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Full text of "Report of the Attorney General for the year ending .."

Public Document 




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Report of the 

Attorney General 

for Fiscal Year 1999 

(Ending June 30, 1999) 




4v^ 



)F THIS Document Approved by Philmore Anderson III, State Purchasing Agent. 
Publication Number 18522-300-800-12/00-5.03-Docuprint 




TOM REILLY 

ATTORNEY GENERAL 



Tfit CommonweaCtfi of Massachusetts 

office oft/k Attorney QemraC 

One !AshBurton Tiace 

"Boston, 9AA 02108-1698 



In accordance with the provisions of Section 1 1 of Chapter 12 of the Massa- 
chusetts General Laws, I hereby submit the Annual Report for the Office of the 
Attorney General. This Annual Report covers the period from July 1, 1998 to 
June 30, 1999. 



Respectfully submitted, 



Thomas F. Reilly 
Attorney General 




TABLE OF CONTENTS 

ASSISTANT ATTORNEY GENERAL APPOINTMENTS i 

BUDGET OVERVIEW vi 

EXECUTIVE BUREAU 1 

Executive Bureau Overview 1 

Children's Protection Project 1 

External Relations 1 

Information Technology Division 3 

Human Resource Management 4 

Operations 6 

Western Massachusetts Division 8 

BUSINESS AND LABOR PROTECTION BUREAU 14 

Unemployment Fraud Division 14 

Fair Labor and Business Practices Division 23 

Insurance Fraud Division 50 

Medicaid Fraud Control Unit 60 

CRIMINAL BUREAU 73 

Appellate Division 75 

Criminal Investigations Division 85 

Environmental Crimes Strike Force 86 

Economic Crimes Division 89 

Financial Investigations Division 114 

High Tech and Computer Crimes 1 17 

Public Integrity Division 121 

Safe Neighborhood Initiative 133 

Special Investigations and Narcotics Division 145 

FAMILYAND COMMUNITY CRIMES BUREAU 153 

Victim Compensation and Assistance Division 156 



TABLE OF CONTENTS 



GOVERNMENT BUREAU 159 

Administrative Law Division 162 

Trial Division 172 

Environmental Protection Division 182 

PUBLIC PROTECTION BUREAU 197 

Civil Investigations Division 201 

Civil Rights and Civil Liberties Division 205 

Consumer Protection and Antitrust Division 219 

Public Charities Division 234 

Chief Prosecutor 249 

Regulated Industries Division 259 

OPINIONS 281 

Opinion No. 98/99-1 281 







APPOINTMENTS 




FiscalYear 1999 (07/01/98 


- 06/30/99) 




OFFICE OF THE Ar lORNEY GENERAL 




ATTORNEY GENERAL, TOM REILLY (14) 


FIRST ASSISTANT ATTORNEY GENERAL, DEAN RICHLIN (14) 




ASSISTANT ATTORNEYS GENERAL: 


AnnAckil 


JohnBigelow(91) 


Lael Chester 


Richard Allen (68) 


Crispin Bimbaum 


John Christin, Jr. 


Dorothy Anderson 


William Bloomer (17) 


John Ciardi 


David Andrews 


Kristi Bodin (68) 


Peter Clark 


Barbara Anthony (88) 


Edward Bohlen 


Jeffrey Clements 


Luz Arevalo 


John Bowen 


Edward Colbert (81) 


Frederick Augenstem 


John Bowman 


Richard Cole 


Lori Balboni (84) 


David Breen 


Joanna Connolly 


Deborah Banda (74) 


Kevin Brekka 


Rosemary Connolly (23) 


Thomas Bamico 


Matthew Brock 


Patricia Correa 


Christopher Barry-Smith 


George Brooks 


Arlie Costine-Scott 


Jason Barshak 


Matthew Buehler 


Pierce Cray 


Mary Elizabeth Basile (7) Margaret Bulger (59) 


John Crimmins 


Judith Beals (93) 


Brian Burke 


Maurice Cunningham (57) 


R. David Beck (21) 


Barrando Butler (52) 


William Daggett 


Annette Benedetto 


Eric Carriker 


Norman D' Amours (12) 


Matthew Berge 


James Caruso, Jr. 


