maintain a focus on the Attorney General's commitment to child protection
and child welfare, the Attorney General Children's Issues Advisory Group was expanded, and
continued to bring together recognized child welfare experts in Massachusetts. The Bureau also
refined the Attorney General's Children's Action Plan ~ identifying past, ongoing and future
initiatives to promote the protection, health, education and welfare of children. In connection with
these efforts. Assistant Attorneys General assigned to the Bureau participated in a Massachusetts
Task Force on Corrmiunity Education, the Boston Bar Association's Task Force on CHINS

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(Children in Need of Services) Reform, the Latino Pediatric Access Project, the Massachusetts
Children's Justice Act Task Force, and the Harvard Law School Adoption Reform Committee.

As part of these efforts, the Attorney General testified before the state legislature in
support of pending Newborn Home Visiting legislation — a bill designed to reduce the incidence of
child abuse and neglect, and promote crime prevention, through regular home visits to children
bom to teenage parents. Bureau staff also testified before the legislature in support of pending
legislation to presumptively preclude child custody awards to parents who commit acts of
domestic violence, and assisted with legislation, now pending before the legislature, for the
creation of child fatality review teams in Massachusetts.

Bureau staff also continue to participate actively with the "Permanency Mediation
Coalition," a group formed by Massachusetts Families for Kids to promote a system for the
expedited permanent placement of foster children.

ELDERS

Protection of our elder citizens remains a high priority for the Office of the Attorney
General, and the office's Elderly Protection Project continues to be an important component of the
Bureau's work. In FY' 97, Project staff continued to focus on police recruit training at academies
across the state - presentations covering a variety of subjects, including the demographics of
aging, effective communication with elders, mandatory reporting and investigation of elder abuse,
neglect and financial exploitation, and mental health issues. The Project also initiated advanced
law enforcement trainings on financial exploitation, outreach and domestic violence involving
elders. In addition, the Project continued its focus on assisting Alzheimer's patients through a
collaborative project with the Alzheimer's Association, the State Police and the Department of
Environmental Management, to develop a statewide protocol to facilitate the search for missing
elders.

The Project repeated its highly successftil Consumer University in F Y'97, providing
training and education to over 300 seniors fi-om the Greater Boston area on consumer rights, scam
and fi-aud avoidance and crime prevention. Project staff also participated in numerous
presentations across the state on fraud prevention, including a program for money managers who
work with elder clients. The Project also participated in the drafting of legislation designed to
protect elders in their homes, both by codifying a prohibition against gaining entry to a home
through fraud or deceit, and through the enhanced regulation of home improvement contractors in
the state.

Project staff also continued to participate in the Bank Reporting Project, a successftil
collaboration between the Attorney General's Office, the Executive Office of Elder Affairs and the
Massachusetts Bankers' Association. Through the project, training of bank management and
security personnel has continued, providing them with an enhanced ability to detect, intervene in
and report elder financial exploitation. A related "train the trainer" program reached personnel
from over 30 banks during FY '97. The success of this project has prompted inquiries from 20
other states interested in replicating this program.

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VICTIMS

The Bureau resumed its efforts during FY'97 to secure the passage of a comprehensive
victim confidentiaUty bill. Working closely with legislative leaders, the Bureau participated in re-
drafting and re-filing such legislation, designed to protect crime victims from the disclosure of
personal and sensitive information.

FY '97 saw the institution of a Sex Offender Registry in Massachusetts, and the Attorney
General's Office, through Assistant Attorneys General in the Bureau, as well as the Government
Bureau, have worked extensively with the Executive Office of Public Safety's Criminal History
Systems Board and the Massachusetts Chiefs of Police Association to provide training to law
enforcement officials on implementation of the Registry. In the fall of 1997, Bureau staff made a
presentation on the Sex Offender Registry at the Attomey General's Statewide Chiefs of Police
Conference, and in January of 1997, made a similar presentation at the Massachusetts District
Attorneys' Association Statewide Prosecutors Conference. A comprehensive summary of the Sex
Offender Registry legislation was also provided by the Bureau in the office's Law Enforcement
Newsletter.

As part of an ongoing effort to provide police with enhanced control over firearm
possession in their jurisdictions, the Bureau re-introduced legislation seeking to limit the duration
of firearms identification cards fi-om an indefinite period to no more than five years.

The Bureau initiated the publication of a newsletter devoted entirely to victims' rights
issues during FY'97. Published for the first time in the spring of 1 997, the newsletter, "Focus on
Crime Victims," was distributed across the state to district attorneys' offices and victim services
agencies. The newsletter met with great response and will become a regular publication of the
Bureau.

The Bureau continued to assist the Attomey General in his capacity as chairman of the
Victim Witness Assistance Board, and in his oversight of the Massachusetts Office for Victim
Assistance (MOV A). Along with MOV A, the Attomey General sponsored the 1997 Victim Rights
Conference in April, where over one thousand victim advocates, police officers, and others
received training on a multitude of subjects affecting victims of crime.

Assistant Attorneys General assigned to the Bureau continued to serve as the Attomey
General's liaison to the Massachusetts Chiefs of Police Association and the Westem Massachusetts
Chiefs of Police Association; and continued to actively participate as a member of the Supreme
Judicial Court's Standing Committee on Substance Abuse.

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VICTIM COMPENSATION AIVD ASSISTANCE

The Victim Compensation and Assistance Division provides financial compensation,
referrals and other assistance to victims of violent crime. Most significantly, it assists qualifying
victims and their families in paying for out-of-pocket medical expenses, lost wages and other
crime-related expenses. Since 1 994, the Division has assumed the legal and administrative
responsibility for receiving, investigating and determining all compensation claims in accordance
wdth the requirements of G. L. c. 258C. Previously, compensation claims were determined through
a litigation-based process in the district courts.

1997 marked the first fiill year of relative stability in the Commonwealth's victim
compensation program since the 1994 reforms went into effect. The conclusion, in the previous
year, of a three year backlog of more than 2,000 court-based claims, enabled the Division to focus
its 1 997 efforts exclusively on streamlining the administrative process and continuing to broaden
the scope of its mission.

1. Claims Activity: Despite a reported decrease in the level of violent crime, the number
of claims filed by victims remained steady. In 1997, the Division received 1,017 claims for victim
compensation. Unlike the previous year, however, the Division increased its decisional activity,
issuing decisions in 1 ,222 claims. This 34% increase enabled the Division to reduce its pending
caseload to 422 claims, a 32% reduction from the previous year's closing caseload of 620 claims.
This achievement continues a dramatic decline in the Division's pending caseload and
demonstrates the Division's continuing success in reducing the waiting time for victims needing
financial relief from their crime-related expenses. After having to wait 2-3 years under the court-
based system, claims processing has been reduced from approximately six months in 1 996 to
approximately four months in 1997. Not surprisingly, this year, 90% of victims surveyed by the
Division report satisfaction or strong satisfaction with the amount of time it takes to decide a claim
for victim compensation.

Analysis of the Division's decisional activity shows remarkable consistency fi-om the
previous year. In 792 of its decisions, (65%), the Division awarded compensation to the claimant.
In 3 1 3 cases (26%), the Division determined that the claimant was statutorily eligible for
compensation but did not, at present, have expenses that can be reimbursed under the statute. The
remaining 1 1 7 claims (9%) were denied because the claimant was not eligible for compensation
under the requirements of G. L. c. 258C. These percentages are virtually unchanged from the
previous year.

Claimants who are found to be statutorily eligible for victim compensation (i.e. all but 9%
of the claimants in 1997) are entitled to reopen their claims if they incur future crime-related
expenses. This occurs most often when victims have ongoing rehabilitation or counseling needs.
In 1997, the Division issued 203 supplemental awards in response to such requests.

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Under G.L. c. 258C, claimants are entitled to seek internal administrative review of the
Division's decisions. In 1997, claimants requested administrative reconsideration of 74 (6%) of the
Division's decisions. In 24 cases (33%), the Program Director modified or reversed the

original decision. The remaining 50 decisions (67%) were affirmed on reconsideration. Again,
these percentages are virtually identical to the previous year.

Claimants are entitled, in addition, to seek judicial review of the Division's decisions. In
1997, seven claimants filed petitions for judicial review. Four of these petitions were either
withdrawn by the claimant or dismissed by the court. The other three petitions remain pending.

Analysis of claims resulting in payment also shows virtually no change firom the previous
year. Crime-type data shows that in 1997, 53 % of all victims receiving compensation were
victims of assault. Homicide claims represented 25% of awards, followed by child sexual assault,
(9%), domestic violence (5%), adult sexual assault (5 %) and DWI/DUI (1%). The remaining 2%
of claims were classified as "other".

The analysis of victim age data shows that 17% of all awards involved victims under the
age of 17. Victims between the ages of 18 and 65 represented 80% of all awards, while victims
over the age of 65 represented 3% of awards. 90% of all compensation awards were made to
Massachusetts state residents. The remaining 10% of awards involved nonresidents who were
victimized in the Commonwealth.

2. Expenditures: In 1997, the Commonwealth paid $3,730,331 in compensation to
crime victims. This represents a 12% reduction fi-om 1996 expenditures and the first time in four
years that expenditures have not significantly increased, requiring supplemental fimding to meet
year-end obligations. The explanation is clear: by finally concluding the backlog of court-based
cases, pressure on the victim compensation ftmd was finally alleviated, restoring the program to
relative financial stability.

Notwithstanding this fact, the Division stepped up its efforts to maximize the benefit of
vicfim compensaUon fiinding. It conUnued to carefully screen all claims for potential
reimbursement through hospital-based "fi-ee care", public insurance programs and other sources.
When these options appeared viable, the Division assisted victims in learning about, and applying
for, alternative sources of reimbursement. When alternatives were not available, the Division
actively negotiated with medical and other providers to accept reduced payment on victims'
outstanding bills. The Division's strong focus on financial advocacy ensured both the prudent
expenditure of victim compensation funding, and that victims can continue to reopen their claims
without exhausting the statutory limit of $25,000 per claim. In one case, for example, a crime
victim with lost wages and over $40,000 in current uninsured medical bills requested assistance
from the Division. The Division negotiated with his medical providers to accept approximately
$7,000 in full payment on the outstanding bills. By so doing, the Division was able to fully
reimburse the victim's lost wages, and will be able to pay for the future purchase and fitting of a
prosthesis and rehabilitation therapy without exhausting the statutory limit.

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Through these cost-containment efforts, the Division achieved $1,014,929 in savings on
outstanding bills without placing any additional financial burden on crime victims. This represents
27% of the Division's overall expenditures and constitutes a 61% increase in savings from the
previous year. Based on the average award of $3,776, these savings enabled the Division to award
compensation to an additional 268 crime victims. As importantly, it will enable certain victims to
continue to reopen their claims for future expenses.

Analysis of the Division's payment data shows that while the Division is statutorily
authorized to award up to $25,000 per claim, only 16 administrative claims resulted in the
maximum award. The average award in 1997 was $3,776, up from $3,062 in the previous year.
The largest category of payment (40%) was for economic support in the form of lost wages and
loss of financial support to the dependents of homicide victims. Medical and dental expenses
represented 28% of all expenses, while funeral and burial expenses represented 25% of expenses.
These were followed by mental health counseling expenses (7%) and "other expenses"
(homemaker expenses and attorneys fees), representing less than 1% of expenses. Again, these
percentages are virtually identical to the previous year.

Application Procedure: In an effort to further simplify the application process for crime
victims, the Division issued a new application form which combines an informational brochure
and application in one document, and reduces the application from six to two pages. Individuals
wishing to apply now need only complete the simple tear-off application and return it to the
Division for verification. As one applicant informed the Division, "This is probably the easiest
and most straightforward government form I've ever seen."

Outreach and Training: The Division continued its efforts to ensure broad public
information about victim compensation. The new application/brochure was widely distributed to
criminal justice agencies throughout the Commonwealth. In an effort to increase referrals from
police departments, the Division published "Victim Compensation: A Guide for Law
Enforcement" in the Winter, 1997 Law Enforcement Newsletter. Copies of this article were sent
with applications and other materials to all state, local and campus police departments.
Applications were also sent to domestic violence programs, rape crisis centers and other
community-based programs. Division staff provided in-house training to district attorneys offices,
police departments, the Coalition of Battered Women Service Groups, the Massachusetts Coalition
Against Sexual Assault, and community-based victim service programs supported by the federal
Victims of Crime Act. Finally, in an effort to increase the number of dentists willing to assist
crime victims under the reimbursement policies of the program, the Division met with dental
professionals and published "Victim Compensation: Helping Crime Victims Get The Dental
Services They Need" in the newsletter of the Massachusetts Dental Society.

Outreach efforts were further enhanced by public service programs. Continental
Cablevision and the Attorney General's Office produced a 30-minute program about victim
compensation which included several interviews with victims assisted by the Division. This
program was aired throughout the state, and, in addition, was distributed to agencies and programs
as a training tool. The Division also distributed a 30-second public service announcement entitled
"Victim Compensation: Picking up the Pieces" to television stations across the state.

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Program Evaluation: Having achieved stability in the day-to-day operations of the
program, the Division undertook to evaluate its services and procedures for purposes of future
policy development. It surveyed all prosecutor-based victim/witness programs about their
experiences with victim compensation and their suggestions for improvement. In response, the
Division streamlined procedures for obtaining police reports and established mechanisms for
ensuring that referring advocates receive copies of the Division's decisions, thereby facilitating
direct and regular feedback between programs.

Begiiming in May, 1997, the Division also began soliciting feedback from victims and
families who apply to the program. It included surveys with all decision letters, including both
awards and denials. The 1 3% of applicants who returned the questiormaire provided
overwhelmingly positive responses to questions about the ease of the application and verification
process, treatment by Division staff, satisfaction with the time taken to reach decisions, and the
substance of the Division's decisions. Many victims also included written comments. The
following examples are typical:

I do appreciate this award . . . not only is it an enormous relief
financially but also mentally. I think that somehow your recognition
gives this whole chapter of my life some kind of validity which it
needed. I thank you and your staff for your courteous, understanding
and sensitive handling of my claim...

... it has helped to know there actually exists a program and
individuals to assist the victim, especially . . . having been in court and
listening to a long list of criminals' rights and nothing in regards to
victims' rights.

I must state that despite all the bureaucracy of the world today, this
division of the Attorney General's Office has maintained compassion
and efficiency with the public.

The only area in which victims reported the need for greater assistance was with regard to
referrals to other programs. This result corresponded with the Division's own observation that,
despite the availability of many excellent commimity -based crisis and counseling programs and
services, many victims do not access these services. In response, the Division stepped up its
efforts to ensure that all victims are made aware of the availability of counseling and support
services, and that they receive referrals to appropriate community-based programs. The Division
developed comprehensive lists of community-based programs for homicide survivors, domestic
violence victims, sexual assault victims, child abuse victims, and children who witness violence.
Applicants are now routinely provided with copies of these lists and informed about the
availability of victim compensation to assist with crime-related counseling expenses.

Legislative Activity: In addition to evaluating its administrative procedures, the Division
undertook to evaluate whether the substantive provisions of G. L. c. 258C are meeting the most
pressing financial needs of crime victims. To do so, the Division met with focus groups of

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homicide survivors, sexual assault victims, and advocates for battered women. It also consulted
with District Attorney VictimAVitness program directors, victim service providers and others.
Finally, it surveyed victim compensation programs throughout the country to learn about benefits
and services available elsewhere. Following this process, the Division developed a proposal to
expand certain key benefits currently available under G. L. c. 258C. The proposal is embodied in
S. 849, "An Act To Further Amend the Victim Compensation Law." This bill, filed by Senator
William Keating and Representative Sal DiMasi, would permit the program in eligible cases to pay
for:

• mental health counseling expenses for non-
offending family members of sexual assault victims;

• the cost of cleaning the crime scene, if the crime occurred in the
victim's home or car;

• the cost of replacing the victim's clothing, bedding
or other personal items held by law enforcement
officials for evidentiary purposes;

• the cost of replacing the victim's locks, if the crime
occurred in the victim's home;

• moving expenses to protect a victim from
continuing harm by the offender; and

• ancillary expenses related to the death of a victim
including travel expenses to identify the body or to
attend the funeral, or lost wages to attend the trial.

In addition, the Division sought to expand coverage under G.L. c. 258C to include acts
of terrorism committed outside the United States against residents of the Commonwealth. This
expansion was prompted by P.L.I 04- 132, the Antiterrorism and Effective Death Penalty Act of
1996, which required states to include such coverage as a condition of future federal Victims of
Crime Act fiinding. The amendment was enacted as an outside section to the 1 998 state budget act.

Publications: Finally, this year the Division began publishing a statewide newsletter
designed to highlight important legal developments, outstanding practices and developing trends in
the field of victim rights and victim services. The first edition of "Focus on Crime Victims" was
published in April, 1997. It included feature articles about retaliatory "SLAPP" suits against crime
victims, and about the discovery of confidential counseling records. A special focus section
addressed the victim's right to confer with the prosecutor, a right established by G.L. c. 258B, the
Victims Rights Law. Other articles addressed topics ranging from victim compensation to tips for
interacting with elder victims of crime. The newsletter was widely distributed to judges,
prosecutors, police departments, victim/witness advocates and other criminal justice personnel,
legislators and victim service programs. Recipients responding to a follow-up survey uniformly

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stated their view that "Focus on Crime Victims" plays an important and useful role in
disseminating information, ideas and initiatives that will enhance the rights and services afforded
to crime victims throughout the state. For this reason, the Division expects to continue to publish
this newsletter twice a year.

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PUBLIC PROTECTION BUREAU

The Public Protection Bureau is comprised of five divisions: Consumer Protection and
Antitrust Division, Regulated Industries Division, Civil Rights and Civil Liberties Division, Public
Charities Division and Civil Investigation Division. The Bureau also has an office of the Chief
Prosecutor, which brings criminal actions in appropriate cases.

The Bureau also includes the Consumer Complaint and Information Section and oversees
the Local Consumer Aid Fund, which provides grants to local community groups to mediate and
resolve consumer complaints at the local level.

The various divisions in the Public Protection Bureau bring affirmative litigation and
criminal prosecutions on behalf of the Commonwealth and its citizens in the areas listed above.
The divisions also conduct investigations and publish and issue reports in areas of interest arising
out of their activities.

The Bureau also has an office of the Legislative Liaison, who coordinates testimony for
hearings before the Legislature on issues of concern to the Bureau. This past year, the Bureau
testified on a variety of legislative items, including: (1) medical records confidentiality; (2) access
for individuals with disabilities; (3) criminal background checks for nursing facility employees; (4)
public disclosure of for-profit conversions; (5) health warnings on the advertising of alcoholic
beverages; (6) health insurance benefits for domestic partners of public sector employees; (7)
clarifying the laws on the solicitation of charitable donations; (8) electronic shelf pricing; (9)
extended warranties; (10) community reinvestment by insurance companies; (11) health club
industry practices; and (12) telemarketing fi^aud. The Legislative Liaison continues to monitor
legislation that impacts the work of Bureau.

Bureau personnel also coordinate and staff the Attorney General's Student Conflict
Resolution Experts (SCORE) Program, a nationally-recognized peer mediation program created to
reduce violence in schools and foster safer learning environments for students. The SCORE
program provides grants for the development of school mediation programs using trained student
mediators to resolve violent and potentially violent conflicts among their peers. The SCORE
program forges partnerships between educators and mediators to establish quality student-centered
mediation programs in the Conmionwealth's schools to prevent disputes from escalating into
violence.

In the past year, the Attorney General charged the Public Protection Bureau with
coordinating efforts and taking the lead in two priority areas - elder issues and health care.
Responding to that charge, the Bureau developed initiatives and legislation in those areas,
including plaiming and participating in panel discussions at the National Association of Attorneys
General Presidential Summit on Elder Issues, which was held in Boston in May, 1997. The
Bureau published What You Can Do to End Violence, Abuse and Fraud Against Elders — A
Community Checklist and distributed the guide to attendees of the Elder Summit. The checklist
idenfifies actions that can be taken by the law enforcement community, legal and financial
advisors, health care professionals, the religious community and educational institutions to reduce

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elder abuse and fraud. In addition, the Bureau also published Choosing the Best Long-Term Care
Option in collaboration with the Massachusetts Extended Care Federation. The Bureau will
continue to forge inroads in these areas in the coming year.

Following the publication of Home Health Aides in Massachusetts: A Report and
Recommendations, the Bureau formed the Attorney General's Home Care and Home Health Care
Task Force to work on ways in which the laws, regulations and business practices of the home
care and home health care industries in Massachusetts can be standardized to ensure the delivery
of quality, reliable care to home health and home care patients. This working group is comprised
of representatives of consumer advocacy groups, the home care and home health care industries,
government agencies and parents with disabled children and others who require home health and
home care services. As a result of the task force's work, the Attorney General will be filing a
comprehensive legislative package to (1) amend the Criminal Offender Record Information
(CORI) statute for home health care and home care employees and volimteers; (2) provide home
health care and home care employers with immunity for sharing information regarding former
employees; (3) establish a registry of home health workers; and (4) establish procedures for
reporting and investigating allegations of abuse, neglect, mistreatment and misappropriation of
home care consumers' property. In addition, the Attorney General will file a bill that would
require home health care agencies to be licensed.

The Bureau also published a report entitled Guardianship in Massachusetts: Where We
Are and Where We Should Be Headed and participated as a member of the Massachusetts
Guardianship Task Force and the Committee on Guardianship Reform. As a Massachusetts
Guardianship Task Force member, the Bureau testified before the Legislature in support of
legislation to establish a public guardianship commission and reform the guardianship statues.
The Committee on Guardianship Reform, which includes the Attorney General, probate judges,
elder and disabled persons advocates and private bar attorneys, is working on revismg Article 5 of
the Uniform Probate Code to update the state guardianship laws.

The Steering Committee of the Inter- Agency Task Force on Long Term Care Financing
also includes various Bureau Assistant Attorneys General. The purpose of this task force is to
study and develop alternative private financing methods for nursing home and other long-term care
with a goal of providing financial security to elders and easing the burden on Medicaid. The task
force is an outgrowth of an interagency workgroup on long-term care financing that met for over a
year and produced A Preliminary Report: Alternatives for Improving Private Financing of Long-
Term Care in Massachusetts. This bi-partisan task force is headed by the Acting Governor and the
Attorney General and includes representatives from the Division of Medical Assistance, Division
of Insurance, Executive Office of Elder Affairs, the insurance industry, health care and long term
care providers, and consumer and legal advocates.

This past year the Public Protection Bureau also established a state-wide toll-free hotline,
(1-888-AG-ELDER) for senior citizens and their families seeking information on a wide range of
elder issues. The elder helpline, which is staffed by a hotline coordinator and senior volunteers, is
available to callers on weekdays during business hours and serves as a comprehensive resource for
information and referral on concerns including health insurance, home health care, long-term care

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and insurance, Medicaid and Medicare coverage, disability rights, age discrimination, credit,
telemarketing fraud and other consumer protection issues.

Some of the Bureau's other accomplishments in the health care area include publishing
The Attorney General 's Report on Managed Care in Massachusetts. The report made
recommendations for a comprehensive regulatory structiire for managed care and was the product
of a year-long study of the effects of managed care on the health care services provided to
Massachusetts consumers. The Bureau is also actively pursuing criminal and civil cases involving
health care fraud against both consumers and insurance companies.

The Bureau continues to be actively involved with consumer issues and this year repeated
the Attorney General's successful Consumer University program, an interactive series of consumer
seminars for Massachusetts elders. The Bureau also participated with the American Association of
Retired Persons (AARP) in various initiatives, including a conference on telemarketing fraud. The
Bureau also participated with AARP on the Senior Health Care Coalition, a consortium of
consumer groups that worked with the Division of Medical Assistance on drafting and revising the
Division's Senior Care Organization (SCO) proposal for dually eligible senior citizens.

The Public Protection Bureau also has a liaison to the lesbian and gay community who
serves as a point of intake and outreach on lesbian and gay issues. The liaison convenes quarterly
meetings with an advisory group of lesbian and gay law enforcement advocates to discuss issues
and concerns of mutual interest. The Attorney General's gay liaison also coordinates testimony for
legislative hearings on gay issues and serves as a member of Attorney General Harshbarger's
Workforce Diversity Committee, which was created to promote dialogue and identify strategies for
addressing diversity issues.

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CIVIL RIGHTS AND CIVIL LIBERTIES DIVISION
MASSACHUSETTS CIVIL RIGHTS ACT CASES

The Division continues to enforce aggressively the Massachusetts Civil Rights Act
(MCRA). The MCRA authorizes the Attorney General to seek injunctive relief when the exercise
of a person's civil rights is interfered with by threats, intimidation, or coercion based on that
individual's race, color, national origin, ethnic background, gender, sexual orientation, disability,
age, or religious affiliation.

In fiscal year 1997, the Division's mission to deter and counteract such hate crimes
resulted in the issuance of two preliminary injunctions by the Superior Court against two
defendants, where it was alleged that the defendants had interfered with the rights of
Massachusetts residents on the basis of their gender and sexual orientation. Five final judgments
by consent were also entered by the Superior Court against nine defendants who had interfered
with the rights of Massachusetts residents on the basis of race, sexual orientation, gender or
national origin. In total, more than seventeen in-depth civil rights investigations of possible
MCRA violations were conducted by the Division.

Following the Division's first landmark MCRA case involving civil rights violations on
the basis of gender in 1994, the Division continued its campaign against gender-biased violence by
obtaining a final judgment by consent against one defendant with an alleged history of hate-
motivated violence and abuse against three women. The defendant allegedly repeatedly physically
and sexually abused two of the victims, who were 14 and 15 years old when they began dating the
defendant, and taunted them with vulgar and demeaning obscenities. The defendant also allegedly
threatened, intimidated and attempted to coerce another woman during the four months he lived in
her house when he was homeless.

Another striking example of the Division's strong response to violations of the MCRA
occurred when it obtained a preliminary injunction and later a ten year final injunction against a
Chelsea man for his alleged assault of a male whom he thought to be a homosexual. The victim
and an acquaintance left a bar located in downtown Boston and entered the victim's car. A pink
triangle, a symbol of the gay community, appeared on the rear bumper of the victim's car. The
defendant and another suspect allegedly approached the car from the rear, yelling anti-gay slurs
and threats. When the victim got out of his car, the defendant allegedly punched him in the face.
When the defendant was subsequently arrested, he declared, "I'm the first of a force of many".

HOUSING DISCRIMINATION

The Division consistently continues to enforce effectively the state's fair housing laws
which prohibit discrimination on the basis of race, color, national origin, religion, sex, sexual
orientation, familial status, marital status, source of income (receipt of housing subsidy), age or
disability.

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In fiscal year 1997, the Division fought discrimination in housing by filing seven new
actions in the Superior Court. These cases involved allegations of discrimination based on race,
familial status, source of income and disability. Four pending cases were also favorably resolved
through court approved consent agreements during this period. Settlements included broad
injunctive and affirmative relief provisions, as well as substantial compensatory damages to the
complainants. Collectively, over $60,000 in monetary damages were provided to the
complainants. Through these and other cases the Division has filed, the Attorney General hopes to
modify realtor practices, to educate tenants about the right to fair treatment in the housing market
and to increase the availability of safe, affordable housing for families with young children.

Members of the Division actively participated in the United States Department of
Housing and Urban Development (HUD) New England Regional Fair Housing Conference in
August 1 996, attended by staff from numerous anti-discrimination enforcement agencies, as well
as housing discrimination attorneys and policy makers. Members of the Division facilitated round
table discussions among the attorneys and made presentations on the use of creative affirmative
remedies, discrimination against people with disabilities, and fair housing enforcement and
coordination.

EMPLOYMENT DISCRIMINATION

In fiscal year 1996, the Division established an Employment Discrimination Project to
focus on systemic employment discrimination practices. The Project investigates allegations of
discrimination or harassment (race, sex, ethnicity, national origin, age, sexual orientation) in order
to determine whether a particular employer or industry is engaged in a pattern and practice of
discrimination, affecting substantial numbers of Massachusetts employees.

In fiscal year 1997, the Project demonstrated the impact it can have on employment
practices in the Commonwealth by entering into a historic, court enforceable agreement with the
Massachusetts Bay Transportation Authority (MBTA) and 26 of its 27 labor unions. The
landmark agreement ends years of alleged violations of state and federal fair employment laws at
the MBTA and protects T workers from future discrimination, harassment and retaliatory conduct.
The Division engaged in negotiations with the MBTA after an extensive sixteen-month
investigation of allegations of systemic violations of federal and state anti-discrimination laws
based on race, color, national origin, ancestry and gender dating back to the mid-1980's. The
Division also investigated allegations of retaliation against employees who filed complaints or
who served as witnesses to violations of anti-discrimination laws.

Under the agreement, MBTA management will act to eliminate and prevent harassment,
discrimination and retaliation based not only on the race, color, national origin, ancestry and sex of
it's employees, but also on the sexual orientation, religion, age and disability of workers. To
guarantee lawful future conduct, the agreement requires the T to implement major changes to it's
complaint investigation practices, disciplinary procedures, supervisory systems, monitoring of
employment practices, and employee training. In order to ensure that changes are implemented,
the MBTA is required to submit regular reports to the Division detailing the steps it has taken to
meet the specific goals and provisions of the agreement. Monthly status reports are required in the

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first year of the agreement, quarterly in the second year and every six months in the third year.
The T's obligations under the agreement will remain in force for three years but can be extended
for an additional two years if the Division determines that the MBTA is in noncompliance with
any provision. These obligations can be extended again if material noncompliance with the
agreement continues. Some of the key provisions of the agreement include:

1) Equal Employment Opportunities: The T will post all permanent job vacancies below
the level of executive management personnel. Postings v^ll include a job description and job
experience requirements. Minorities, women employees and members of other protected groups
will be provided a fair opportunity to apply and be considered for promotional and transfer
positions.

2) Complaint Investigation Procedures: Current practices will be changed to ensure
prompt, thorough and fair procedures for investigating complaints of discrimination, harassment
and retaliation.

3) Corrective Action and Discipline: The T will take appropriate corrective action in a
timely manner that is reasonably calculated to stop illegal employee conduct and to deter potential
violators. Supervisors or employees engaged in harassment, retaliation or other serious forms of
discrimination are subject to discharge for the first offense.

4) Supervisory Responsibility: Each supervisor will be accountable for recognizing and
immediately reporting harassment, discrimination and retaliation, as well as participating in
investigations. Supervisors will be subject to serious discipline, up to and including discharge, if
they observe or are informed about racial, religious, national origin, sexually charged or hostile
graffiti in T facilities, but fail to immediately notify the MBTA Police and Office of Diversity.

5) Compliance Monitoring: The T will establish a central, computerized system to
identify patterns of violations of anti-discrimination laws by particular employees or supervisors,
and to identify locations where such conduct may be occurring. The system also will be used to
ensure equal treatment of all workers in promotion, assignment and disciplinary decisions.

Since the signing of the agreement, the Division has received four reports from the
MBTA detailing it's implementation of the agreement. The MBTA has altered many of its
investigatory practices to ensure the protection of workers from discrimination and harassment.
The Division trained the 157 senior managers of the MBTA on their responsibilities under the
Agreement and federal and state anti-discrimination law. The Division continues to field
complaints from T employees during the post-agreement period.

In another effort that serves as a national model for future state and federal joint
enforcement of civil rights cases, the Division filed a complaint in June 1997 in federal court,
along with the Equal Employment Opportimity Commission (EEOC), alleging that Bull HN, a
major information services company, violated the Older Workers Benefit Protection Act
(OWBPA) - a federal statute that establishes certain criteria an employer must satisfy before
obtaining a waiver of an age discrimination claim. This effort was the first ever in the United
States between the EEOC and a state attorney general for enforcement of a federal statute. The
Division had previously filed a complaint in the MCAD alleging systemic age discrimination
against Bull HN with regard to it's ongoing layoffs of employees. A complaint was also filed in
the EEOC against Bull HN alleging violaUons of OWBPA . The EEOC found probable cause to

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believe that Bull HN violated OWBPA and the MCAD subsequently found probable cause to
believe that Bull HN was violating the state anti-discrimination law. The Civil Rights Division
and the EEOC then filed the joint complaint against Bull HN in federal court. Specifically, Bull
HN is alleged to have violated OWBPA in five ways: by chilling the protected right of former
employees to file age discrimination charges; by failing to provide employees selected for layoff
with legally required information needed to evaluate the waiver request; by refusing to provide 45
days to decide whether to sign the waiver; by failing to provide additional severance for signing
the waiver; and by retaliating against former employees who filed age discrimination claims by
demanding return of the severance payments.

The Project also successfully defended the Massachusetts Department of Personnel
Administration, the City of Boston and the Boston Police Department in a legal challenge by the
Boston Police Superior Officers Federation and others to the use of affirmative action in
appointments for lieutenants by the Boston Police Department. On June 13, 1997, the United
States District Court upheld the affirmative action promotional policies of the department, by
finding them to be narrowly-tailored and serving a compelling state interest. The court denied
summary judgment to the Union, granted it to the defendants and ordered judgment to enter
dismissing the action.

The Employment Discrimination Project also files amicus briefs or intervenes in pending
cases in state and federal courts when a legal question is raised which presents an issue of public
importance. The Project filed an amicus brief in the Supreme Judicial Court in the important
precent-setting case titled Melnychenko v. 84 Lumber Company. In this case, three male
employees of 84 Lumber Company were found by the Superior Court to have been relentlessly
sexually harassed by their male supervisor and another male co-employee. The Attorney General
took the position that under state law, same gender, hostile work environment under the equal
protection clause of the U.S. Constitution sexual harassment claims are cognizable if a plaintiff
demonstrates that offensive sexual conduct interfered with work performance regardless of the
sexual orientation of the harasser. The Supreme Judicial Court agreed with the Attorney General's
position and adopted the arguments set forth in the brief This resulted in recognition for the first
time that Massachusetts employees are protected from same gender hostile work environment
sexual harassment under the Massachusetts anti-discrimination statute and makes it clear to
attorneys that inquiry into the sexual orientation of sexual harassment victims is unnecessary in
pursuing such a claim.

In November 1996, at an annual conference sponsored by the Attorney General, the
Massachusetts Municipal Association, and the City Solicitors and Town Counsel Association, the
Division Chief and the Directors of the Employment Discrimination and the Disability Rights
Projects of the Division detailed specific steps municipalities need to take to protect workers fi^om
discrimination and harassment as well as to decrease the risk of financial liability to their
communities.

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RELIGIOUS FREEDOM

The Division joined two other state attorneys general (MD, NY) in fihng an amicus brief
in the United States Supreme Court in support of the constitutionality of the federal Religious
Freedom Restoration Act (RFRA) in the case of City of Boeme v. Flores. The federal statute,
signed into law in 1993, requires government to show a compelling interest to interfere with
religious practice. In the City of Boeme case, St. Peter Church in Boeme, Texas sued the city
under RFRA after the city denied the church's request to expand its building. The city claimed
RFRA was unconstitutional and it was not bound by the Act. In June 1 997, the Supreme Court
issued its opinion, striking down RFRA, holding that the federal statute which provides important
religious protections was beyond the authority of Congress to enact.

POLICE-RELATED MATTERS

In a cooperative effort to promote civil rights, assist the police, and provide departments
with technical assistance, the Division continues to provide an extensive amount of civil rights
training to police departments covering issues of civil liability, sexual harassment, racial and
cultural awareness and hate crimes. The Division has sponsored many training sessions for police
officers and police supervisors in cities and towns throughout Massachusetts, including, Brookline,
sergeants from numerous Cape Cod police departments, police cadets attending regional police
academies in Boston, Canton, and Salem, as well as Boston School Department Police Officers.
The Division met with New Bedford City Council and community leaders to develop an effective
civil rights training program for the New Bedford Police Department. The Attorney General's
Civil Rights Division along with the Boston Police Department and Northeastem University's
Center for Criminal Justice Policy Research organized, sponsored and held a three-day statewide
civil rights and hate crimes training for law enforcement and criminal justice professionals
responsible for hate crime response and investigations. In October 1996, police officers from
many police departments throughout the Commonwealth attended and participated. The Division
also made a presentation at the Attomey General's Campus Police Training on hate crimes and
sexual harassment at Holy Cross College in Febmary 1997.

The Division continues to be consulted by departments to assist them in their intemal
civil rights investigations as well as to investigate allegations of police misconduct itself It has
worked with departments to take remedial steps when credible evidence is found to substantiate
the complaints.

PUBLIC ACCOMMODATIONS

In November 1996, the Division filed a Superior Court action against the Haverill
Country Club alleging that the club disparately treats it's female members by charging them higher
fees and failing to make full golf membership and its accompanying privileges equally accessible
to women. The lawsuit seeks civil penalties and would prohibit Haverhill from gender-based
discriminatory membership practices.

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CIVIL RIGHTS IN THE SCHOOLS

The Division has been active in education and outreach efforts on civil rights issues
within the state's school systems. Its goal is to assist in educating administrators, teachers,
students and staff about their rights and responsibilities as it relates to hate crimes, discrimination
and sexual, racial, national origin and religious harassment in the schools. In January 1997, the
Division made a presentation to school officials and police from Middlesex County sponsored by
the Middlesex County District Attorney's Office. The presentation focused on how schools can
establish systems to identify and address effectively bias crimes and civil rights in the schools.
The Division Chief was a presenter at a New England regional conference held in February 1997
in Burlington, Massachusetts on hate crimes prevention and enforcement for law enforcement,
school personnel and community advocates. The workshop discussion was titled "Hate Crime
Prevention - School Climate, Policies and Protocol." The Division also made presentations at a
conference sponsored by the Essex County District Attorney's Office in March 1997 titled,
"Partnership for Violence Prevention", which focused on school safety and civil rights. The
Division also spoke to three fifth grade classes at the Avery School in Dedham about civil rights
and sexual harassment. The Division is also involved in the Attorney General's Office internal
"Children's Issues Working Group," which focuses on children's issues in the schools.