Pamela Dashiell 


Aime Berlin 


Pamela Castrucci (58) 


Leslie Davies 


Edward Berlin (69) 


Eileen Cenci (91) 


George Dean 


William Berman (52) 


RanjanaChand (11) 


Edward DeAngelo 






' 



APPOINTMENTS 



Linda Del Castilho 
Gerald D'Avolio, Jr. 
Stephen Dick 
Michael Dingle 
Kristen Dionisi (24) 
Elisabeth Ditomassi (51) 
William Duensing (52) 
William Dunnirvine (56) 
Henry Eaton 
Deborah Ecker (80) 
David Edmonds (60) 
Anne Edwards (15) 
Stanley Eichner (66) 
F. Henry Ellis, III 
Barbara Fain 
Jennifer Ferreira (55) 
Daniel Field (3) 
Freda Fishman 
Francis Flaherty, Jr. 
Elizabeth Ann Foley (5) 
Mary Freeley 
Cynthia Gagne 
Rosemary Gale (89) 
Rosalyn Garbose (82) 
Rafael Garcia 
Dana Gershengom (26) 
Bonny Gilbert (5) 



Suzanne Glick Gilfix 
Gregory Gilman (83) 
Salvatore Giorlandino 
I. Andrew Goldberg 
Richard Gordon 
Eliot Green (20) 
Leslie Greer (52) 
Mary Griffin (65) 
John Grossman 
John Grugan 
Irene Guild 
Daniel Hammond 
Heidi Handler (50) 
Nancy (Betsy) Harper 
Sarah Hartry 
Katherine Hatch 
Christian Hatfield (63) 
Ladonna Hatton 
Richard Hecht 
Michael Hering 
Lee Hettinger (77) 
R. Scott Hill-Whilton 
John Hitt 

Audrey Huang (94) 
Pamela Hunt 
Marsha Hunter 
Carol lancu 



Marcia Jackson 
Patrick Johnston 
Diane Juliar (72) 
Michelle Kaczynski 
Judy Zeprun Kalman 
Glenn Kaplan 
Jamie Katz 
Sean Kealy (77) 
Carolyn Keshian (80) 
Rosa Kim (52) 
Mark Kmetz 
Michael Kogut 
Pamela Kogut 
Helen Koroniades 
Joshua Krell 
Stu Tip Lam 
Andrew Latimer 
Andrew Lawlor 
Kelli Lawrence (25) 
EUyn Lazar (53) 
Angela Lee 
William Lee (81) 
Peter Leight 
Gerard Leone, Jr. (14) 
Martin Levin 
Susan Levsen-Reardon 
Leonard Lopes 







APPOINTMENTS 


Kara Lucciola 


James Milkey 


Susan Paulson (4) 


Jacinta Ma (6) 


Laura Miller (22) 


Anthony Penski 


Glenn MacKinlay 


Daniel Mitchell 


Rebecca Perez 


Anita Maietta 


Jonathan Mitchell (1) 


Judith Phillips 


M. Toni Maloney 


Margaret Monsell (71) 


Mary Phillips 


Julie Marcus 


AHce Moore (14) 


Barbara Piselli 


David Marks 


T. Gregory Motta 


William Porter 


Laura Maslow-Armand 


Mark Muldoon 


Anne Powers (86) 


Gregory Massing (70) 


Mark Mulligan 


Candies Pruitt 


William Matlack 


Mary Murphy-Hensley (92) 


Christopher Quaye 


William McAvoy 


Vema Myers (78) 


Jason Queenin (13) 


Catherine McClure (8) 




Robert Quinan 


Thomas McCormick (54) 


Kevin Nasca (62) 


Elizabeth Reinhardt 


Timothy McDonough 


Cathryn Neaves 


Juliana Rice 


Philip McGovem 


Mytrang Nguyen (87) 


Shelley Richmond-Joseph 


Karen McGuire (64) 


James O'Brien (25) 


Robert Ritchie 



Frances Mclntyre (73) 
Rebecca Mclntyre (73) 
Beth McLaughlin 
Marianne Meacham 
William Meade 
Elisabeth Medvedow 
Pamela Meister 
Ramon Melendez (84) 
BethMerachnik(18) 
Howard Meshnick 
Nicholas Messuri 



Jean O'Brien 
Michelle O'Brien 
Thomas O'Brien 
Erin Olson 
James Paikos (9) 
Donna Palermino 
Kathryn Palmer 
Emily Paradise (25) 
William Pardee 
Margaret Parks 
Lori Parris 



Lena Robinson ( 1 0) 
Beverly Roby 
Anthony Rodriguez 
Joseph Rogers 
Deirdre Rosenberg 
Stua.Emest Sarason 
Kurt Schwartz (14) 
Pasqua Scibelli 
Sharon Scott (76) 
Jeffrey Shapiro (12) 
Amy Sharff 



APPOINTMENTS 



Matthew Shea (19) 
Timothy Shea (23) 
Neil Sherring 
Robert Sikellis (61) 
Jeremy Silverfme 
Adam Simms 
Ginny Sinkel 
Mark Smith 
Johanna Soris 
Amy Spector 
Richard Spicer (67) 
Susan Spurlock 
Carol Starkey 
Deborah Steenland 
Kenneth Steinfield 
James Stetson 
Catherine Sullivan (16) 
Mark Sutliff 
James Sweeney 
Diane Szafarowicz 
Pamela Talbot 
Rosemary Tarentino 
Neil Tassel 
Steven Thomas 
Hung Tran (2) 
Bruce Trager 
Thomas Ulfelder 



Margaret Van Deusen (85) 
Gina Walcott 
Lucy Wall (75) 
George Weber (73) 
Peter Wechsler 
William Weinreb (25) 
Karen Wells (14) 
Joseph Whalen, III (86) 
James Whitcomb 
Douglas Wilkins (79) 
H. Gregory Williams 
Odette Williamson (94) 
Jane Willoughby 
Howard Wise 
John Woodruff 
Chi Chi Wu 
Charles Wyzanski 
Judith Yogman 
Karla Zarbo 
Catherine Ziehl 
Michael Zullas (90) 



APPOINTMENTS 



APPOINTMENT DATE 




TERMINATION DATE 


1. 07/27/1998 


50. 


07/03/1998 


76. 02/09/1999 


2. 09/01/1998 


51. 


07/24/1998 


77. 02/12/1999 


3. 09/09/1998 


52. 


07/31/1998 


78.02/17/1999 


4. 09/14/1998 


53. 


08/14/1998 


79. 02/22/1999 


5. 10/05/1998 


54. 


08/31/1998 


80.02/26/1999 


6. 10/21/1998 


55. 


09/02/1998 


81.03/05/1999 


7. 10/26/1998 


56. 


09/11/1998 


82.03/18/1999 


8. 11/04/1998 


57. 


09/18/1998 


83. 03/19/1999 


9. 11/09/1998 


58. 


10/16/1998 


84.03/26/1999 


10.11/23/1998 


59. 


10/19/1998 


85. 04/07/99 


11.11/30/1998 


60. 


10/30/1998 


86. 04/30/1999 


12. 12/01/1998 


61. 


11/06/1998 


87.05/21/1999 


13.01/07/1999 


62. 


11/13/1998 


88.05/31/1999 


14.01/20/1999 


63. 


11/23/1998 


89. 06/10/1999 


15.01/23/1999 


64. 


11/30/1998 


90.06/11/1999 


16.03/22/1999 


65. 


12/15/1998 


91.06/18/1999 


17. 04/02/1999 


66. 


12/18/1998 


92. 06/24/1999 


18.04/13/1999 


67. 


01/12/1999 


93. 06/27/1999 


19.04/14/1999 


68. 


01/15/1999 


94.06/30/1999 


20.04/15/1999 


69. 


01/18/1999 




21.04/29/1999 


70. 


01/19/1999 




22. 05/03/1999 


71. 


01/22/1999 




23.05/17/1999 


72. 


01/29/1999 




24.06/01/1999 


73. 


01/31/1999 




25.06/14/1999 


74. 


02/05/1999 




26. 06/21/1999 


75. 


02/06/1999 





BUDGET OVERVIEW 



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BUDGET OVERVIEW 





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T-co o>!ololo -^tjO 

s; § §! g| si le: s g 

?"; ? ?! 1 ; S" S", 

S; *^; Sj 1 ^ii 


s- ^!ie § 

^! f2= ^\ S 

to' CM! rT\ 

?; ^"; s| 

! ! 1 


?? §i? 

Si S ^ 

CM to CM 

S" 5 S' 
Si S '^ 

i 1 


§ 

to 

to_ 


o, oo, m 

,- oo lO 

S 8 8 
w ^ «/» 


5 

1 

cm' 


CO 

5 


o, r-- 

ii i 

1- 


o 
p 

oo 


in 


^ 


o 

§ 


§ 
o 


§ 

o 

§ 

S 


i 

§ 

CO 




8:5 

iri T- 


1 


8:8 

O CM 

•^1 s 


g 

CO 
ID 


i 


§!§ 

d d 

8 § 
g S 
Si 5 

1 


O 
CO 

5 


I 


CO 

r-- 


S 
to 


8 
i 

i 


CM 


8 

g 


8' 

s 


1 

oo' 


8 

d 

8 

i 


1 
S 


7/ 

1 


1 

to 

d 

H 

z 

1 
q: 
o 


Z 
m 

[^ 
z 
< 

LU 
O 

z 

UJ 

Q 
> 

Q. 


1 

E 

o 
a: 

s 

UJ 

I 


■ 

i 

LU 
U. 

m 

z 
< 

I— 
z 


1 
§ 

LU 

w 

i 
i 


1 i 

o o 

^ 8 

111 o 

^ o 
w o 


CO 

1 

1— 
< 
1— 
Z 
Q 

8 

X 

a: 

s 

I 

C3 

UJ 

z 

Ul 


1 

j 

ll 

zl 

UJ 

Z 
UJ 

-} w 
< Q 

?S 


1 

p 

UJ 
Q. 

O 

o 

1 

t- 
o 

> 


2 

o 

i 

1— 

i 

a: 
a. 