In other initiatives related to civil rights in the schools, the Division Chief provided a
presentation at a national training conference sponsored by the U.S. Department of Education held
in January 1997 in Washington, D.C. The Division Chief provided bias crime and sexual
harassment training to Bias Crime and Gender Equity Grantees of the U.S. Department of
Education from throughout the coimtry, including a Massachusetts' grantee. The Chief made a
presentation at another national conference for Safe and Drug Free Schools sponsored by the U.S.
Department of Education in June 1997 titled, "Promising Practices in the Area of Bias Crime
Prevention" in Virginia. The presentation focused on developing law enforcement-school
partnerships in order to identify, address and respond to hate crimes and harassment in schools.

CIVIL RIGHTS LEGISLATION

With strong leadership from the Attorney General and his Civil Rights Division, the
legislature passed an amendment to the state criminal civil rights statute, G.L. c. 265 section 39,
which extends the protection of this statute to persons who are victimized by a crime because of
their sexual orientation or disability. The amendment also permits a felony prosecution for
criminal acts where serious bodily injury results, where previously such violations under the
statute were misdemeanors. The bill also provides financial restitution directly to victims. The
Division also drafted a letter to the Judiciary Committee leadership in support of an amendment to
the same statute in order to make crimes based on gender bias a hate crime.

The Division drafted an amendment to the state anti-discrimination law in response to the
Supreme Judicial Court's decision declaring unconstitutional the section of the state anti-
discrimination law which protects employees' rights to practice religion, subject to reasonable
accommodation by an employer.

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In letters to the state legislature, the Attorney General advocated for the passage of
legislation supporting domestic partnership benefits and the repeal of archaic sex laws, which are
both pending in the Legislature.

HATE CRIMES TASK FORCE

The Chief of the Division continues to chair and Division staff continue to actively
participate in the Attorney General's Interagency Law Enforcement Hate Crimes Task Force. The
Task Force consists of federal, state and local prosecutors and law enforcement officials. Its focus
is to coordinate efforts to investigate and prosecute hate crimes in the Commonwealth. It also
organizes and sponsors presentations on an ongoing basis to develop increased expertise and
cooperation among law enforcement. In March of 1997, the New England Office of the Anti-
Defamation League and the Boston Office of the FBI made presentations to the Task Force.

RACE AND ETHNIC BIAS IN THE COURTS

As a result of the findings in the report of the Supreme Judicial Court Commission on
Race and Ethnic Bias in the Courts issued in September 1 994, the Division has taken a leadership
role in an office- wide Task Force. The Division Chief chairs the Attorney General's Task Force
on Race and Ethnic Bias in the Courts and Division staff serve as active members. The Task
Force consists of subcommittees on Cultural and Linguistic Barriers to the Justice System,
Education and Training, Sentencing, and Jury and Jury Pools.

In an effort to address cultural and linguistic barriers in the courts, the Task Force
published and distributed a booklet to assist victims of domestic violence to understand their rights
and provide them with helpful resources and contacts. The booklet is available in eight languages.
The Division Chief also helped to develop and served as a co-trainer of Superior Court Judges and
on another occasion, judges from various departments in the Judiciary, on cultural and linguistic
barriers to equal justice in the judicial system. The Division Chief was the co-author of a law
review article titled, "The Role of Counsel and the Courts in Addressing Foreign Language and
Cultural Barriers at Different Stages of a Criminal Proceeding," which was published by the
Western New England Law Review in June 1997. The article extensively reviews the state of
criminal law at all stages of criminal proceedings as it relates to language and cultural issues.

The Division played a major role in organizing the Attorney General's Race Forum titled,
"Race on Trial-The LA Cases," which was comprised of a panel of prosecutors, defense counsel
and other legal professionals to address the impact of race on the justice system. The forum
discussion was facilitated by the Attorney General. In July of 1996, the Education and Training
Subcommittee presented an innovative program to address the issues of diversity in the workplace.

MORTGAGE LENDING DISCRIMINATION

In August of 1996, the Division Chief published a chapter titled "A Practical Model for
Investigating Mortgage Lending Discrimination by Financial Institutions," in a 716-page book
titled Mortgage Lending. Racial Discrimination and Federal Policy by the Urban Institute Press.

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NATIONAL CIVIL RIGHTS INITIATIVES

As Chair of the National Association of Attorneys General (NAAG) National Adarand
Working Group, the Division Chief was one of the leading organizers for and participated in
roundtable discussions with forty leading litigators, policy makers, researchers and economists to
assist states, municipalities and the federal government in defending business utilization and
affirmative action programs in contracting and procurement for minorities and women. The
Division Chief prepared an article summarizing the roundtable discussions which was published as
the lead article in the NAAG Civil Rights Newsletter which is distributed to all state attorneys
general offices in the fall of 1996 entitled, "Summary of Recent Discussions at Executive
Roundtable on Designing and Defending Affirmative Action and Business Utilization Programs."

The Division Chief continued to work as the National Chair of the NAAG Civil Rights
Working Group and its four Task Forces to facilitate national litigation and policy initiatives in the
area of bias crimes, mortgage lending, housing and disability rights. Members of the Division
continued working on the Task Force's litigation and joint policy initiatives subcommittees to
address emerging issues in fair housing.

The Division Chief was the lead organizer of the fourth annual National Association of
Attorneys General Civil Rights Conference held in March of 1997 in Florida. Members of the
Division made presentations at the conference on employment discrimination and the Attorney
General's Task Force on Race and Ethnic Bias as well as on cultural and language barriers to equal
justice.

OTHER SIGNIFICANT DIVISION INITIATIVES

The Attorney General believes that proactively working with various authorities and
organizations through education and outreach is also an effective approach to eliminating hate
crimes, discrimination and harassment. Some of the Civil Rights Division's efforts include:

-Providing technical legal assistance in the development of the Asian- American Civil
Rights Resource Guide which was published in April of 1997;

~A presentation to the Anti-Defamation League's Civil Rights Committee on the
prosecution of hate crimes and the Division's civil rights trainings of police;

-A presentation with the Community Reinvestment Coalition, that focused on the
insurance industry's failure to serve urban communities in Massachusetts;

-A presentation at a Mediation and Diversity training, sponsored by the Boston Housing
Authority, on the impact of and importance of addressing hate crimes, discrimination and
harassment;

-The Division Chief drafted a chapter on language barriers and the right to an interpreter
in an article entitled "On Your Own" in the Massachusetts Bar Association Legal Guide for
Immigrants;

-A presentation at the NAACP New England Regional Conference on the issues of
addressing and responding to police misconduct;

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-A member of the Division has authored one and co-authored another article for the
Individual Rights and Responsibilities Section of the Massachusetts Bar Association. The first
article is titled, "Attorney General files an Amicus brief in Support of Same Gender Sexual
Harassment Claim" and the other is,"Blanket Disqualification fi-om Employment for Certain
Disabilities Violates State Law Under Most Circumstances";

-A member of the Division was a speaker at a Northeastern University School of Law
"Forum on Hate Crimes" and presented on how hate crimes affect our community, the AG's role
in handling hate crimes and the types of remedies that are available to victims of hate crimes;

-A member of the Division presented an overview of the Massachusetts Civil Rights Act
at a program titled, "Somerville Unites for Human Rights";

-A presentation to the Greater Boston Civil Rights Coalition on the goals, priorities and
accomplishments of the Attorney General's Office in the area of employment discrimination.

DISABILITY RIGHTS PROJECT
ENSURING ACCESS TO PRIVATE BUSINESSES

The Disability Rights Project continues to work hard to ensure that private businesses are
accessible to and do not discriminate against individuals with disabilities. Often this involves the
removal of not only physical barriers, but communication barriers as well.

The Project received a complaint that a South Shore movie theater did not have the
required assistive listening systems ("ALS") in place so patrons with hearing impairments could
hear the movies. Project staff contacted the movie management and obtained assurances that the
necessary equipment would be made available at their theaters, that staff would receive training
concerning its use, and that the equipment would be maintained properly.

A man with a rare disability who had been repeatedly refiised service by a pub on the
North Shore filed a complaint conceming his improper treatment. The Project sent a demand
letter. The Pub acknowledged its error and changed its policies. All employees were required to
receive training on state and federal and disability laws, and the owner issued a written apology to
the man.

A disability advocate in Marblehead filed a complaint alleging that a movie theater had
treated her improperly when she tried to attend a movie with a non-disabled companion. Although
the law requires that theaters afford accessible seating for people with disabilities and removable
seating for non-disabled companions, theater staff forced her to sit by herself, away from her non-
disabled companion. After receiving our demand letter, the theater remedied the problem by
providing sufficient accessible seating and removable chairs for companions.

In December, Project staff conducted a final access review of the hotel and trade center in
central Massachusetts to ensure that the last set of access problems had been resolved. In fact, the
hotel had addressed some additional issues that had arisen since the filing of the consent judgment.
As a result of our lawsuit, the hotel is now one of the most accessible hotels in the state. After the
hotel hosted a recent statewide conference of independent living centers, the organization sent

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hotel management a letter expressing its appreciation for how folly accessible the hotel had
become.

MUNICIPAL ACCESS

The long-standing municipal access case involving the Town of Spencer was resolved
this past quarter when the Town implemented the final set of access remedies to make its Town
Hall fully accessible to citizens with disabilities.

PROTECTING FAIR HOUSING RIGHTS OF INDIVIDUALS WITH DISABILITIES

The Project continues to be involved with ensuring that the state and federal fair housing
rights of individuals with disabilities are safeguarded. Increasingly, mvmicipal officials proactively
contact our office to ensure that their actions or policies comply with the law.

The city solicitor of Lynn sought our view as to whether a proposed use of several
properties by the Catholic Charities Bureau, the establishment of two small group homes to be
used as "Bridge Homes" for children entering the DSS placement system for the first time, would
fall within the educational use exemption of Chapter 40A. The Project reviewed the materials and
confirmed the solicitor's understanding that the proposed project would be a protected use under
40A.

The city planner and city solicitor for Taunton, asked for our interpretation of whether
Taunton could require, consistent with Chapter 40A, an OFC residence to go through a site review
hearing, where single family residences are not subject to the same procedural requirement. The
Project explained why imposing an additional requirement on the residence would violate the non-
discrimination requirements of Chapter 40 A, and thus Taunton would not be able to require the
OFC residence to do so. The Project also sent the city officials a copy of our publicafion,
"Protecting the Right of Your Client to Live in the Community of Their Choice."

The Department of Mental Health ("DMH"), which was working in conjunction with the
Pittsfield Housing Authority, contacted us because it had encountered difficulties in its attempt to
establish a community residence due to Pittsfield's zoning ordinance which prohibited a
community residence ft-om locating within 1000 feet of another such residence. (As it turns out,
the proposed residence would be only 800 feet from an existing one.) The planning board had
recommended that the 1000 foot provision be deleted fi-om their zoning ordinance. The matter
was scheduled to be heard by the city council. The mayor, who had supported the establishment of
the residence and the repeal of the provision, wanted support for what he anticipated would be a
close vote. We prepared a letter which outlined the non-discrimination requirements of state and
federal fair housing laws, and which urged repeal of the provision. DMH presented our letter at
the council meeting and the ordinance provision was repealed.

Growing out of a series of fair housing disputes between Boston and EOHHS agencies,
EOHHS has been working hard to reestablish a prior city-state agreement concerning the siting of
community residences within Boston. The agreement establishes the process by which the city and

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state would attempt to coordinate their housing efforts and to resolve disputes that arise. At the
request of EOHHS, our office reviewed the document for potential fair housing problems with
representatives of EOHHS, and shared our analysis of the document with them.

We were contacted by the attorney for Housing Assistance Corporation, a non-profit
corporation that wished to establish a residential program for individuals in recovery from
substance abuse (Angel House) on the Cape. He alleged that the residence was not being afforded
its rights under Chapter 40A (the "Dover Amendment"), which generally exempts educational uses
from local zoning restrictions. Although counsel for the residence felt that they had presented clear
and convincing evidence to qualify under c. 40A's exemption, the building inspector took the
position that the residence was not entitled to the exemption, in part because the proposed
residents did not have the more traditional disabilities of mental retardation or mental illness.
Tovm counsel also requested our involvement, seeking our analysis. We sent a letter to the
inspector discussing the c. 40A case law. We also assisted counsel for the residence, by reviewing
with him what supplemental information should be submitted to meet the state standards. The
inspector reviewed the new materials and found the residence to be entitled to the statutory
exemption. Town coimsel stated that he was pleased with how the matter was resolved and "was
proud to be part of the process."

COMMUNITY EDUCATION

At the inauguration of the Project, the Attorney General emphasized the importance of
community education to increase people's understanding of and compliance with state and federal
disability rights laws. Toward that end, the Project has issued legal advisories on a number of
important issues, participated in various trainings and seminars, and published community
education materials.

LEGAL ADVISORIES

On July 26, 1996, the sixth anniversary of the enactment of the ADA, our office, in
partnership with the Department of Justice, issued an advisory concerning the legal rights of
individuals who use service animals. The advisory, signed by Attorney General Harshbarger and
Deval Patrick, explained, in a question and answer format, the legal obligations imposed by state
and federal law on places of public accommodations including, retail, restaurant and lodging
establishments. We sent the advisory to the professional associations for those Massachusetts
three business sectors who agreed to distribute it to their members. In total, approximately 2600
businesses received copies of the advisory. In addition, approximately 1200 members of the
disability advocacy community received it in a mailing from the Massachusetts Office on
Disability. The Massachusetts Commission for the Blind also disseminated the advisory to its
clients on its electronic bulletin board.

After learning of the disparate treatment that workers with cancer have experienced in the
workplace, the Project prepared an advisory which discusses the employment rights of workers or
applicants who are receiving treatment for a serious illness such as cancer, HIV or AIDS. The
advisory discusses the application of the ADA, Ch. 15 IB and the Family Medical Leave Act to

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workers with these disabilities and offers the assistance of the DisabiHty Rights Project in helping
to sort out these mandates. We sent it to business organizations such as the Associated Industries
of Massachusetts and the Retailers' Association of Massachusetts.

The MA Attorney General's Office, the U.S. Department of Justice, and the U.S.
Department of Housing and Urban Development promulgated a joint advisory to building
inspectors and others in January, 1 997 which sets forth the accessibility requirements relative to
newly built housing, to ensure compliance with the construction and design requirement of the
federal and state fair housing laws.

SEMINARS, CONFERENCES AND TRAININGS

— Presented on the fair housing rights of individuals with disabilities at fair housing
conference sponsored by Citizens Housing and Planning Association ("CHAPA"); and at several
Massachusetts Continuing Legal Education ("MCLE") programs on disability rights;

~ Project staff worked with the Real Estate Board and the Massachusetts Realtors
Association on their new mandatory training curriculum for people renting or selling real estate in
Massachusetts and wrote the training curriculum on fair housing law, including those provisions
specific to individuals with disabilities.

-- Lectured on the legal rights of students with disabilities at The College Board New
England Regional Meeting; and on the legal rights of parents with disabilities when the state
attempts to terminate their parental rights, at the Continuing Legal Education Program on Children
and Family Law for CPCS Appointees.

— At the Attorney General's annual Municipal Forum, discussed how municipalities can
affirmatively use the administrative requirements of Title II of the ADA (grievance procedure,
notice, etc.) to reduce the risk of municipal liability.

— Conducted a presentation on the Employment Rights of Employees and Applicants
with Disabilities for the entire Supervisory staff of Barnstable County.

Project staff also wrote several articles: 1) "Protecting the Right of Your Clients to Live
in the Community of Their Choice" chapter in course book for MCLE Program "Housing and
Disability;" and 2) "State Enforcement of Disability Rights," which describes the work of the
Project for the spring issue of the MBA's Individual Rights & Responsibilities Section Newsletter.

CONSUMER PROTECTION AND ANTITRUST DIVISION

The Consumer Protection and Antitrust Division enforces Massachusetts General Law
chapters 93 and 93A as well as other state and federal consumer protection and antitrust statutes.
The Division's case load primarily consists of actions affecting large numbers of vulnerable
consumers who have been harmed by illegal activities, particularly fraud. Additionally, the
Division seeks to protect and promote competition so that consumers are offered goods and
services of higher quality at lower prices. Other efforts include regulatory and legislative
activities, participating in consumer out reach, and mediating individual complaints through the
Consumer Complaint and Information Section and the Local Consumer Programs.

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In fiscal year 1997, the Division obtained judgments or entered into settlements for the
following amounts:

CIVIL PENALTIES/ATTORNEYS' FEES/COSTS $2,329,610

CONSUMER RESTITUTION $1,175,485

LOCAL CONSUMER AID FUND $ 270,962
OTHER:

McNeil PPC, McNeil Consumer
Products Co., Arthritis Foundation

American Lead Abatement,
Douglas Williams, James Judge

Sportsworld, Inc.

Judith Bailey; Adoption Center, Inc.

In re: Disposable Contact
Lens Antitrust Litigation

Zeneca, Inc.

$250,000 to N.I.H. research.
30 hours of community service.

$750 worth of sports equipment contributed to
the Jimmy Fund

Transfer of real property valued at over
$200,000 to The Adoption Center, Inc.
charity.

Mail order lens distribution; free coupons and
$35 rebates to customers

$25,000 contribution to Community Involved in
Sustaining Agriculture

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ADOPTION SERVICES

Comm. V. Adoption Center. Inc. and Judith Bailey i

In April 1997, CPAD entered into a consent judgment in Middlesex Superior Court with
Judith Muzzioli Bailey, the former operator of The Adoption Center, Inc. CPAD previously filed
a civil action against Ms. Bailey and the adoption agency she directed, alleging various types of
misconduct, including: the alteration of documents reflecting the medical backgrounds of birth
mothers; false and illegal billing of adoptive parents; misrepresentations to adoptive couples about
services and billing; diversion of agency funds to Ms. Bailey's personal use; excessive
compensation paid to Ms. Bailey; and failure to have a disinterested Board of Directors overseeing
the adoption agency, which is organized as a charity under Massachusetts law.

The consent judgment requires that Judith Bailey may not offer any child adoption service
nor accept any compensation for any activity related to adoption for the period of one year and she
is barred from offering adoption services in Massachusetts for an additional six months thereafter.
In addition, the Commonwealth received $144,000 to distribute to former clients of the Adoption
Center, who are entitled to refunds under the original contracts they entered into with Ms. Bailey's
organization. The judgment also required Bailey to transfer two parcels of land valued at
approximately $200,000 to The Adoption Center, Inc., a charity under new management and a new
board of directors.

Comm. V. Madeline Daniels and Cambridge Adoption and Counseling Associates. Inc.

In May 1997, CPAD filed a consent judgment in Suffolk Superior Court with Cambridge
Adoption and Counseling Associates ("CACA"), of Watertown MA, and CACA's director
Madeline Daniels to resolve a suit filed against CACA and its director alleging a variety of unfair
and deceptive acts and practices, including misrepresentations to adoptive couples about services
and billing.

The consent judgment provides $50,000 in restitution for affected consumers, and
requires Daniels and CACA to follow a set of procedures in accord with current Office for
Children adoption regulations, including the distribution of written disclosures regarding pricing,
policy and procedures, to ensure that the problems involved in this case do not recur.

AMICUS BRIEFS

Welch V. City of Peabody. et al.

In June 1 996, CPAD filed an amicus memorandum during the two-day
trial of this Essex Superior Court action, in which the owners of Welch's Mobile Home Villa in
Peabody sought to prevent the Peabody Rent Control Board from redetermining rents at Welch's
and seven other parks in the City. CPAD argued that the action was actually a collateral attack
seeking to challenge the rulings on cross motions for summary judgment entered in favor of the
Commonwealth in Commonwealth v. Peabody Rent Control Board, et al. In addition, CPAD
argued, inter alia, that only the Office of the Attorney General may challenge the right of the Rent
Control Board's hearing officer to hold office, under the doctrine of quo warranto, and that the
state statute authorizing mobile home park rent control was constitutional.

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Quinn v. Peabody Rent Control Board and
Kapamagian v. Peabody Rent Control Board

In August, 1996, CPAD filed an amicus memorandum in support of the
Peabody Rent Control Board, which had redetermined the rents at two Peabody parks, as ordered
in CPAD's case. Commonwealth v. Peabody Rent Control Board. Quirm and Kapamagian, owners
of Red Hill Estates and Little Trailer Park, respectively, filed appeals under the Administrative
Procedure Act, seeking reversal of the Board's decisions redetermining their rents. In its amicus
memorandum, CPAD argued, inter alia, that the new rents were constitutional because they did not
effect a Taking under the Just Compensation Clause, did not violate the Contract Clause, and
contained adequate Emergency Preambles. In addition, CPAD argued that G.L.c. 40O, eliminating
rent control statewide, contained an explicit exemption for mobile home park rent control.

ANTITRUST

Stop & Shop/Roval Ahold Merger

In July 1 996, CPAD entered into a consent decree in the United States District Court for
the District of Massachusetts that approved the acquisition of the Quincy-based Stop & Shop
supermarket chain by Royal Ahold, nv, on the condition that Royal Ahold sell two stores in
Massachusetts in areas where competition would be threatened by the merger.

The Federal Trade Commission, which worked with CPAD in reviewing the merger, and
the Attorneys General of the states of Connecticut and Rhode Island filed separate agreements with
the merging parties. In all, the agreements require the divestiture of 30 stores and two sites in the
three states.

The consent decree also requires that Royal Ahold be bound by the terms and obligations
of an earlier consent agreement negotiated in the merger of Stop & Shop and the Purity Supreme
supermarket chain, which was approved in October 1995.

Comm. V. Vistakon. et al.

In December 1996, CPAD and 21 other states filed an antitrust lawsuit in federal court
against three contact lens manufacturers (Vistakon, Bausch & Lomb, Inc., CIBA Vision Corp), and
optometrists, individually and through their professional associations, including the American
Optometric Association.

The states allege that the defendants conspired to restrain consumer access to the
prescriptions or work orders needed to obtain contact lenses and to eliminate the supply of contact
lenses to mail order companies, pharmacies, buying clubs and other alternative channels of
distribution.

In May 1997, the states entered into a consent judgment with CIBA Vision, Inc.,
requiring CIBA Vision to pay to consumers who buy lenses fi-om any of the defendants a cash
rebate of $35 dollars following the purchase of certain CIBA lenses. In addition, consumers will
receive free coupons for other lens care products. CIBA is also required to pay $5 million to a
settlement fund. Subsequent to the state actions, CIBA changed its distribution policy so that

143

consumers can get lenses through aUemative distribution channels, and agreed to keep the
distribution policy in place for five years.

Farm Chemicals Antitrust Investigation
American Cyanamid

In February 1997, American Cyanamid Co., one of the country's largest manufacturers of
agricultural chemicals agreed to pay $7.3 million as part of a nationwide settlement of claims that
the company violated antitrust laws by using dealer rebate programs to set minimum retail prices
for crop protection chemicals. Massachusetts' $75,995 share of the settlement amount will be
used for antitrust and consumer protection enforcement, and to reimburse the cost of this
investigation by CPAD.

The Attorneys General charged that American Cyanamid' s CROP and APEX rebate
programs violated the antitrust laws by requiring dealers to sell the company's crop protection
chemicals at or above specified retail prices in order to qualify for rebates of up to 1 2% of
American Cyanamid's wholesale prices. Massachusetts also alleged that these practices were
unfair and violated the Massachusetts Consumer Protection Act.

The consent judgment prohibits American Cyanamid from conditioning the payment of
dealer rebates on the resale prices at which dealers offer to sell crop protection chemicals. It also
prohibits American Cyanamid from otherwise agreeing with dealers to control or maintain the
dealers' resale prices for these chemicals.

Zeneca

In June 1997, Zeneca, Inc., of Wilmington, Delaware, agreed to pay $3.9 million to a
group of forty-seven states, including Massachusetts, and the District of Columbia and Puerto
Rico, as part of a settlement of claims that the company violated antitrust laws by using dealer
rebate programs to set minimum retail prices for crop protection chemicals.

A multi-state investigation found that Zeneca, beginning in the late 1 980's and continuing
through 1993, used its Stewardship Bonus Program to influence the pricing practices of its
distributors on the resale of its agricultural products. The states concluded that the Stewardship
Bonus Program violated state and federal antitrust laws by allegedly requiring its dealers to price at
or above a Zeneca price schedule in order to receive cash rebates. Zeneca withheld rebates if the
prices were not followed.

The settlement prohibits Zeneca, Inc. from operating similar programs in the fiiture and
requires Zeneca to pay $45,308 to the Commonwealth.

AUTOMOBILES

Lemon Law Arbitration Enforcement Actions

Comm. V. M&B Auto Repair. Inc. November 96.

Comm. V. Viking Motors February 97

Comm. v. Peter Sarkis d/b/a Riverside Garage February 97

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Comm. V. New England Auto Sales & Service. Inc. March 97

These cases were filed by CPAD in FY 97 to enforce used car lemon law arbitration
awards that were not paid by the car dealer. Pursuant to the Used Vehicle Lemon Law, failure to
pay an arbitration award is a violation of the Massachusetts Consumer Protection Act.

Comm. V. Guy Axeil Emmanuel

In July 1996, CPAD filed a complaint in Middlesex Superior Court against Guy Axell
Emmanuel, and his various businesses, Axell International, Anchor Shipping, and Axell Airways
International, Inc., who had charged consumers up to $2,400 each to deliver cars and trucks to
Haiti, but left 1 80 vehicles at the Fall River State Pier and failed to refund consumers' payments.

CPAD sued Guy Axell Emmanuel and sought a restraining order when it obtained
evidence that Emmanuel had collected thousands of dollars in shipping fees, but had no ship and
was seeking new fees from consumers in order to pay previous creditors. Judge Hiller Zobel issued
the restraining order and a preliminary injunction barring Emmanuel from collecting shipping fees
or otherwise participating in the shipping business. CPAD then obtained the release of the
consumers' vehicles from a creditor of Axell, who had attempted to seize them, and worked with
the Fall River Pier Line to ensure the return of the 180 vehicles to their owners.

Comm. V. M.J.C. Enterprises d/b/a Grand Prix Auto Sales; Mark Colangelo

In September 1996, CPAD obtained a contempt order against M.J.C. Enterprises d^/a
Grand Prix Auto Sales and its principal, Mark Colangelo requiring the defendant to pay
outstanding amoimts due imder a previously obtained consent judgment and also to pay a $10,000
penalty. The previous consent judgment, which resolved the Commonwealth's allegations that the
defendant used unfair and deceptive acts and practices in the sale and repair of used cars,
permanently enjoined Colangelo from owning, operating, or working for a new or used car
dealership and required the defendant to pay restitution to consumers.

The present action was commenced when Colangelo failed to make the required
restitution payments.

Comm. V. Marlboro Auto Exchange

In January 1997, CPAD filed a consent judgment against Marlboro Auto Exchange, Inc.,
a used car dealer located in Marlboro, Massachusetts, and its President, Howard J. Wilner,
resolving claims that Marlboro Auto Exchange and Wilner violated the Massachusetts Consumer
Protection Act in connection with the sale and service of used cars.

CPAD alleged that Marlboro Auto Exchange had engaged in a variety of unfair or
deceptive practices, including selling defective and unsafe used cars; failing to honor the
obligations imposed upon them by the Used Vehicle Lemon Law; and making material
misrepresentations concerning repairs allegedly performed on used cars brought in for service.

The consent judgment enjoins Marlboro Auto Exchange and Wilner from engaging in the
unfair or deceptive practices identified in the Complaint. The defendants also agreed to pay
$10,000 in restitution to consumers.

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Comm. V. Nickerson Enterprises. Inc. . et al.

In April 1997, CPAD entered into a consent judgment with Nickerson Enterprises, Inc.
d/b/a Route 38 Auto Sales and Americar Superstore and its owner, Daniel Nickerson. CPAD
alleged that the dealerships misrepresented the condition of vehicles for sale, failed to perform
warranty repairs or performed faulty repair work, and misrepresented the coverage or availability
of extended warranties sold to consumers.

Under the terms of the consent judgment, the defendants were required pay $36,000 in
restitution to affected consumers and to conduct their auto sales and servicing business in
compliance with all applicable laws and regulations.

Automobile Advertising Cases

In the Matter of General Motors, Honda. Isuzu and Mitsubishi

In November 1 996, CPAD entered into an assurance of discontinuance with four major
automobile manufacturers that promises to change the way auto leases are advertised across the
country. Twenty-three other states and the Federal Trade Commission also filed settlements
contemporaneously with the CPAD settlements.

The settlement with General Motors, Honda, Isuzu and Mitsubishi concerns ads that were
allegedly deceptive because they told consumers they could lease cars for "0 Down" or "nothing
down." In fact, customers had to have as much as $780 in the form of first months' lease payments
and security deposits before they could lease the cars.

The agreement requires that when companies advertise an amount down, they must tell
consumers the total amount the consumer must pay in a way that is not only clear, but is just as
conspicuous as the initial statement.

General Motors and Mitsubishi are also required to clearly and conspicuously disclose
final "balloon payments" in vehicle purchase advertisements. In the past, these companies have
advertised a monthly payment amount, while disclosing only in tiny print that customers must pay
almost $ 1 2,000 at the end of the contract to own the car. The agreement requires that these large
payments now must be disclosed prominently and in close proximity to the highlighted monthly
payments in a way that is both readable and understandable to consumers.

The manufacturers will also pay at total of $1 million dollars to the states in settlement
of this matter.

Comm. V. Mazda Motor of America

In December 1996, CPAD entered into a consent judgment with Mazda requiring the car
manufacturer to reform its national auto leasing advertisements and pay a total of $857,500 to 20
states. CPAD alleged that Mazda's "zero down" and "penny down" lease ads, which aired on
national network and cable television programs for several months earlier this year, were deceptive
since a consumer actually must pay approximately $900 in up-fi-ont fees for the advertised leases,
including a $450 "acquisition fee."

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The consent judgment prevents Mazda from misrepresenting the amount of up-front lease
costs, including the amount "down," the "downpayment" or the "capitalized cost reduction." The
company also agreed to comply with the federal "truth-in-leasing" regulations by disclosing all
required lease terms in a clear and conspicuous manner. These terms include the total amount of
up-front lease costs, and the number, amoimt and timing of scheduled payments. Mazda also will
be bound under the agreement to comply with changes to federal leasing regulations which will go
into effect in October 1997.

CIVIL FORFEITURE

Comm. V. One 1988 Honda Accord Sedan

In February 1997, a default judgment was entered in this civil forfeiture action brought in
Worcester Superior Court in July 1995, involving the forfeiture of an automobile that was used in
connection with illegal drug activity. Pursuant to the default judgment, the court ordered the
automobile be forfeited to the Commonwealth

Comm. V. One Parcel of Land and Buildings

at 688-692 Moody Street, Waltham, et al.

In June 1997, CPAD obtained a consent judgment in this civil forfeiture/nuisance action
involving a parcel of real estate that was allegedly used for drug activity. The consent judgment
enjoins the landlord from permitting drug activity on the premises.

COMPUTER AND INTERNET CASES

In the Matter of Packard Bell/NEC

In October 1996, CPAD filed an assurance of discontinuance with Packard Bell to settle
allegations that it sold computers as new when they actually contained parts from computers that
had previously been sold to consumers and returned.

Under the agreement, Packard Bell must place a prominent notice on all of its boxes
explaining its practice of including components from previously sold computers in the computers
and monitors that it sells as new. In addition, such components must be covered by the Packard
Bell original product warranty for new products. The company must also provide notices outlining
the practice for display wherever their computers are sold. Packard Bell also agreed to pay
$1,540,000 in attorneys' fees and investigative costs to the 22 states involved in the investigation.
Massachusetts received $70,000.

Comm. V. Robert Novello d/b/a VE Services

In October 1996, CPAD obtained a consent judgment against Robert Novello who
advertised and sold videos on the Internet through Usenet groups, and on his own web page using
the business name "VE Services."

The videos contained footage allegedly taken with hidden cameras inside women's locker
rooms, rest rooms and shower facilities, without the knowledge or permission of those being

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filmed. Contemporaneously with the filing of the complaint, CPAD obtained a temporary
restraining order against Novello enjoining him from advertising or selling the videos.

The consent judgment bars Novello from advertising or selling "Voyeur Videos" on the
Internet, or by any other means. The judgment also requires the defendant to pay $7,500 in civil
penalties.

In the Matter of Compaq Computer Corp.

In November 1996, CPAD filed an assurance of discontinuance against Compaq
Computer Corporation of Houston, Texas which restricts access to packaging which could be used
by independent dealers to deceptively market used machines as brand new. Under an agreement
with Massachusetts and 21 other states, the company will no longer provide dealers with such
materials as extra marked boxes and factory sealing tape. Such materials have in the past been
provided to replace cartons defaced or scuffed in transit.

In addition to restricting access to packaging materials, Compaq agreed to pay $6,000 to
Massachusetts, and each of the other states involved, to cover the costs of investigation.

In the Matter of America Online

In December 1996, CPAD joined with 19 other Attorney Generals to reach an agreement
with America Online ("AOL") regarding the implementation of its $19.95 per month flat-rate plan.
The agreement secured automatic refunds for AOL members who did not want the company's
more expensive flat-rate plan and was precipitated by AOL's announcement that it planned to
automatically convert all of its members to the new plan unless they specifically objected prior to
their December 1 996 billing date.

The agreement provided that AOL must obtain affirmative consent to the billing change
from as many of its members as possible; must automatically provide retroactive refunds to all
consumers who asked to switch back to their old plan prior to March 31, 1997 and requires AOL
to notify its members of their rights and obligations in light of their automatic conversion plan
through the U.S. mail and in a series of on-line screens.

In the Matter of America Online II

In February 1997, CPAD and attorneys general in 44 other states filed assurances of
discontinuance to address complaints about accessibility of service after AOL began offering its
members $19.95-a-month plan for "unlimited access" to the service. Consumer found it difficult
to get connected to the service since the institution of the unlimited access plan.

The agreement provides for refunds to consumers who filed complaints with America
Online or their Attorney General's Office within 120 days of the agreement's signing. The size of
the refrmd varied, depending on consumers plan and the access the consumer had to the plan.

In the Matter of AST Research Inc.

In March 1997, Massachusetts and 20 other states filed assurance of discontinuance
against AST Research Inc., enjoined them from selling equipment as new if it has been operated

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and returned to the company. Under the agreement, which stems from an investigation into
marketing practices throughout the computer industry, AST Research, Inc. will be allowed to sell
returned computers as new only if they come back to the company in unopened, factory-sealed
containers and show no signs of use. If the company offers a used computer for sale, it must
"clearly and conspicuously" disclose the fact that it is used on the container.

In addition to modifying its sales practices, AST was also required to pay $90,000 to
cover investigative costs, $10,000 of which was paid to Massachusetts.

FINANCIAL
Comm. V. Rhodes Financial/Randolph L. White

In October 1996, the Suffolk Superior Court ordered Randolph L. White, II (also known
as Lee White), a former mortgage broker, to pay the Commonwealth nearly half a million dollars
in restitution and civil penalties under the Massachusetts Consumer Protection Act. Following
nine days of trial in 1994 and 1995, Superior Court Judge John Cratsley entered 78 pages of
factual findings and legal conclusions, including a judgment against Mr. White for $382,000 in
restitution for consumers and $100,000 in civil penalties. The Court also prohibited Mr. White
from acting as a mortgage lender or a mortgage broker until at least 2006.

In 1991, CPAD sued Mr. White, the Money Tree, Inc. (a mortgage brokerage firm owned
and operated by Mr. White), and Rhodes Financial Services, Inc. (a related mortgage lending firm
that shared space and customers with the Money Tree) for various violations of the Massachusetts
Consumer Protection Act, most of which involved mortgage loans to low to moderate income
homeowners. Before trial against Mr. White began in October 1994, both the Money Tree and
Rhodes Financial had filed for relief in bankruptcy court. Mr. White also filed a bankruptcy
petition which was later dismissed by the bankruptcy court for failure to obey an order of the
Bankruptcy Court.

Comm V. United Companies Lending Corporation

In December 1996, CPAD filed a complaint in Suffolk Superior Court against United
Companies Lending Corporation ("UCLC") alleging that UCLC charged more than $13,000 as a
mortgage broker fee to a Dorchester, Massachusetts woman who borrowed $134,700 from United
Companies Lending Corporation to refinance an existing mortgage and to pay for home
improvements to her 3-family house in Dorchester. It is unlawfiil in Massachusetts to be both a
broker and a lender in the same transaction. The borrower also paid more than $4,000 as a broker
fee to a different broker called United Capital Systems, an entity with which the borrower may
have had no direct dealings.

United Companies Lending Corporation claimed that its $13,000 mortgage brokerage fee
was in fact an origination fee, or "points," an error it attributes to its closing attorney in Rhode
Island. Under that scenario. United Companies Lending Corporation had charged the consimier
ten points, an assessment the complaint alleged is unlawful because it exceeds industry-wide
standards or is otherwise unconscionable. The Complaint also alleges that United Companies
Lending Corporafion may have charged similar "points" to as many as 300 consumers in
Massachusetts.

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In January 1997, CPAD obtained a preliminary injunction from the Suffolk Superior
Court ordering United Companies Lending Corporation to comply with Massachusetts law,
including the mortgage points statute and the Attorney General's mortgage regulations, during the
pendency of litigation. In addition, UCLC was required to give 30 days' advance notice to the
Attorney General of all mortgage foreclosures.

0% Financing Advertisement Cases

In the Matter of Tandy

In the Matter of CompUSA

In the Matter of Montgomery Ward

In the Matter of Best Buy

In September 1996, CPAD and 24 other states reached agreements with Tandy (which
includes Radio Shack, Computer City, McDuff and Incredible Universe) CompUSA, Montgomery
Ward and Best Buy, all of which offered "Zero Percent Financing" programs that may have been
misleading to consumers. The states alleged that the companies did not always give consumers
clear disclosure of all the important terms of the zero interest programs.