Q- 

e 


i 

< CO 

s s 

j 

11 

X z 

ID Ul 
Q S 


[2 

UJ 
Q. 
X 

ill 

z 
o 
1— 
< 

l^ 

CO 
Ul 


Ul 

O 
1 

CO 
Ul 


UJ 

1- 

X 

Ul 
Ul 

I 

H 

ir 

8 

o 


% 

a: 

Ul 

H 

CO 
Ul 

o 

> 

tr 

UJ 


CO 

CD 

z 
2 
< 

1— 
z 

Q 
Ul 

z 

1 

Ul 

u. 
O 

z 

UJ 
U- 
UJ 

a 


Q- 

CO 

UJ 

1 

CO 
Ul 

— 1 

i 

> 

Ul 

z 


[2 

CO 

z 

Ul 
Q- 
X 

Ul 

H 
Z 

i 

5 

Ul 

o 


1 -i 

1 9^ Q 

fv- O ; Ul 

^ "^ 

1 ^^ 
-mo 
CO 5 z 
UJ Ul , ~ 

tn 

ill 

CD O t" 

21 ^iS 


(- 

i 

P 

li 

S 

SI 




: ' i ' : 1 1 j i 

' ' i : i i : 1 j 

o CN to to o o t3>; •<r r^ ooj toj to 
o o o CO m oo o> to^ to to' to 00 
O OiOOO o oooo o o 

§ §' § § § § § § i i §; i 


i 1 

' j 

O CO CM 

? S E5 

§ i i 


I'M 

1 

OO; O CO oi T- 

§ i ill 
i § i i § 


§. § 8 8, § 

§ § i i: Si 


li. 


a> a> a> 
§ 1 1 


1 1 1 i 1 1 1 1 1 1 11 II 



BUDGET OVERVIEW 






S!S 



O) at 

' o> 

O) 



BUDGET OVERVIEW 



1 


n 


S 


o 

s 


o 


o 


-o 


-o 

5 


o 

5 


o 

5 


o 


o 

5 


o 


o 

5 




5 


b 


o 


o 


O 


o 


o 


o 

5 


5 


1 


CO 

g 

en 


en 


o 


6^ 


S 
? 
S 


en 
id' 


CD 
CO 

o 


8 
g 


8 

g 


o 
o 
d 


o 

69 


o 
o 
to 


o 

CD 

to 


o 

CD 

to 


CM 
00 

od 
g 


o 
c\i 

° 

to 


in 

lO 

Ln 
to 


CM 

8 


Csi 
CO 

o 


0.4 
O 


8 

in 


CO 

r^ 
cd' 
to 


TO 
CN 


UJ, 


8 


s 


8 


8 


8 


8 


irl 

CX3 

eg 


8 
g 


8 

g 


8 

g 


o 

g 


o 

g 


o 

g 


8 
g 


o 

g 


o 

g 


o 

CD 
CO 


o 

CD 

to 


8 

CD 
CO 


8 

CD 

to 


8 

CD 

to 


8 

d 
to 


8 

o 
to 


1 


5 




6^ 


S 


c=i 


S 

CO 

in 
to 


8 

CD 

o 

CO 


8 


8 

CN 


8 


o 


8 

g 

1--' 
to 


8 

CO 
CNJ 

to 


CD 

to 


00 
00 
CD 
CO 


o 

CNJ 

o 


in 
in 

to 


CM 

8 


CnI 

c\i 

s 


CM 
CD 


o 
o 
ih 

8 


CO 

cd' 


TO 

csi 


i 


-1 
Q 

UJ 

O 
d: 
o 

CO 
LU 

o 


_i 
—J 

< 

UJ 

X 
1— 
UJ 

u. 
O 


> 

o 

H- 
U. 
O 

2 


CO 

4 

en 


en 


§ 
ch 

o 
o 

O 
CO 
Q 

UJ 
UJ 

o 
O 

a: 
a. 


UJ 

Z 
1 
Q 

< 

IT 
UJ 

Z. 
UJ 

O 

> 

UJ 

z 
< 


CO 

< 

< 
o 

3 
< 

> 

a: 

3 
h- 
Z 
UJ 

o 

CO 

> 

CO 

u. 

o 


1 

Q 

UJ 

y 

IT 
UJ 
CO 

> 

CO 
CO 

U- 

o 
o 


< 

CD 
Q 

3 

§ 

UJ 
UJ 

u 

3 

cc 

CO 
CO 

> 

CO 
CO 

u. 

o 

2 


i 

Q 

a: 

UJ 

z 

3 

u 

>■ 
a. 