As part of the agreement the companies are required to provide clearer explanations of
their zero interest programs in their advertisements, prominently including information about
whether the full purchase price must be paid during within the zero interest period and that if the
consumer fails to make any required payments when due or fails to pay the purchase price in full
by the end of the zero interest period they may be liable for all interest accruing during the zero
interest period. In addition, the companies were required to pay $925,000 to the states, with
Massachusetts receiving $50,000.

In the Matter of Circuit City

In January 1997, CPAD along with 19 other states and the District of Columbia reached
agreements with Circuit City which offered "Zero Percent Financing" programs that may have
been misleading to consumers. The states alleged that the companies did not always give
consumers clear disclosure of all the important terms of the zero interest programs.

As part of the agreement Circuit City was required to provide clearer explanations of their
zero interest programs in their advertisements, prominently including information about whether
the full purchase price must be paid during within the zero interest period and that if the consumer
fails to make any required payments when due or fails to pay the purchase price in full by the end
of the zero interest period they may be liable for all interest accruing during the zero interest
period. In addition, Circuit City was required to pay $225,000 to the states, with Massachusetts
receiving $25,000.

Comm. V. Felix Rodriguez d/b/a Fargo^s Express

In January 1997, CPAD entered a consent judgment against Felix Rodriguez d/b/a
Fargo's Express enjoining Rodriguez from operating an unlicensed check cashing operation and
requiring the payment of a $1,250 civil penalty.

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CPAD alleged that Rodriguez violated the Massachusetts Consumer Protection Act by
cashing checks for a fee greater than one dollar without possessing a valid license from the
Commissioner of Banks.

In the Matter of Ronald Brown d/b/a International Investment Group. Ltd.

In March 1997, CPAD filed an assurance of discontinuance against Ronald Brown d/b/a
International Investment Group, Ltd. CPAD alleged that Brown offered "self-liquidated" loans of
hundreds of thousands of dollars by fee from "off-shore banks", contingent upon the consumer
sending in a fee ranging from $35 to $1 50. Brown allegedly had no affiliation with any financial
institutions and could not aid consumers in obtaining loans.

The assurance bars Brown from soliciting money from Massachusetts constuners or using
a Massachusetts address for his business. Brown must also pay up to $2,000 in restitution to
consumers who were allegedly affected by the scam.

Comm. V. DTM Financial Services, et al.

In March 1997, CPAD obtained a default judgment against DTM Financial Services,
enjoining deceptive marketing of credit repair services and ordering payment of a $100,000 civil
penalty. CPAD previously filed a complaint against DTM Financial Services, a credit repair
services company, for allegedly misrepresenting the effectiveness of its "credit repair kits" to
remove all negative items from consumer credit reports. This action was filed as part of joint
effort with the FTC called "Operation Payback." A temporary restraining order and preliminary
injunction were obtained prohibiting DTM, its affiliates and owners/operators from accepting
payment until full and complete satisfactory performance of credit repair services is provided to
consumers. This case was one of several to be brought nationwide to enforce the FTC's new
Telemarketing Sales Rule.

Comm. V. The Calling Center Services. Inc.

In May 1997, CPAD entered a consent judgment against The Calling Center Services,
Inc. enjoining The Calling Center from operating an unlicensed check cashing operation and
requiring the payment of a $2,500 civil penalty.

CPAD alleged that The Calling Center violated the Massachusetts Consumer Protection
Act by cashing checks for a fee greater than one dollar without possessing a valid license from the
Commissioner of Banks.

GENERAL

Comm. v. Direct Marketing Enterprises

In July 1996, CPAD filed suit in Suffolk Superior Court against a New York-based
sweepstakes operations, their affiliated companies, and their owners/operators for allegedly
misleading thousands of Massachusetts consumers into believing they had won cash prizes and
inducing such consumers into buying millions of dollars in products for the chance of winning
such prizes.

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The complaint was filed against Raffoler Ltd. and Direct Marketing Enterprises Ltd., both
doing business out of Westbury, New York as CVP Sweepstakes; and their owners/operators Jerry
Williams and Stephen Brown for allegedly sending misleading and deceptive sweepstakes award
solicitations to Massachusetts consumers.

Raffoler Ltd. and Direct Marketing Enterprises Ltd. (also using the name "CVP
Sweepstakes"), allegedly mail more than three million sweepstakes solicitations to Massachusetts
consumers every year that create the impression that the recipient must purchase a product to win a
prize and that a recipient has a better chance of winning a major prize or other sweepstakes award
than is actually the case. It was further alleged that the solicitations make it more difficult for non-
purchasing participants to enter the sweepstakes promotion than for purchasing participants, in
violation of Massachusetts law.

Comm. V. Federal Record Service

In August 1996, CPAD obtained a consent judgment resolving the suit brought in May
against Federal Record Service Corporation, a New York company that is in the business of
sending mass mailings offering certain services relating to social security numbers. Federal
Record Service had allegedly been sending out two types of mailings to consumers in
Massachusetts and elsewhere. The first, sent to persons who just had a child, warns that a social
security number must be obtained by the child's first birthday, and offers to complete the
paperwork necessary to apply for a number, for a $1 5 fee. The second mailing, sent to persons
about to be married, offers, again for a $15 fee, to complete the paperwork necessary to make
official name changes on Social Security Administration records.

CPAD alleged that these solicitations were deceptive, and violated the Massachusetts
Consumer Protection Act, because they failed to disclose that social security numbers are often
assigned to newborn children automatically as part of the birth registration process, and because
they fail to disclose that name changes and new social security numbers can be obtained for free
directly from the Social Security Administration, without paying a $15 fee to Federal Record
Service.

The consent judgment requires Federal Record Service to advise consumers that they can
deal directly with the Social Security Administration, or pay a $15 fee to Federal Record Service,
in order to obtain the social security numbers. It also requires the company to advise consumers,
in the mailing sent to new parents, that their child may already have been registered with the Social
Security Administration, if they authorized the hospital to release the birth records. The judgment
requires Federal Record Service to continue to disclose that it is a private company not affiliated
with any government agency and requires the company to provide restitution to consumers.

Comm. V. Direct Link

In August 1996, CPAD obtained a consent judgment in Suffolk Superior Court with
Direct Link, Inc., a Framingham company and Suzanne Bannister, requiring them to stop placing
allegedly misleading and deceptive "help wanted" advertisements for the purpose of offering their
employment information service to the public.

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Direct Link and Bannister allegedly placed "help wanted" style advertisements in local
newspapers that tended to describe a job opportunity in such a manner that consumers were misled
as to the characteristics, salary and/or qualifications needed for the advertised position. The
advertisements implied that prospective job applicants could begin working that day, and that
positions were available that would pay good hourly wages, with little or no experience when in
fact, many of the employment opportunities required training or prior work experience in order to
earn the advertised salaries.

Consumers who responded to the advertisements discovered that they would be required
to enter into a three month subscription agreement to defendants' service and to pay a subscription
fee of $159.00 before being given information about the advertised opportunities.

The judgment prohibits Direct Link and Bannister from engaging in misleading
advertising practices and from making material misrepresentations about the employment
information services they offer. The consent judgment also requires that Direct Link resolve all
outstanding consumer complaints and pay $15,000 in civil penalties and costs to the
Commonwealth.

Comm. V. John Corcoran, d/b/a Tempest Corporation

In September 1996, CPAD obtained a consent judgment against John Corcoran d^/a
Tempest Corporation. CPAD alleged that Corcoran operated an illegal pyramid scheme that he
marketed as a "profit sharing plan." The pyramid scheme provided that in exchange for a fee, a
consumer was entitled to receive a variety of stationery to use to recruit new consumers. Each
consumer received a monthly amount for every other person they recruited into the program.

Pursuant to the consent judgment, Corcoran is enjoined from operating a pyramid scheme
and was required to pay a $2,000 civil penalty.

Comm. V. J.J. O'Brien Movers

In September 1996, CPAD filed a complaint and obtained a temporary restraining order
in Suffolk Superior Court against Gary DeCicco and J.J. O 'Brien Movers, Inc., a Lynn storage
company that was operating a public warehouse without a license.

The temporary restraining order prevents DeCicco and J.J. O'Brien Movers, Inc., from
operating a warehouse at 35 - 41 Wyman Street, Lynn, Massachusetts. The order prevents the
defendants from removing consumers' personal property from the warehouse, accepting new
property for storage, and selling any property that had been stored there. In addition, the order
required the defendants to identify to the Attorney General's Office the persons or entities whose
property is currently stored at the warehouse.

Comm. V. Thomas F. Spencer. Jr.

153

In November 1996, CPAD obtained a consent judgment against Thomas Spencer, Jr., a
disbarred attorney, enjoining Spencer from participating in the real estate closing and financing
business.

Spencer allegedly performed closings for residential refinances, failed to turn new loan
proceeds over to original mortgage holders, and failed to discharge the original mortgages. The
result was that consumers had 2 mortgages on their property, and in some cases had suffered other
monetary losses. The title insurance company paid off all first mortgages, and compensated some
consumers for other costs to the extent such costs affected the title to the property. Some
consumers were left with losses not covered by the title insurance company.

In addition to the injunctive provisions, Spencer was required to pay $1,500 in restitution
to consumers.

Comm. V. Clearinghouse Publications

In November 1996, CPAD filed an action in Suffolk Superior Court against Daniel Buck
and National Marketing Enterprises, individually and doing business as Clearinghouse
Publications, for allegedly swindling consumers out of thousands of dollars by convincing them to
pay fees for nonexistent "work-at-home" job opportunities. Clearinghouse allegedly placed
advertisements in a variety of local newspapers promising consumers that they could earn
hundreds of dollars by working at home. When consumers responded to these ads. Clearinghouse
would solicit them to pay a fee for "kits", books or other materials. In many cases. Clearinghouse
failed to send consumers anything in return for their payments. In other cases. Clearinghouse
would string consumers along by making ftirther promises of at-home employment, then soliciting
additional fees.

In December 1996, CPAD obtained a preliminary injunction against Clearinghouse and
Buck prohibiting them from advertising, soliciting payments for, or accepting payments for home
employment "opportunities." It also forbids Buck and Clearinghouse Publications from placing
deceptive advertisements, making misrepresentations about nonexistent home employment
"opportunities," and failing to disclose fees charged for these "opportunities."

Comm. V. Donald and Judith Berman d/b/a Dana Ross Studios

In November 1996, CPAD obtained a consent judgment against Donald and Judith
Berman, owners of Dana Ross Studios, a Boston identification card maker. The consent judgment
bars the defendants from selling false identification cards to youths under the legal drinking age of
twenty-one. The Bermans are also required to pay a civil penalty of $3,000.

The agreement followed an investigation by the Attorney General's Office and Boston
Police into the sale by Dana Ross Studios of false identification cards to youths seeking to
purchase alcohol illegally. The identification cards allegedly resembled official identification
cards and driver's licenses from virtually every state.

Comm. V. The Sportsman^s Guide. Inc.

In December 1996, CPAD obtained a consent judgment against The Sportsman's Guide,
Inc., a Minnesota-based business that orders the company to take precautions in the sale of air

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rifles, BB guns, firearms and ammunition to minors in Massachusetts. CPAD alleged that The
Sportsman's Guide, Inc. sold BB guns and air pistols to minors without making any attempts to
determine the age of the minors.

The consent judgment requires that sales agents of The Sportsman's Guide, Inc. (a) be
provided with a driver's license number (or other government issued identification number), (b) be
provided with the residential address identified on the driver's license, (c) that no delivery be made
to an address other than on the driver's license, and (d) that no age-restricted product may be
delivered to anyone in Massachusetts without the delivery agent first obtaining an adult signature
indicating acceptance of the age-restricted product. In addition, the judgment orders the company
to pay the sum of $5,000 as civil penalties to the Commonwealth and to make a settlement offer to
a minor consumer who was harmed by the company's business practices.

Comm. V. Wilbur Brown d/b/a Am-Tech Communications. Inc. and National
Communications Group

In December 1996, CPAD filed a complaint against Wilbur Brown d/b/a Am-Tech
Communications, Inc. and National Communications Group. CPAD alleged that the defendants
placed newspaper advertisements offering a "no money down" pay telephone business opportimity,
made material misrepresentations and omissions to callers who responded to the advertisement,
and accepted payments fi-om consumers across the country for goods and for services in
connection with the alleged business opportunity without providing the promised goods or making
refunds to consumers.

Upon filing the complaint, CPAD obtained a temporary restraining order which
prohibited the defendant fi-om engaging in unfair or deceptive acts or practices in cormection with
the advertisement, sale, and provision of any pay telephone or other business opportunity scheme.
After nofice and hearing, the court issued a preliminary injunction enjoining the defendant fi-om
continuing to operate the pay-telephone business opportimity scheme.

Comm. V. Carl F. Simmons, et al..

In December 1996, CPAD obtained a final judgment against Carl Simmons, an owner-
operator of a vocational school that allegedly had been operated in such a knowingly financially
irresponsible manner as to resuh in the school's closure by the United States Department of
Education. Consumers remained responsible to lenders for their tuition notwithstanding the
school's closure. The final judgment bars Simmons from operating a school in Massachusetts and
required Simmons to pay $25,000 in civil penalties.

Sports Memorabilia Cases

In December 1996, CPAD aimounced that a sting operafion uncovered dozens of
apparently fake Drew Bledsoe autographs on photographs, miniature football helmets and
regulation size football helmets. As part of the sting, CPAD sued Robert Mattson of Coventry,
Rhode Island, who does business as Center Ice Promotions, for distributing allegedly forged
Bledsoe autographs. The complaint seeks to enjoin Mattson from selling these items and seeks the
imposition of civil penalties of up to $5,000 for each violation of the law.

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Consent judgments were also filed against two Boston area retailers ~ Boston Baseball
Cards, Inc. of Watertown and Andrew McCrea of North Reading who does business as The Inside
Pitch - for isolated incidents of selling unauthentic sports memorabilia. Both companies quickly
resolved the matter by agreeing to pay a civil penalty of $1,250 each. The sting operation was
conducted with the cooperation of the New England Patriots, Drew Bledsoe and Raymond
Bourque.

Comm. V. AmCan Enterprises. Inc. et al.

In January 1 997, the Suffolk Superior Court entered an order requiring AmCan
Enterprises, Inc. which does business as North American Directories and its ovmer/operator,
Charles King to pay $1,000,000 in civil penalties, $147,000 in consumer restitution and $26,415 in
costs for violations of the Massachusetts Consumer Protection Act.

The judgment follows a March 1996 decision that the defendants' solicitation packages
were illegally deceptive. The decision found that consumers were likely to be misled into
reasonably believing that the solicitations had been sent by the publishers of the local yellow pages
directories, such as NYNEX, and that they were renewing existing listings by responding
favorably to the solicitations. The defendants admitted that they had sent more than 2.3 million of
these solicitations to Massachusetts businesses between 1990 and 1994.

Comm. V. Sportsworid. Inc.

In February 1997, CPAD obtained a consent judgment against an Everett sports
memorabilia dealer that allegedly sold bricks that the dealer claimed were from the Boston
Garden, when the bricks were actually either unauthorized for sale by the Boston Garden, or were
not from the Garden. Under the terms of the consent judgment, Sportsworld is harmed from
selling sports memorabilia that is either not authorized for sale by its true owners, or is
unauthentic. Sportsworld must also attempt to repurchase all bricks sold to consumers, and must
pay a $500 civil penalty to the Commonwealth. In addition, Sportsworld has agreed to provide a
charitable donation of $750 in sports memorabilia to the Jimmy Fund.

Comm. V. National Citizenship and Immigration Services

In February 1997, CPAD obtained a consent judgment against National Citizenship and
Immigration Services and its owner Robert Pore. CPAD alleged that Pore and NCIS had charged
immigrants between $200 and $250 to provide citizenship tests, and then failed to provide the
complete and official tests. Some immigrants were also promised classes, which they never
received. Consumers who took the incorrect and incomplete "tests" received notices that they had
failed or have not received test results as promised.

The consent judgment prohibits Pore from operating NCIS or any other business in
Massachusetts involving citizen testing or immigration matters. The judgment also requires Pore
to return payments to injured consumers, beginning with an initial sum of $15,000 in restitution.

Comm. V. Russ Movers, et al.

156

In March 1997, CPAD filed a consent judgment with Russ Movers, a Maiden-based
moving company and its principals to resolve allegations that the defendants improperly moved
and stored consumers' property and were operating without the requisite licenses and certificates.

Pursuant to the consent judgment defendants are required to maintain a bond and/or
insurance policy to cover any future losses to consumers and are required to pay $25,000 in
restitution to consumers. The consent judgment also requires the defendants to submit to periodic
inspections of the warehouse to ensure that it is being operated correctly.

Comm. V. First Network. Inc. and Randv L. Domings

In April 1997, CPAD filed a complaint in Middlesex Superior Court against First
Network, Inc. and its principal. Randy L. Domings. CPAD alleged that Domings and First
Network, Inc. placed misleading and deceptive "help wanted" ads in local newspapers, for taking
up-front fees for job referrals and other services which the company failed to provide, and for
verbally abusing and threatening consumers who complained or demanded refunds.

Consumers who responded to the ads were allegedly assured that positions were available
and that details and referrals would be provided upon payment of a $1 10 subscription fee. After
paying the fee, consumers discovered that First Network did not have the advertised jobs or
services and refused to refund their money.

In May 1 997, CPAD obtained a preliminary injunction prohibiting the defendants from
engaging in the actions alleged above.

Comm. V. Bearak Reports. Inc.

In April 1997, CPAD filed suit to stop Bearak Reports, Inc., a Framingham company,
from obtaining private bank account information of individuals and businesses, and selling that
information to others, without the consent or knowledge of the account holder.

Bearak Reports charged its clients, such as law firms or estranged spouses, as much as
$1,795 for "asset searches" of targets in lawsuits or divorce proceedings. Allegedly, Bearak
Reports then obtained bank account information, including specific balances, through the use of
deception and ruses, such as impersonating a bank account holder in an attempt to trick the bank
into releasing such information.

In the Matter of Environmental Compliance Testing. Inc.

In May 1997, CPAD filed an assurance of discontinuance against Environmental
Compliance Testing, Inc., stemming from a bulk mailing by ECT of a postcard-sized solicitation,
offering to send a technician to test the "Indoor Air Quality" of the recipient's work environment.
The solicitation contained the statement: "You must test the Indoor Air Quality at your business,"
and cited an "OSHA STANDARD ON INDOOR AIR QUALITY" which, in reality, is merely a
proposed standard. As such, the proposed standard is not legally enforceable and creates no duty
to test.

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The assurance enjoins ECT from invoking non-existent state or federal statutes or
regulations in an effort to cultivate business. ECT was also required to pay $1 ,500 in costs to the
Commonwealth.

Comm. V. Forbes Real Estate et al.

In May 1997, CPAD filed an assurance of discontinuance with Forbes Real Estate
Company, a Boston-based real estate company owned an operated by Richard M. Kelleher. CPAD
alleged that Kelleher improperly used fuel escalation and rug shampooing clauses in leases with
tenants in violation of the Massachusetts Consumer Protection Act.

Under the terms of the assurance, Kelleher will not to charge his tenants for additional
fuel costs unless each unit is individual metered and will not charge previous tenants for the costs
of shampooing carpets which have not been damaged beyond reasonable wear and tear.
Additionally, Kelleher is required to pay restitution to affected tenants and $1 ,500 to the
Commonwealth.

Comm. V. U-Haul

In May 1997, CPAD filed a complaint charging that a broad array of the business
practices of U-Haul-a truck, trailer, and storage locker rental business- violated the
Massachusetts Consumer Protection Act. CPAD alleged that U-Haul International, Inc. and its
affiliates operating in Massachusetts advertised and collected deposits for "guaranteed
reservations", but on numerous occasions failed to have the reserved equipment available for the
consumer; provided defective or substandard equipment to consumers; charged consumers
unconscionable "late fees" for storage locker rental if payment were one day late- amounting in
some cases to up to 100% of the amount due; with insufficient notice, sold consumers' property in
storage when consumers failed to make payment; made false representations about the security of
its storage facility in Medford.

Comm. V. Certified Business Supply. Inc.. d/b/a Purity Medical Products

In Jime 1997, CPAD obtained a consent judgment against Certified Business Supply, a
California telemarketing company, which had also been doing business in Massachusetts using the
name "Purity Medical Products", ordering the company to cease using misleading sales scripts.

CPAD alleged that the company used sales scripts which it tailored to create false
impressions in the minds of its customers' employees. Other scripts gave the impression that
Certified was the office's regular supplier. Certified' s sales agents would also pressure employees
to purchase products by implying that there was a shortage.

In addition to deceptive sales scripts, Certified sent unsolicited products to some
institutions or businesses hoping that an imsuspecting employee would pay the accompanying bill.

The judgment orders Certified to stop using its misleading sales scripts and to actively
disclose during telephone solicitations that it is not a regular supplier and that the customer has not
already purchased the product. It also forbids Certified from billing customers for unsolicited
products and requires Certified to pay a $5,000 civil penalty.

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HEALTH AND MEDICAL ISSUES

Comm. V. Telebrands Corporation and Ajit Khubani

In July 1996, CPAD and 16 other states reached a settlement with a New Jersey-based
company and its president for allegedly using deceptive advertising practices in selling a hearing
aid device known as the "Whisper XL". The Whisper XL had not been approved by the FDA as a
hearing aid prior to its being sold to in the Commonwealth and advertisements claimed a wearer
would be able to "hear a whisper up to 100 feet away."

The consent judgment prohibits Telebrands and Khubani from selling any hearing aid
without first obtaining the required FDA approval and from making any claim in any advertising
of any hearing aid wdthout the appropriate FDA approval. Further, the company is prohibited from
making any claims in an advertisement for the Whisper XL or any hearing aid which is false,
misleading or deceptive. Telebrands and Khubani were also required pay refunds to consumers
who purchased the device and pay $33,462 to Massachusetts.

In the Matter of McNeil PPC. et al.

In October 1996, CPAD and 18 other states filed assurances of discontinuance with
McNeil Consumer Products Company, a major pharmaceutical company, and the Arthritis
Foundation over the marketing of four over-the-counter pain relievers sold imder the name
"Arthritis Foundation Pain Relievers."

McNeil and the Arthritis Foundation had advertised The Arthritis Foundation Pain
Relievers nationally in TV ads, radio, direct mail and in-store promotional materials. These
advertisements claimed that the pain relievers were especially formulated, "new," and
"doctor-recommended," that the Arthritis Foundation had helped to create the medications, and
that a portion of the sales price went to fiind arthritis research. The states believed that these
claims were misleading because the active ingredients in the pain relievers were merely ordinary
aspirin, acetaminophen and ipubrofen.

The assurance prohibits McNeil and the Arthritis Foundation from advertising that the
products are new, representing that the products are "especially formulated" or contain a different
formula than other over-the-counter pain relievers if the active ingredients are the same as those
found in other OTC medications already on the market, and representing that their product brand is
recommended by doctors, unless it is. In addition, McNeil paid $1,960,000 ~ $250,000 to an
agency of the National Institutes of Health for arthritis research and $1,710,000 ($90,000 each) to
the participating states for consumer education, attorney's fees, or costs.

Comm. V. Kristen Beth Nursing Home. Inc. and Philip McCourt. Jr.

In February 1997, CPAD entered into a consent judgment in Suffolk Superior Court with
Kristen Beth Nursing Home, Inc. and its president, Philip McCourt, Jr. to resolve allegations of
serious patient care deficiencies at the nursing home. To address this danger to the residents, the
court had previously allowed the Commonwealth's petition for the establishment of a receivership
and appointed receivers to correct the patient care and physical plant deficiencies, requalify the

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facility to receive Medicaid funding, care for the patients and locate a qualified purchaser to run
the facility at the close of the receivership. The responsibility for operating the nursing home was
transferred to a DPH approved bidder in 1992.

The consent judgment bars the defendants from becoming health care service providers
or having any interest in a health care service or facility in Massachusetts for a period of 20 years.
Pursuant to a prior court approved plan, the Commonwealth received $200,450 in restitution and
attorneys fees.

Comm. V. Edgewood Nursing Home. Inc. and Philip McCourt. Jr.

In February 1997, CPAD entered into a consent judgment in Suffolk Superior Court with
Edgewood Nursing Home, Inc. and its president, Philip McCourt, Jr. to resolve allegations of
serious patient care deficiencies at the nursing home. To address this danger to the residents, the
court had previously allowed the Commonwealth's petition for the establishment of a receivership
and appointed receivers to correct the patient care and physical plant deficiencies, requalify the
facility to receive Medicaid funding, care for the patients and locate a qualified purchaser to run
the facility at the close of the receivership. The responsibility for operating the nursing home was
transferred to a DPH approved bidder in 1990.

HOUSING AND HOME IMPROVEMENT

Commonwealth v. Timothy Rich d/b/a Air Temp Engineering

In July 1996, CPAD obtained a default judgment permanently enjoining Timothy Rich
d/b/a Air Temp Engineering, a chimney repair contractor, from engaging in deceptive practices
and ordered payment of a $70,000 civil penalty.

CPAD alleged that Rich failed to obtain licenses and permits required for installation and
removal of home heating, cooling and ventilation systems. A temporary restraining order and a
preliminary injunction were obtained prohibiting the defendant and his employees from engaging
in home improvement work without first obtaining
appropriate plumbing, heating and other permits.

Comm. V. American Lead Abatement. Inc.. et al.

In October 1996, CPAD entered into a consent judgment with American Lead Abatement,
Inc., a deleading contractor; Douglas L. Williams, Sr., who was in charge of lead abatement for the
company; and James C. Judge, a lead inspector.

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CPAD alleged that consumers that contracted with American Lead Abatement to do
abatement work also agreed to pay for hazardous lead waste disposal under their contracts. At the
end of each job, Williams allegedly requested exorbitant fees for hazardous lead waste disposal, in
one case 22 times the amount estimated in the contract. When consumers refused to pay, Williams
allegedly returned 55-gallon drums filled with hazardous lead waste back to consumers. Judge did
the initial lead paint inspection of the property and issued letters of lead abatement compliance for
the property. Subsequent inspections allegedly revealed that Judge had missed a number of
surfaces that required lead abatement during the initial inspection and had improperly certified the
house.

The consent judgment permanently enjoins the defendants from operating in the lead
paint removal business, requires them to participate in 30 hours of community service and required
the payment of a $1,000 civil penalty.

Comm. V. Billings. Oullette d/b/a Allvac Chimney Service, Billings Construction

In December 1996, CPAD obtained a consent judgment against Donald Billings and
Normand Oullette, home improvement contractors who do work under the business names "Allvac
Chimney Service" and "Billings Construction."

CPAD alleged that the Billings and Oullette approached an 86-year old woman, and
offered her their services as chirrmey sweepers. After performing that work and gaining her
confidence, they allegedly caused her to sign additional contracts for home improvement work, as
to all of which she was materially overcharged. The consumer paid the defendants over $43,000
for home improvement work.

The judgment permanently bars Billings and Oullette from engaging in the residential
contracting business and the plumbing and/or gas fitting business in Massachusetts. In addition,
the judgment orders the defendants to pay $20,000 in restitution.

Comm. V. Federal National Mortgage Association

In April 1997, CPAD obtained a consent judgment requiring the Federal National
Mortgage Association (Fannie Mae) to sell a foreclosed upon home to a Mattapan community
group for the benefit of its disabled occupant.

CPAD alleged that the 60-year old former school teacher was going to be evicted on the
day the initial complaint was filed. She had, through the Community Homeowner's Association,
been negotiating with Fannie Mae to repurchase her property which had been taken by Fannie Mae
at a foreclosure sale in 1993. According to the complaint, Fannie Mae had not been negotiating
with the Association in good faith with the known result that Ms. Turner would be evicted.

TOBACCO

Comm. of Massachusetts v. Philip Morris. Inc.. R.J. Reynolds Tobacco Company. Brown &
Williamson Tobacco Corporation. B.A.T. Industries P.L.C.. Lorillard Tobacco Company.

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Liggett Group. Inc.. New England Wholesale Tobacco Co.. Inc.. Albert H. Notini & Sons.
Inc.. The Council for Tobacco Research -U.S.A.. Inc.. and The Tobacco Institute. Inc.

In the last year, attorneys from CPAD and the Government Bureau have responded to
several lengthy motions to dismiss the case filed by the cigarette industry defendants. In October
1996, the defendants filed a 53-page motion to dismiss each of the substantive claims in the
Commonwealth's complaint and certain other defendants filed a motion to dismiss for improper
joinder. In November 1996, B.A.T. pic also filed a motion to dismiss for lack of personal
jurisdiction. The defendants also filed a motion to dismiss for failure to join indispensable parties.

Working with Special Assistant Attorneys General, the tobacco litigation team responded
to each of these motions in May 1997. The court has not set a date for oral argument.

Liggett Settlement
In March 1997, Attorney General Scott Harshbarger signed an historic agreement with
Liggett Group, Inc. For the first time in history a major tobacco company agreed to actively assist
Massachusetts in its lawsuit against the tobacco industry and radically change its business
practices.

Liggett agreed to place prominent warnings on all of its products and in its advertising
stating that smoking is addictive. In addition to the warning labels, Liggett will disclose internal
research on tobacco products and cease marketing to children. State attorneys general will be
provided with all relevant documents in its possession regarding tobacco industry conduct, and
Liggett will make available to prosecutors current and former employees for witness interviews,
depositions and trial testimony.

This agreement comes exactly one year after a settlement between Liggett and five other
states, including Massachusetts. In the original agreement, Liggett agreed to stop marketing its
product to minors, withdraw its opposition to proposed federal rules regarding tobacco advertising
and provide fimding to states to help pay for health care costs incurred treating tobacco related
illnesses.

In compensation for past, present and fiiture costs incurred in treating indigent citizens of
Massachusetts for smoking related illnesses, Liggett agreed to pay the five initial states that had
settled one year ago a total of one million dollars immediately. The company will pay a total of
four million dollars in equal annual installments over the next nine years and either 2.5 percent of
their pretax profits or 30 million dollars, whichever is greater, over the next 25 years.

Agreement in Principle in Proposed Settlement of State Tobacco Suits
In June 1997, after three months of negotiation. Attorney General Scott Harshbarger
announced that an agreement in principle had been reached with the tobacco industry. This
agreement in principle was designed to protect generations of children, improve the public health
and reclaim billions of taxpayer dollars.

Among many other things, the agreement in principle includes:

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-Industry payment of 368.5 billion in the first 25 years of the agreement for health care

costs and federal, state and local enforcement of the agreement and youth access laws;

-Full federal authority to regulate nicotine as a drug;

-A 500 million dollar per year counter-advertising campaign, modeled after the one in

Massachusetts to be paid for by the tobacco industry;

-A national youth smoking reduction goal to cut youth smoking in half with seven years

with an $80 million dollar penalty for every percentage point the industry falls short of

that goal; and

-Full industry fiinding of state and privately run smoking cessation programs.

Congress and the White House need to approve a final agreement, and this process is
currently underway.

PhiHp Morris. Inc.. et al. v. Harshbarger. et al..
United States Tobacco Co.« et ai. v. Harshbarger. et al..

These cases were filed in August 1996 by manufacturers of cigarettes and smokeless
tobacco products challenging the new Massachusetts ingredient reporting law. The manufacturers
asserted claims imder the supremacy clause, the takings clause, the due process clause and the
commerce clause of the United States Constitution.

The parties cross-moved for partial summary judgment on the preemption claim.
Those motions were argued before United States District Court Judge O'Toole in December 1996.
The Court issued its decision in February 1997 granting the Commonwealth's motion and denying
the manufacturers' motions. The manufacturers then moved for certification of an immediate
appeal of the Court's judgment to the Court of Appeals for the First Circuit. The Court of Appeals
accepted the manufacturers' appeal. The appeal was fiilly briefed and the First Circuit heard oral
argument in June 1997. The appeal is still under advisement. District Court Judge O'Toole still
retains jurisdiction over the manufacturers' remaining claims.

TRAVEL

In the Matter of Elite Enterprises. Inc. d/b/a Elite World Travel

In August 1996, CPAD entered into an assurance of discontinuance with Elite World
Enterprises, Inc., a Worcester ticket seller/travel agent that sold travel and ticket packages for the
Olympic games without disclosing that it was obtaining Olympic tickets fi-om third parties, not the
Olympic committee.

Under the terms of the assurance Elite was required to disclose its non-agency
relationship to the Olympic Committee; to keep all ticket funds in escrow until the end of the
Olympic games; and to pay $1,000 in costs to the Commonwealth.

Comm. V. Journeys on Dialysis. Inc. and George Muir d/b/a Journeys on Dialysis.

In December 1996, CPAD obtained a consent judgment against Journeys on Dialysis, Inc.
and its principal, George Muir, enjoining Journeys on Dialysis and Muir fi-om operating any travel

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business, and ordering the payment of $90,000 in consumer restitution and $200,000 in civil
penalties.

The defendants allegedly lured kidney failure patients by false offers of vacation cruises
made possible by dialysis treatments aboard ship. CPAD alleged that the defendants violated the
Consumer Protection Act by accepting money for vacation cruises and on-board dialysis treatment
from consumers and then failing to provide either the travel accommodations or refunds. The
court issued a temporary restraining order and subsequently, a preliminary injunction, prohibiting
Journeys on Dialysis and Muir from accepting fiirther payments for travel arrangement services.

Comm V. New Horizons

In May 1997, CPAD obtained a consent judgment against Resort Properties, Inc. and
Great American Records, Inc. of Milford, Connecticut and their principal, Anthony Newman.
CPAD alleged that the defendants used deceptive solicitations to lure consumers to attend sales
presentations, engaged in high pressure sales tactics to coerce consumers to purchase travel club
memberships, and engaged in unfair or deceptive financing and debt collection activities in
connection with those sales.

The suit also alleged that Great American Records, doing business as G.A.R. Financial,
engaged in unfair debt collection activities. G.A.R. Financial, an affiliated company, financed
many of the sales transactions.

The consent judgment prohibits Resort Properties, Great American Records and Newman
from engaging in misleading advertising practices and from making material misrepresentations
about the vacation club memberships they offer. The consent judgment also requires that the
defendants to pay more than $63,000 in restitution and $30,000 in civil penalties and costs for
alleged unfair and deceptive business practices in connection with the marketing and sale of
vacation club memberships.

UNAUTHORIZED PRACTICE

Comm. V. Carmen Abreu

In September 1996, CPAD filed a consent judgment in Suffolk Superior Court against
Carmen Abreu to resolve allegations that Abreu had engaged in the unauthorized practice of law.
The consent judgment prohibits Abreu, who had previously done business as the Hampden County
Legal Assistance Center, from engaging in the unauthorized practice of law and required the
payment of $1,270 in restitution to affected consumers.

Comm. V. Leon Aronson

In December 1996, CPAD filed a consent judgment in Suffolk Superior Court against
Leon Aronson to resolve allegations that Aronson had engaged in the unauthorized practice of law,
holding himself out as an attorney and misrepresenting that he was able to act as an attorney, and
failing to disclose that he had been disbarred.

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The consent judgment permanently enjoins Aronson from engaging in the practice of law,
holding himself out or otherwise acting as or representing himself to be an attorney; and
misrepresenting in any way, orally or in writing, that he is able to act as an attorney.

Comm. V. Fredy Pellecer

In March 1997, CPAD obtained a default judgment against Fredy Pellecer enjoining him
from the unauthorized practice of law, and ordering payment of $5,000 in consumer restitution and
$2,000 in civil penalties.

CPAD alleged that Pellecer misled immigrants seeking work permits and legal status to
believe he was an immigration lawyer. CPAD obtained a temporary restraining order and
preliminary injunction prohibiting the defendant from engaging in the practice of law, representing
that he is competent or qualified to practice law and from giving legal advice on immigration
matters.

Comm. V. John F. Kennedy d/b/a J.F.K. TV Repair

In June 1997, CPAD obtained a consent judgment against John F. Kermedy d/b/a J.F.K.
TV Repair permanently enjoining Kermedy from holding himself out as a radio and television
technician, and operating a business of radio and television repair without a license.

CPAD alleged that Kermedy, a TV repair technician doing business in Roslindale,
violated the Massachusetts Consumer Protection Act by engaging in the business of television and
radio repair after his license had been revoked by the state board of registration; charging
consiuners for repairs which had not been authorized by the customer; and reftising to return
customers' televisions and radios.

The consent judgment requires Kennedy to pay approximately $4,800 in restitution and
$10,000 in civil penalties. Also, should Kennedy's television and radio repair license be
reinstated, he is also enjoined from charging for repairs which are not authorized by the customers
and refiasing to return deposits even after work was never performed or after consumers demand
back their televisions and/or radios.

OTHER INITIATIVES

Mobile Home Regulations

In August 1996, the Office promulgated final regulations governing manufactured
housing communities in the Commonwealth. The regulations address consumer protection issues
involving terms and conditions of occupancy, the promulgation of community rules by
manufactured housing community owners, the provision of goods and services within
manufactured housing conmiunities, the purchase and sale of manufactured homes within these
communities, the termination of tenancies and eviction, the sale or lease of entire manufactured
housing communities by the owners of those communities, and other related issues.

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If owners of manufactured housing communities violate the regulations, they can be
subject to penalties of up to $5,000 per violation, and can be sued by the State or by private
citizens under the state Consumer Protection Act.

Multistate Cigarette Sting

In October 1996, the Attorneys General of Massachusetts, Minnesota, New Mexico, New
York and Vermont simultaneously released the results of sting operations in their respective states
that show that children continue to have widespread access to cigarettes despite increased focus on
the problem nationally. In the sting operations, minors attempted a total of 1405 purchases in the
six states and were successful 463 times, a 33% success rate. The sale of cigarettes to minors is
illegal in each of the states participating in the sting operation.

Minors involved in the multistate sting volunteered with the permission from a parent or
guardian and attempted to purchase cigarettes while accompanied by a representative of the
attorney general's office, state tobacco control program or other state agency. In Massachusetts,
40 teens participated.

The minors' rate of success in purchasing cigarettes ranged from a high of 56% in
Massachusetts, which targeted areas of the state without tobacco control programs, to a low of
23% in Vermont.

KENO Sting

In October 1 996, CPAD released a report describing the results of a statewide
investigation of retailer compliance with the law prohibiting minors from participating in KENO.
The investigation found that minors could purchase KENO tickets two out of three times. As part
of the sting, children as young as 14 were able to make KENO bets. Retailers who sell KENO
tickets to individuals under the age of 1 8 violate both the Massachusetts Consumer Protection Act
and the Lottery Law.

The students who participated in the survey were between the ages of 14 and 17. The
students were successftil in buying KENO tickets in 109 out of 166 times, a 66% success rate.

The survey was conducted in 35 communities in the Commonwealth including: AUston,
Arlington, Ashland, Attleboro, Billerica, Boston, Braintree, Brighton, Burlington, Cambridge,
Chelsea, Dorchester, Everett, Fall River, Framingham, Gloucester, Jamaica Plain, Lynn, Maiden,
Medford, Natick, New Bedford, Peabody, Quincy, Reading, Roslindale, Somerville, South Boston,
Springfield, Stoneham, Waltham, Watertown, West Roxbury, Wobum and Worcester.

The survey also showed that only 34% of sales agents were in compliance with legally
mandated posting requirements requiring them to post conspicuously information about help
available from the Council on Compulsive Gambling. Similarly, only 46% of the sales agents
surveyed were in compliance with the requirement that they conspicuously post a notice informing
customers that you must be 18 years of age to purchase a lottery ticket.

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I There are approximately 1 500 KENO installations in Massachusetts. Gross revenues

from KENO are approximately $300 million per year.

Health Club Legislation

In March 1997, a representative of the Office delivered testimony to the Legislature's
Joint Committee on Commerce and Labor in support of a health club bill that would provide
greater protections to consumers who enter into health club contracts. The bill was drafted in
collaboration with health club industry representatives and is sponsored by Sen. Robert Travaglini,
D-Boston and Reps. Daniel Bosley, D-North Adams, and Robert Koczera, D-New Bedford.

The bill requires health clubs to offer month-to-month memberships, limits the length of
any health club contract so that consumers will not pay more than 12 months ahead of time for any
service, requires that consumer deposits on unopened health clubs be placed in an escrow account,
and provides consumers with a broad range of cancellation rights.

Handgun Regulations

In Jime 1997, the office announced rules that effectively ban the sale of so-called "junk
gims" in Massachusetts and require all handguns sold in the state to include child-proofing
features, use limitation devices and consumer safety warnings.

The regulations require all handguns sold in Massachusetts to meet a minimum quality
standard by passing a materials test featuring specific scientific standards for melting point, tensile
strength and metal density, and a drop test measuring the potential for accidental discharge.
Handguns that fail the materials test would be required to pass a performance test applying specific
thresholds for malfunctions and part wear per rounds fired. Approximately 30 common types of
handguns, most of them .22 or .25 -caliber weapons, would likely be barred from sale here for
failing to win certification under these tests. None are currently made in Massachusetts.

In addition, the regulations require all handguns sold in Massachusetts to feature child-
proofing safety mechanisms to hinder unauthorized use, to contain duplicated serial numbers either
in a secret interior location or on the exterior of the handgun, and to be accompanied by written
instructions urging consumers to keep the weapons locked and stored in a secure place.

The regulations were first proposed in July 1 996, and were followed by a day-long public
hearing at the State House in November 1996. The regulations will be phased-in beginning
November 1997 and will fully take effect in August 1998.

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DIVISION OF PUBLIC CHARITIES

The Attorney General represents the public interest in the proper solicitation and use of charitable
funds and is authorized to "enforce the due application of funds given or appropriated to public
charities within the commonwealth and prevent breaches of trust in the administration thereof."
G.L. c.12, sec. 8. The Division of Public Charities was established to carry out the Attorney
General's responsibilities in this area.

More than 37,000 charities are registered with the Division, as well as 249 fundraisers
presently operating on behalf of charities in Massachusetts. A public charity is an entity which is
non-profit, whose piupose is charitable and which benefits a portion of the public; in addition to
philanthropic organizations, examples of public charities include nonprofit hospitals, schools,
social service providers, and cultural organizations. As well as registering and obtaining financial
reporting by charities and fundraisers, the Attorney General is the defendant in all proceedings
brought in the Supreme Judicial Court to wind up the affairs of a public charity.

Beyond enforcement of laws requiring annual reporting by public charities operating in
the Commonwealth, the Division focused its activities during the last fiscal year in three primary
areas: enforcement litigation to address deception and fraud in charitable fundraising; estate and
trust actions to ensure charitable trust funds are appropriately administered and applied; and
corporate governance and oversight initiatives to ensure charitable governing boards are carrying
out their fiduciary duties of due care and loyalty.

Recognizing that charities provide vital services in our commimities, enjoy certain
benefits due to their tax-exempt status, and assume certain obligations as a result of these benefits,
the Division has been involved in a number of initiatives over the past year intended to strengthen
the charitable sector at large. These efforts have included the Division's annual report on
charitable fundraising, published during the Fall giving season; the Attorney General's Fifth
Annual Conference for Board Members; and proposed legislation in two key areas~(i) charitable
fundraising and (ii) acquisitions of nonprofit health care providers by for-profit companies.

SOLICITATION OF CHARITABLE FUNDS

The Attorney General takes affirmative legal action against charities and professional
fiandraisers for unfair or deceptive solicitation practices and to enforce their fiduciary duties with
respect to funds raised. In addition to injunctive relief, he may seek restitution of fimds intended
by the public to benefit a specific charity, or particular charitable purpose, along with penalties and
fees.

Following are examples of deceptive charitable solicitation cases in which the Division
was involved in the last fiscal year:

Commonwealth v. International Union of Police Associations, Vietnam Veterans of
America, Massachusetts State Council. Inc.. American Trade and Convention
Publications. Inc.. Robert James Drake Marketing, and George Campbell

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In October, the Attorney General filed suit and obtained consent judgments against a
professional professional fundraiser and two charities permanently banning their deceptive
fundraising practices. The deceptive practices included impersonating police officers, naming
local police forces without authorization, and failing to disclose the professional fundraiser's status
as such. The court awarded $36,500.00 to the Attorney General's Local Consumer Aid Fund.

In December, a consent judgment was obtained against another professional fundraiser
named in the suit permanently barring it from any further charitable solicitation in Massachusetts.

Commonwealth v. Professional Consultants. David E. Giovannucci et. al.

In January, the Attorney General obtained a consent judgment permanently banning the
deceptive fundraising practices of a professional fundraiser and requiring him to perform 140
hours of commimity service. In a lawsuit filed previously, the Attorney General alleged that the
fundraiser violated a 1993 court order that prohibited him fi-om engaging in deceptive charitable
fundraising, by conducting another deceptive fundraising campaign.

Commonwealth v. William Twohig d/b/a United States Charitable Publications.

American Veteran's Relief Fund. Inc.. Disabled Peace Officers Association. Inc.. and

American Manufacturers Mutal Insurance Company

In April, the Division filed a complaint as part of a federal and state sweep of
badge-related telemarketing fraud. A preliminary injunction issued against the fundraiser and, in
June, against one of its client charities, enjoining the further use of deceptive solicitation. A
preliminary injunction was issued against another client charity enjoining it from conducting
fundraising activities in Massachusetts. The complaint alleged that Massachusetts residents were
asked to donate money to purchase such items as crutches and wheelchairs for disabled veterans,
when in fact the charity only provided a few food baskets, books or games with a total value of
about $650 to Veterans Administration hospitals.

In June, the surety consented to the Attorney General's motion for leave to deposit a
$10,000 bond with the court.

Commonwealth v. Dennis Bebar. Mass. Coalition Against Child Abuse, and Bay State

City & Town Business Directory. Inc.

In April, the Division filed a complaint and obtained a consent judgment against a
for-profit organization with a charity-sounding name who solicited funds by misleading donors
into thinking that contributions would help prevent child abuse. The court permanently barred the
defendants from charitable fundraising in Massachusetts and ordered them to pay $9,400 to the
Attorney General's Consumer Aid Fund and $600 in restitution to the Massachusetts Society for
the Prevention of Cruelty to Children.

Commonwealth v. BLS Concepts d^/a Safety Facts, Barry Singer, Fleet Associates,

James Linehan. and Mitchell Brown

In May, the Division obtained a judgment permanently barring the use of deceptive
fundraising practices by two professional fundraisers and their telemarketing company. According
to the complaint, filed previously, the professional fundraisers led people to believe that a safety

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education program was a charity and that funds raised would benefit Massachusetts school
children through the distribution of safety education materials to local schools. The program was
in fact a for-profit corporation, and no schools had agreed to conduct the program.
The court ordered the solicitors to pay the state $25,000 in civil penalties.

Commonwealth v. American Veterans Assistance Corporation and RD Marketing
In June, the Division obtained a court order requiring a veterans organization to pay
$10,000 to the Attorney General's Local Consumer Aid Fund and to refrain from using deceptive
practices in its fimdraising. In a complaint filed in 1994, the Division sued the charity and a
professional solicitor who had raised fimds on the charity's behalf, claiming that the telemarketers
led people to believe that the organization was a local organization, when in fact it was located in
California, and that the money raised would be used to help veterans in the communities in which
the prospective donors lived. The fundraiser previously paid $10,000 to the Attorney Generals
Consumer Aid Fund to pursuant to a consent judgment.

Commonwealth v. Noel Enterprises. Inc.. Leon Saja. Chiefs of Police National Drug Task
Force. Inc.. Bay State Consulting d/b/a Bay State Consulting Corporation et. al.
In June the Division obtained a consent judgment banning a national professional
fundraiser from conducting charitable fund-raising in Massachusetts for a ten year period. The
Attorney General had alleged in a complaint filed earlier that the fimdraiser had falsely represented
that the solicitations he conducted on behalf of several national law enforcement groups were
affiliated with or approved by Massachusetts police departments. Also, the complaint alleged that
solicitors falsely represented to potential donors that individuals who made donations would
receive favorable freatment by police officers.

Also in June, another fundraiser named in the case was ordered to pay $15,000 to the
Attorney General's Local Consumer Aid Fund, as well as to stop using deceptive practices in its
fimdraising.

ESTATES AND TRUSTS

In furtherance of his authority to "enforce the due application" of charitable trust fimds
and to "prevent breaches of trust in the administration thereof," the Attorney General is an
interested party in the probate of all estates in which there is a charitable interest and in all other
judicial proceedings affecting charitable trusts. Accordingly, the Division continued to handle a
large volume of cases in this area involving such matters as proposed allowance of accounts, will
compromises, sale of real estate, change of purposes or beneficiaries of charitable trusts and
bequests, amendment of charitable trusts to meet IRS requirements, and termination of charitable
trusts under G.L. c.203, t25. For example:

Winning Home. Inc. v. Harshbarger

Winning Home, Inc., is a charitable corporation whose principal asset consisted of 1 12
acres of open land in the towns of Wobum, Winchester, and Lexington. Its purpose is to provide
services to disadvantaged children and their families. Winning Home notified the Division that it
had determined that it could best carry out its mission by selling its property to a developer and

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using the proceeds to become a grantmaker. We informed Winning Home that the proposed
transaction needed court approval, pursuant to G.L. c. 180, t 8 A. After review of the details of
the proposed sale, including a description of the charity's financial situation, alternative plans for
its future, and documentation of the maimer in which the proposed sale was negotiated and
approved by the trustees, the Division assented to the charity's complaint requesting permission to
sell its land.

Rogerson Communities v. Harshbarger

The charity's complaint sought permission to use a portion of its endowment assets as
collateral for letters of credit to develop the Boston Alzheimer's Center. When it is built, the
Center will be the only residential facility in Massachusetts devoted solely to patients with
Alzheimer's and related disorders. Rogerson Communities provided the Division with extensive
documentation regarding the process it undertook to determine the project's feasibility, and after
review, the Division assented to the charity's complaint filed with the Suffolk County Probate
Court.

Town of Westminster v. Attorney General

Westminster filed a complaint seeking authority to deviate fi-om the provision of Joseph
Hager's will which devised a parcel of land known as Hager Park to the Town. The deviation
sought would permit Westminster to convey to Fitchburg a 16.14 acre portion of the park in
exchange for Fitchburg conveying to the town a 69.5 acre parcel of land in Westminster. The
portion of Hager park coveyed will be used to build a court ordered water filtration plant to be
used by both Westminster and Fitchburg. After review, the Division assented and judgment
entered permitting the deviation.

Thelen. Town of Wellesley v. Harshbarger

Mildred Thelen, by her will, established a trust for the purpose of awarding scholarships
to the most outstanding Spanish language students at Wellesley High School. The Town of
Wellesley filed a cy pres petition, without the Division's assent, seeking to expand the purposes of
the trust so that the Town could use trust assets to construct a language laboratory. After extensive
negotiation, the Town agreed to entry of a judgment which adheres to the donor's intent while
permitting the school to use a portion of the accumulated income for language lab
"enhancements," and, thereafter, to use approximately one-third of the income generated annually
to be used for such purposes as ftmding for student participation in language exchange programs
and funding guest speakers and cultural events which emphasize language and culture, especially
the Spanish language. The bulk of the income must still be used for scholarships. Judgment
entered in July.

Wills, Trusts, and Other Probate Statistics

During the past fiscal year, the Division received 1 ,273 probate citations; received and
reviewed 1 ,095 new wills, and received and reviewed 547 interim accounts for executors and
trustees, as well as 615 final accounts. In addition, the Division received 617 miscellaneous
probate matters or pieces of correspondence in new or existing probate cases, including 76
petitions for license to sell real estate and 20 petitions under G.L. c.203, sec. 25 to terminate trusts

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too small to be administered economically and distribute the trust property to the beneficiary,
resulting in the availability of more income to the charitable beneficiaries of such trusts by reason
of elimination of administrative costs. After review and negotiation, a total of 692 assents were
issued in all categories of probate matters.

Public Administration

For the period July 1, 1996, through October 3 1 , 1996, the Division continued to
represent the State Treasurer in the public administration of intestate estates which escheat to the
Commonwealth because the decedent had no heirs. This was done in cooperation with the
Treasury Department of the Commonwealth and the 48 Public Administrators currently serving in
the several counties of the Commonwealth. Pursuant to these procedures. Public Administrators
send escheated funds directly to the Treasury Department, Unclaimed Property Division. In
addition, the Division opened files on 22 new intestate estates, closed 7 estates, and handled 1 5
other miscellaneous public administration matters. In November of 1 996, in culmination of
discussions with the Treasury Department, the Division devolved the Public Administration
function to the State Board of Retirement.

CHARITY GOVERNANCE

The Attorney General's oversight of charitable corporations focuses on stewardship by
charity boards of directors. The Division can become involved when directors breach their
individual fiduciary duties of due care and loyalty or to prevent the misuse of charitable ftmds.
Under Attorney General Harshbarger, in recent years the Division has brought a number of
enforcements actions and obtained several governance agreements, after investigation, in which
charity boards have agreed to reform the manner in which they operate.

Scott Harshbarger v. Jean Chase Corvier. Paul Cormier. Debora Dunton. et. al.

The Division sued the executive director and board members of a non-profit day care
center for allegedly diverting $100,000 of the center's funds to a for-profit school owned by the
director and her husband. The complaint also alleged that members of the Board of the Directors
of the center failed to provide meaningful oversight of the day care center's operations, or to
protect its assets. A majority of the board members were related to the executive director. The
complaint seeks to have the director and board members removed fi-om office, and seeks to
recover the money which was diverted.

Commonwealth v. Community Cancer Services, Inc. and Paul Solas
The Division obtained a consent judgment ordering the closing of a charity that claimed
to raise money for cancer victims, and permanently banning its president fi-om any involvement
with charitable organizations or charitable ftmdraising in Masssachusetts. In a lawsuit filed earlier
in the year against the charity and its president, the Division alleged that the charity failed to
provide the extensive services it claimed to provide to cancer patients, instead performing only
token charitable benefits. The complaint also alleged that the president and his brother
appropriated charitable assets such as cars and computers for their own use, and that many
expenditures classified as patient services were actually spent on the president for his personal
benefit. The president was also ordered to pay $40,000 in restitution.

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Richard Bradford et. al. v. Harshbarger

A Dorchester church agreed to restore $97,000 to a fund meant for poor and indigent
people which the Division maintained was spent for other purposes. The agreement settled a
lawsuit previously filed by the church rector and wardens who were the fund's trustees, challenging
the Attorney General's authority to require them to account for the fund. The Division alleged in a
countersuit that between 1983 and 1993, the money was used not for the donor's intended purpose
but rather for general church purposes, including a portion of the rector's compensation package
and airfare and honoraria for visiting clergy.

The agreement forbids the use of money from the fund for the benefit of any parish
trustee or his or her relatives. It also requires the trustees to provide the Attorney Genberal's office
with a written itemizafion of all funds used twice a year.

Governance Agreements

In addition to governance matters which resulted in formal litigation, agreements were
obtained, after investigation, with the following charitable organizations:

(1) Billerica Hockey Association. This organization came into compliance with Division
reporting requirements, and amended its by-laws to add a conflict of interest policy.

(2) Oak Meadow Montessori School. Hiring, evaluation and compensation procedures
reformed. By-laws amended with conflict of interest policy and teacher grievance
mechanism explicitly included.

For-Profit Acquisitions

The Public Charities Division continued this year to devote considerable time and
resources to investigating proposed for-profit acquisitions of health care providers. Massachusetts
charitable organizations may not, on their own, "convert" to for-profit status. If charitable assets
are to be transferred to a for-profit, it must be for fair value, the transaction must be necessary and
in the best interest of the charity, and the charity board must have acted carefully and in a maimer
uninfluenced by conflict of interest.

At the end of the fiscal year, one acquisition of a nonprofit acute care hospital by a
for-profit hospital chain had been investigated by the Division and approved by the court, and a
second investigation was pending.

St. Vincent Hospital v. The Attorney General

Worcester-based St. Vincent Hospital and several of its related organizations within the
Fallon Health System proposed acquisition by OrNda, a for-profit hospital chain. The Division's
investigation of this proposed transaction included expert analysis and a public comment period.
After negotiation of certain provisions, the Division recommended approval of the sale to the
Worcester Probate Court. The court followed the Attorney General's recommendation. The buyer
agreed to abide by the Attorney General's Community Benefits Guidelines for Acute Care
Hospitals and to indefinite provision of free care at historic levels. As a result of the sale, a $4
million dollar donation was made by Fallon and OrNda to the Worcester Community Foimdation.

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Neponset Valley Health System

An investigation into the proposed sale of the Neponset Valley Health System, a
non-profit hospital system on two campuses, to Columbia/HCA, a national for-profit hospital
chain, was pending at the end of the fiscal year. As in other Division investigations, an
independent expert is assisting the Division and a public hearing will be held.

Review of Asset Dispositions

Under amendments to the non-profit corporations act, which took effect in April 1990, a
charitable corporation must give 30 days advance written notice to the Attorney General before
making a sale or other disposition of all or substantially all of the charity's assets if the disposition
involves or will result in a material change in the nature of the activities conducted by the
corporation. G.L. c.180, t8A(c). During the year, the Division reviewed over 30 such
dispositions. In addition to for-profit dispositions such as those discussed above, the Division is
reviewing the proposed nonprofit reorganization of Blue Cross/Blue Shield of Massachusetts.

Charitable Corporation Dissolution Statistics

In order to cease corporate existence, charitable corporations must dissolve through a
proceeding in the Supreme Judicial Court. To enforce the public's interest in the disposition of
charitable assets, the Attorney General is a party to all voluntary dissolutions of charitable
corporations under G.L. c.l80, fl 1 A. After review, negotiation of necessary modifications, and
assent by the Division, the pleadings are filed by the dissolving charity in the Supreme Judicial
Court.

During the reporting year, the Division assented to 1 24 final judgments dissolving
charitable corporations pursuant to section 1 1 A.

SIGNIFICANT DIVISION INITIATIVES

Giving Season Public Education Campaign

In consultation with the Attorney General's Advisory Committee on Public Charities, the
Division continued its ongoing public education campaign regarding charitable giving and charity
stewardship.

In November, a Guide for Professional Solicitors and the sixth annual Attorney General's
Report on Charitable Fundraising were published as part of the Attorney General's sixth aimual
"GIVINfG SEASON" public educafion campaign. Timed to coincide with charitable appeals
during the holiday season, and in cooperation with the "Give But Give Wisely" education program
conducted by the Better Business Bureau and other charitable organizations, this campaign is a
long-term effort to inform individuals and businesses about the donating process and how to make
sure that their contributions are put to the best possible use.

The 43-page Report on Charitable Fundraising explains how charitable fundraising
works, including the role that commercial solicitors play, and analyzes the financial reports of 274
fundraising campaigns by solicitors. Of the total dollars raised in all campaigns, 42% went to

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charity. In solicitation campaigns which involved the purchase of an event ticket, product,
advertising, or other "premium," the charities retained 20%, on average, of the gross proceeds.

The Division also issued a new Tips On Charitable Giving brochure. The Division also
helped prepare, and appeared in, the Attorney General's "Issues and Answers" cable TV program
on charitable giving in November.

In April, the Division issued a public advisory providing tips to assist the donating public
when they receive phone call solicitations asking for donations to police, fu^efighter, or law
enforcement organizations. This public education initiative occurred as part of a nationwide
federal and state coordinated crackdown on law enforcement-related fundraising fraud.

Fifth Annual Conference for Non-Profit Board Members

The fifth annual conference for non-profit board members, entitled "Tools for Success"
was attended by 235 volunteer charity directors and other members of the charitable sector. Held
June 2, 1 997, in Wobum, the conference agenda addressed the challenges facing charity fiduciaries
as they plan for the ftiture in a world of changing resources and changing structures.

Conference and Professional Education Presentations and Publications
As part of the Division's ongoing public education effort throughout the year, the Director
of the Division and other Assistant Attorneys General in the Division spoke to numerous
charitable groups, served on several continuing professional education panels and national
educational conference panels, and contributed to educational publications, including: Health
Affairs Journal; National Association of Attorneys General, National Association of State Charity
Officials, American Bar Association Business Law Section, American Hospital Associations,
Kaiser Foundation National Conference on Healthcare Conversions, Kaiser Foundation National
Briefing for Congressional Staff and Journalists, New York University School of Law, New
England Associaition of Corporate Directors, Massachusetts Hospital Association, Massachusetts
Continuing Legal Education, Massachusetts Health Officers Association, Boston Bar Association,
Boston Community Centers, Boston University School of Public Health, Deaconess Glover
Hospital, Committee for Community Living, New England Healthcare Tax Seminar, Smith
Healthcare Conference, North Shore United Way, Acton Boxborough United Way, Executive
Service Corps, and Massachusetts Paralegal Association.

National Training for Regulators on For-Profit Acquisitions

In July, the Division planned and hosted a national training workshop for state regulators
on issues facing states in for-profit acquisitions and conversions. More than 50 regulators from 30
states attended the two and a half day session. Sponsored by the Attorney General, the National
Association of Attorneys General (NAAG) and the National Association of State Charity Officials
(NASCO), the training was supported by a grant obtained by the Division from the Henry J. Falser
Family Foundation.

In June, the Division obtained a $295,000 grant from the W.K. Kellogg Foundation to
develop and conduct a national training program for regulators, policymakers, hospital trustees,
advocates and communities dealing with for-profit acquisitions and conversions of nonprofit

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hospitals and other health care entities. The grant will fund the Healthcare Conversion
Information Project, which will create and distribute national training materials and conduct a
training conference for regulators from across the United States.

Legislation

The Division drafted legislation filed by the Attorney General to strengthen the laws
relating to charitable fundraising, while bringing them into conformity with U.S. Supreme Court
decisions. The legislation would prohibit misrepresentations of the amount or percentage the
charity will receive, require that the compensation paid to the fundraiser be fair and reasonable to
the charity, and prohibit the charity from giving control or management of its affairs to its
commercial fundraiser.

The Division also assisted in the drafting of legislation co-sponsored by the Attorney
General to codify and strengthen the laws relating to for-profit acquisitions and conversions of
non-rofit acute care hospitals and health maintenance organizations. In addition to addressing the
investigation and review procedures followed by the Division, the legislation would enact stronger
protections relating to community benefits, indigent care, and community access to essential health
services.

Implementation of Probate Court's Uniform Probate Practice/Charitable Interests
The Chief Justice of the Probate Court issued the Uniform Probate Practice: Charitable
Interests, which became effectice December 1, 1996. The purpose of the Uniform Practice is to
clarify when notice must be given to the Charities Division of proceedings in the Probate Courts,
and otherv^ise to encourage uniformity of practice relating to charitable interests and to conserve
the limited resources of both the courts and the Charities Division by eliminating unnecessary
paperwork and delay. The new rules are the result of a Division initiative undertaken with a
subcommittee of the Advisory Committee.

DIVISION ADMINISTRATION AND STATISTICS

Enforcement of laws requiring accountability by public charities is central to Division
responsibilities with respect to charitable funds. With the exception of religious organizations and
certain federally chartered organizations, all public charities must register with the Division and all
registered charities must submit annual financial reports. The registrations and financial reports
are public records and public viewing files are maintained. The Division responded to over 4,1 1 8
requests to view files in the past fiscal year and, in response, approximately 6,523 files were
pulled.

Charitable Organizations: Registration and Enforcement

From July 1, 1996 through June 30, 1997, the Division processed approximately 13,706
annual financial reports and annual filing fees totalled $1,384,415. During this period, 1,909 new
organizations were reviewed, determined to be charitable, and registered. Each was sent the
Division's packet of information about the Division's registration and filing requirements.

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As part of an ongoing compliance program, the Division contacted approximately 7,348
charities whose annual filings were deficient or delinquent to rectify filing deficiencies.

Issuance of Certificates to Charities Who Fundraise

Under G.L. c. 68, sec. 19, every charitable organization which intends to solicit funds
fi-om the public, except religious organizations, must apply to the Division for a solicitation
certificate before engaging in fundraising. Upon receipt, the Division reviews certificate
applications for compliance with statutory requirements. Unless there is a deficiency in the
application, all certificates are issued within a 10-day statutory period.

This year, 4,325 certificates were requested and processed.

Registration of Professional Solicitors and Fund Raising Counsel

Under tt22 and 24 of G.L. c.68, all persons acfing as professional solicitors, professional
fundraising coimsel, or commercial co-venturers in conjunction with soliciting charitable
organizations must register annually with the Division. Solicitors and commercial co-venturers
must also file a surety bond in the amount of $10,000.00. All fundraisers must also file with the
Division a copy of each fiondraising contract which they sign with any charitable organization, and
solicitors must later file a financial return regarding each fundraising campaign.

During the fiscal year ending June 30, 1997, a total of 213 registrations were received and
approved, resulting in $66,200 in fees to the Commonwealth. Registrations were received fi-om 90
solicitors, 125 ftmd-raising counsel, and 24 commercial co-venturers.

Charifies Division Computerization

With Information Technology ftmding from the Legislature, the Division is in the process
of developing and implementing a new, comprehensive database and imaging system for the
Division's charity and fundraiser registrations and financial filings. The new system will enhance
compliance with the registrafion and financial reporting requirements, facilitate the Division's
administration of the registrations and filings, and improve public access to the filed information.

TABLE I: Money Recovered
For The Commonwealth Treasury

A. Charitable Registrafions, Certificate Fees, $1,450,215.00
And Fundraiser Registrations

B. Other fees, requests for copies, requests

for computer information 5,083 . 1 1

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REGULATED INDUSTRIES DIVISION

The Regulated Industries Division represents consumer interests in regard to two specific
industries: insurance and public utilities. Although some of the Division's work is carried on in
state and federal courts, most is performed before administrative regulatory bodies: the
Massachusetts Department of Public Utilities, the Federal Energy Regulatory Commission, the
Federal Communications Commission, and the Massachusetts Division of Insurance. In many of
these matters, particularly public utility rate cases, the Division is often the only active participant
advocating on behalf of Massachusetts consumers.

INSURANCE

The Division's representation of consumer interests in insurance matters is divided into
several distinct categories. The Division intervenes in both automobile and health insurance rate
setting proceedings. The Division also performs a consumer protection/insurance laws
enforcement ftmction: through The Division's consumer hotline and direct mail and telephone
communications, the Division receives many consumer questions and complaints. Through
mediation, negotiation and, if necessary, litigation, the Division obtains both restitution and
injunctive relief for insurance consumers. Finally, the Division engages in non-case related work
to advance insurance consumer interests, including legislative, regulatory, educational, and other
outreach activities.

RATE CASES

1997 Private Passenger Automobile Insurance:

On July 3, 1996, the Automobile Insurance Bureau of Massachusetts ("AIB") filed with the
Division of Insurance its recommendation concerning the profit component of 1997 private
passenger automobile insurance rates. On August 16, 1996, AIB filed with the Division of
insurance its recommendation concerning the main rate for 1997 private passenger automobile
insurance rates. On profits, AIB requested an increase of 2.3% and on the main rate, it requested
an additional 4.8% increase over the 1997 rates. If approved, these requests would have been
equivalent to an average increase in auto insurance premiums for Massachusetts drivers of $60 per
car or 207 million dollars overall. On behalf of Massachusetts consumers, the Division challenged
the increase requested by the industry. During the course of the evidentiary hearings and
following the discovery of an error by a mathematician in the Division of Insurance, the AIB filed
an amended filing indicating that an error had occurred in the filing. On ftirther questioning by
the Division, the AIB acknowledged that the same error had occurred during the years 1991
through 1 996 rate years. The Division filed a request with the DOI that the industry be required to
refund the amounts collected during those years, a total of $176 million dollars. The
Commissioner ruled that the funds should be reimbursed to consumers. On January 24, 1 997, the
Commissioner issued a decision fixing and establishing an average rate for which is approximately
6.2% lower that the equivalent 1996 rate or 13.3% lower than the industry's requested increase.
This reduction included 40% of the 176 million dollars collected in error during the years 1991
through 1996. The remaining 60% will be returned to policyholders during the years 1997 and
1998. The Division's intervention resulted in savings to Massachusetts consumers of 390 million

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dollars or an average of $114 per car. In addition, rates will be reduced in 1998 and 1999 by
approximately 70 million and 35 million dollars respectively.

1998 Automobile Insurance:

Proceedings concerning the 1998 automobile insurance rate began on May 27, 1997 with notice of
the armual hearing called by the Commissioner to determine whether it was necessary that the rates
for 1998 be fixed and established in accordance with G.L.M. c. 175, §1 13B. The Division
participated in the hearings and took the position that market conditions continued to require that
rates be set pursuant to G. L. M. C. 175. The Division noted, however, that for the second
consecutive year some level of competition already existed in Massachusetts as a result of the
large number of group rates and deviations approved by the Commissioner during 1996 and 1997.
No decision had been issued by the Commissioner by the end of the fiscal year although the
Commissioner did ultimately concur with the Division's position and ordered that the rates be
fixed and established for the year 1997.

1995 BCBS Non-group Insurance:

In April, 1995, BCBS proposed an 8 percent increase in its Managed Major Medical (MMM) non-
group insurance product. The Division intervened in proceedings before the Division of Insurance
in opposition to this rate increase. On August 8, 1995, BCBS filed an amendment to the above
filing to change the product offerings. In light of the proposed reform of the non-group health
insurance bill pending in the Legislature, the Division and BCBS negotiated a continuance in the
rate case pending passage of reform legislation. Following the passage of reform legislation in
August of 1996, BCBS withdrew its application for increased rates. As a result of the Division's
agreement with BCBS in 1995, there were no increases in BCBS non-group indemnity plans since
1993.

1997 Prudential Insurance Company - AARP Medicare Supplement Insurance: In the fall of
1996, the Division participated in hearings to consider the Prudenfial's proposed Medicare
supplement insurance requests for increases in both their pre and post OBRA and pre and post
G.L.M. C.176K plans. The Attorney General participated in the hearings. The case was settled
through stipulations that required nofice to all consumers of the new plan offerings available as a
result of the enactment of G.L.M. C.176K (Medicare supplement insurance reform) which
mandated coverage to all consumers at generally lower rates. The stipulation also significantly
reduced the rate requested by the Prudential resulting in savings to Massachusetts consumers of
over one million dollars.

Bankers Multiple Line Medicare Supplement Insurance:

In the July of 1996, the Division participated in hearings to consider Bankers Multiple Line
Medicare supplement insurance requests for increases in their pre and post OBRA and pre and
post G.L.M. c. 176K plans. Bankers Multiple Line requested increases of over 100% in their
plans. The Attorney General participated in the hearings. The case was settled through
stipulations that required notice to all consumers of the new plan offerings available as a result of
the enactment of G.L.M. 176K (Medicare supplement insurance reform) which mandated coverage

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to all consumers at generally lower rates. The stipulations also resulted in lower rates that saved
Massachusetts consumers over one million dollars.

BCBS Medicare Supplement Insurance:

In August of 1996, BCBS filed for an increase in its Medicare supplement insurance policy rates to

be effective January 1, 1997. Following lengthy hearings before the Commissioner in which the

Division actively participated and argued against the increase, the Commissioner approved an

increase, effective March 15, 1997, that was almost 6 million dollars less than BCBS had

requested.

CONSUMER PROTECTION/ENFORCEMENT

The Division also engaged in non-rate case related insurance work during fiscal year 1 997
that involved consumer protection issues and/or enforcement of the Commonwealth's insurance
laws. Representative matters include:

EMPLOYERS FAILURE TO REMIT HEALTH INSURANCE PREMIUMS

During the 1997 fiscal year, the Division continued its work in this area which had been
initiated in a prior fiscal year.

Investigations:

The Division continued to investigate complaints against employers by employees that
their health insurance had lapsed because of the failure of their employer to pay health insurance
premiums or otherwise to provide sufficient funding to cover their employees' health costs. The
majority of these complaints involved a dispute between a single employee and the employer, and
were resolved by payment of the outstanding medical claims by either the employer or the insurer.
There has been a significant decrease in the number of complaints from prior fiscal years against
employers who allowed coverage to terminate because of nonpayment of premiums. The Division
ascribes this decrease to the efficacy of the Attorney General regulation, 940 C.M.R. 9.00,
effective March 1 996, which encouraged notification by insurers to employees prior to termination
of coverage. Except for single employee issues, complaints received now relate to self insured
plans only. Some of these complaints required the Division to take more formal action as
described below.

Civil Litigation

The Division entered into a consent decree with one Massachusetts employer, Carr
Leather, which had represented to its employees that it was withholding funds for the payment of
health insurance premiums and also represented to employees that it was providing health
insurance when in fact it was not. The consent decree provided that Carr Leather would pay all
outstanding medical costs of injured employees and make contributions to the Massachusetts
Consumer Aid Fund. The Division alerted the Attorney General's Fair Labor and Business
Practices Division to the company's failure to pay wages and vacation pay. Working with the Fair

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Labor and Business Practices, the Division obtained over $1 30,000 in reimbursement to 47
employees for unpaid medical bills, wages and vacation pay.

Criminal Litigation

The Division continued its prosecution of John E. Flynn, Jr., the owner and CEO of a
Boston architectural and engineering firm, Alonzo B. Reed, who allegedly failed to remit health
insurance premiums and other payroll withholdings including employees' contributions to the
employer's 401(k) plan and state withholding taxes. Flynn was indicted by a Suffolk County
grand jury during the previous fiscal year for several counts of larceny of employee funds, failure
to account for and pay over state withholding taxes and failure to file personal income tax returns.
The Division continued to work with the U.S. Attorney's Office in Boston, to which it previously
had provided evidence that Flynn had committed related federal crimes. At the end of this fiscal
year, Flynn pleaded guilty to federal bankruptcy fi-aud and ERISA embezzlement in federal court,
and is due to be sentenced in September 1997. The state case will be resolved by plea or trial
during the next fiscal year.

HOMEOWNERS INSURANCE

The Division continued its work in the examination of the problems faced by urban
dwellers in the purchase of homeowners insurance. In particular, the Division participated in the
request for a rate increase filed by the FAIR Plan and also was active in supporting Community
Reinvestment legislation.

FAIR Plan Rate Increase:

In August, 1996, the Massachusetts Property Insurance Underwriting Association ("FAIR")
submitted to the Division of insurance filings regarding their Homeowners product, the Personal
Property endorsement. Commercial lines and Dwelling and Fire coverage. The Division
participated in the hearings and the case was settled by stipulation. The stipulations resulted in
savings to Massachusetts consumers of over $600,000 .

Community Reinvestment Bill:

In March, 1997, The Division presented testimony to the Joint Insurance Committee of the
Legislature in support of a community reinvestment bill for the insurance industry. The bill
would require insurance companies to invest in the low and moderate income communities and to
report annually to the Division of Insurance, the amount of these investments. On behalf of the
Attorney General, the Division also asked the Joint Committee on Taxation of the Legislature to
condition any tax benefit to the insurance industry on community investment. In addition,
members of the Division attended several community meetings to educate members of the
community about community reinvestment and to express support for the passage of the bill.

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LONG-TERM CARE INSURANCE

The Division continued its work in the examination of problems faced by elders in financing
nursing home and other long-term care.