< 

CO 

U- 

o 


H 
UJ 

I 

X 

o 
Q 

z 
O 

< 

CO 

LI. 

o 


o 

z 

CO 
UJ 

Z 

o 

I 

3 

CO 
CO 

< 

u. 

o 

O 


i 

CO 

b 
< 

CO 

> 

u. 
O 


CO 

UJ 

i 

a. 

I— 

CO 

u. 

o 


3 
< 
UJ 
UJ 

i 

Q 
O 

X 

o 

UJ 

X 

u 
o 
tr 

1 
> 

8 


Uj 

i 

X 
1— 

o 
o 


2 

UJ 

=1 

CO 

z 
< 

X 

< 

o 
o 


z 

UJ 
H 
CO 
Q 

< 

z 
< 

3 

p 
CO 

> 

X 
1— 

o 
o 


Cl 

§ 

O 
N 
h- 

CO 

> 

< 

H 
UJ 

tr 


o 

z 

> 

u. 

o 

CO 

z 
o 

CO 
CO 

1 

CO 

> 

X 
1— 

o 
o 


i 

Q 

—1 

cr 

Di 

O 
o 

Q 
O 

< 

u. 
O 

X 

1— 

i 

o 
u 


CO 

X 

< 
UJ 

X 

UJ 

3 
UJ 

^ 

X 
1— 
-J 

o 

O 

o 


i" 

1 


5 

o 


o 


o 


§ 


o 


5 

o 


IT) 

8 

§ 


s 

g 

o 


§ 


8 

§ 


ir> 

8 

o 


8 

o 


CJ) 

8 

o 


in 

5 
o 


o> 

8 
S 

o 


TO 
O 


CO 

TO 
O 


i 

TO 
O 


CD 
Oi 

8 

TO 
O 


§ 


CM 

o 

§ 


CO 

§ 


8 


1 

S 

il 


1 


i 


1 


i 


i 


i 


i 


i 


i 


i 


i 


1 


i 


i 


i 


1 


8 

en 


i 


cn 


8 

en 


8 

cn 


i 


en 

8 



BUDGET OVERVIEW 



s 




s 


5 


s 


s 


o 

5 


-o 


o 

5 


o 


o 

5 


-o 


s 


o 


-o 


d 

5 


o 

5 


o 


o 


o 

5 


d 


o 


o 


o 

5 


ay 


CNJ 


IT) 

i 


05 


g 
i 

cm' 


8 

in 


o 
aj 

6^ 


q 
in 


o 
o 

8 

CN 


o 
o 

g 

CN 


8 


8 

CO 
CD 
Oi 


8 

CM 


s 

d 


d 


8 

d 


8 

CO 


8 


C35 
CD 

d 


8 

d 

CM 


CO 


in 


8 


CO 

o 
in 


o 


8 


8 

o 


8 

d 


8 

d 


8 

d 


8 


8 


8 


8 


8 


o 


o 


in 

CO 

CO 
CO 


CD 


o 


o 
o 


o 


o 


o 


8 
8 

o 

8 

in 


8 


1 


8 


CO 


00 

n 

CNJ 


CO 

s 


d 


8 

d 


8 

d 

8 

in 


8 

a> 

6<> 


8 

in 


8 
3 


8 
8 

CM 


8 


8 




00 


s 
§ 


8 


8 

CO 


8 


s 

d 

CO 


8 


in 


in 




05 


en 

z 

o 

—1 

LU 
< 

X 

> 

X 
1— 

8 


< 

-> 
z 

UJ 

LU 

1— 

> 

8 


UJ 

o 
cc 

1- 

> 

CO 

8 


CO 

< 

UJ 
i 

of 

UJ 

q: 

UJ 


CO 
UJ 

i 

< 

Q 
CO 

> 

CO 

i 

8 


CO 

u. 
O 

I 

UJ 

O 
tr 

H 
UJ 
CL 


UJ 

g 

i 

< 

D. 
CO 

8 


a 
cr 

8 

u 
z 
< 

z 
u. 

i 

CO 

> 

CO 

8 


CO 
UJ 

Ct 

>- 
> 

CO 
CO 

2 


i 

CO 

1— 
o 

Q 

§ 

Q. 
Q 

5 

CD 
UJ 
UJ 

^ 
UJ 

o 

2 


CO 
UJ 

o 

1 

i 
1 

>- 

a: 
O 

(— 

Q 
CO 

> 

O 


i 

z" 

E 

h- 

Z 

i 
P 
UJ 
U. 

— 1 

CO 

> 

CO 

2 


< 

UJ 

Z 

z 

CO 

> 

CO 
CO 

8 


i 

Q 

cr 

5 

CO 

> 

X 

8 


Q 
m 

UJ 

O 
tr 

CO 

> 

X 

8 


s 

g 

uJ 

— 1 

CO 

> 

CO 
CO 

I 

2 


cr 

UJ 

z 
1- 

1 
o 

m 

CO 

> 

CO 

I 

8 


:^ 

z 
_j 
I- 

h^ 
cr 

Q 
oa 
a: 

UJ 

1— 

CO 

z 

z 

UJ 

8 


O 

-J 

UJ 

O 
1— 

UJ 

cc 

< 

— r 

m 

>- 
tr 

z 

UJ 

X 

8 


z 

UJ 

g 

< 

X 

i 

=) 

UJ 

cr: 

8 


UJ 

cr 

b 

UJ 

u. 