Long Term Care Task Force:

Members of the Division, together with Bureau attorneys, participated in a statewide Task Force
on Long-Term Care Financing (the "Task Force"). The Task Force is a bipartisan effort led by the
Attorney General and the Governor to develop strategies to increase the private financing options
for long-term care, and to provide financial security to elders who risk impoverishment fi-om the
costs of long-term care services. Participants include representatives of the relevant state agencies,
consumer and elder advocacy groups, the insurance industry and long-term care provider
organizations. The Task Force is an outgrowth of the Interagency Workgroup on Long-Term Care
Financing, in which members of the Division and Bureau attorneys worked with the Division of
Insurance, the Division of Medical Assistance and the Executive Office of Elder Affairs during the
first part of the 1997 fiscal year to produce a preliminary report that called for further study of
certain issues. Members of the Division serve on the Task Force steering committee, and are
leading and participating in several work groups that are studying a number of issues, including the
regulation of long-term care insurance, public education concerning long-term care financing, and
development of alternative insurance products to cover some of the costs of long-term care. The
Task Force will be continuing into the next fiscal year.

Consumer Complaints and Education:

This year's enactment of the federal Health Insurance Portability and Accountability Act,
which provides certain tax incentives for the purchase of long-term care insurance, has resulted in
increased marketing of these products and increased consumer conftision. The Division responded
to numerous consumer inquiries regarding long-term care insurance policies. A member of the
Division made presentations to elder organizations concerning long-term care insurance.

MANAGED CARE

As more and more Massachusetts citizens receive their health care coverage through health
maintenance organizations, the Division engaged in sever al activities to ensure that those citizens
get the health care coverage they need. During the 1 997 fiscal year, the Division undertook a
variety of initiatives in the area of managed health care.

Managed Care Complaints:

Members of the Division resolved complaints received fi-om consumers, and in some
cases providers, concerning managed care plans. These complaints fell into several categories:
difficulty accessing the grievance procedures of the managed care organization; problems related
to limited networks of providers; denials of coverage for care received in emergency rooms;
denials of coverage for care deemed not medically necessary or experimental; utilization review
policies and practices (e.g., denials of coverage made by unqualified plan personnel); and
complaints related to quality of care, among others. These complaints gave the Division an
understanding of the kinds of problems that consumers face in managed care settings.

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Managed Care Report:

A member of the Division was responsible for researching and writing the Attorney
General 's Report on Managed Care in Massachusetts: Protecting Managed Health Care
Consumers, a comprehensive document that examined the state of managed care in Massachusetts
and made detailed recommendations for the creation of a state regulatory framework for managed
care. The purpose of the report was to stimulate public debate and legislative action. The
Managed Care Report was the product of a year-long effort by the Division, and other Bureau
attorneys, which involved reviewing Massachusetts and other states' laws applicable to managed
care organizations, analyzing existing literature and studies pertaining to developments in the
managed care and health care markets, and consulting with representatives of the managed care
industry, provider groups, the Legislature and consumer groups.

Legislative Work:

The Division provided information and support to members of the Legislature in their
drafting and consideration of managed care legislation. This included the compiling of statistical
information related to managed care complaints received by the Division. The Division prepared
testimony, delivered by the Attorney General, for legislative hearings on managed care legislation.

Public Records Request:

The Division devoted substantial resources toward responding to a public records request
by the Massachusetts Association of HMOs for copies of all managed care complaints that the
Division had received over a two-year period.

HMO Community Benefit Guidelines:

A member of the Division, with other Bureau attorneys, undertook oversight of the
Attorney General's HMO Community Benefits Guidelines. During the 1997 fiscal year, the
Division member provided guidance to the HMOs in their completion of the first annual
community benefits reports, which were due on the last day of the fiscal year. This work will
continue into the next fiscal year, with the preparation of the Attorney General's report evaluating
the HMOs' community benefits programs.

LIFE INSURANCE LITIGATION

Consumer Complaints:

During the year, the Division devoted a considerable amount of time and resources to sales
practices in the life insurance industry. These practices included the alleged misrepresentations
made by various life insurance companies in the sale of their life insurance products. These
misrepresentations generally involved "churning" (the practice of turning in old policies for new
policies on the representation that the old policies would fully or partly support the new);
"vanishing premiums" ( the promise that premiums would no longer be necessary after a finite
number of years). The Division mediated cases on behalf of individual consumers and also
engaged in discussions with several companies that would resolve the cases on a global basis.

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Companies with whom we mediated individual complaints included: Berkshire Life, Boston
Mutual Life , Crown Life, Equitable Life Assurance Society, John Hancock,
MassMutual/Connecticut Mutual, Metropolitan, Mutual of New York, New York Life, Provident
Mutual, Prudential Life Insurance Company of America, Sentry, The New England and
Transamerica Life. Individual settlements reached on behalf of individual consumers resulted in
benefits to them of over six hundred thousand dollars.

Prudential Life Insurance Company of America
Litigation:

In addition to the resolution of individual complaints, the Division engaged in litigation
with Prudential to provide a remedy to all consumers who had been harmed by widespread sales
practices which allegedly deceived and harmed its life insurance policyholders. Policyholders
complained to the Division that Prudential had: (I) unfairly "churned" their policies, by convincing
them to surrender or borrow against old policies and buy more expensive new policies, without
disclosing the full costs and risks involved; (ii) misrepresented that the obligation to pay annual
premiums would vanish after a finite number of years, when the life insurance policies actually
required premium payments for the life of the policyholder; and (iii) deceptively sold life
insurance policies as investments, retirement plans, or other non-life insurance products.

In January, 1997, after months of negotiation with the Prudential, the Division filed a
petition to intervene in a federal class action suit against Prudential pending in New Jersey. On
February 3, 1997, the federal court granted the Attorney general leave to intervene. In December,
1996 and February, 1997, the Division filed preliminary and supplemental objections, respectively,
to the proposed settlement of the federal class action case, arguing that the settlement placed too
many burdens on consumers who would file claims.

After continuing negotiations with the Prudential, the Division, on behalf of the Attorney
General, entered into a preliminary settlement with Prudential on February 21, 1997. In the
settlement. Prudential agreed to make it easier for injured consumers to prove their claims and
also to increase the relief that would be to those consumers. After further negotiations, Prudential
consented to the entry of a judgment against it in the Massachusetts Superior Court, and the court
approved the judgment on June 19, 1997. The judgment requires Prudential to resolve claims
from individual policyholders under an Alternative Dispute Resolution (ADR) process. The
Division estimates that, as a result of this process, Prudential will eventually provide refunds and
other forms of relief to Massachusetts policyholders worth $20 million to $40 million.

Claims Settlement:

As part of the settlement of the Massachusetts case, the Prudential provided the Office of the
Attorney General with $ 1 .2 million. Two hundred thousand was for the Score program conducted
by the Attorney General, two hundred thousand was for the Local Consumer Aid Fund, one
hundred and fifty thousand was contributed to the Commonwealth's general fund as payment of
costs associated with the litigation and six hundred thousand was for the general purpose of
educating consumers about insurance. The Division used a significant portion of these ftmds in an
extensive outreach program, including media advertising, to reach all Prudential policyholders to
inform them that the Division was available to help them. In addition, the Prudential sent a letter

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to over 250,000 Massachusetts policyholders advising them of the Division's efforts. Apparently,
as a result of this outreach, over 45,000 Massachusetts consumers elected to file claims through
the ADR process. This was significantly higher (about quadruple) than the Prudential had
expected and than the percentage in other states. Along with the Massachusetts Division of
Insurance, the Division set up a Hotline to answer consumers' questions about filing claims and to
help them with filling out the claims forms. During the first four weeks of its operation, the
Hotline responded to more that 13,000 consumers. In addition to the Hotline, the Division
conducted training seminars around the state to help consumers. The training sessions continued
into the next fiscal year and it is anticipated that approximately 1,500 consumers will attend those
training sessions.

John Hancock Mutual Insurance Company:

Early in 1 997, the division entered discussions with John Hancock Mutual Life Insurance
Company regarding possible settlement of the large number of complaints Massachusetts
consumers have made against its sales practices. Hancock filed a proposed global settlement with
the federal district court in Boston, in connection with a nationwide class action lawsuit brought by
policyholders. The Division is reviewing the proposed settlement and attempting to improve on
the relief it offers consumers.

In the interim, the Division has worked with Hancock to resolve the more than 100 individual
complaints we have received. As of June, 1997, Hancock began making settlement offers to
individual consumers.

LEGAL ACTIONS

Commonwealth v. Coletti:

The Division filed a complaint against an insurance broker, William Coletti, alleging that he had

accepted premium payments from consumers but failed to remit the premiums to the insurance

companies. The Division obtained a preliminary injunction enjoining Coletti from depositing

premium payments into his own accounts. The Division also obtained restitution for injured

consumers.

Commonwealth v. Attias:

During the year, the Division received approximately $7,500 in payments from Rent-A- Wreck of
Framingham in connection with a consent judgment entered against it in April, 1996. Consumers
had lodged numerous complaints against Rent- A- Wreck for a variety of unfair practices connected
to its car rental business - illegally requiring renters to purchase collision damage waivers
(CDWs); failing to waive damage claims against those who had purchased CDW coverage and had
accidents; and renting defective automobiles. The consent judgment required R-A-W to pay
almost $10,000 in fines and to repay harmed consumers approximately $2,500.

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ASSURANCES OF DISCONTINUANCE

The Division entered into one Assurances of Discontinuance during fiscal year 1997

Central Massachusetts Health Care, Inc. :

The Division entered into an Assurance of Discontinuance with Central Massachusetts Health
Care, Inc. ("CMHC"), a health maintenance organization ("HMO") that closed its prescription drug
formulary after the open enrollment period without prior notice to its members. The Division
investigated CMHC based on complaints received from Mass. Organization of State Engineers and
Scientists ("MOSES") Legislative Chairperson, John Gatti. Meetings with MOSES and with
CMHC, discussions with consumers, and legal research and analysis resulted in the Division's
finding that CMHC had violated c. 93 A by changing the pharmacy benefit after the close of the
open enrollment period. CMHC re-opened the formulary on February 1, 1996, but the Division
obtained restitution for consumers harmed while the formulary was closed. The Assurance of
Discontinuance required CMHC to reimburse its enrollees for out-of-pocket expenses incurred as a
result of CMHC's closing of the prescription drug formulary and a contribution to the Local
Consumer Aid Fund. Total refimds to consumers were approximately $35,000.00.

CONSUMER ASSISTANCE

In addition to the many consumer complaints which the Division was able to resolve on
behalf of consumers, members of the Division explained and worked with many consumers to
guide them in such matters as: understanding the intricacies of various entitlement programs and
the interplay between them; the billing practices of their health insurers; continuation of health
insurance coverage following termination of employment or following divorce and the like. While
no monetary consumer benefit can be placed on these activities, they provide a valuable service to
Massachusetts consumers, many of whom are elderly or who have no other sources to turn to.

Coverage for Bone Marrow Transplants:

In two cases, the Division successfully negotiated coverage of the donor search costs in connection
with a bone marrow transplant. Consumers who had coverage for bone marrow searches
discovered, when they tried to access that coverage, that while their carriers would cover the cost
of the actual transplant, they would not cover the cost of testing potential donors. Because the cost
of testing potential donors can exceed $10,000.00, the consumers were unable to proceed with the
transplant. A member of the Division got the agreement of both carriers to pay for the cost of
testing in addition to the transplant already covered. Subsequently, the Division undertook an
examination of the policies and practices of the 50 largest carriers in Massachusetts regarding the
payment of testing for bone marrow donor costs. The survey had not been completed by the end of
the fiscal year.

Emergency Treatment by Clinics: I

In another case, the Division challenged the internal policies of a clinic operated by a
managed care organization that denied emergency assistance to a non-member who was
suffering a heart attack. The Division's challenge resulted in changes to the policies of the
clinic to ensure that appropriate assistance would be provided in the fijture.

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Fraternal:

In response to complaints against Fraternal Organization, an

entity that acts as an intermediary for small businesses seeking health insurance, the Division

investigated fraternal. In its capacity as intermediary collected premiums from small businesses

and failed to remit the premiums to carriers resulting in wide scale cancellations by the carriers.

Following our investigation. Fraternal refiinded premiums to the consumers and terminated its

business as an intermediary. The Division also assisted in making sure that these consumers found

adequate alternative health coverage.

Consumer Hot-Line and Paralegal Resolution of Inquiries and Complaints:

During the fiscal year, the Division received and responded to almost 8,000 telephone inquiries, an

increase of 33% over the prior fiscal year; almost 1700 written complaints, an increase of 50 %

over the prior fiscal year. Over $1,200,000.00 were received by consumers through the

intervenfion of the paralegal and volunteer interns, an increase of almost 75% over the prior fiscal

year.

AGELDER:

During the year, the Division initiated a new toll free help line to assist individuals on a wide range
of elder issues. The help ;line, which is staffed by elderly volunteers, serves as a comprehensive
resource for information and referral on a full range of concerns raised by callers. Those concerns
include health insurance, home health care, long term care, long term care insurance, Medicare,
Medicare supplement coverage, Medicaid, disability rights, age discrimination, telemarketing
fraud and other consumer protection issues. In its first month of operafion, the help line received
over 700 calls.

VIATICAL SETTLEMENTS

The Division undertook several initiatives regarding viatical settlements during the fiscal year: the
promulgation of regulations regarding viafical sales and viatical loans; the publication of a
brochure advising terminally ill people how to obtain cash out of their life insurance policies; and
the provision of testimony in support of a bill requiring the licensing of viatical companies.

Viatical regulations:

Working closely with the Aids Acfion Committee, the Division drafted regulations. They were
sent out for comment to interested parties. Following receipt and incorporation of many of the
comments, the Division scheduled a public for public comment. The regulation will be
promulgated in the next fiscal year.

Brochure:

Public Protection Bureau attorneys and the Division drafted a brochure entitled "Turning Death
Benefits into Living Benefit: A Guide to Drawing Cash from your Life Insurance Policy". The
brochure will be distributed widely through various organizations helping the terminally ill.
Publication date is scheduled for the Summer of 1 997.

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Testimony:

The Division presented testimony to the Massachusetts Committee on Insurance in support of
House Bill 52 which would require viatical companies to be licensed by the Massachusetts
Division of Insurance prior to conducting business in Massachusetts. The bill was filed after the
Division began work on regulations on viatical sales which would place certain disclosure
requirements on viatical companies. The bill and the regulations will ensure that Massachusetts
consumers that enter into viatical arrangements will have the protection needed for this vulnerable
population.

OTHER ACTIVITIES

LEGISLA TIVE A CTIVITIES

In addition to the legislative testimony on managed care, viatical companies and community

reinvestment mentioned previously, the Division also testified on several other bills before the

Legislature.

Non discrimination:

The Division testified in support of a bill. Senate Bill 716, cosponsored by Attorney General Scott
Harshbarger and Senator Dianne Wilkerson. The bill would provides that insurance companies
may not discriminate on the basis of gender, inter alia, either in the pricing or sale of policies.

Mutual Holding Companies:

The Division wrote to the Massachusetts Joint Committee on Insurance urging the Committee to
consider the balance between consumer interests and the interests of the insurance companies prior
to passage of a statute.

Auto Insurance Overcharge:

The Division testified before the insurance Committee in favor of a bill that would require the auto
insurance to return amounts during previous years through an error in the auto industry's annual
rate request. Because the Commissioner ordered the companies to return the moneys, as requested
by the Division, in her rate decision, the bill became moot and no fiirther action was taken.

Mandated Benefits in Health Insurance:

A member of the Division testified in favor of a bill which would require coverage for certain

contraceptive services and also for Estrogen Replacement Therapy.

Sale of Insurance by Banks:

In a letter to the Massachusetts Joint Committee on Banks and Banking, the Division asked the
Committee to consider additional consumer protections in the bill prior to passage. The additional
protections would provide clear delineation between banking and insurance functions and require
clear disclosures of this distinction.

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REGULATORY ACTIVITIES

Medigap Insurance:

In June 1 997, the Division presented testimony at a public hearing convened by the
Division of Insurance to monitor the overall condition of the Massachusetts market for Medicare
supplement insurance following the reform enacted by the Legislature in December, 1993.

Non-group Health Insurance Reform:

A member of the Division testified before the Division of insurance on the proposed regulations

regarding the rate hearings for the new non group health insurance products.

MISCELLANEOUS ACTIVITIES

Guest Speakers

Members of the Division made presentations to several organizations regarding insurance
and financial exploitation of elderly.

Public Education Programs

Consumer University

A member of the Division participated in the presentation of Consumer University, an
Attorney General sponsored consumer advice program that was presented to 300 consumers as the
opening day of the NAAG Conference.

Newsletter

The Division prepared and distributed, to approximately 2,000 elderly consumers, a
newsletter explaining the reform of the way in which Medicare supplement insurance policies are
sold in Massachusetts and advising them of their options.

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ESTIMA TED SA VINGS TO CONSUMERS

Auto Rate Case 390,000,000 in 1 997 rates

70,000,000 in 1998 rates
35,000,000 in 1999 rates
Medigap Insurance Rate Cases 8,000,000

Life Insurance mediation 600,000

Prudential case 30,000,000

Consumer Insurance Matters 2 1 0,000

Consumer Hotline 1.200.000

Total 535,010,000

UTILITIES

The composition of the Regulated Industries Division's utility workload in fiscal year
1 997 continued to reflect the rapid and dramatic changes underway in the telephone, electric and
gas utility industries: there were few traditional rate cases and much of the Division's work
involved consideration of alternative approaches to rate regulation that place greater reliance upon
utility performance and competitive forces and less on the review of actual utility costs. These
efforts involved advocating new structures and rules to maximize the consumer benefits jfrom the
change in regulatory approach and protecting the interests of small residential and business
customers during the transition to new regulatory frameworks. While some of this work occurred
in contexts applicable to all three of the public utility industries, most occurred either in the
context of industry specific administrative rulemaking/factfinding proceedings or in adjudications
of specific cases. Examples of the Division's public utility work relative to each industry in fiscal
year 1997 include:

ELECTRIC MATTERS

Restructuring

Electric Utility Restructuring, D.P. U 96-100. On May 1, 1996, the DPU issued proposed
regulations to implement a "restructuring" of the Commonwealth's investor owned electric utility
industry in a Notice of Inquiry/ Rulemaking proceeding it had opened earlier. Among other things,
in it request for coimnents, the DPU indicated that it intended to allow electric utilities to recover
any stranded costs over the next ten years fi-om their customers and sought comments on the
following issues related to restructuring: (1) market structure, (2) market power, (3)
transmission service and rates, (4) distribution service and rates, (5) stranded cost
calculation and recovery mechanisms, (6) rate unbundling, (7) performance-based
ratemaking, (8) environmental regulation and demand-side management, (9) default
service, (10) universal service, (1 1) the effect of restructuring on municipal electric
companies, and (12) the local and utility tax impacts of restructuring. The Division filed
written comments with the DPU during the Spring, presented oral testimony at hearings held

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during June and July of 1996, filed written comments in August, 1996, and explained the Attorney
General's position on electric utility restructuring at evening public hearings held by the DPU
throughout the state during the fall of 1996. In an order issued on December 30, 1996, the
Department determined that it would not proceed without further legislative direction but did
indicated agreement with many of the modifications to its May 1 proposal that the Office had
recommended in its earlier comments, including a requirement that all distribution utilities make
available to their customers a fixed price transition service.

Massachusetts Electric Company, DP. U. 96-25; Boston Edison Company, DP. U. 96-23;
Eastern Edison Company, DPU 96-24. Following the DPU's public pronouncement in May,
1996 that it would allow electric utilities to recover "stranded costs" fi-om their customers, the
Division initiated settlement talks with electric utilities in an effort to ensure that any restructuring
in Massachusetts satisfied the five principles for restructuring that the Attomey General had
aimounced in early 1996. Following negotiations over the summer of 1996 with Massachusetts
Electric Company and its wholesale affiliate. New England Power Company, in September, 1996
the Attomey aimounce his "Consumers First" agreement with those Companies. The agreement
was filed with the DPU in October after numerous parties joined and supported the agreement,
including the Weld/Cellucci administration, low income, environmental, and energy conservation
advocates as well as potential suppliers and/or sellers of competitive power. Under the terms of
the settlement, the Companies agreed to: (1) a ten percent overall rate reduction for all existing
customers upon the effective date of restructuring; (2) stranded cost recovery limited to the actual
amount by which the Companies' sunk costs exceeded their market value (i.e., book value less the
sales proceeds for all of the New England Power Company's non-nuclear power generation
plants); (3) continued levels of substantial funding for energy efficiency programs and programs
designed to promote clean renewable energy resources; (4) continued funding for special rates for
low income consumers as well as ftmding for a new credit guarantee program designed to
encourage market participants to serve such customers; and (5) mechanisms to ease the transition
to market competition for customers (a "standard offer" transition rate), utility employees
(treatment of retraining, severance, and early retirement programs as recoverable "stranded costs"),
and communities that host power plants (treatment of any necessary "payments in lieu of taxes" as
recoverable stranded costs). Following evidentiary hearings in November and December,
responsive briefing, and minor modifications in January, the DPU approved the agreement in late
February. The Division intervened in and at the end of the year was actively participating in a
proceeding before the Federal Energy Regulatory Commission concerning the wholesales aspects
of the agreement.

In December 1996, the Division announced that together with the Division of Energy
Resources within the Executive Office of Economic Affairs, it had reached agreements in principle
with Boston Edison Company (DPU96-23) and Eastern Edison Company (DPU96-24) to
implement the Attomey General's "Consumers Firsf approach to restmcturing. On May 16,
1997, the Division, together with ten other interested parties submitted to the DPU a written
settlement agreement with Eastem Edison Company and its wholesale affiliate, Montaup Electric
Company that was substantially identical to the earlier agreement with Massachusetts Electric and
New England Power Companies . At the close of the fiscal year, evidenUary hearings had not yet

191

begun on the proposed settlement. A written agreement with Boston Edison was filed with the
DPU shortly after the close of the fiscal year.

Legislative Efforts. During fiscal year 1 997, the Division continued to assist the
Legislature in its consideration of electric industry restructuring, giving testimony on general
restructuring issues as well as the Consumers First agreement with MassElectric to both the
Committee on Government Regulations and the Special Committee on Electric Utility
Restructuring. The Division also provided drafting and other assistance to the Special Committee,
which, on March 20, produced a comprehensive report on the many restructuring issues as well as
proposed legislation.

Generating Performance Reviews/Fuel Clause Proceedings

Although there were no traditional base rate cases involving electric companies during the fiscal
year, the Division was active in proceedings concerning the performance of certain electric
generating units. In addition to conducting discovery in proceedings concerning the extended
outage of the three Millstone nuclear units in Connecticut and securing an agreement with Western
Massachusetts Electric Company to defer any request to recoup replacement power costs incurred
during those outages, the Division was active in performance reviews concerning generating units
supplying power to Boston Edison, Commonwealth Electric Company, and Cambridge Electric
Light Company. Although none of these matter reached the hearing stage during the fiscal year,
on March 7, 1997 the DPU issued a decision in an earlier Boston Edison performance review
(D.P.U. 95-1 -A), in which it accepted a number of arguments the Division had made. The
Department found that Boston Edison imprudence had be the cause of outage days not only at its
Pilgrim nuclear power plant but also at its fossil fueled New Boston and Mystic plants and ordered
refunds to Boston Edison consumers of almost $2 million.

GAS MATTERS

Base Rate Cases

Boston Gas Company (DPU 96-50) In May, 1996, Boston Gas Company filed a request to increase
its rates by $31 million (4.7%), which reflected its proposal for a traditional rate increase as well as
one to, beginning in December 1996, to subject it rates to a so-called "price cap" approach to rate
regulation, which would provide that the overall level of the Company's rates would be adjusted
annually to reflect the reported rate of inflation, less a productivity factor of 0. 1 percent The
Division participated in evidentiary hearings during the summer of 1 996 and filed briefs in
September and October, opposing the proposed increase and the "price cap" proposal. Throughout
this period, the Division was also an active participant in a formal mediation process conducted
under the auspices of Massachusetts Office of Dispute Resolution which involved all of the parties
active in this phase of the proceeding: the Massachusetts Division of Energy Resources,
Associated Industries of Massachusetts, and The Energy Consortium, a group composed of the
Company's largest customers. This process produced a settlement agreement which was filed with

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the DPU in November, under which the Company would: be permitted to increase its rates by $13
million or 1 percent, be required to fund conservation programs for low income consumers, and be
required to offer a fixed price "interruptible transportation" rate during most of the year. A the end
of November, the DPU rejected the settlement agreement, instead it allowed a rate increase of $6
million and eliminated any fixed price interruptible tariff. The Company filed motions seeking
recalculation and reconsideration of a number of aspects of the DPU Order. The Division opposed
most aspects of these motions, but the DPU did increase the amount of the allowed increase to
$8.5 million and modified the price caps scheme by lowering the base level for service quality and
the productivity offset from 2.0 to 1.5 percent. The Company filed an appeal of this decision to
the Supreme Judicial Court which was pending at the close of the fiscal year.

Fall River Gas Company (DPU 96-60) In May, 1996, Fall River Gas Company filed a request to
increase its rates by $5. 1 million (1 1 .9%). The Division participated in evidenfiary hearings held
during July and August, 1996 and, on October 3, filed a settlement agreement with the DPU in
which the amount of the rate increase was reduced to $3.2 million and the company agreed to cap
the average increase to residential customers at 8.5%, nearly 50% less than the increase the
company had proposed initially for residential customers. The settlement agreement which was
approved by the DPU also required the company to withdraw its incentive rate making proposal
and to a three year rate freeze.

Blackstone Gas Company (DPU 96-65) In June, 1996, Blackstone Gas Company filed a request to
increase it rates by SI 14 thousand (13.2%). The Division intervened and following discovery and
extensive negotiations, reached a settlement which was filed with and approved by the DPU.
Among other terms, the settlement required that the proposed increase be limited to $62,000 and
the Company be required to share with its customers any future earnings above a specified level.

Essex County Gas (DPU 96-70) In May, 1996, Essex County Gas Company filed a request to
increase its rates by $3.4 million (7.4%). The Division intervened and following discovery and
extensive negotiations, reached a settlement which was filed with and approved by the DPU.
Among other terms, the settlement required that the proposed increase be limited to $2.1 million.

Restructuring

Boston Gas Company (DPU 96-50) Simultaneous with the rate increase it had proposed, Boston
Gas Company also put forward a proposal under which it withdraw from the provision of bundled
gas and delivery service over the next five years and would allow all of its customers to choose
their supplier of gas. Although this aspect of the Company's May, 1996 filing was the subject of
much discussion among the many parties that intervened in the rate case and participated in the
mediation sessions, no agreement was reach on the many issues raised by the Boston Gas proposal.
In its November 1996 decision on the proposed rate increase, the DPU deferred any decision on
the Company's proposal until Phase II of that proceeding, which was still pending at the close of
the fiscal year.

Bay State Gas Company, (DPU 95-104-A) Worked with the Company to design reports on the first
year of a pilot program under which it allowed a limited number of residential and commercial

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customers to purchase their supply of gas from a number of competitive suppliers. Also worked to
design the terms of the second year of the pilot under which all of the Company's 80,000
residential and commercial customers in its Springfield Division will be eligible to participate. It
will also open up the option of supplier choice to small commercial customers in the Brockton
area. The Second Year Pilot will feature an open enrollment so that customers can choose or
switch suppliers at any time throughout the year starting August 1, 1997. Consumer protections
will remain the same as the first year: customers dissatisfied with the program can go back to Bay
State and will be subject to potential shut off only for nonpayment of their Bay State bill. Any
money owed to gas marketers must be collected by traditional collection procedures and cannot be
the basis for a service shutoff.

Miscellaneous

The Division also intervened on behalf of Massachusetts consumers in various not rate
proceedings that could affect the rates paid by consumers and which reflect the change underway
in the gas industry. In Colonial Gas Company/Distrigas Proposal (DPU97-49), the Division
opposed a joint venture proposed by Colonial Gas Company, the local distribution company
serving the Lowell and Cape Cod areas, and Distrigas of Massachusetts, a wholesale supplier of
liquified natural gas from its storage facilities in the Boston area. Under the proposal, Distrigas
would lease a portion of Colonial's LNG storage facility in Tweksbury at cost and share with
Colonial any profits it made on sales from that facility. The Division opposed the arrangement
because, unlike the current treatment of profits from off-system sales from the Tweksbury facility.
Colonial's customers would not benefit under the proposed arrangement. Similarly, in Hopkinton
LNG (FERC 97-156-000), the Division intervened in a proceeding before the Federal Energy
Regulatory Commission concerning a proposal by Hopkington LNG, an affiliate of
Commonwealth Gas Company, under which it would sell capacity in its LNG storage tank that
was not being used by it affiliate and keep the proceeds of such sales. We opposed the proposal on
the ground that the facility was built to serve Commonwealth Gas Company customers and
because under the existing terms of the agreement with Hopkington LNG Commonwealth Gas
Company had an exclusive right to all of the capacity, its customers were entitled to any profits
from any sales. Both cases were pending at the close of the fiscal year.

TELEPHONE MATTERS

Massachusetts New Area Code (DPU 96-61) The Division intervened and participated in a DPU
investigation concerning how to address the depletion of available numbers for use in the
geographic areas presently included in the 617 and 508 area codes. Following active participation
in hearings during October, the Division filed briefs in November supporting the creation of two
new area codes by dividing each of areas covered by the existing 617 and 508 area codes into two
new areas codes. The Division argued that the this approach ~ a geographic split ~ was the
preferable approach as it was the only approach that would allow consumers to continue to place
calls by dialing only seven, instead often or eleven digits. In a decision issued in January 1997,
the DPU adopted the Division's position. Parties filed motions for clarification and
reconsideration in January. The DPU issued its rulings on the motions in April and May.

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Implementation of the Geographic Split Plan will begin in September 1997 and will be completed
on May 1, 1998.

MCI Relay Service D.P. U. 96-118 Subsequent to receiving complaints from four disability rights
advocacy groups regarding the quality of the "relay service" available for communications to and
from deaf and hard of hearing consumers, the Division working with the Attorney General's
Disability Rights Project advised the group how to petition for a DPU investigation and then
intervened in the proceeding investigation that was subsequently initiated. At the close of the
fiscal year, the DPU had yet taken any formal action on the groups' petition.

NYNEX - Second Annual Price Caps Compliance Filing - (DPU 96-68) On September 12,
1996, NYNEX filed its second annual price caps compliance filing reducing its overall rates by
$29.6 million. Parties including the Office of the Attorney General filed briefs in January 1997,
and the Department issued its decision in April 1997, implementing the proposed decrease in rates.

NYNEX - Compliance with the 1996 Telecommunications Act's 14-point Local Competition
Checklist - (DPU 97-38) On March 21, 1997, the DPU opened an investigation into the question
of NYNEX's compliance with the 14 point checklist prescribed in the Telecommunication Act of
1 996 as a prerequisite for local phone companies to enter the long distance market. The Division
intervened on behalf of consumers and at the close of the fiscal year was preparing a brief setting
forth its position on how the DPU should proceed to determine whether the check list had been
satisfied.

NYNEX - IntraLATA Presubscription - (DPU 96-1 18) On October 30, 1997, NYNEX filed with
DPU a plan to allow its customers to choose a "primary"or "preferred inter-exchange carrier"
("PIC") as the carrier over whose lines any intraLATA toll calls should be directed, automatically,
i.e., carriers to which intraLATA calls are directed --just like long distance calls ("interLATA"
calls) - without dialing any special access codes. The Division intervened on behalf of consumers
and participated in the public and evidentiary hearings held in regard to the "intraLATA
presubscription"proposal. In briefs filed in April 1997, the Division urged the DPU to reject
NYNEX's proposed $5.00 charge for switching PICs because it was not supported by any cost
data. In its May 28, 1997, decision, the DPU agreed that NYNEX had not supported its proposed
charge but allowed it an opportunity to file a supporting study in the future.

NYNEX- increasing 10(^ local coin rate to 25<f: - (DPU 97-18) In January 1997, NYNEX filed a
proposal with the DPU to raise the initial local coin rate from 100 to 250, which it claimed was
required under the terms of the 1996 Federal Telecommunications Act. The Division urged the
DPU to reject NYNEX's proposal, arguing that under the Act no increase could be allowed until
NYNEX first eliminated approximately $32 million in subsidies to pay phone rates collected in
other Massachusetts rates. In April the DPU issued an order allowing the rate to increase to 250,
but also requiring that NYNEX remove the $32 million-plus subsidy retroactively from its
Massachusetts rates in its upcoming annual price caps compliance filing.

NYNEX - Annual Price Caps Compliance Filing - (DPU 97-67) On June 9, 1997 NYNEX filed
its third annual price caps compliance filing with the DPU proposing to reduce residential rates by

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$49.9 million and business rates by $15.2 million, an overall rate reduction of $65.1 million. The
Attorney General has intervened in the Investigation.

NYNEX- Quality of Telephone Service in the Mission Hill Area of Boston - (DPU96-30) On
February 12, 1996 twenty-nine customers of NYNEX filed a petition with the DPU requesting an
investigation into NYNEX's quality of service. The complaint was filed as a result of years of
poor quality service and a week long outage affecting 293 customers in the Mission Hill area. The
Division intervened and was an active participant in the public and evidentiary hearings as well as
filed initial and reply briefs. The Division argued that the extended outage suffered by the
residents and businesses was evidence of a need for a complete overhaul of NYNEX's distribution
cables, feeder cables and ancillary equipment in Mission Hill as well as for formal and meaningful
emergency response plan for NYNEX to address future major service outages in the
Commonwealth. The case was pending at the end of the fiscal year.

Establishment of Discounts on Massachusetts Telecommunications Services Provided to Schools
and Libraries, pursuant to Section 254(h)(1)(B) of the Telecommunications Act of 1996 (DPU97-
68) On May 8, 1997 the Federal Communications Commission, pursuant to the
Telecommunications Act of 1996, established discounts on certain interstate telecommunications
and information services to ensure that eligible nonprofit elementary schools, secondary schools
and libraries have affordable access to such services. In order for Massachusetts schools and
libraries to become eligible for these federally firnded interstate discounts, the DPU must adopt
intrastate discounts that are at least equal to the FCC's interstate discounts. On June 30, 1997 the
DPU opened its investigation to establish intrastate telecommunications discounts and proposed to
provide intrastate discounts equal to those of the FCC. At the close of the fiscal year, the Division
was preparing to file comments on behalf of Massachusetts consumers.

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CONSUMER COMPLAINT AND INFORMATION SECTION

The Attorney General's Consumer Complaint and Information Section ("CCIS") provides
services to individual consumers by responding to thousands of consumer complaints and requests
for information on consumer issues and referrals on the Attorney General's consumer "hotline";
through a voluntary mediation program aimed at resolving consumer complaints against
businesses which obtains refunds and other savings for individual consumers; by educating the
public through developing and distributing educational materials and participating in consumer
education initiatives; by responding to public records requests; and by identifying potential trends
of unfair or deceptive trade practices for further investigation or possible prosecution by the
Consumer Protection and Antitrust Division.

For the period July 1, 1996, through June 31, 1997, CCIS received and responded to
17,837 written complaints and other correspondence; responded to 126^56 telephone calls to
the Attorney General's consumer hotline; mailed consumer educational brochures or
pamphlets to 5,159 consumers; opened 2,602 consumer complaints for mediation, and closed
4,656 complaints, recovering $492,285 in refunds or other savings for individual consumers.

CCIS' major initiative for fiscal year 1997, was the further development and
implementation of the Consumer Complaint Tracking System ("CCTS"). CCTS, a database
designed specifically for CCIS, allows the Section to perform its hotline, mediation, education,
and trend identification responsibilities in the most efficient manner possible.

CCTS allows staff to respond more efficiently to consumer inquiries and enter consumer
or merchant information on the hotline and automatically generates cover letters and complaint
forms with specific complaint numbers which are used in the fiiture to access the consumer's
information. It allows staff to scan consumer complaint forms and correspondence into the
database using an imaging software, so that the actual image of the complaint appears on the
computer screen; to access information and make referrals to other agencies more efficiently by
listing federal and state agencies' and local consumer programs' phone numbers; to quickly and
easily retrieve complaint records filed against a particular business; to respond to public records
requests by quickly providing the number of complaints filed against a particular business with a
breakdown by location; to research complaints involving particular industries; and to identify
patterns or trends of unfair or deceptive practices.

As a result of the Section's focus on CCTS in fiscal year 1997, a technical support staff
member was hired to implement the installation of CCTS in the nineteen (19) local consumer
programs. Once the local consumer programs are linked, data from the individual programs will
be downloaded directly to the Attorney General's database on a daily basis, thereby insuring the
integrity of the information provided to the public and the press concerning the number of
complaints on file against a particular business.

A final goal of the CCTS implementation project was reached in fiscal year 1997:
utilization of the management report function. Extensive efforts were made to identify
programming problems with the management report generating fianction of CCTS. As the result of

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this focus, monthly, quarterly, six-month and annual reports are run containing comprehensive
information, such as the number calls to the hotline, the number of referrals to
local consumer programs and state or federal agencies, the number of complaints by business and
complaint type, the total amount of complaints mediated and money recovered for consumers; the
merchants with the highest number of complaints by business and complaint type or the
geographic location of the complaining consumer.

The Section continued to focus on consumer education initiatives; three frequently
distributed consumer educational pamphlets were updated and rewritten; a pamphlet detailing
important changes to the regulations governing septic systems was written and distributed in
cooperation with the MA Association of Realtors.

CCIS staff conducted or participated in numerous community based consumer education
initiatives in which they answered questions and distributed consumer educational materials and
consumer complaint forms. These consumer education initiatives took place, in cooperation with
the MBTA and the Fleet Center, at the North Station Commuter Rail; at the Attorney General's
Consumer University; at three college campuses, a population from which we receive numerous
complaints, but haven't historically provided outreach to; at the Attorney General's educational
booth at "The Big E," the Eastern States Fair; and at AARP's telemarketing conference at Fanuel
Hall.

The Section maintained the increase in the number of interns participating in the
undergraduate mediation internship program. Due to the increase, the complaint assignment
process was expedited, thereby decreasing the waiting period for consumers. Lastly, CCIS staff
provided staffing and training to the AG Elder Hotline and participated in Bureau and Office-wide
initiatives including the Diversity Committee, the Language and Literature Committee, the
National Association of Attorneys General Telemarketing Group, and the Supreme Judicial
Court's Racial and Ethnic Bias Committee. As a result of the Section's participation in the
Telemarketing Group, the Federal Trade Commission's telemarketing complaint database was
installed in the Section. Data from telemarketing complaints received by this office is entered into
the national database, and information regarding telemarketing companies about which
Massachusetts consumers have complained is retrieved from the database. The information
contained in the database is accessed by federal and state authorities throughout the U.S.A. for law
enforcement purposes.

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MEDIATION SERVICES DEPARTMENT

The OAG Mediation Services Department is located in the Consumer Protection Division
of the Public Protection Bureau. It consists of 6 staff, 1 Director, 1 Deputy Director, 1
Administrative Assistant and 3 Regional Coordinators. The Face to Face Mediation Program
(FTFMP), the Student Conflict Resolution Experts Program (SCORE) and the Conflict
Intervention Team (CIT) are the three major programs overseen by MSD. The MSD Director
and Deputy Director represent the OAG in public events, trainings, conferences, and workshops
and oversee grant and program administration for 35 mediation programs (23 SCORE programs
and 3 affiliates, 8 Face to Face Mediation Programs and the Conflict Intervention Team). Three
Regional SCORE Coordinators also represent the OAG at public events and provide technical
assistance, training and supervision to SCORE programs in the Northeast, Central & Boston and
Western MA regions. The Director and Deputy Director provide coverage to SCORE programs in
the Southeastern region that are not served by a Regional Coordinator.

Face to Face Mediation Programs

In 1984, the OAG initiated 3 pilot Face-to-Face Mediation Programs (FTFMPs) in
Worcester, Somerville and Haverhill. These pilot programs were initiated to provide consumers
left with unresolved complaints in spite of assistance provided by an OAG affiliated local
consumer program (LCP) with an alternative to court action. Unlike the telephone and letter-
writing mediation efforts provided by the LCPs, the FTFMP recruits and trains volunteer
mediators to facilitate face-to-face mediation sessions to resolve consumer disputes. Following
the success of the 3 pilot programs FTFMP service was initiated in Brockton, Hyannis,
Fitchburg, Springfield and Lowell and expanded to serve consumers at small claims court.

Courts, police, community agencies and LCPs refer consumer disputes to FTFMPs for
mediation services. FTFMPs are part of statewide network of 30 community-court-based
volunteer mediation programs. Citizens from all walks of life are recruited and trained by the
FTFMPs to serve their communities as volunteer mediators.

During FY 97, the 8 FTFMPs served 7,468 individual consumers, convened 1,694
mediations with 77% reaching a voluntary resolution. As a result of these mediated agreements, a
total of $854,447 dollars and services valued at $204,383 were returned to consumers.

FTFMP Annual Site Visits

During the three month period of September 1996 through November 1996, MSD
conducted aimual site visits with each of the 8 FTFMPs. In the course of these visits, MSD staff
met with and administered site visit questionnaires to FTFMP Directors, volimteer mediators and
clerk-magistrates. Additionally, MSD staff monitored the mediation procedures used by the
FTFMPs in small claims court and observed FTFMP mediation sessions.

Consumers interviewed at small claims court following mediation, expressed their
satisfaction and enthusiasm for the services rendered by the FTFMPs. At courts served by

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FTFMPs , clerk-magistrates volunteered their appreciation to the OAG for the valuable services
provided by the FTFMPs.

Student Conflict Resolution Experts

SCORE is an award winning, innovative and comprehensive peer mediation program. In
the SCORE model, an adult coordinator hired by the SCORE grant recipient (a community
mediation program) administers the SCORE program at the school. The community mediation
program provides local supervision and expertise to the SCORE coordinator, assists in the training
of student mediators and works jointly with the school to develop a quality student-centered peer
mediation program.

In eight short years, SCORE has initiated 38 peer mediation programs in schools
throughout Massachusetts. Last year, 3 new SCORE programs were implemented in Springfield
and Lynn and 3 sister programs in Springfield were welcomed as SCORE affiliates. Today, 26
schools in 1 8 Massachusetts communities receive SCORE grants or technical support to operate
peer mediation programs. From September 1996 through June 1997, SCORE responded to 3,149
peer conflicts and convened 2,191 peer mediations with 97% reaching a voluntary mediated
agreement to end the conflict.

SCORE Annual Site Visits

Annual site visits were held at 21 of the 23 SCORE programs during the last quarter of
the school year (April-June). Annual site visits enable MSD to conduct field evaluations, facilitate
needed program improvements, troubleshoot problems and interact with local school officials.
During the annual site visit program evaluation questionnaires are administered to SCORE
coordinators, school principals, student mediators and SCORE grant recipients. Information
gathered from the annual visits and program questionnaires is used to develop program priorities
for SCORE in the new school year.

The Conflict Intervention Team

Ready to mobilize at a moments notice in response to school crises which are often ftieled
by racial tensions, the CIT provides a rapid response to schools in need of emergency mediation
services. A roster of specially trained community mediators stands ready to mediate on an "on
call" basis. In most instances, MSD coordinates and oversees the mediators serving on CIT during
an intervention. MSD staff coordinated 6 of the 7 interventions held last year.

During the 96'-97' school year, 7 interventions were held at schools in Boston, Holyoke,
Lynn, Worcester, Marlborough and Amesbury and 1 conflict assessment was conducted in
Weymouth. Sixty-one mediators served on CIT and conducted 274 intake interviews, 16
mediations and 5 group facilitations. As a result of CIT assistance, students in each of the 7
schools, were able to get past the anger and communicate with each other, reduce tensions and
exchange ideas to improve school safety and climate. A brief summary report on CIT activities for
the 96'-97' school year is attached.

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Trainings

Last year 310 student mediators were trained by SCORE programs and MSD staff led
9 of the 18 SCORE trainings held during the school year. Other trainings conducted by MSD
included a conflict resolution training for youth in Chelsea at the SNI Jobs for Youth Program, an
adult mediation training for the Brockton FTFMP, a two-day training for OAG/CCIS complaint
mediators and a four-day advanced mediation training for FAA mediators.

Troubleshooting

In FY97, MSD responded to problems in existing SCORE programs in Springfield,
Boston, Taunton, Dartmouth and Haverhill.

Springfield: In December 1995 MSD initiated negotiations with the Springfield Public School
System to keep SCORE a viable program in Springfield. Negotiations were completed in October
1996 and resulted in some changes for SCORE in Springfield. The SCORE programs at Central
and Putnam High Schools were converted into SCORE affiliates and the Chestnut St. Middle
School peer mediation program was converted into a SCORE program. SCORE affiliate status
was also extended to include the peer mediation program at Commerce High School.

Dartmouth and Taunton: In June 1997, during the annual site visit at Dartmouth and Taunton
High Schools MSD was pleased to verify that the strong working relationship previously enjoyed
by these schools and their SCORE grant recipient had been restored to good working order.

Haverhill: MSD was alerted by Haverhill High School (HHS) and the SCORE grant recipient,
Haverhill Community Action, that school budget constraints were jeopardizing matching funds for
SCORE in 97'-98'. Despite the support for SCORE in Haverhill and the efforts of HHS, Haverhill
Community Action and school officials, it remains doubtful that matching funds for 97'-98' will
materialize. A final decision about HHS SCORE funding is expected in late August. MSD will
refer to the SCORE waiting list if SCORE is not continued at HHS in 97'-98'.

Boston: Despite the overwhelming support for SCORE in Boston, school budget constraints made
it difficult for matching funds to be allocated to the 6 Boston SCORE programs. After much
effort, five of the six Boston schools received matching funds for SCORE in 97'-98'. Madison
Park High School was unable to recover from the loss of matching funds from its corporate
sponsor, Blue Cross/Blue Shield, and could not secure funds needed to continue with SCORE in
97-98'.

Regional Coordinator Reports

For comprehensive look at the Northeast and Western MA regions, please refer to the
attached Regional Coordinator Reports from Sandra Washburn, and Steve Lilly- Weber. Susie
Wong, Central and Boston Regional Coordinator, is recovering from surgery and will provide her
report upon her return.

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Innovations

In 1994, OAG won a prestigious national award from the Ford Foundation for its SCORE
and CIT programs. The $100,000 award was given following a national competition to seek
creative programs which provide valuable services to the public. The $100,000 award was used to
disseminate information nationally about SCORE and CIT and to encourage replication of
these programs by other Attorneys General and State Departments of Education.

During FY 97, MSD expended the remainder of the award money by completing the
following activities: 3 SCORE/CIT replication trainings, sponsoring a statewide conference for
Massachusetts student mediators and production of the SCORE brochure and poster.

Kathleen Grant and Darlene Skog, traveled to Louisiana to provide a 3'/2 day intensive
SCORE peer mediation replication training for Louisiana AAG's and selected community
mediators. In North Carolina, a 3 day CIT replication training was conducted by Kathleen Grant
and Melissa Brodrick for members of the North Carolina Mediator Network. Kathleen Grant also
delivered a presentation on SCORE and CIT replication in Arizona to the Supreme Court Juvenile
Justice Program.

Community Outreach

Community outreach projects in FY 97 brought MSD staff to communities in Chelsea,
Lynn and Boston. In Lynn, Kathleen Grant and Susie Wong (OAG) continued to work with the
members of the Lynn community to ease tensions caused by feuding gang-involved youth. In
South Boston, Kathleen Grant joined the efforts of local community activists seeking ways to stop
the spiral of youth suicides in South Boston's public housing projects. She and others are
providing technical assistance for the development of a community mediation program in South
Boston. Kathy will also assist in a mediation training being offered to adults and youths in this
community. In Chelsea, Kathleen Grant and Alice Comack, (Somerville SCORE) conducted a 10
hour conflict resolution training for young people involved with the Chelsea SNI Jobs for Youth
Program. In Brockton, MSD staff continued to work with the Brockton SNI coordinator to
stimulate interest for a SCORE program in Brockton. In Boston, Darlene Skog joined the steering
committee of the Massachusetts Violence Prevention Task Force and Kathleen Grant continues to
represent OAG on the SJC ADR Task Force.

Public Events, Conferences, Workshops

During the year, MSD staff participated in 7 public events and conducted 8 workshops at
local, state and national conferences. MSD staff represented the OAG in Holyoke at a peer
mediation recognition ceremony, in Quincy at the Quincy College Violence Prevention Series
(this event was broadcast on local cable TV), in Boston at the Harvard Luncheon Series, in
Cambridge at the Harvard Dispute Resolution Forum, at UMASS Boston teaching a class on CIT,
on Scott Harshbarger's Issues and Answers cable show, at the Society for Professionals in

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Dispute Resolution (SPIDR) National Youth Conference in California, at the MAMPP
conference in Waltham and in Amherst at two peer mediation conferences for Western MA
educators. MSD also delivered workshops on SCORE to professional mediators attending the
Masters in Mediation Conference sponsored by the NE Chapter of SPIDR in Rockport , at a
violence prevention conference sponsored by the North Shore Holocaust Center and at a Dept. of
Justice youth gang violence prevention conference in Newport, RI.

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PUBLIC PROTECTION BUREAU
CHIEF PROSECUTOR

The Chief Prosecutor of the Public Protection Bureau prosecutes criminally a myriad of
crimes related to the priority areas of the Bureau, providing the unique capability of protecting the
public through both civil and criminal enforcement mechanisms. Assistant attorneys general bring
criminal cases in the District and Superior Courts throughout the Commonwealth as well as
conduct ongoing investigations, all under the supervision of the Chief Prosecutor.

Substantive target areas for a criminal focus continue to include consumer-related crimes,
elder fraud, private insurer health care fraud, crimes upon charities, telemarketing fraud, abuse of
disadvantaged populations by staff members, and unauthorized practice of certain professions.
Emphasis is placed upon developing effective and ethical criminal remedies to complex crimes
that may fall outside the ambit of fraditional law enforcement authorities.

I. HIGHLIGHTS OF CASES PROSECUTED TO COMPLETION
Anusavice, Gary
Weissman, Michael
Ghorieshi, Abbas
Johnson, Keith

Massdent Management Corporation d/b/a
DDS Dental Center

Health Care Fraud G.L c. 17511/Larceny.

The principal dentist and a periodontist of a dental center were indicted and convicted of
private insurer health care fraud. More than two hundred complaints were registered with the
Office of the Attorney General and the Division of Registration.

The defendants Weissman and Anusavice pleaded guilty to criminal indictments alleging health
care fraud and signed a civil consent agreement as part of a global settlement of the complaints
lodged against them. In the criminal matter defendants paid $1 70,000 forthwith to a fimd for all
DDS victims (not just those involved in the criminal matter) and were placed on criminal
probation and probation with the Board of Regisfration in Dentistry for five years. Defendants lost
their dental licenses for five years and were ordered to perform three hundred hours of community
service. In the civil settlement the defendants were ordered to pay an additional $75,000 to CMHC
insurance and an additional $55,000 to the consumer fund. After their five-year license loss the
defendants will be on probation with the Board of Registration in Dentistry requiring ethical,
educational and substance abuse training.

Abbas Ghorieshi lost his license to practice dentistry for one year and had to pay
approximately 5100,000 of the amount assessed against Weissman and Anusavice.

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Austin, Arthur
Larceny From an Elder

An insurance agent and financial planner who bilked three elderly female clients out of
their life-savings by promising to safely invest it for them was indicted and convicted of larceny.
After a trial, a Middlesex County Superior Court jury convicted the defendant of three counts of
larceny from a person older than sixty-five years of age. The defendant was sentenced to five
years incarceration with probation to follow. Probation conditions include restitution of $173,000
and alcohol counseling.

Crafts, Frederick
Fiduciary Embezzlement

A lawyer who bilked four estates out of significant sums of money and a broker out of his
commission was indicted and convicted. The thefts were more than $600,000. The defendant was
sentenced to serve two years in the House of Correction with a four to a six-year state prison
sentence suspended for five years. Restimtion of $630,000 was also ordered.

Zammuto, PauP
Assault and Battery on a Person with a Disability

The defendant, who was a caretaker at a DMR facility pleaded guilty to assaulting a
patient at a DMR facility. The victim suffered severe facial bruises. Over the Commonwealth's
objection, the defendant's case was continued without a finding for eighteen months with
supervised probation. A term of the defendant's probation is that he is barred from working in the
health care field or in any health care facility. If the defendant violates his probation, he will be
incarcerated for six months.

Nguyen, Xuan Vinh
Assault and Battery with a Dangerous Weapon/ Unauthorized Practice of Medicine

The defendant was observed by a neighbor performing cosmetic plastic surgery on a
woman's eyelids in a residential apartment. The defendant was not a doctor. Although the
Commonwealth recommended jail time, a District Court Judge placed the defendant on pre-trial
probation.

Gusatavis, Carla.
Unauthorized Practice of Nursing.

The defendant admitted to sufficient facts in district court to practicing nursing without
a license after this case was referred to this office from the Board of Regisfration in Nursing.

Vigeant, Richard
Home Contractor Larceny/Unregistered Home Contractor

The defendant pleaded guilty to multiple charges of larceny stemming from his home
confracting practices. The Commonwealth moved to join the defendant's charges pending several
different district courts and successfully had his bail revoked due to new charges being lodged
against the defendant. The defendant was sentenced to two and one half years in the house of
correction with nine months to serve. The defendant paid $7,650 in restitution at sentencing and
was ordered to undergo drug and alcohol counseling.

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Lebrun, Joseph
Ethnic Affinity Fraud

A Maiden man was prosecuted for preying on fellow members of the Haitian community
with an investment scam. The defendant fraudulently promised high returns on investments in
his various businesses. The defendant pleaded guilty and received a suspended sentence of two
years in the house of correction and was placed on probation for ten years. The defendant was
placed on electronic ankle bracelet monitoring for two and was ordered to pay $1 70,000 in
restitution.

II. Cases Closed by Means Other Than Criminal Prosecution.

The chief prosecutor of the Public Protection bureau uses a variety of means to resolve
cases short of criminal prosecution. Investigations led to civil settlements which included
injunctive relief and monetary damage payments. Other cases were terminated by civil assurances
of discontinuance. When appropriate, advisories are published to educate consumers regarding
areas where they could be victimized and to guide businesses from practices that could violate
criminal statutes.

Joint criminal investigations with the United States Attorney's Office in the areas of
alleged telemarketing, fraudulent charitable solicitation and excessive force by law enforcement
personnel are ongoing.

Cases were jointly investigated with and referred to other agencies when appropriate. In
this year the chief prosecutor worked with the Division of Registration, Board of Medicine,
Secretary of States Office, Department of Revenue, United States Attorney's Office, Federal
Bureau of Investigation, Internal Revenue Service, Postal Inspectors and several state's Attorneys
General.

III. Referrals Evaluated

The chief prosecutor evaluated one hundred and nine complaints during this year. The
complaints came from other divisions within the Office of the Attorney General, police
departments, outside agencies, attorneys and private citizens. Most referrals require initial
investigation.

IV. Other Activities

Chief prosecutor Howard Wise acts in an advisory capacity to all Public Protection
Bureau personnel including assistant attorneys general and CID investigators. Training was held
in search and seizure, joint criminal and civil investigations and various facets of criminal
procedure. The division also hosted a national round table discussion and training session in
health care fraud put on by the National Association of Attorneys General. Educational materials
were purchased and distributed as part of the continuing education on criminal procedure. The
Criminal Resource Library now contains criminal law books and a bank of sample memoranda and
motions. Training in criminal investigative techniques continued for CID investigators.

Review of proposed legislation and court initiatives was a priority. The chief prosecutor
provided review and input on diverse topics including proposed legislation on home contractor

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registration and the Model Rules of Professional Conduct. The chief prosecutor was also selected
to coauthor a chapter of the upcoming MCLE publication, Massachusetts Superior Court Criminal
Practice Manual.

The Bureau continues to send assistant attorneys general to the District Court rotation
program which enables them to gain valuable courtroom experience to bring back to the criminal
cases in the bureau or to expand their horizons in the Safe Neighborhood Initiative.

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CIVIL INVESTIGATION DIVISION

The Civil Investigation Division conducts investigations primarily for divisions within
the Public Protection and Government Bureaus. In addition, CID also investigates cases or matters
within the Family and Community Crimes and Business and Labor Protection Bureaus and, on
occasion, for the Executive Bureau, or in conjunction with the Criminal Bureau.

The major duties of Division investigators are: locating and interviewing victims,
witnesses, subjects and others; obtaining and reviewing documentary evidence from numerous
sources including individuals, corporations, and federal, state, county and municipal agencies;
conducting surveillance, background checks and asset checks; analyzing financial records and
performing other forensic accounting frinctions; and, testifying before the Grand Jury and at trial.

In fiscal year 1997, the Division initiated 479 investigations in the following major areas:

PUBLIC PROTECTION BUREAU

Consumer Protection and Antitrust

Investigators continued to perform their traditional role by assisting the office in bringing
G.L. c. 93A enforcement actions against businesses and individuals in major consumer areas such
as automobile sales and repair, credit repair services, travel services, health spas, retail sales,
computer scams, advance fee loan scams, immigration services and employment schemes. Areas
also included numerous issues affecting the elderly and vulnerable populations such as the
unauthorized practice of law, investment and home improvement scams.

The Division also initiated several investigations and surveys to determine compliance
with existing laws and regulations pertaining to numerous consumer areas. Some were multi-state
and nationwide and included areas such as funeral homes, fraudulent sweepstakes promotions and
telemarketing scams. Investigators worked closely with other state attorneys general's offices, the
U.S. Postal Inspection Service and investigators with the Federal Trade Commission.

Additional areas affected underage consimiers including the sales of fake sports
memorabilia, the sales of cigarettes and keno tickets and the production and sales of false
identification cards to be used for illegal purchases and consumption of alcohol and cigarettes.
Civil Rights/Liberties

The Division investigated "hate crimes," allegations of police misconduct and other
violations of the Massachusetts Civil Rights Act. Investigations were also conducted into
allegations of discriminatory housing and employment practices, as well as investigations to
determine compliance with the rules and regulations established by the Americans with
Disabilities Act and the Architectural Access Board. Division staff interviewed victims,
witnesses and, where appropriate, subjects of such investigations. Investigators obtained and
reviewed police reports, court documents and other available evidence.

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Public Charities

The Division investigated individuals associated with organizations who raised funds
from the public in violation of Massachusetts law. Investigators interviewed victims, usually
business people, who made donations to a charity based on the representations of a solicitor. In
some instances, solicitors posed as law enforcement or other public officials or otherwdse
misrepresented themselves or the charities' purpose. Investigators worked with federal agents,
local police departments, district attorneys and neighboring state attorneys general in locating
"couriers" who picked up donations. The Division's financial investigators reviewed and audited
books, records and financial reports of many non-profit organizations.

Regulated Industries

Investigators continued to work with PPB and RID attorneys to review and investigate
businesses and organizations that withheld from employees contributions for health insurance
premiums, but failed to actually purchase the health insurance coverage for employees and their
families. Other cases investigated included unlawful sales practices also known as "churning," the
sale of fraudulent or costly life insurance and other policies to the elderly.
Bureau Prosecutor

Investigators worked with the Bureau prosecutor on numerous cases which resulted in
indictments against individuals for violations of the Commonwealth's criminal laws. Cases
included larceny against the elderly and vulnerable by financial advisers, attorneys, home
improvement contractors and auto dealers. Cases also involved investigations relative to the
imlicensed practice of medical professions, health care fraud, illegal charitable ftmdraisers and
embezzlement from non-profit organizations.

The Division also continued to play a key role in the Human Services Institutional Abuse
project within PPB. Investigators interviewed victims and witnesses and collected documentary
evidence.

GOVERNMENT BUREAU
Environmental Protection

The Division's role in EPD cases primarily involved locating and identifying assets of
potentially responsible parties liable for paying costs incurred by the Commonwealth in the clean-
up of polluted or hazardous waste sites. Investigators also located former employees and officers
of defunct companies responsible in part for such violations, and reviewed, evaluated and analyzed
financial documents and prepared ability to pay analyses.

Trial

The Division played a major role in tort actions filed against the Commonwealth by
investigating allegations of abuse, mistreatment and deaths of clients in state care; alleged
wrongful termination of state employees; and, personal injuries and other damages which occurred
on state-owned property and/or in accidents on state roads or involving state cars. The Division
also investigated cases involving contract disputes and eminent domain proceedings.

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CRIMINAL BUREAU

Safe Neighborhood Initiative (SND

The Division continued its assistance to the office's Abandoned Housing Recovery
Project by conducting research on target properties primarily to determine the status of ownership
and existence of encumbrances of the buildings, and also in some instances, assisted in inspecting
properties scheduled for renovation.

BUSINESS & LABOR PROTECTION BUREAU

Insurance Fraud Division

In conjunction with the protocols established by the Attorney General's Task Force to
Reduce Waste, Fraud and Abuse in the Workers' Compensation System, the Division continued
to investigate allegations that state employees or employees of self-insured companies were
fraudulently receiving workers' compensation benefits or other insurance benefits.

Investigators worked with the Insurance Fraud Bureau of Massachusetts in a joint effort
to investigate instances of premium avoidance by employers attempting to defraud insurers of
premiums owed for workers' compensation coverage.

Investigators also participated in the efforts to reform the disability pension system.

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STATISTICS

The Division opened 479 investigations in Fiscal Year 1997, with 357 investigations
ongoing as of June 30, 1997. Case distribution by division and/or bureau is as follows:

DIVISION/BUREAU

OPENED
DURING FY '97

ONGOING AS

OF 6/30/97

Consumer Protection/Antitrust

Civil Rights

Public Charities

Regulated Industries

PPB/Criminal

Government

Environmental Protection

Trial

321

203

Family & Community Crimes

Insurance Fraud

TOTAL

479

357

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GOVERNMENT BUREAU

The Government Bureau provides representation for the Commonweahh and its agencies \
and officials in all types of civil litigation, and for employees of the Commonwealth with respect j
to certain civil claims made against them resulting from the performance of their duties. The
Attorney General's environmental enforcement function also falls to the Government Bureau.

A major priority of the Bureau is improving the functions of government. Many of the
cases and initiatives discussed below reflect that priority. In addition, bureau attorneys have
advised agencies in numerous ways how to reduce accidents and legal errors, thereby eliminating
liability and injury to the public. The Bureau also provides general advice and consultation to
officials with respect to legal issues arising in connection with their official functions, particularly ;
in instances where such advance consultation may serve to prevent urmecessary litigation. As in j
previous years, the Bureau in fiscal year 1 997 continued and expanded its efforts to develop and '
maintain close working relationships with agency counsel and to provide them with information
and advice on matters of broad common interest. A meeting with all agency general counsel was
held in November, 1997. In May, 1997, we published the seventh issue of the Agency Counsel
Newsletter, containing reports on legal developments in areas of relevance to agencies of the
Commonwealth generally.

The Government Bureau consists of an Administrative Law Division, a Trial Division
and an Environmental Protection Division. During fiscal year 1997, several attorneys were
assigned permanently to work in more than one division, and we continued to assign a sampling of
cases from each division to attorneys in the other, so as to broaden the exposure of the attorneys to
the full range of cases the divisions handle. In addition, a number of particularly complex and
significant cases were handled by teams assigned to multiple divisions.

All three divisions initiate affirmative litigation on behalf of state agencies and the
Commonwealth and submit briefs amicus curiae in cases presenting issues of law affecting the
Commonwealth's interests. The Administrative Law Division defends suits concerning the
legality of governmental operations, particularly those seeking injunctive or declaratory relief The
division is also responsible for legal review of all newly enacted town by-laws, and for preparation
of legal opinions for constitutional officers, heads of agencies, and certain other officials
concerning issues arising from the performance of their official duties. The Trial Division defends
suits seeking damages or other relief for alleged wrongful acts of government officials or
employees, particularly contract-related disputes, real estate matters, torts, civil rights violations,
employment disputes and environmental damage claims. The Trial Division also reviews certain
contracts, leases, bonds and various conveyancing documents submitted by state agencies for
approval as to form.

The Environmental Protection Division represents the Commonwealth's environmental
agencies in affirmative litigation to enforce environmental laws and in defensive litigation
challenging those agencies' regulatory and enforcement activities. There is significant overlap
between the other divisions of the Government Bureau and the Environmental Protection Division
in substantive legal issues addressed in litigation, the nature of the litigation and interactions with

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agencies. The organization of these divisions within one bureau promotes the sharing of resources
and expertise, and the coordination of positions taken in cases. In addition, this organization
makes the substantive expertise of the Environmental Protection Division more readily available to
other agencies in the environmental matters.

AFFIRMATIVE LITIGATION

Tobacco litigation - The Government Bureau, in conjunction with the Consumer
Protection and Antitrust Division, continued to pursue its landmark lawsuit against the five major
cigarette manufacturers and several related entities to recover the Commonwealth's health care and
other expenditures for smoking-related diseases, including expenditures in the state Medicaid
program. Commonwealth v. Philip Morris, Inc., et al. The suit also seeks injunctive relief to,
among other things, compel the disclosure of cigarette industry research on smoking, health and
addiction and to require cigarette industry funding of a "corrective" public education campaign
about smoking, health and addiction.

In an historic agreement reached in March 1997, one of the defendants, the Liggett
Group, agreed to pay Massachusetts and other settling states 25% of its pretax profits for the next
25 years, to place prominent warnings on all of its products and in its advertising stating that
smoking is addictive, and to end marketing practices aimed at children. In addition, Liggett agreed
to assist Massachusetts and other states in their cases against the cigarette industry by turning over
internal company documents and making Liggett employees available to assist the states in these
cases. The 1997 agreement expanded upon the agreement Liggett reached v^th the
Commonwealth and four other states in March 1 996.

In June 1997, an agreement in principle was reached to settle the cases filed by the
Commonwealth and other states against the other four cigarette companies, Philip Morris, Inc.,
R.J. Reynolds Tobacco Company, Brown and Williamson Tobacco Corporation and Lorillard
Tobacco Company. Among other things, the agreement in principle includes:

-Tobacco Industry payment of $368.5 billion in the first 25 years of the agreement for

health care costs and federal, state and local enforcement of the agreement and youth

access laws;

-Full federal authority to regulate nicotine as a drug;

-A 500 million dollar per year counter-advertising campaign, modeled after the one in

Massachusetts to be paid for by the tobacco industry;

-A national youth smoking reduction goal to cut youth smoking in half with seven years

with an $80 million dollar penalty for every percentage point the industry falls short of

that goal; and

-Full industry funding of state and privately run smoking cessation programs.

The agreement is intended to resolve all of the pending Medicaid cost recovery actions
filed by attorneys general against the tobacco industry, to implement a significant structural
reformation of the tobacco industry and to expand the scope federal and state regulation of that

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industry. To be implemented, it must be enacted into law by Congress and signed by the
President.

In addition to the tobacco litigation, the Government Bureau maintained an active docket
of affirmative litigation in fiscal year 1997 to assert the interests of its state agency clients. In
Commonwealth v. Federal Deposit Insurance Corporation, the United States Court of Appeals for
the First Circuit ruled that the Commonwealth is precluded by federal law from filing deposit
insurance claims with the FDIC on behalf of the owners of bank deposits that are deemed
abandoned under state law, thus precluding the state Treasurer's claims for millions of dollars in
abandoned deposits. In Michigan, et al, v. U.S. Department of Energy, et al, the Commonwealth
joined other states in a petition filed in the U.S. Court of Appeals for the District of Columbia
Circuit to enforce that Court's earlier order requiring the U.S. Department of Energy to accept
high-level nuclear waste, currently stored on site at nuclear reactors throughout the nation, for
storage in a central repository by 1998. In Commonwealth v. Markings, Inc., the Bureau obtained
a consent judgment from a Highway Department contractor which, among other things, required
payment of a $15,000 civil penalty to the Commonwealth for breach of contract. In
Commonwealth v. Ruggles Center Joint Venture, et al. the Bureau filed an action for damages
against the owner, general contractor and various other parties to recover the Commonwealth's
losses in connection with indoor air quality problems that required the Registry of Motor Vehicles
to vacate its headquarters at Ruggles Center. In Metropolitan District Commission v. Andrew
Chris to Engineers, Inc., the Bureau brought suit against subconfractors on the Lynn way
reconstruction alleged to be responsible for rainwater runoff that flooded a large number of homes
and business in Lynn and Swampscott. In Massachusetts Highway Department v. Smith et al. , the
Bureau filed an action to enforce a confract requiring a former owner of a parcel taken for the
Central Artery project to indemnify the Commonwealth for the cost of removing hazardous
substances from the property. In Commonwealth v. TLT Construction Co., the Bureau continued
to pursue an action filed on behalf of the Trial Court and the Division of Capital Planning and
Operations to recover damages from the contractor, architect and others alleged to be responsible
for defects in the design and performance of the renovation of the exterior of the Suffolk County
Courthouse. In addition, several actions were filed on behalf of the Commissioner of Insurance to
compel various individuals and companies to provide documents and testimony related to the
Commissioner's investigation of Electric Mutual Life Insurance Company's move to Bermuda.

Central Artery Project - In 1 996, the legislature created the Cenfral Artery Oversight
Coordination Commission, consisfing of the Attorney General, the State Auditor and the Inspector
General, and provided certain additional resources for oversight of the Cenfral Artery Project. The
Government Bureau has been and will be an active participant in the Attorney General's future
work in this area.

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ADMINISTRATIVE LAW DIVISION

The Administrative Law Division has three functions: (1) defense of lawsuits against
state officials and agencies concerning the legality of governmental actions, particularly where
injunctive or declaratory relief is sought; (2) legal review of all newly enacted town by-laws; and
(3) preparation of legal opinions for constitutional officers, heads of agencies, and certain other
officials concerning issues arising from the performance of their official duties. During fiscal year
1997, significant events occurred in each of these areas.

During fiscal year 1997, the Division opened 1258 cases and closed 1 199 cases. At the
end of the fiscal year, 2600 cases were pending. Cases handled by Division attorneys resulted in
35 reported decisions of the Supreme Judicial Court, 15 reported decisions of the Massachusetts
Appeals Court, 3 reported decisions of the United States Court of Appeals for the First Circuit, and
8 reported decisions of the United States District Court for the District of Massachusetts. As well.
Division attorneys were involved in many cases in those courts and in the state trial courts that
resulted in unpublished decisions.

1. Defensive Litigation

The Division spent significant time and resources in fiscal year 1 997 defending the newly
enacted sex offender registry statute. In one case brought by a juvenile. Doe v. Weld, the United
States District Court for the District of Massachusetts denied plaintiffs motion to enjoin
enforcement of the statute, holding that the statute is a non-penal regulatory measure that does not
impose punishment on juvenile sex offenders adjudicated delinquent before passage of this law.
In Doe V. Attorney General fNo. \). the Supreme Judicial Court ruled that specific provisions of
the sex offender registry statute apply to require the disclosure of certain juvenile court records,
notwithstanding the confidentiality generally afforded to juvenile court records under the youthful
offender act. However, in another case. Doe v. Attorney General rNo.2\ the Supreme Judicial
Court upheld a preliminary injunction against the enforcement or implementation of a portion of
the statute that directs the Criminal History Systems Board to disclose certain information about
sex offenders to any adult who requests it. The Court held that plaintiff would likely prevail on his
contention that that provision serves no remedial purpose and therefore imposes punishment in
violation of the constitutional prohibitions against double jeopardy and ex post facto laws.

During fiscal year 1997, the appellate courts decided several important welfare and
Medicaid cases handled by Administrative Law Division attorneys. In Dowell v. Dep't of
Transitional Assistance, the Supreme Judicial Court upheld the validity of a DTA regulation
denying eligibility for Emergency Assistance to families who were evicted from public or
subsidized housing for nonpayment of rent. In several appeals from administrative decisions of
the Department of Medical Assistance-Cohen v. Comm'r of Dep't of Medical Assistance. Canter
V. Comm'r of Public Welfare, and Tarin v. Comm'r of Dep't of Medical Assistance— the state
appellate courts clarified the standards for determining what income and assets are "available" to
applicants or recipients for purposes of determining their eligibility for Medicaid benefits and
calculating the amounts of benefits, if any, they are entitled to receive. In Visiting Nurse Ass'n.
Inc. V. Bullen. the United States Court of Appeals for the First Circuit upheld the validity, under
the Medicaid Act, of state regulations establishing class-based rates for home health providers.

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In other significant litigation involving children and families, the Supreme Judicial Court,
in Planned Parenthood League of Massachusetts. Inc. v. Attorney General, largely upheld the state
law concerning parental consent for abortions sought by unmarried minors. In Richardson v.
Dep't of Revenue, the Supreme Judicial Court held that the Department correctly refused to refund
child support payments made by a man who, at the time of the child's birth, had acknowledged his
paternity and agreed to support the child but later determined that he was not, in fact, the child's
father. In another child support case. Child Support Enforcement Division v. Brenckle. the
Supreme Judicial Court held that a child support order entered by an Alaska court was enforceable
in Massachusetts under the Uniform Interstate Family Support Act.

The enforcement and interpretation of consent decrees also continued to generate
significant litigation during fiscal year 1 997. In Inmates v. Sheriff of Suffolk County, the United
States District Court for the District of Massachusetts held that the consent decree mandating
single-celling of all but 100 cells at the Nashua Street Jail may no longer be enforced by contempt
or specific performance but apparently may be enforced through damages. The inmates, sheriff.
Commonwealth, and United States all appealed, and those appeals were pending at the close of
fiscal year 1 997. In Judge Rotenberg Education Center. Inc. v. Comm'r of Dep't of Mental
Retardation, the Supreme Judicial Court affirmed a contempt judgment, concluding that the
Commissioner of the Department of Mental Retardation violated the provisions of a consent
decree in the manner in which he regulated the plaintiff school. The court also affirmed, for the
most part, the receivership orders entered by the trial court as a remedy for contempt. However,
the court vacated the trial court's award of attorneys' fees on the grounds of sovereign immunity.

Automobile insurance cases decided this year included Automobile Ins. Bureau of
Massachusetts v. Comm'r of Insurance, in which the Supreme Judicial Court upheld the
Commissioner's authority to adjust future auto insurance premiums to account for an error in
balancing safe driver insurance plan surcharges and credits in prior years. In a related case. Trust
Insurance Co. v. Comm'r of Revenue, the Supreme Judicial Court held that the 1997 insurance
rates set by the Commissioner are not confiscatory as applied to the plaintiff insurance company.
In two individual appeals from auto insurance merit rating surcharges, Yazbek v. Board of Appeal
on Motor Vehicle Liability Policies and Bonds, the Appeals Court held that the Board's
presumptions of fault may be overcome, not by merely introducing some contradictory evidence,
but, rather, only by a "showing" contrary to the presumption. In another surcharge case, Prescott
V. Board of Appeal, involving the presumption of fault for failure to stop at or to proceed with due
caution from a stop sign, the Appeals Court held that the Board erred in relying on that
presumption in the absence of substantial evidence that the plaintiff failed to proceed with caution.

Tax cases decided this year included TEAM v. Comm'r of Revenue, in which the
Supreme Judicial Court held that plaintiffs lacked standing to challenge the constitutionality of
recent amendments to the capital gains tax law; Comm'r of Revenue v. Dupee. in which the
Supreme Judicial Court held that a nonresident shareholder who did not have sufficient personal
involvement with the corporation in question, i.e., the Boston Celtics, was not liable for capital
gains tax on the gain realized on the sale of the company's assets; Minkin v. Comm'r of Revenue,
in which the Supreme Judicial Court granted our application for further appellate review and
affirmed the Appellate Tax Board's conclusion that certain corporate trusts must recognize capital

216

gains upon liquidation of the trust property and were not entitled to a step-up in basis on shares
that had passed from one decedent shareholder to another; and Comm'r of Revenue v. Brown, in
which the Appeals Court held that a minority shareholder who did not have decisionmaking
authority over the corporation's disbursement of funds or day-to-day management was not
personally responsible for payment of the corporation's sales taxes.