§ 

U- 

tr 

Ol 

u. 

X 

i 

— 1 
_l 
— 1 
tr 
en 

UJ 

2 


E 
o 

1 

z 
o 

CL 

UJ 
CO 

O 

a: 

o 
o 


o8 

UJ 
CO 

i 

O 
o 


CO 
UJ 

p 

cc 

UJ 

cc 

i 

o 
o 




s 

g 
§ 


i 


o 

T- 


CO 

i 

o 

§ 


8 

CD 
O 


o 

s 

o 
§ 


s 

o 
§ 


o 

8 

§ 


CM 
O 


in 
o 


o 

§ 


i 

CD 
O 


CD 
CD 

o 

§ 


1 
s 

i 








i 


i 


§ 


o 
o 

§ 


o 

i 


CO 

o 

§ 


i 


i 


i 


1 


1 


i 


i 


i 


i 


i 


i 


i 


i 


i 


i 


i 


i 


en 


1 


i 


05 


CJi 


en 


C3) 



BUDGET OVERVIEW 



s 




o 

5 


5 


5 


5 


£ 


S 


s 


s 


o 

5 


o 

5 


o 

5 


o 


o 


o 


o 

5 


o 


s 


s 


5 


s 


5 


5 


8 

5 


s 




CO 

1 


8 


8 
g 

CM 


8 

in 
o 




8 

o 


CO 


8 


8 


8 

ih 
a> 

to' 


s 


8 


8 


in 

CM 


8 


8 


8 


8 


in 


in 
o 


8 

d 
o 
g 


s 


8 


s 

00 
00 

0» 


CO 

§ 


8 
1 

o 


8 

o 


8 


8 

o 


8 


1 


8 


8 


ro 

6^ 


I 

co' 


8 


8 

in 


in 


8 


8 

1 
5 


8 


8 

in 


8 
g 




8 


o 

00 

5 


o 
oi 
in 


CO 


CO 


o 
o 


o 
d 

in 


o 
tri 




o 
d 

8 

o' 


■ ^ 

CO 

d 


o 

CD 

in 


8 

00 


d 


o 
d 

8 


o 

d 

8 


o 
d 

8 


in 
CO 


o 
d 

8 


o 
d 

8 

CO 


o 
d 


o 
iri 

s 


in 

6* 


CM 

m 


8 
1 


o 

Q. 

tr 

y 

z 

< 
8 


i 

LU 

Z 

z 

LU 

it: 

uJ 

z 
I 
O 

-) 

8 


O 

z 
z 

1X1 
LU 

z 
< 

CO 
CO 

CO 
CO 

< 

8 


> 
z 
< 

8 

m 
tr 

CO 

LU 
CO 

< 

8 


> 
z 
< 

8 

Z) 
CD 

DC 
CO 

^ 
LU 
CO 

< 

5 


< 

> 
I 
< 

LU 

< 
CO 

oc 

LL 

< 

o 


O 

1- 
LU 

_J 
X 

^ 
LU 

cr 
o 

X 

1- 
q: 
O 

z 

o 


< 

LU 

d 
< 

o 
m 

LU 

z 

i 

u 


< 

LU 

Z 

LU 

i 

i 

I 

2 


O 

z 

Q 

Z 
LU 
_l 
CO 
LU 

z 
< 

i 
8 

Q 
t^ 

Z 

=) 

! 

2 


CL 

O 

Z 
Q 
Z 
=) 
Li. 

< 

O 

X 
< 


d 

z 

LU 
LU 

tr 

< 

i 

< 


CO 

d 

LU 

X 
>- 

< 

X 

< 


CL 

8 

CO 

i 

Q 

1 

< 


i 

Q 
oa 

i 

LU 

cr 

LU 
CL 

i 
< 


Q 
1 

3 

2 

O 
< 

X 
H 

< 


Q 
of 

^ 

Q 
LU 
N 

z 

LU 
CD 

^ 

X 

< 

1 

o 


1— 

Q 
lU 

a: 
o 

i 

LU 

a 

LU 
LL 
Q 

z 

8 

LU 
CO 

X 
< 

1 

O 


DC 

o 
cr 

< 

Li- 

z 

LU 

X 

X 

< 
o 


CL 

cc: 

8 
i 

—I 

CO 
Q. 

d 

X 
CL 

^ 

X 

1— 
< 

u 


LU 

CO 

1— 

z 

CO 

d; 

z 
z> 

X 

1— 

_I 

o 


CO 

in 

CJ) 

LU 
LU 
O 
O 
(T 

a. 

^ 

z 

LU 
Q. 
LU 

cr. 

t 

LU 
LL 

LL 


Q 

1 
LU 

> 

LU 
CO 
Q 

z 

8 

a: 

< 

z 

Li. 

2 


i 

CO 

>- 

CO 

o 

z 

LU 

d 

a: 
o 

8 


o 
o 

§ 


o 
o 

§ 


o 
o 

§ 


o 
o 

§ 


o 
o 

§ 


o 
o 

§ 


o 
§ 


ro 

CM 

o 
§ 


o 

§ 


o 

§ 


o 

§ 


8 

o 

§ 


o 

§ 


o 


o 

§ 


o 

i 


P5 

o 

§ 


o 
§ 


o 

§ 


o 

s 

o 

§ 


s 

o 

§ 


CM 

i 


o 

§ 


in 
o 

§ 


i 




en 


05 

i 






i 


i 


i 


i 


i 


i 


i 


i 


CD 


i 


i 


i 




i 






CJ) 


1 



BUDGET OVERVIEW 





Q 


"o 


"o 


o 


o 




o 


-o" 


























<D 


s 


s 


(£> 


CD 


CD 


CD 


5 






O) 


-o 


-o 


O 


'a- 


o 


~o 


"o 


to 




00 


o 


o 


o 


ID 


o 


O 


o 


« 




r-~ 


d 


o 


IT) 


CM 


d 


CD 


CD 






CD 


V) 






•^ 




CM 


CD 






CO 








y> 




r- 


r^ 






V¥ 




o' 


cm' 




in 


to 


d 


ro^ 










</> 




CM 




CN 










m 






to 




to 


s 




.^ 


o 


-o 


-o 


-o 


o 


o 


~o 


o> 




T— 


o 


o 


o 


o 


o 


o 


o 


q 




CSJ 


o 


o 


IT) 


d 


<=> 


d 


■^ 


d 




CO 


o 


fA 




«/> 


to 


oo 


oo 


J 




CD 


o 




O 






CD 


■^ 




a> 


r-~" 




CD" 






T— " 


o 






en 


CM 




«« 






to 




« 




CD 


«/> 












to 


oi 




CO 
















CM 




</» 
















^ 


-o 


-o 


-"o 


o 


•^ 


"o" 


■~o 


"o 


lO 




o 


o 


o 


o 


in 


o 


o 


o 


C«J 




Q 


Q 


Q 


d 


<N 


C3 


d 


d 


r«^ 










o 


•^ 






in 


m 




o 


o 


o 


o 


«/> 


O 


•<;t 


CM 


«i. 




o' 


h-' 


o" 


c:> 




in 


cm' 


T-' 


« 




o 


CM 




t/> 




CM 


to 


r~ 


r* 




t^ 


to 


^ 






to 




to 


<» 




co" 
















CM 




«/» 
















U 


















J 


cv 


















< 


CN 


















H 


Cs 


















o 






CD 

z 

2 




CD 






i 


CO 

=5 


H 


^ 


w 


< 

LU 

_I 

o 
z 


^ 


^ 


< 




2 

O 


g 




^ 


> 


< 


1 


tr 




Q 


Q 




^ 


< 


i 

(0 


Q 
LU 


LU 

Z 
LU 
CD 

>- 


CJ 

z 

CO 
LU 


Z 


CO 




tu 


i 


< 

—i 


z 




LU 

Z 


1— 

z 

Z) 




1- 






2 


CQ 


o 


o 


[— 


z 


Q_ 






o 

LU 


1 


CD 

H 

o 


z 
o 


LU 


Qi 




CO 
D 

z 






s 


CO 

LU 


_J 


5 


f 


1 


J 


LU 

1 






13 


LU 


LU 


CO 


LU 


lU 


>- 






LU 


o 
o 

< 


_I 


CC 


> 


> 


z 


_J 






f 


< 


Q 

Z 


O 




co 


< 






LL 


^ 


Q- 


< 


1- 




o 






o 


w 


CO 


w 


-2 


co 


CO 


CO 








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EXECUTIVE BUREAU 



Executive Bureau Overview 

Children's Protection Project 

External Affairs 

Information Technology Division 

Communications 

Human Resource Management 

Operations 



Executive Bureau 



EXECUTIVE BUREAU OVERVIEW 



The Executive Bureau provides the overall administration, policy-setting, supervision, and training of 
staff for the Office of the Attorney General. The Bureau also handles a number of specialized fiinctions, 
including the coordination of legislative affairs, community outreach, constituent relations, administrative 
and technical support, and all internal and extemal communications activities. 