Several appellate decisions were rendered this year in employment-related cases handled
by Division attorneys. In Tanca v. Nordberg. an employment discrimination case, the United
States Court of Appeals for the First Circuit affirmed the District Court's decision that the mixed
motive provisions of the Civil Rights Act of 1991 do not apply to retaliation claims. Rather, in
retaliation cases, an employer is not liable for employment discrimination if he can prove that,
even if he had not been motivated by retaliation, he would have made the same personnel decision
regarding the employee. In Police Comm'r of Boston v. Personnel Administrator, the Supreme
Judicial Court upheld the Personnel Administrator's decision to set aside a police officer's
termination for imauthorized absences, on the ground that the officer's failure to give proper notice
of her absences was "reasonable under the circumstances" for purposes of G.L. c. 3 1, § 38. In
Provencal v. Civil Service Comm'n. the Supreme Judicial Court held that a statute protecting
disabled veterans from layoffs did not apply to protect them from demotions. In MacHenry v.
Civil Service Comm'n. the Appeals Court held that the Personnel Administrator is statutorily
empowered to review the substantive validity of the reasons given by an appointing authority
when it chooses to "bypass" the top candidate on a civil Service list in order to appoint a lower-
ranking candidate. In Commonwealth v. MOSES, the Supreme Judicial Court upheld our position
than an arbitrator lacked authority to order the Highway Department to pay sick, vacation, and
holiday pay to an employee who was also receiving such benefits from the imion. In Christensen
V. Teachers Retirement Board, the Appeals Court held that an optional "longevity" payment
available to teachers under a collective bargaining agreement was "regular compensation" that
should be considered in calculating the teachers' retirement benefits.

Recent amendments to the workers compensation statutes also continued to generate a
significant amount of litigation during fiscal year 1 997. For example, in O'Brien's Case, the
Supreme Judicial Court upheld the constitutionality of the impartial medical examination
procedure as affording sufficient procedural due process to claimants, who are given the
opportunity to present evidence in addition to the impartial medical examiner's report in certain
circumstances. In Coggin v. Massachusetts Parole Board, the Appeals Court ruled that the
administrative judge properly admitted additional medical testimony where the report of the
impartial medical examiner was inadequate and properly concluded that the plaintiff was disabled,
despite the impartial medical examiner's contrary opinion. In another workers' compensation
case, Tobin's Case, the Supreme Judicial Court upheld the constitutionality, under the due process
and equal protection clauses, of a 1991 amendment to the statute, limiting eligibility for workers'
compensation benefits of certain employees over age 65 who are eligible for social security or
pension benefits.

Several cases decided by appellate courts this year involved issues of state agency
authority to regulate handicap access and building safety. In lodice v. Architectural Access Board,
the Supreme Judicial Court ruled that the Architectiu-al Access Board is "the ultimate arbiter of

217

regulatory compliance" and rejected the plaintiffs argument that the Board is without statutory
authority to review the building inspector's decision as to a proposed building's compliance with
the AAB's regulations unless the developer claims that the inspector's requirements are too
onerous. In 1010 Memorial Drive Tenants Corp. v. Automatic Sprinkler Appeals Board, the
Supreme Judicial Court held that, in exempting older condominium buildings from full automatic
sprinkler requirements, the Legislature intended to exclude older cooperative apartment buildings
as well. And, in Massachusetts Laborers' District Council v. Board of Elevator Regulations, the
Appeals Court held that the Board lacked authority to require that dismantling or removing of
decommissioned elevators be done only by licensed elevator mechanics.

In appeals from decisions of professional licensing boards, the appellate courts affirmed
the revocation of the license of a physician who had sexual intercourse with an intoxicated patient
(Moustafa v. Board of Registration in Medicine): upheld the validity of regulations authorizing
independent schools of manicuring (Massachusetts Association of Cosmetology Schools v. Board
of Registration in Cosmetology): reversed a decision of the Board of Registration in Medicine
suspending a physician's right to renew his license, on the ground that the Board had failed to
make the requisite credibility findings (Herridge v. Board of Registration in Medicine): and
affirmed the discipline of a certified public accountant on the ground that his advertisements were
inherently misleading (Kelleher v. Board of Public Accountancv).

The Division also handled a large number of appeals arising from the grant or denial of
unemployment compensation benefits. Two such cases ~ Cahalen v. Comm'r of Dep't of
Employment and Training and Potris v. Comm'r of Dep't of Employment and Training ~
involved the issue of whether the employee left work "involuntarily." In Still v. Comm'r of Dep't
of Employment and Training, the Supreme Judicial Court held that a nursing home aide who was
discharged for swearing at a patient was not disqualified from receiving unemployment benefits,
because her discharge was not attributable to a "knowing" violation of her employer's policy
prohibiting patient abuse. In Modem Dispersions. Inc. v. Comm'r of Dep't of Employment and
Training, the Appeals Court held that "miscommunication" between an employer and his attorney
does not constitute "good cause" for the employer's delay in providing separation and wage
information.

The Division successfully defended two appeals concerning the State Lottery
Commission. In Singer Friedlander Corp. v. Massachusetts State Lottery Comm'n. the Supreme
Judicial Court broadly construed the statutory prohibition on the assignment of lottery winnings.
In Bretton v. State Lottery Comm'n. the Appeals Court held that the Lottery is not engaged in
"trade or commerce" within the meaning of G.L. c. 93 A and therefore cannot be sued for damages
under that statute.

Division attorneys also handle some environmental litigation. This year, in Baker v.
Coxe. the United States District Court allowed, in part, our motion to dismiss a case arising from
an environmental impact review of the construction of a pier on the plaintiffs property. In Strahan
V. Coxe. the United States District Court allowed in part and denied in part our motion to dismiss
claims brought by a whale protection advocate who contended that the Commonwealth violated
the federal Endangered Species and Marine Mammal Protection Acts by licensing gill net and

218

lobster pot fishing in Massachusetts coastal waters. We appealed the Court's preliminary
injunction requiring further state regulation of commercial fishing to the United States Court of
Appeals for the First Circuit, which had the appeal under advisement at the close of fiscal year
1997.

This year. Division attorneys also successfully defended two appeals involving the State
Racing Commission. In Taunton Dog Track. Inc. v. State Racing Comm'n. the Supreme Judicial
Court upheld the Commission's authority to permit a race track that had completed a "full
schedule of live racing performances," as that statutory language was interpreted by the
Commission, to continue simulcasting after its racing season was terminated due to a quarantine.
In Foxboro Harness. Inc. v. Racing Comm'n. the Appeals Court upheld the Commission's
authority to review a race track's refusal to do business with a trainer licensed by the Commission
and to determine that the race track's business judgment was not reasonable.

Other significant cases handled by Division attorneys in fiscal year 1997 included
Dinsdale v. Commonwealth, in which the Supreme Judicial Court held that assistant attorneys
general defending state agencies and officials in civil litigation are absolutely immune from civil
rights liability for their conduct in that capacity; Van Munching v. Alcoholic Beverages Control
Commission, in which the Appeals Court held that the ABCC erred in determining that a beer
supplier's quantity-based discount to Massachusetts wholesalers violated the intent of G.L. c. 138,
§ 25A; and Smith v. Registry of Motor Vehicles, in which the United States District Court rejected
a double jeopardy challenge to a motor vehicle license suspension based on a prior conviction for
drunken driving.

Two cases were filed in federal court in August 1996 by manufacturers of cigarettes and
smokeless tobacco products challenging the new Massachusetts ingredient and nicotine yield
reporting law. Philip Morris. Inc.. et al. v. Harshbarger. et al.. United States Tobacco Co.. et al. v.
Harshbarger. et al.. The manufacturers asserted claims under the Supremacy Clause, the Takings
Clause, the Due Process Clause and the Commerce Clause of the United States Constitution. In
February 1997, the District Court ruled that the new Massachusetts law is not preempted by the
federal cigarette and smokeless tobacco labeling laws. This issue was accepted for interlocutory
review by the First Circuit, where it is awaiting decision. The remaining claims are pending in the
District Court.

2. Amicus Curiae Briefs

The Commonwealth's position was adopted by courts in a number of cases in which
Government Bureau attorneys filed amicus briefs. In Pinecrest Village. Inc. v. MacMillan. the
Supreme Judicial Court held that G.L. c. 148, § 261, requires the installation of automatic sprinkler
systems in condominium townhouses of four or more units, notwithstanding any conflicting
provisions of the State Building Code. In Kerins v. Lima, the Supreme Judicial Court held that
foster parents are not "parents" for purposes of being held responsible for the tortious acts of
children under their care, pursuant to G.L. c. 231, § 85G.

219

3. Municipal Law

The Attorney General's Office is required by statute to review and approve town by-laws
and amendments to home rule charters. In addition, the Attorney General's Office reviews and
comments on any inconsistencies between state law and proposed home rule charters and charter
revisions. These reviews are performed by attorneys in the Municipal Law Unit within the
Administrative Law Division of the Government Bureau, with the assistance of attorneys from
every other bureau in the Attorney General's Office.

During fiscal year 1997 the Municipal Law Unit received for review 1,767 by-laws and
22 home rule charters, charter revisions, and charter amendments. The Attorney General's Office
approved 1 ,547 submissions and disapproved 75 by-laws. The by-laws reviewed included 760
general by-laws and 862 zoning by-laws.

Zoning by-laws strike a balance between a property owner's right to use and enjoy private
property and a municipality's exercise of police power to regulate structures and uses of land for
the common good. During the past year local attempts to regulate so-called "adult" uses were
again very common. Passage of the 1996 Federal Telecommunications Act spurred most
municipalities to adopt by-law regulating the siting and visual characteristics of wireless
communications antennas and towers. As was true last year, a number of communities chose to
adopt "phased development" by-laws to slow down new residential construction. Many
communities made an effort to upgrade their flood plain and well site overlay districts.

General by-laws pertain to town governance and the exercise of municipal power. As has
been true for the past several years, the most popular subjects for local regulation are dogs, cats
and children. Towns adopted by-laws that raised licensing fees, limited numbers of animals, and
defined nuisances. Children's activities, from skateboarding and roller blading to loitering and
curfews, were subjects of by-laws approved by several towns. Some of these by-laws were so
vague as to require disapproval by the Attorney General's Office. Once again, many towns
adopted or amended general by-laws regulating wetlands. The General Court enacted legislation
this year permitting towns to adopt by-laws dispensing with counted votes when a two-thirds
majority approval is required for a town meeting vote. Many municipalities passed the requisite
by-laws at their 1997 annual meetings.

In addition to reviewing by-laws, the Municipal Law Unit publishes the Municipal Law
Newsletter and responds to telephone calls and information requests from town officials and
residents, legislators, reporters and state agencies. Attorneys from the Municipal Law Unit spoke
at meetings of associations of town clerks, town counsel, and town planning and zoning boards.

4. Opinions

The Attorney General is authorized by G.L. c. 12, §§ 3, 6 and 9, to render formal opinions
and legal advice to constitutional officers, agencies and departments, district attorneys and
branches and committees of the Legislature. Formal, published opinions are given primarily to the
heads of state agencies and departments. Less formal legal advice and consultation is also
available from the Opinions Coordinator, as is information about the informal consultation

220

process. The questions considered in legal opinions must have an immediate concrete relation to
the official duties of the state agency or officer requesting the opinion. Hypothetical or abstract
questions, or questions which ask generally about the meaning of a particular statute, lacking a
factual underpinning, are not answered.

Formal opinions are not offered on questions raising legal issues that are the subject of
litigation or that concern ongoing collective bargaining. Questions relating to the wisdom of
legislation or administrative or executive policies are not addressed. Generally, formal opinions
will not be issued regarding the interpretation of federal statutes or the constitutionality of enacted
legislation.

Formal opinion requests from state agencies that report to a cabinet or executive office
must first be sent to the appropriate secretary for his or her consideration. If the secretary believes
the question raised is one that requires resolution by the attorney general, the secretary then
requests the opinion.

During fiscal year 1997, the Attorney General issued one formal Opinion, concerning
whether certain proposed ballot questions were questions of "public policy" within the meaning of
G.L. c. 53, § 19 and could appear on the ballot. In addition, the Attorney General issued 72 letters
providing informal advice or declining to give advice.

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THE TRIAL DIVISION

In FY 1 997, the Trial Division carried forward the innovations and initiatives begun in
FY 1996 and earlier. The Division emphasizes early evaluation of cases for settlement, disposition
by motion, or more protracted litigation. In particular, the Division placed increased emphasis on
efficient case management and alternative dispute resolution (ADR). Working with the recently-
hired office wide Alternative Dispute Resolution Coordinator, the Division has continued to insure
that appropriate cases are resolved as quickly and expeditiously as possible through the ADR
process.

The Practice Group concept continued through FY 1997 and has proven effective as a
professional development vehicle for assistant attorneys general (AAGs) at all levels of
experience. Other training initiatives undertaken include the development and fiill implementation
of a formal Trial Division orientation program. The eminent domain second chair program also
began, with the inclusion of Trial AAGs in trials of eminent domain cases being handled by
outside counsel. These and other professional development ideas, including the established
mentoring and supervision model, and requiring two AAGs in all Division trials, reflect the
Division's tradition of and commitment to continuing legal education for its staff.

The Division contributed to the Attorney General's major priorities in developing and
producing a program in risk management for Commonwealth agencies. In an effort to Make
Government Work Better, the Division helped produce a seminar for interested agency personnel
on the subject of reducing risks and associated costs in the tort area. Division staff participated in
the Attorney General's Task Force On Diversity, a major priority of the Attorney General in his
second administration, as members of the Task Force and through development and production of
an office wide seminar called Race on Trial: The L.A. Cases.

The Division opened 456 cases in FY 1997 and closed 521 . At the end of the fiscal year,
1585 cases were pending.

The Division continued to handle cases in the areas of torts and civil rights, employment,
eminent domain and other real estate, and contract. The subject matter of these cases reflects the
wide range of activities engaged in by Commonwealth agencies, but the Central Artery/Ted
Williams Tunnel Project, the Suffolk County Courthouse litigation, and the Registry of Motor
Vehicles' Ruggles Center litigation generated many of the largest and most resource-intensive
matters.

1. Civil Rights Cases

Civil rights cases, defended in both the Trial Division and Administrative Law Division,
present a myriad of legal problems and can subject the Commonwealth to significant exposure.
Civil rights damage awards are not limited by statute, and successful litigants may recover interest,
costs and attorneys fees. The Trial Division defended a number of civil rights cases in FY 1997.
The following are representative.

222

Prisoners bring many actions against the Commonwealth during their periods of
incarceration, many of which they style as civil rights cases. Most significant among these was
Richardson v. Commonwealth, in which the Supreme Judicial Court upheld a grant of summary
judgment against two court officers who, it was alleged, had been deliberately indifferent to the
decedent's rights, leading to his suicide. Likewise, in Mayhew v. Commonwealth, the Superior
Court dismissed all civil rights claims in a prisoner suicide case.

Actions involving civil custodial arrangements (civil commitments or foster children)
often are brought under the civil rights laws. In Ashley v. Commonwealth, the Appeals Court
upheld a summary judgment on a claim of improper commitment to Taunton state Hospital. The
Division obtained dismissal of civil rights claims arising out of the placement of plaintiff s minor
children into a foster home in Kroutil v. DSS. After dismissal of the civil rights claims against
state social workers, arising out of removal of one of the plaintiffs' children from their home, in
Suarez v. Commonwealth, the plaintiffs dropped their remaining claims.

Courts also granted several Commonwealth motions to dismiss in actions against court
personnel. In Janes v. Cambridge District Court, the Commonwealth's motion was allowed in a
suit claiming that the court clerk had discriminated against the plaintiff, and in Triplett v.
Donovan, the plaintiffs claims against a court clerk for improper docketing of court filings was
dismissed. See also Gorod v. Commonwealth; Houston v. Rufo.

The Court dismissed the plaintiffs suit in Cormier v. Rapone. in which he made
allegations that state troopers had beaten him and denied him medical treatment after they had
been called to quiet a noisy party. The Court's based its ruling on qualified immunity grounds.

The Division settled numerous civil rights cases. In a significant affirmative action case
in the U.S. District Court where the plaintiff challenged the constitutionality and implementation
of the set aside program for minorities and women, the Commonwealth settled with the plaintiff
for $77,000. P.J Gear and Sons. Inc. v. Palermo. The Division settled another federal court
affirmative action case, brought by a business that had claimed to be minority-owned. Converse
Construction Co. v. Kerasiotes. Where an attorney claimed that the Board of Bar Overseers had
violated his first amendment rights in a disciplinary matter, the Commonwealth reached a
nonmonetary settlement. Diviacchi v. Board of Bar Overseers.

2. Real Estate Cases

In the area of eminent domain and other real estate, the Division opened 106 cases and
closed 144 during FY 1997. The disposition of land damage cases resulted in a savings of over
$105 million to the Commonwealth, which represents the difference between the amounts claimed
and the amounts paid.

The Trial Division handles many different kinds of real estate cases. The ones with the
largest potential exposure to the Commonwealth are often in the area of eminent domain, where
landowners are entitled to jury trials in cases where they are not satisfied with the award the
Commonwealth has made to them in the condemnation process. In the last few years, many cases
have been generated by the Massachusetts Highway Departtnent's Central Artery/Ted Williams

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Tunnel project, the largest single public works project in the United States, in which downtown
Boston's entire traffic pattern is undergoing change. The following are some of the significant
Central Artery cases and others the Trial Division handled in the real estate area in FY 1 997.

In one Central Artery case, the Commonwealth took plaintiffs ground leasehold and
industrial building in South Boston near the World Trade Center. Plaintiff was a major Boston
developer, and the industrial building had once housed the Turner Fisheries processing operation.
The plaintiff testified his property was worth as high as $2.1 million and his appraiser testified that
it was worth $570,000. The jury returned a verdict of $200,000, which represented a savings to
the Commonwealth of nearly $500,000, including interest, if the jury had based its verdict on
plaintiffs appraiser's figure. One Fish Pier Realty Trust v. Commonwealth.

In perhaps the largest eminent domain claim in the history of the Commonwealth,
McCourt V. Commonwealth, the Trial Division helped negotiate a settlement of $57.5 million in
"new money," or damages in excess of the original payment to the landowner. In this case, the
Central Artery made a large and complex series of takings in South Boston directly across
Northern Avenue fi-om the new federal courthouse under construction on Fan Pier. The
Commonwealth faced significant exposure in this case because the original payment did not take
into account the high per square foot payment that the federal government made when it bought
the nearby Fan Pier property, a number that would have been used as a "comparable sale" had
there been a trial. Nevertheless, the Commonwealth successfiiUy negotiated a final settlement
figure that was well under plaintiffs appraiser's figure of $149 million. The settlement process
was extremely complex, and the final transactions involved payment of money and ancillary
transactions involving the grant of easements to the MBTA and other land purchases. The
settlement saved the Commonwealth $130 million or more, including prejudgment interest, over
the result that would have obtained fi-om a verdict based on plaintiffs high appraisal figure and
provided significant additional public benefits to the MBTA.

In a taking of a former gas station property by the Massachusetts Highway Department in
Middleborough, plaintiffs appraiser valued the land at trial at $1.1 million. This case was a re-
trial that resulted from the court's declaration of a mistrial when the "pro tanto" amount-the
money originally paid to the owner-mistakenly came to the attention of the jury. In the retrial the
parties settled the case in mid-trial for a savings of $3 1 7,000, had the jury based a verdict on
plaintiffs appraiser's tesfimony. LeFever v. Commonwealth.

The jury returned a verdict which saved the Commonwealth almost $450,000 in two
related cases arising out of a Metropolitan District Commission land taking in the vicinity of Route
1 in Saugus. In these cases, plaintiffs' appraiser testified that one piece of land was worth
$397,000 and another was worth $889,000. Gregson and Hollet v. Commonwealth. Hollet v.
Commonwealth.

In a case tried to a judge but not yet decided. Division staff contributed large amounts of
time and effort to the defense of Spaulding Rehabilitation Hospital v. Commonwealth. The case
involves a claim by Spaulding that the Central Artery agreed to "take" Spaulding for its proposed

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Charles River Crossing. The plaintiff asserts that Commonwealth's potential exposure in the case
exceeds $60 million.

In addition to eminent domain cases, the Division handles other real estate matters.
Among those are cases having to do with "great ponds" in the Commonwealth and all cases in the
Land Court in which the Commonwealth may have an interest.

The Division also contributes to legislative efforts the Attorney General undertakes. In
the real estate area, for example, the Office supported legislation proposing to reduce the statute of
limitations for filing eminent domain actions from three years to one year.

3. Employment Cases

In the employment area, the Division opened 25 cases during the fiscal year. The
following are representative of the cases the Division handled in FY 1997.

McCarthy v. Office of State Auditor involved a sexual harassment claim. Plaintiff
alleged that supervisors had created a hostile work environment and later retaliated against her for
having made the initial claim. The plaintiff had asked for $330,000, including attorneys fees, and
the Division successfully settled the case for $85,000. This is an excellent example of the use of
ADR to settle Commonwealth litigation.

In a United States District Court case, the plaintiff alleged she had been terminated
because of discrimination based on her age, sex, and religion. The Commonwealth's defense was
that plaintiff had abandoned her job, had given no indication of when she would return, and as a
consequence she was dismissed. Because the plaintiff failed to cooperate with discovery, the
Court dismissed the complaint. Plaintiff is now appealing the dismissal. Gorod v. Division of
Employment and Training.

The Court granted the Commonwealth's motion for summary judgment in Alston v. State
Board of Education and Local 509. after the plaintiff failed to show that the Board's reasons for
her dismissal were a pretext for discriminating against her because of her race. In this case, the
Board had been restructured and a white female had won a job through a "bidding" process the
plaintiff had formerly held. The Board held that the successful applicant had more seniority and
greater skills and therefore deserved the position. The Court upheld the Commonwealth's and the
Board's positions.

In another United States District Court case, the Court granted the Commonwealth's
motion for summary judgment after the plaintiff failed to show she would have received a
promotion had it not been for her sex. The First Circuit affirmed the judgment for the
Massachusetts Rehabilitation Commission on appeal. Smith v. Commonwealth.

In a suit against the Departments of Mental Health and Mental Retardation, the plaintiff
claimed that the Commonwealth had discriminated against her because of her sex and because she
was handicapped. At the start of a five day trial, the disability claims against the Department of
Mental Retardation were dismissed, leaving the sex claims against the Department of Mental
Health. The Department of Mental Health presented evidence at trial that plaintiff was qualified

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only for entry level "step-in-grade," she had been promoted to a higher grade, men and women
were subject to the same job requirements, and plaintiff was dismissed after she abandoned her
job. Plaintiffreceived an award after trial of only $20,000. Carbone v. Department of Mental
Health and Department of Mental Retardation.

4. Torts Cases

In the torts area, the Division opened 271 cases and closed 313. The remainder were
resolved by dispositive motion or settlement. The following are representative of the cases the
Division handled in FY 1997.

The Division prevailed at the appellate level in several torts cases during the fiscal year.
In Barnes v. Commonwealth, the Supreme Judicial Court reversed a Housing Court decision,
because the public housing contract in question expressly excluded Commonwealth liability to
third parties, including liability for lead paint in a privately owned apartment. In another trial
division case, the Supreme Judicial Court rejected a liquor liability claim against the
Massachusetts National Guard, because there was insufficient evidence to find that the persons
who served the liquor were acting within the scope of their military employment. Burroughs v.
Commonwealth.

In the Appeals Court, the Division prevailed in Jenkins v. DeTucci. by obtaining reversal
of a $500,000 verdict against two Department of Mental Retardation officials, where there was no
evidence that the officials acted maliciously. It also prevailed on appeal in Ashley v.
Commonwealth (failure to post a bond pursuant to the medical malpractice tribunal statute) and in
ESA V. Linsky (no defamation or abuse of process).

Trial Division attorneys tried ten cases during FY 1997. In one Suffolk Superior Court
jury trial, the plaintiff claimed she had suffered injuries when her golf cart hit an unmarked
sprinkler head at a state-owned golf course. After two days of trial, the jury found the
Commonwealth was not negligent. Wright v. Commonwealth.

In a case against the University of Massachusetts, after three days a Middlesex County
jury returned a verdict for the Commonwealth. The plaintiff had claimed the University was
negligent after he had slipped and fallen in a puddle of water. Nassor v. University of
Massachusetts.

A plumber who lost his foofing descending a ladder on the roof of a Commonwealth
building suffered a knee injury and sued. The handrail at the upper end of the ladder was cut short.
The plaintiff claimed that the injury was caused by his inability to prevent his fall by grasping the
ladder. After a three day jury trial, a Suffolk County jury returned a verdict in favor of the
Commonwealth and other defendants in the case. Pierce v. Massport.

When he was a student at the University of Massachusetts at Amherst, the plaintiff
injured his leg sliding into home plate in an intramural Softball game. He sued the University
claiming that it had been negligent in not maintaining properly the area around the plate and a

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depression had developed which caused the injury. A Middlesex County jury returned a verdict
for the Commonwealth in the case. Donovan v. University of Massachusetts.

Juries returned verdicts for the Commonwealth in several other cases as well. Rainey v.
Commonwealth (automobile accident involving an employee of the Massachusetts Fire Fighting
Academy); Hougham v. Metropolitan District Commission (fall at a public skating rink); Larkin v.
Morgante. et al. (automobile accident involving a National Guard vehicle); and Connerty v.
Commonwealth (injiuy to a child's leg in a park). In one arbitration involving a motor vehicle
accident, the arbitrator awarded $50,000 after finding the state police negligent, but finding the
plaintiff 40% negligent as well.

Most tort cases do not go to trial, but are either disposed of in pre-trial proceedings or are
settled. The following are examples of Division tort cases disposed of but not tried in FY 1997.

The so-called "public duty" amendments to G.L. c. 258 § 10 continue to provide grounds
for disposition of tort cases by motion, rather than trial. For example, in Rocheleau v.
Commonwealth, the plaintiff claimed that he was injured when a sandbag thrown off an overpass
hit his windshield. At the time of the incident, the overpass was under construction and the
evidence showed that the sandbag was thrown from the bridge by an unidentified third person.
The court granted summary judgment in favor of the Commonwealth on the ground, among others,
that G.L. c. 258 § 10(i) barred the suit. In another § 10(j) case, the Commonwealth obtained
summary judgment where the plaintiff alleged that he was pushed to the ice by a fellow skater at a
public rink. Murphv v. Commonwealth.

Notwithstanding the road defect statute, a plaintiff claimed that his car was damaged
because two sections of a bridge were improperly aligned. The Commonwealth moved to dismiss
the case on the basis that the road defect statute limited liability to personal injuries. The Court
agreed and granted the motion. Merchants Mutual Insurance Co. v. Commonwealth.

The recreational use statute required dismissal of a claim by a plaintiff whose bicycle
struck an alleged defect in the Esplanade roadway, but there was no evidence of willful, wanton or
reckless conduct by the Metropolitan District Commission.

In an unusual defamation case, the plaintiffs claimed that Massachusetts Highway
Department Employees made damaging statements about them in connection with the awarding of
a public contract. The Court agreed with the Commonwealth that the statements, which had been
made before a Committee of the House of Representatives, were privileged and not defamatory.
Signal V. Nagle.

In a Worcester case, the plaintiff sued the Commonwealth for personal injuries arising
from an accident. The plaintiff had previously reached a settlement with the Massachusetts
Highway Department for property damage resulting from the same accident. The Court agreed
with the Commonwealth and granted a motion for summary judgment, holding that the plaintiff
could not bring further claims on the same case, after settling one claim. At the time, there was no

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Massachusetts case law on the subject and the Court followed the construction of the same
language in the Federal Tort Claims Act. Knight v. Commonwealth.

Significant torts settlements included Pounds v. Commonwealth ($100,000 total payment
to two victims of a shooting by a recent parolee); Driscoll v. Commonwealth ($45,000 paid to a
victim of an electrical shock while working on a prison structure); Woodbum v. DSS ($25,000
settlement in a custody and medical care case); Campos v. Commonwealth ($55,000 contribution
to a settlement paid to a minor plaintiff who jumped from the window of a residential facility
where DMH had placed him); Jean W. v. Commonwealth ($1 1 7,5000 payment to a rape victim
and others where the perpetrator was mistakenly released on parole); Retecki. Adm.'s. v.
Commonwealth ($200,000 payment to estates of decedents whose deaths allegedly resulted from
the negligence of a state psychiatrist); Gigliotti. Adm'x. v. Commonwealth ($75,000 payment to
estate of a decedent which brought a malpractice action against the Massachusetts Hospital
School, 1/3 of which is to be given to a scholarship fiind).

5. Contracts Cases

In the contracts area, the Division opened 47 cases and closed 45. Two major affirmative
cases in the contracts area (Suffolk County Courthouse and Ruggles Center) are discussed above
under "Affirmative Litigation." The Division also continues to defend a number of cases
involving state contracts. The types of contracts include construction contracts for projects
ranging in value from many millions to several hundreds of thousands of dollars; leases entered
into by state agencies; and contracts for the purchase of goods and services. At the end of the
fiscal year, 229 contracts cases were pending, representing a total dollar exposure to the
Commonwealth of over $25 million. The following are representative of the Division's contract
cases.

In a case involving a computer procurement designed to replace outdated human
resources and payroll systems for 248 state agencies including the judiciary, the plaintiff sought
injunctive relief after the contract originally awarded to the plaintiff had been rescinded following
a reconsideration of the plaintiffs ability to perform. The Court granted a preliminary injunction,
but the matter settled before a hearing on the merits for approximately 25% of plaintiff s original
offer. American Management Systems, Inc. v. Personnel Administrator.

Where an auto dealer attempted to stop the state police's purchase of over 400 new police
cruisers through the public bidding process, the Court allowed the Commonwealth's motion to
dismiss the case. AMI Motor Sales v. Department of State Police.

As the result of unusually heavy rains, a diversionary water system flooded in 1995 and
caused damages to 52 homes and businesses in Lynn and Swampscott. The Metropolitan District
Commission sued to recover damages in excess of $300,000 from the architect and contractor who
designed and built the system. Metropolitan District Commission v. Paonessa Company. Inc.

In North Shore Steel Co. v. Division of Capital Planning and Operations, the Court
denied a subcontractor's motion to enjoin the Division of Capital Planning and Operations from
requiring it to perform as a Minority Business Enterprise (MBE) participant on a building

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construction contract. The subcontractor, a certified MBE and a filed subbidder on the contract,
had been carried by the lowest bidder for the ftiU amount of its filed subbid. The Court ruled in
the Commonwealth's favor, concluding that the subcontractor failed to show "likelihood of
irreparable harm."

The Division also participated in a variety of ADR forums and had several advantageous
settlements as a result. One of these was JRJ v. Commonwealth, where a claim of approximately a
half million dollars was settled for $30,000 plus the contract balance. Other settlements resulted in
Buduo V. Commonwealth, and I.W. Harding Construction Co. v. Commonwealth.

In addition to litigation, the Division advises state agencies and officials on contract
issues, including questions concerning formation of contracts, contractor performance, bidding
procedures, challenges to bidding processes, contract contents, contract interpretation and other
matters. The most fi-equent requests include questions involving the bid process and potential
litigation of the Commonwealth and other parties in the event of failure to perform contractual
obligations. The Trial Division also conducted two seminars for the Department of Environment
Management engineers on how to avoid litigation and how to conduct their work to make their
decisions defensible in the event of litigation.

The Trial Division also reviews contracts for legal services. The Division received 174
contracts during the fiscal year, of which 155 were approved and 19 were rejected.

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THE ENVIRONMENTAL PROTECTION DIVISION

The Environmental Protection Division (EPD) serves as litigation counsel on
environmental issues for various state agencies, particularly those within the Executive Office of
Environmental Affairs. EPD handles the Commonwealth's civil litigation to enforce
environmental protection programs established by state statutes and regulations, including laws
governing air pollution, water pollution, water supply, waterways, wetlands, and hazardous and
solid waste. Based on the Attorney General's broad authority to protect the environment of the
Commonwealth, EPD initiates and intervenes in state and federal litigation, and participates in
administrative proceedings before federal agencies on significant environmental issues. EPD also
defends lawsuits challenging the actions of state environmental agencies and the legality of state
environmental laws.

During fiscal year 1997, EPD handled enforcement proceedings leading to judgments
requiring fiiture payments to the Commonwealth of $2,266,128. These figures are for penalties
and cost recovery awarded in fiscal 1997, whether or not actually paid in fiscal 1997. Actual
payments, received by EPD, in fiscal year 1997, were $1,147,790 for civil penalties and
$5,046,949* for hazardous material cost recovery, for a total of $6,194,739. Other cases resulted
in court judgments requiring private parties to undertake costly cleanups~a savings of millions of
dollars for the Commonwealth.

*This figure includes Charles George Expendable Trust and asbestos monies to DCPO.

I. State Enforcement and Cost Recovery

One of the most important fimctions of EPD is to bring litigation to enforce state and
federal environmental statutes. In the past fiscal year, EPD handled numerous major enforcement
cases, including the following:

A. Air Pollution
Clean Air Act enforcement was a priority. Examples of significant air pollution matters
we handled include Commonwealth v. MacMillan-Bloedel. in which we obtained a consent
judgment requiring payment of $400,000 in civil penahies and injunctive relief involving alleged
air pollufion violations by a company that paints and stains wood siding for buildings. We also
obtained a consent judgment in Commonwealth v. Quantum Machine Stained Coatings. Inc..
requiring payment of $325,000 in civil penahies and injunctive relief involving similar violafions.

In Commonwealth v. Poly Organix. we sued a company for alleged violations of the
Toxic Use Reduction Act and the Clean Air Act. As a remedy for these violations, the company
agreed to apply for a new comprehensive air pollution permit, to install additional air pollution
control equipment, to implement designated toxic use reduction measures, to perform a
compliance audit, and to pay a penalty of $50,000.

The Bankruptcy Court entered an order allowing administrative expense priority status
for the civil penalties and fees owed to the Commonwealth in Commonwealth of Massachusetts v.
Salem Suede. Inc. The U.S. Bankruptcy Court for the District of Massachusetts granted Salem

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Suede, Inc., a Chapter 1 1 Debtor, authority to enter into a consent judgment with the
Commonweahh to resolve alleged environmental violations and pay a civil penalty and Toxic Use
Reduction Act fees of between $250,000 and $100,000. Under the terms of the consent judgment
filed in Suffolk Superior Court, Salem Suede must obtain necessary air and water permits, install
pollution control equipment, comply with sewer discharge limits of the South Essex Sewerage
District, and submit required filings on its use of toxics.

We obtained a consent judgment in Commonwealth v. Zeneca. a case in which we
alleged that a company in Wilmington failed to report a release of hazardous materials into the air.
The settlement required the company to pay a $400,000 penalty and to conduct comprehensive
auditing of its facility.

We also obtained consent judgments in cases involving gas stafions that had not installed
required vapor recovery equipment, including Commonwealth v. Yankee Trader ($10,000 penalty)
and Commonwealth of Massachusetts v. Zartir. Inc.. et al. ($5,000 penalty).

Cases we filed involving the alleged illegal handling or disposal of asbestos included
Commonwealth v. Pam Realty. Inc.. in which we alleged the president of Pam Realty hired a
contractor to renovate a commercial property and that the contractor illegally demolished and
disposed of an old boiler containing asbestos. In Commonwealth v. Chicken Brook Realty Trust.
we alleged that, during renovation of commercial property in Medway, dry asbestos was left
exposed inside and outside the property. The defendant agreed to pay a civil penalty of $32,500.
We also obtained a final consent judgment in Commonwealth v. Granger a case involving the
removal of asbestos in an apartment building in Worcester. The defendant agreed to pay a $11, 500
civil penalty and to participate in an asbestos removal training course.

B. Water Pollution/Water Supplv
EPD handled a number of water pollution cases and brought enforcement actions to
prevent water pollution and protect water supplies. Amtrak will pay $150,000 in penalties and
improve its train washing facility in South Boston after the company discharged pollutants into the
Boston sewer system in excess of the amount allowable under state law. In addition, Amtrak must
install a system to reduce the level of oil in the wastewater, and install related pollution control
devices to ensure compliance.

Two enforcement actions were brought against two mobile home parks with failing septic
systems. In Commonwealth v. Kelleher. the court entered two consent judgments to address the
problems suffered by the residents of a mobile home park in Belchertown with failing septic
systems and a threatened water supply. The first judgment requires the former owners to pay a
$10,000 penalty and fund a $27,500 escrow account that may be drawn on by the current owner to
help fimd necessary remedial work. The second judgment requires the current owner to address
the former owners' neglect of the sepfic and water supply systems by inspecting and repairing
them and by replacing the park's well. And, in Commonwealth v. Heritage Mobile Home Park.
Inc.. we commenced the action for violations of the Clean Waters Act and Title 5 of the State
Environmental Code. We also alleged that the owner of the park allowed the discharge of
pollutants into Commonwealth waters without a groundwater discharge permit in violation of the

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Clean Waters Act. The court granted our requests for a temporary restraining order, preliminary
injunction, and the appointment of a receiver. This case was resolved in a manner that fixed the
sewage disposal problem and that resulted in the purchase of the park by the tenants.

In Cape Ann Citizens Association v. City of Gloucester, a citizen suit that sought to
challenge the Consent Decree that we had obtained in United States v. City of Gloucester, we
successfully argued to the First Circuit that the consent decree was consistent with the objectives
of the Clean Water Act and otherwise not subject to challenge.

In an Environmental Strike Force case, McMahon v. Town of Dracut. the court entered a
Modified Final Judgment against the town that requires it to correct water pollution problems
recently discovered by the Environmental Strike Force. By the terms of the modified judgment,
the town must install sewers in unsewered or imdersewered sections of the town and must study
what kinds of pollution controls it need to install elsewhere. Among other serious problems, town
residences and businesses have had their sanitary systems illegally connected to the Town's storm
drainage system, through which they have been discharging raw sewage to the Merrimack River,
principal water source for Methuen, Tewksbury and Lowell.

In Commonwealth v. Town of Cohasset. the Division obtained Town agreement to, and
Court approval of, an amended consent judgment, requiring the Town to construct a wastewater
treatment plant by the year 2000. The Town subsequently appropriated $15 million for this
purpose.

C. Hazardous Waste and Materials
EPD brings lawsuits against responsible parties to remediate contamination caused by oil
or hazardous materials, including litigation to recover costs incurred by the Commonwealth when
it undertakes cleanup actions. In addition, EPD brings enforcement actions to require proper
management, storage and disposal of hazardous wastes and to collect penalties for violations. The
following are examples of hazardous waste cases that EPD handled in the last fiscal year.

In Commonwealth v. Federal Pacific Electric Co.. the court entered three consent decrees
resolving the liability of the defendants at the Norwood Superfund Site. These decrees obligated
the defendants to reimburse the United States and the Commonwealth approximately $ 1 1 million
for costs incurred for remediation of the site, and to implement a large portion of the remediation
at the site.

A consent judgment was entered by the court in Commonwealth v. Rozenas. a case
involving oil contamination at a gasoline station/fiimiture warehouse in Raynham. The owner and
operators of the site agreed to pay the Commonwealth $300,000 for the clean-up.

We filed suit in Commonwealth v. Thompson, to require the defendants to perform
immediate hazardous waste cleanup at an industrial property in East Longmeadow and to recover
costs incurred by DEP at the site. The defendant owner of the site died shortly after the action was
commenced. Although the court denied our motion for preliminary injunctive relief, we obtained
partial summary judgment against the deceased property owner's estate, establishing its liability

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under c.2 1 E. In Commonwealth v. Microwave Development Laboratories. Inc.. we obtained

a consent judgment that requires the defendant to complete the cleanup at and around its facility in
Needham and to operate various interim remedial measures currently in place. The defendant will
make payments into an escrow account for 1 5 years to fund the cleanup measures. The Town of
Needham, an intervenor plaintiff, will also receive reimbursement of cleanup costs it incurred.

We filed suit seeking removal of underground storage tanks at the defendant's property in
Holyoke in Commonwealth v. William Clausen. A preliminary injunction requires the defendant
to immediately drain the product from the tanks. A real estate attachment covering two other
properties was also allowed.

D. Wetlands
EPD also brings enforcement actions to protect the Commonwealth's wetlands resources.
Among the wetlands cases that we did this year was a series of cases that sought to "turn around"
the practices of an entire industry, the redi-mix concrete industry. In Commonwealth v. Bardon
Trimount. Inc.. we filed suit alleging that the defendant violated water quality requirements by
discharging cement truck-wash to a reservoir watershed in Waltham, a playground in Watertown,
and the MWRA sewer in Dorchester, and that Bardon violated the Wetlands Act by discharging
sediment-laden water in Peabody. The consent judgment provides that the defendant will pay a
$150,000 civil penalty, conduct an independently verified environmental audit of all of its
Massachusetts facilities, help present an industry envirormiental training program, and eliminate
almost twenty years of filling by restoring over an acre of wetlands at its Peabody site. Another
example is Commonwealth v. Wakefield Ready-Mixed Concrete Company in which we obtained a
$100,000 civil penalty. The defendants also agreed to repair three acres of wetlands at their
Burlington site and to construct facilities to recycle wastewater and waste concrete.

In 1995, the defendant agreed to the entry of a Final Judgment in Commonwealth v.
Benevento Sand & Gravel. Inc.. that required it to refrain from further violations, restore
previously filled wetlands and pay a penalty of $100,000. After DEP discovered that the defendant
was in violation of the Final Judgment, we settled the matter by agreeing to entry of a Modified
Final Judgment, which ends the defendant's violations of the Clean Waters and Wetlands
Protection Acts, fined it an additional $25,000 and required it to place an advertisement in a trade
magazine informing other firms in the industry of the need to comply with state and federal
environmental laws.

In Commonwealth v. Blackstone-Chicago Corporation, we obtained a consent judgment
with the Blackstone-Chicago Corporation, a real estate developer allegedly responsible for
wetlands damage due to erosion at its subdivisions in Northbridge and Uxbridge. Blackstone
agreed to take steps to help restore the damaged wetlands and pay a civil penalty of $25,000. In
Commonwealth v. Mendes. the defendant had been found liable after trial of violating the
Wetlands Protection Act and the Solid Waste Disposal Act and of creating a public nuisance, by
illegally dumping fill on his property in Agawam. After the defendant failed to comply with the
resulting court order, we filed a contempt action and obtained the defendant's arrest on a no exit
warrant. The defendant then completed the required restoration of the subject site.

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Commonwealth v. Aguiar is another case demonstrating the office's commitment to
follow up on the judicial relief it obtains. In this case, the defendant destroyed coastal wetlands
and repeatedly failed to comply with the enforcement orders of local and state authorities. After
the court issued an order requiring the defendant to restore the wetlands by a certain date or go to
jail, the defendant complied.

E. Solid Waste

In Commonwealth v. Hercules Building Wrecking Co.. we obtained a court order
prohibiting the defendants from accepting debris at their Brockton site. When the order was
violated we obtained an order in a civil contempt action that put the defendants on notice that
certain conduct could subject them to criminal contempt in the future.

F. Pesticides

In Commonwealth v. Buckeye Pipeline, we alleged that the defendants used unregistered
pesticides in their annual applications on a right of way in Ludlow and failed to have approved
plans for the applications. We obtained a consent judgment requiring the defendants to pay
$62,500 for violating the Massachusetts Pesticide Control Act. The judgment also required the
defendants to refrain from using unregistered pesticides and to obtain necessary approval before
further applications are made to any right of way.

G. Forest Cutting.

We obtained a temporary restraining order and a preliminary injunction against the
defendants in Commonwealth v. Mizhir to enjoin clear-cutting of a forest in Winchendon. Our
complaint alleged that the defendants clear-cut forests in violation of the Forest cutting Practices
Act, G.L. c. 132, §§ 40-46, without an approved forest cutting plan from the Department of
Environmental Management.

II. Clean State Initiative

The Clean State Initiative was created through the partnership efforts of the Attorney
General and the Weld Administration. Under Executive Order 350, state agencies and authorities
have been directed to identify, prioritize and remedy their environmental problems.

A. Clean State Report to the Legislature

Pursuant to his authority under G.L. c. 12, § 11 D, the Attorney General issued his second
report to the Governor and the Legislature on the Clean State Initiative at the end of this fiscal
year. The report documents the successes of the Clean State Initiative, points out problems
relating to many "priority" matters that were going to fail to make the June 30, 1997 deadline for
resolving such matters, and recommends steps that need to be taken now if the state is to achieve
environmental compliance on the over 1400 remaining matters by the year 2000 and to remain in
compliance. Further, in a direct response to recommendations made by the Attorney General in a
prior Clean State progress report. Governor Weld in January, 1 997, issued a directive that requires
each state agency to appoint an Environmental Health and Safety Director. The EHS Directors are
ordered to ensure that ongoing environmental problems are dealt with expeditiously and that
agencies comply with environmental laws in the future.

B. Other Actions of EPD in Conjunction With the Clean State Initiative

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In Commonwealth v. Massachusetts Bay Transportation Authority, an action taken under
the Clean State Initiative, we obtained a consent judgment that requires the MBTA to complete the
cleanup of petroleum contamination at the Fellsway Bus Garage in Medford. Under the terms of
the judgment, the MBTA must also comply with regulations for testing and maintenance of
underground storage tanks at the garage. The MBTA is currently performing immediate response
actions at the site to stop the migration of petroleum in groundwater and in a storm drain system.

In Commonwealth v. Commissioner. Department of Public Safety, we brought suit
against DPS for numerous underground storage tank (UST) violations of longstanding duration at
its 1010 Commonwealth Avenue property. DPS agreed to survey the property and tanks, drain the
tanks immediately, and remove the USTs by October, 1997.

In related action, we launched an investigation of state-owned USTs which revealed
numerous violations of the UST regulations. We sent letters to each agency and authority detailing
the violations, requesting that they enter all noncompliant USTs into the Clean State database, and
requesting that tightness testing be performed on all aging USTs in order to prevent environmental
damage and expensive fiature G.L. c. 21 E cleanups. We also requested that all USTs no longer in
service immediately be removed from the ground.

After lengthy involvement by our office and discussions with the Town of Norfolk, the
Department of Correction agreed to replace, rather than just repair, its failing sewage pipeline in
Norfolk. Several large sewage outbreaks into a lake occurred in 1 995 from the pipeline, which
handles the sewage from four prisons. Despite an increase in cost, DOC has also agreed to
construct the new pipeline in a public easement, a more environmentally-protective route than its
present location. DOC has signed an administrative consent order agreeing to deadlines for the
construction of the new pipeline.

III. Brovynfields Reform:

The office was extremely active on several fronts in efforts to further the redevelopment
of contaminated "brownfields," which exist most often in urban areas. First, we participated in the
statewide policy debates at the State House and through the state "Brownfields Advisory
Committee" on how to reform our hazardous waste liability laws to fiirther brownfields cleanup
and redevelopment. On December 4, 1 996, Attorney General Harshbarger together with
Representative Charlotte Richie filed A Bill to Create Brownfields Development Agreement Pilot
Program (H. 4334). This bill would set up a pilot program designed to spur the reuse of
brownfields in the areas of the Commonwealth with the most economic need. This program
would create a process through which developers proposing to redevelop brownfields in such areas
could apply for liability protection and ftmding through "one stop shopping." The Attorney
General also provided extensive oral and written testimony on other bills that would create some
across-the-board liability changes and ftmding, as well as proposed substitute language on key
provisions.

The office was also extensively involved in efforts to turn around particular brownfields
sites statewide. Through the Clean Sites Initiative that the Attorney General previously established
with the Weld Administration, we granted many covenants-not-to-sue that helped further the

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redevelopment of projects from Lee to Revere. In addition, the office has also had a critical role in
solving the liability issues for, and thus trying to make happen, many important projects outside of
the Clean Sites Initiative, ranging from the first supermarket built in the Jackson Square area in
many years, to the innovative development efforts being undertaken at Ft. Devens, to the Regional
Transportation Center in Wobum, to the Medical City development in Worcester, to the rebirth of
shipbuilding at the Quincy Shipyards. The office has also played an integral role in ftirthering
local brownfields programs in Boston and New Bedford.

The office continued to work closely with state and federal officials to resolve issues
regarding the contamination of the Housatonic River and landowners' properties with
polychlorinated biphenyls (PCBs) that were generated by General Electric's former manufacturing
operations in Pittsfield. This effort took many forms, including work on a pilot program designed
to help spur the redevelopment of part of the industrial site. In a related matter, an amicus brief
that we filed in Church v. General Electric convinced the federal District Court to deny General
Electric's motion for summary judgment in suits against the company for property damages caused
by the PCBs. GE had argued that the suits should be dismissed as being barred by the statute of
limitations. Together with the state Department of Environmental Protection, the office also
offered to provide liability protection for property owners onto whose property PCBs from the GE
plant had migrated. Similar protection was offered to residents of Cape Cod whose property
overlay underground plumes of contamination emanating from the Massachusetts Military
Reservation.

IV. Low Emissions Vehicle Litigation & Related Developments

On many fronts, the office continued its role fighting for Massachusetts' right to require
cleaner cars. In American Automobile Manufacturers Ass'n et al. v. DEP. the long running battle
by the automobile manufacturers and dealers against the Massachusetts Low Emission Vehicle
program, we filed for summary judgment in U.S. District Court on the remaining issue: whether
Massachusetts can require the manufacturers to deliver a limited number of electric vehicles for
sale between now and model year 2003, when a full scale production and delivery mandate will
take effect.

Comments to EPA on National Low Emission Vehicle Proposal. On March 7, 1 997,
Attorney General Harshbarger wrote to the federal EPA asking the agency to rethink its proposal
for a "National Low Emission Vehicle Program." EPA was preparing to issue regulations that
would create a framework to implement an elaborate proposed agreement between the
Northeastern States and the car companies. Pursuant to such an agreement, the car companies
would produce cars nationwide meeting standards stricter than the current federal "Tier I"
standards, but laxer than the California LEV standards. The Attorney General criticized the
proposal for asking the States to give up their statutory right to require the California standards in
return for benefits that — for a variety of reasons - they would otherwise see anyway. He also
questioned the legality of the EPA proposal.

In Virginia v. Environmental Protection Agency, the U.S. Court of Appeals for the D.C.
Circuit held that EPA's rule which required states in the Ozone Transport Region to adopt
California automobile emissions standards exceeded its authority under the Clean Air Act. Having

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taken a lead role in support of EPA's rule with four other states, we filed a request for
reconsideration and rehearing en banc in the challenge to EPA's rule requiring States in the
Northeastern U.S. to adopt the California Low Emission Vehicle program. The Court denied the
request.

V. Energy-Related Environmental Issues

The Attorney General intervenes in facility siting and licensing proceedings when he
determines that intervention is necessary and appropriate to protect the public health or the
envirormient. In addition, the office has been heavily involved in environmental issues relating to
the restructuring of the electric generation industry, facility siting reform, and energy efficiency
standards.

A. Facility Licensing.

Deerfield River Hydroelectric Project The Federal Energy Regulatory Commission
(FERC) rejected a number of water quality conditions contained in the Massachusetts and
Vermont § 401 water quality certifications for the relicensing of two hydroelectric projects on the
Deerfield River. We filed a joint petition with Vermont for rehearing arguing that FERC has no
discretion imder the Clean Water Act to exclude state § 401 conditions from these 40 year
licenses.

In a related proceeding, we intervened in a Vermont administrative appeal of the water
quality certification (WQC) that Vermont had issued for one of the Deerfield River hydroelectric
projects. Our intervention was based on concerns that changes to Vermont's WQC and the
operation of the project could cause flooding in Massachusetts and result in violations of the
Commonwealth's water quality standards. We agreed to dismissal of the appeal when a settlement
was reached. New England Power Co., the licensee, agreed to place permanent conservation
restrictions on 1500 acres of project lands along the Deerfield in Massachusetts.

B. Energy Restructuring - Department of Public Ufilities.

Along with Regulated Industries, EPD participated in reaching agreements with three
major Massachusetts electric companies, the New England Electric System, Boston Edison and
Eastem Utilities, that would reduce the cost of power to all classes of ratepayers while greatly
improving air emissions output. As approved by the DPU, the NEES agreement requires that
company to reduce, by 2010 its total power plant emissions of nitrogen oxide and sulfur dioxide to
meet the stringent new standards for power plants. The agreement also benefits the environment
by incorporating on-going funding for demand-side management activities, including
conservation, and for the stimulation of development of clean renewable energy sources. The
BEG and EUA settlement are similar to the NEES deal, but are yet to be approved by the DPU.

C. Northeast Clean Air Compact Proposal.

On December 3, 1996, Attorney General Harshbarger sent a proposal to the governors of
the twelve northeastern states urging them to form a "Northeast Clean Air Compact" to combat
polluted air that blows into the region from the Midwestern states. This interstate compact would
allow states that comply with strict air pollution standards to ban the importation of power from
out-of-state sources that do not adopt such standards. Alternatively, the downwind states, such as

237

the New England States, could add a surcharge to the price of imported power from the Midwest.
The surcharge money would then be distributed to in-state ratepayers or to clean air funds to pay
for further air pollution reductions. In a related coordinated effort, we have been working closely
with other Northeastern states in developing a petition to be filed pursuant to section 126 of the
federal Clean Air Act to require EPA to address the problem of interstate air pollution blowing
into Massachusetts from upwind states.

D. Energy Facility Siting Reform.

We presented oral and written testimony to the Joint Committee studying siting and
offered our version of what should be included in a bill to ensure maximum environmental
protection in the context of a restructured energy supply system.

E. Appliance Standards

We led a four-state effort to encourage the U.S. Department of Energy (DOE) to
implement tough, new efficiency standards for refrigerators and freezers. Along with the
Attorneys General of Maine, Connecticut, and Rhode Island, we filed comments with the DOE
urging it to promulgate the standards that had been collaboratively agreed to by a coalition of
appliance manufacturers, utilities, environmental groups, and state agencies in 1994.
Implementation of the standards would save, over the next twenty years, $20 billion for consumers
and avoid the need for eight 500-megawatt baseload power plants.

VI. Defensive Cases

One of the critical fimctions of the Attorney General's Office is the defense of lawsuits
challenging the regulatory and enforcement actions of state environmental offcials and agencies.
These cases, which involve numerous challenges to state permitting decisions, as well as
challenges to the legality of state environmental regulations, include the following cases: Seipel v.
Commonwealth and Rigney v. Commonwealth (settlement agreements filed in these defensive
Title 5 cases brought to challenge DEP's denials of variances for each plaintiffs proposed septic
system; under each agreement, DEP approved a newly designed system, more protective of the
environment than the system originally proposed); Conservation Law Foundafion v. Struhs (we
successfully argued that the Court lacked jurisdiction to hear plaintiffs complaint alleging that
issuance of a permit to allow construction of a outdoor parking lot in Chinatown violates the
Boston parking freeze, after which CLF agreed to drop the case); Allua v. Department of
Environmental Protection (successful defense of DEP permitting action regarding a landfill mining
project at the Fairhaven landfill); Bazilia v. Secretary of Executive Office of Environmental
Affairs (challenge to decision to require an environmental impact report); Town of Foxborough v.
Coxe (challenge to decision that Amtrak need not prepare a supplemental environmental impact
report to further study noise and safety impacts of the high speed rail electrification project); Legal
Sea Foods. Inc. v. Daniel S. Greenbaum (challenge to administrafive order prohibiting the
company from using water from its non-municipal well in Allston for various "human
consumption" purposes, including making ice to chill the restaurant's fish products resolved
through convincing plaintiff to agree to decommission the water well, thus refraining from using
the well-water for any purpose); Goldman v. Department of Environmental Protection (successful
defense of state authority to require applicants to pass a written examination as a condition of
licensure of licensed hazardous waste clean-up professionals, even though its statute does not

238

specifically reference an exam); Zora Enterprises v. Department of Environmental Protection
(successful defense of regulatory takings claims brought by a Marion developer); William Connor
& Geochem. Inc. v. PEP (successful defense of DEP revocation of hazardous waste storage
license for failure to pay annual compliance assurance fees); TMS Mortgage. Inc. v. Department of
Environmental Protection (successful defense of denial of reimbursement to party who performed
a site cleanup after receiving a "notice of responsibility"); Douglas Environmental Associates v.
DEP (defense of decision to deny plaintiff a permit to build a 1500 ton-per-day landfill on 125
acres of woodland bordering the Douglas State Forest); Cambridge v. DEP (defense of decision
to issue a Chapter 91 license for the Charles River Crossing component of the Central
Artery /Timnel Project).

VII. New Legislation

In addition to our work on brownfields legislation and energy facility siting legislation
discussed above, we filed testimony in support of S. 1678/H. 2457, the "Updated Bottle Bill." The
bill would, among other things, broaden the definition of beverages to require refundable deposits
for many widely used drink containers, such as those for sport drinks, iced tea, and juices, to
discourage littering and encourage reuse/recycling.

VIII. Significant Hearings. Amicus Briefs, etc.

Support for New Clean Air Standards. On January 4, 1997, we presented oral and written
testimony in support of EPA' s proposal to amend its national ambient air quality standard for
ozone and to promulgate a new such standard for "fine particulates" (small particulates that lodge
deeply in the lungs). The new standards are expected to produce major health benefits.

We filed an amicus brief in Daddario v. Cape Cod Commission. The Commission denied
the plaintiffs application for a permit to construct a sand and gravel mine. The Land Court found
that the denial constituted a taking. The Commission appealed and obtained direct appellate
review in the SJC. The SJC recently overruled the Land Court and declared the Commission's
actions not to be a taking.

The Commonwealth joined 12 other states in filing a amicus brief in General Electric v.
United States Department of Commerce, in support of the Natural Resource Damage Regulations
issued by the National Oceanic and Atmospheric Administration under the Oil Pollution Act.

Massachusetts and a number of other states filed an amicus brief in American Rivers. Inc.
V. Federal Energy Regulatory Conmiission arguing that FERC had no authority to reject water
quality conditions contained in Vermont's water quality certifications for the relicensing of three
hydroelectric projects.

We joined a amicus brief in support of North Carolina in North Carolina v. Federal
Energy Regulatory Commission. D.C. Circuit, a case involving a hydroelectric project which is
located in both Virginia and North Carolina. At issue is FERC's determination that large water
withdrawals from the project reservoir in Virginia did not entitle North Carolina to issue a section
401 water quality certificate under the Clean Water Act. We argued that North Carolina, not
FERC, should make the determination as to whether the change in the project operation adversely
affects water quality in North Carolina.

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We intervened on the side of the Interior in Kennecott Utah Copper Corporation v.
United States Department of the Interior. D.C. Circuit. The court issued a ruling largely upholding
natural resource damage assessment regulations promulgated by the Department of the Interior
under the Superfund law. Tlie court denied the industry's petitions except with regard to a
regulation setting forth the Interior's interpretation of the statute of limitations and a rule regarding
calculation of damages.

We prepared a public information pamphlet on the complicated law of beach access. The
pamphlet, which attempts to explain in simple language the rights of those seeking to enjoy the
many miles of the Massachusetts shoreline and beaches and the rights of coastal property owners,
was widely distributed to coastal communities and was published on the internet.

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THE WESTERN MASSACHUSETTS DIVISION

The Western Massachusetts Division of the Office of the Attorney General, located in the
State Office Building at 436 Dwight Street, Springfield, is a part of the Executive Bureau. The
Division is responsible for all legal matters arising in the four western counties, Hampden,
Hampshire, Franklin, and Berkshire. The Division is staffed by eleven assistant attorneys general,
three civilian investigators, four paralegals, three Massachusetts State Police Officers, and
additional support staff. In addition, an attorney and two investigators assigned to the Medicaid
Fraud Unit are part of the staff.

The Western Massachusetts Division has defensive and affirmative litigation
responsibilities and, as well, fields and handles a large number of consumer-related complaints for
area residents. In addition, the Western Massachusetts Division takes part in a variety of
community-oriented public safety and quality of life programs and task forces, such as the Drug
Den Elimination Program, Abandoned Housing Project, and the Springfield City- Wide Violence
Prevention Task Force.

Summary of Defensive Litigation

In the area of defensive litigation, the Western Massachusetts Division defends the
Commonwealth in administrative law, contract, eminent domain, civil rights, and torts cases. At
any given time, there are approximately 150 open defensive cases.

In fiscal year 1997, the following number of new defensive cases, by category, were
opened:

Admin. Law Eminent Domain Torts Declaratory Judgment Miscellaneous

43(51%) 4(4%) 23(27%) 5(5%) 9(11%)

In fiscal year 1997, 59 defensive cases were closed, either by way of settlement, trial, or
dispositive motion, for a through-put rate of 1 08%. Four cases were tried before a jury in
Superior Court. Two Superior Court trials ended injury verdicts for the Commonwealth. One jury
trial ended by way of a motion for directed verdict in favor of the Commonwealth. One jury trial
ended by way of a plaintiff s verdict of $30,000. The total amount of money awarded plaintiffs in
tort, breach of contract, and civil rights lawsuits, either by way of settlement or trial was $530,000.
The total amount of money awarded plaintiffs in eminent domain cases was $1,149,000.

Defensive Case Highlights

(n Malin v. Commonwealth (DMA)

The plaintiff claimed that her contract and civil rights were violated by the refusal of the
DMA to pay for dental treatment to correct her TMJ. Notwithstanding the fact that TMJ tt-eatment
is not a covered benefit, the DMA had exercised its discretion to extend the plaintiff benefits up to
$28,000. After the plaintiff had been to numerous specialists and the DMA had spent about

241

$13,000, the plaintiff ripped the dental work out of her mouth with a butter knife and sent the
dental appliance to the DMA in an envelope. The plaintiff proposed a new $50,000-$75,000
treatment plan by a non-Medicaid provider. The DMA declined the proposal but did continue to
offer the plaintiff the original plan, provided that the plaintiff continue seeing a psychologist to
prepare her for the necessary dental therapy and certify that she was ready to receive it. The
plaintiff rejected the condition and the plan. After a two-day jury trial, the Commonwealth's
motion for a directed verdict was allowed.

(2) Haberstroh v. Rosen, et al CDMRy

The plaintiff claimed that her civil rights were violated when she was demoted as a result
of her memoranda detailing her concerns with the Monson Development Center's programs. After
considerable trial preparation and protracted settlement discussions took place, the plaintiff agreed
to a settlement of $175,000, which included attorney's fees. This figure represented a considerable
savings to the Commonwealth because it avoided significant litigation costs (four special assistant
attorneys general were appointed so as to avoid any conflict of interest arising fi"om our
representation of numerous defendants).

(3^ Cardinal v. Nordberg rPET)

The plaintiff claimed in this case that she was bypassed for several positions within DET
because of her gender and that she was transferred to a distant office in retaliation for having made
a MCAD complaint. After a multi-day trial, a defense verdict was returned.

(4) Moriartv v. DSS

This case began as a medical malpractice case against four doctors. The plaintiff was
brought to the hospital following an automobile accident in his foster parents' car. The doctors
failed to detect that a piece of glass, which was quite obvious on the X-Ray, remained in the
plaintiffs eye. As a resuft, the plaintiff suffered a detached retina and ultimately, lost the vision in
his eye. The doctors impleaded DSS, alleging that DSS should have more diligently pursued
follow up visits to the eye doctor. After protracted discovery and an all day mediation, the case
settled for $400,000. The Commonwealth's share was $13,050, of which almost $10,000 was a
waiver of the Medicaid lien and some of which, will be reimbursed pursuant to a DSS insurance
policy that was in effect at the time of the accident.

(5) Coppollino V. Commonwealth (Berkshire County Community College)

The plaintiff claimed that he hurt his thumb when he caught it between the weight bar and
another sharp-edged piece of the apparatus while working out in the college gym. The Superior
Court allowed the Commonwealth's motion for summary judgment on the ground that the claim
was barred by the recreational use statute.

242

Summary of AfFirmative Litigation

In the area of affirmative litigation, the Western Massachusetts Division prosecutes pro-
active civil rights, consumer protection, and criminal cases. In fiscal year 1997, an average of 28
civil affirmative litigation cases was open at any given time. In fiscal year 199, 31 civil
affirmative litigation cases were closed. In addition, approximately 35 investigations were opened
and closed without litigation.

Affirmative Case Highlights

m AT&T

It was alleged AT&T, together with Safe-Tech, committed multiple unfair and deceptive
trade practices in connection with the sales and servicing of home security systems. This office
fielded 90 complaints, many from elders. After protracted negotiations spanning many months,
the case was settled for $240,000, to be distributed among the plaintiffs, and a $100,000 - Local
Consumer Aid Fund (LCAF) contribution.

(2) Go Travel

As a result of numerous complaints brought to this office about a travel agency which
took money but did not deliver trips, this office sued the company and its principal, ultimately
obtaining a consent judgment that bans the principal from the fravel business for life and
restitution (in the companion criminal case) of $149,853.

(3) Attorney General v. Hampden County Commissioners

In this Superior Court case, the HCC is alleged to have violated the open meeting law and
other laws. The Superior Court entered a judgment that reads like a consent decree. In essence,
the HCC agreed to abide by the Open Meeting Law. Because the HCC committed new violations,
a contempt complaint regarding the same subject matter has been filed.

Summary of Criminal Litigation

In the area of criminal litigation, the Westem Massachusetts Division prosecutes a variety
of cases, ranging from bank fraud, public integrity, credit card fraud, and attomey defalcation to
narcotics and illegal weapons cases. In fiscal year 1997, 22 criminal cases were disposed by way
of guilty pleas. In the fiscal year 1997, 18 indictments were returned by the Grand Jury
against three defendants.

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Criminal Case Highlights

(\) Commonwealth v. Gary Heller

The defendant was an attorney (since disbarred), who embezzled approximately $200,000
from his clients who had retained him in connection with the refinancing of their homes. The
attorney would take the payoff check, deposit it into his own account, and then continue to make
monthly payments on the first mortgages in the names of his clients. His scheme was discovered
when one of the homeowners sought a home equity loan and was refused on the groimd that there
were already two outstanding mortgages on her home. The attorney was sentenced to a three year
House of Correction term. The title insurance company paid off the first mortgages of two of the
three homeowners. The defendant was ordered to pay restitution of approximately $40,000 to the
remaining homeowner.

(2) Commonwealth v. Stewart

This was an insurance fraud case involving interesting legal issues as to the meaning of
"materiality" for purposes of the fraud statute. The defendant claimed that since his insurance
company would have paid the claim whether or not he was involved in an accident, his false claim
that he was in an accident was not "material." After a jury-waived trial, defendant was found
guilty and sentenced to an 18 month House of Correction term.

The three assistant attorneys general and three state troopers assigned to the Western
Massachusetts Division are involved in numerous intensive investigations and prosecutions and
will continue to pursue these cases with diligence and expertise.

The Western Massachusetts Division will continue to provide the residents of western
Massachusetts with access to their state government and will continue to provide state
governmental agencies with the highest quality legal representation.

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No. 96/97-1
August 29, 1996

The Honorable William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1 705
Boston, N4A 02108

Dear Secretary Galvin:

You recently transmitted to me a series of proposed ballot questions and requested my
opinion whether these questions are one of "public policy" within the meaning of G.L. c. 53, § 19
(1994 ed.) and, if so, what simple, unequivocal and adequate form is best suited for presentation of
these questions on the November 1996 ballot. 1 have received the proposed questions and have
concluded that, with one exception, each of them is a public policy question which may appear, in
the form provided herein, on the November ballot.

The principles governing my review of proposed ballot questions are well settled, have
been reviewed in prior Opinions of the Attorney General, and accordingly need not be extensively
reviewed here. See, e^, 1990-91 Op. Att'y Gen. No. 1, Rep. A.G.. Pub. Doc. No. 12 at 78
(1990); 1988-89 Op. Att'y Gen. No. l.Rep. A.G.. Pub. Doc. 12 at 102 (1988). It is sufficient to
say that each question must (1) involve a determination of what governmental action is desirable
or necessary for the public interest, as opposed to individual concerns; (2) relate to an important
public matter in which every citizen of the Commonwealth would have an interest, even if the
direct impact of the question is confined in some way to a specific geographic area; and (3) be
consistent with the powers of the Legislature and involve a subject matter that is fit for legislative
action. With one exception, each of the questions proposed here meets these standards.

The excepfion is a question proposed for the First Franklin and Second Hampshire
representative districts, identical to one rejected by my predecessor as Attorney General in 1988

245

and almost identical to one rejected by him in 1990, that provides (with emphasis in the original)
as follows:

In biological terms, when does an individual human life begin?

Mark a cross "X" in the square next to the answer you prefer. Only vote for one.

□ A. Conception.

D B. Viability.

a C. Birth.

D D. Write-in: Specify a different biological term

This same question was proposed in 1988 and was determined by the Attorney General not to be
appropriate for presentation on the ballot as a question of public policy. See 1988-89 Op. Att'y
Gen. No. 1 at 104-06. That determination was challenged in court in a suit against the Attorney
General and the Secretary, and the Supreme Judicial Court declined to overturn or even review the
determination, adhering to the longstanding rule that "the Attorney General's decision, in the
absence of bad faith, is final." New England Christian Action Council. Inc. v. Secretary of the
Commonwealth. 403 Mass. 671, 673 (1989) (citing Thompson v. Secretary of the Commonwealth.
265 Mass. 16, 19 (1928)). Two years later, the Attorney General disapproved another, slightly
different question concerning when an individual human life begins. 1990-91 Op. Att'y Gen. No.l
at 82.

The principal basis for the Attorney General's 1988 ruling was that the question was not
phrased as, and did not purport to provide, an instruction to a legislative representative regarding
governmental action. Indeed, the question did "not indicate whether any governmental action at
all is contemplated," and it "fail[ed] to notify voters what public policy, if any, would be changed
or established by a representative seeking to follow their instruction." Id. at 105. Providing such
instruction "is fundamental to properly posing a 'question of public policy' under Massachusetts
law," specifically Article 19 of the Massachusetts Constitution's Declaration of Rights and G.L. c.
53, § 19. 1988-89 Op. Att'y Gen. No. 1 at 105. This principle was followed again in 1990 when
my predecessor disapproved a question concerning a local traffic safety issue on the ground that
the question did not concern any proposed action by the state Legislature. 1990-91 Op. Att'y Gen.
No.l at 81-82.

The 1988 question concerning when an individual human life begins was also determined
to be flawed because, unlike any other public policy question that had ever appeared on the ballot
under G.L. c. 53, § 19, it did "not allow for affirmatively voting that no instruction on this issue
should be given." 1988-89 Op. Att'y Gen. No. 1 at 105-06 8c n.8 (emphasis in original). This
principle was again followed in 1 990 when another, slightly modified question concerning when
an individual human life begins was rejected by my predecessor on the ground that "a multiple
choice question which fails to allow voters to reject entirely any instrucfion to their legislator on
the subject of the question [] is impermissible." 1990-91 Op. Att'y Gen. No.l at 82.

246

Attorneys General have historically been extremely reluctant to depart from the legal
opinions of prior Attorneys General. When an Attorney General is asked to revisit an earlier
opinion, that opinion "is entitled to great weight and is subject to reversal only if there has been a
substantive change in the law, or if the original interpretation was clearly erroneous." 1979-80
Op. Att'y Gen. No. ll.Rep. A.G.. Pub. Doc. No. 12 at 120 (1980); see 1978-79 Op. Att'y Gen.
No. 21. Rep. A.G.. Pub. Doc. No. 12 at 131 (1978). I see no reason to depart from the earlier
determination, left undisturbed by the Supreme Judicial Court in 1988 and followed in 1990, that
the proposed question concerning when an individual human life begins is not a question of public
policy under G.L. c. 53, § 19 and therefore may not appear on the ballot. I note, however, as did
my predecessor in 1990, that in light of the Attorney General's 1988 determination, "the rejection
of the question on this ground was . . . entirely foreseeable" and that "the requirements for public
policy questions do not prohibit a properly posed public policy question that involves a theory of
when life begins." 1990-91 Op. Att'y Gen. No.l at 83 n.lO (emphasis added).

I conclude that each of the other proposed questions may appear on the ballot, in the
district(s) indicated, in the following form, which has been developed in consultation with your
staff.

First Barnstable, Second Barnstable, Fourth Barnstable, First Berkshire, Second

Berkshire, Fourth Berkshire, First Bristol, Seventh Bristol, First Essex, Seventh

Essex, Second Franklin, Second Hampden, Fourth Hampden, First Hampshire,

Second Hampshire, Third Hampshire, Thirteenth Middlesex, Fifteenth Middlesex,

Sixteenth Middlesex, Twenty-Seventh Middlesex, Twelfth Norfolk,

Twelfth Suffolk. Nineteenth Suffolk, and Thirteenth Worcester Representative Districts

Shall the state representative from this district be instructed to vote in
favor of legislation that:

• Limits spending on political campaigns;

• Removes the influence of contributions by large donors; and

• Creates a level playing field for candidates and voters.

By providing the option of public financing to candidates who agree to
strict spending limits?'

Third Berkshire

Shall the state representative from this district be instructed to vote in
favor of legislation providing that restaurants must designate at least
60% of their seating capacity as a non-smoking area but may designate
up to 40% of their seating capacity as a smoking area if the restaurant

' In the Second Franklin, Second Hampden, and Fourth Hampden districts, the last
phrsae should read "candidates who agree not to accept or spend any private money?"

247

ventilation meets code requirements and signs indicating smoking and
non-smoking sections and capacity are prominently displayed?

Fifth Hampden

Shall the state representative from this district be instructed to vote in
favor of a rule requiring bills to be in print for at least 24 hours before
consideration by the House of Representatives?

Fifth Hampden

Shall the state representative from this district be instructed to vote in
favor of a rule requiring any bill relative to taxation to be on the
legislative calendar for at least seven days before being passed by the
House of Representatives?

Third Berkshire. Fourth Berkshire

Shall the state representative from this district be instructed to vote
against legislation enabling the merger of Berkshire Medical Center
and Hillcrest Hospital of Pittsfield?

Tenth Middlesex. Twelfth Middlesex

Shall the state representative from this district be instructed to vote in
favor of a bill to reduce the size of the Newton Board of Aldermen
from 24 members to 16 members?^

In accordance with the practice of prior Attorneys General, I have not made any
independent inquiry whether the above questions meet the additional requirements for public
policy questions set forth in G.L. c. 53, §§ 19-21 (1994 ed.). These requirements involve factual
determinations which are more appropriately made by you as Secretary of the Commonwealth. I

^ This question may approach the limit of the principle followed by my predecessors that
"[e]ven when a question appears to affect a small geographic area, if the problem it addresses is
one of concern to the Commonwealth in general, the question may be considered one of public
policy." 1988-89 Op. Att'y Gen. No. 1 at 103 (citing prior Opinions). But "[i]t has rarely been
concluded that a matter is solely of local concern." Id.; see id. at 104 n. 5 (citing approval of
earlier locally-focused questions). I also note that a similar question, concerning legislation
affecting the size and make-up of the Boston City Council, was approved in 1980. 1980-81 Op.
Att'y Gen. No.6, Rep. A.G.. Pub. Doc. No. 12 at 1 1 1. Other questions seeking to instruct
legislators on issues of local governmental structure have also been approved. 1990-91 Op. Att'y
Gen. No. 1 at 78 n.2, 84. I therefore approve this question.

248

conclude only that the questions are ones of public policy and may, if these other requirements are
met, appear on the ballot in the form set forth above.

Sincerely,

Scott Harshbarger

249

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