The Executive Bureau is designed to develop and maintain the agency's infrastructure, enabling all 
Bureaus to function productively and effectively for the benefit of the citizens of the Commonwealth. The 
Bureau consists of the Office of the First Assistant, Human Resource Management Office, Budget Office, 
hiformation Technology Division, Operations Division, Extemal Affairs Office, and the Communications 
Office. The Regional Office Division, the Office of the Attorney General's Legal Counsel, the Bellotti Law 
Library, and Support Services also are housed within the Executive Bureau. 



CHILDREN'S PROTECTION PROJECT 



One of Attorney General Reilly 's first initiaUves upon taking office in January of 1 999 was the creation 
of the Children's Protection Project. Operating within the agency's Family and Community Crimes Bu- 
reau, it was established as a cross-bureau initiative to draw upon the multi-jurisdictional expertise and 
talents of staff members throughout the office regarding all the issues that affect children. The Project aims 
to promote the health, safety and welfare of children in homes, schools and neighborhoods across the 
state. It focuses on all areas of child welfare, including labor, consumer protection and criminal law 
enforcement, as well as education, training, prevention and early intervention strategies. 



EXTERNAL RELATIONS 



Another integral component of the Executive Bureau is the Extemal Relations Office, which coordi- 
nates office contacts with interest groups, constituents, and elected and appointed officials at all levels of 
government. Housed within Extemal Relations are the Offices of Community Partnerships, Community 
Relations, Community Liaisons and Intergovernmental RelaUons, all of which deal with the vast constituen- 
cies that are involved with and impacted by the Attorney General's Office. 



January 1999 -July 1999 



EXECUTIVE BUREAU 



OFFICE OF COMMUNITY PARTNERSHIPS 

Attorney General Reilly created the Office of Community Partnerships to work with Massachusetts 
mayors and other urban leaders to address issues that relate to our cities, particularly as they affect the 
health and safety of children. The office acts as a direct liaison between the Attorney General's Office and 
the state's cities and towns. 

In FY99, tlie Office of Community Partnerships canvassed the state's mayors, school superintendents 
and other urban leaders in more than 30 cities in an effort to develop an urban agenda that was grounded 
in the needs and concerns of those on the front lines of the foremost issues affecting the Commonwealth's 
cities. 

In this same vein, in March of 1 999 during a statewide summit of urban leaders, the Attorney General 
assembled a team of mayors, urban school superintendents and District Attorneys, as well as representa- 
tives of the Executive Office of Health and Human Services and the University of Massachusetts. The 
goals of the Urban Alliance is to generate ongoing discussion and opportunities for collaboration around 
the unique challenges affecting Massachusetts' cities. The Alliance meets regularly to advise the Attomey 
General on issues affecting children, schools and cities. 

INTERGOVERNMENTAL AFFAIRS 

The Intergovernmental Affairs Office acts as the Legislative liaison to the state and federal 
government. This Office introduces and tracks legislation and monitors budget issues relevant to 
the Office of the Attomey General. In FY99, in conjunction with Intergovernmental Affairs, 
Attomey General Tom Reilly briefed the House of Representatives and Senate regarding the 
tobacco settlement, and testified before the Health Care Committee. He strongly encouraged them 
to use the funds for tobacco control and public health programs. A decision on the settlement is 
expected in FYOO. 

In March of 1999, the Intergovernmental and Attomey General Reilly testified before the Senate 
Committee on Ways and Means to secure a FYOO operating budget. Priorities included the Children's 
Protection Project, Central and Southeastern Massachusetts Regional Office expansions, and a High Tech 
Crime Unit. 

An early legislative priority for the Attomey General was the passage of the April 1 999 "Information 
Sharing" Bill which would enable a multi-jurisdicational approach in handling cases involving at risk youth. 



EXECUTIVE BUREAU 



The law would enable all those involved with youth - social services, educators, law enforcement - to 
establish lines of communication and coordinate early intervention programs to identify those with the 
greatest chance of falling into the criminal justice system. Throughout his career, Reilly has seen the value in 
a coordinated approach in dealing with high risk youth. As Attorney General, Reilly has pledged to bring 
the benefits of information sharing to the statewide level. 

The Attorney General testified before the Joint Committee on the Judiciary with District Attorneys 
Kevin Burke and Ralph Martin and Secretary of Health and Human Services, William O'Leary, in support 
of the bill. The bill is currently pending before the House Committee on Ways and Means. 



INFORMATION TECHNOLOGY DIVISION 



COMPUTER UPGRADES 

As the largest public law office in the Commonwealth, the Attorney General's Office has an obligation to 
provide the most up-to-date and professional services to the people of the state. In large part, that includes 
keeping apace with changes in technology fi-om an internal operations perspective. To that end, the Information 
Technology Division has made enormous strides in equipping the agency with upgraded computer resources, 
enabling the agency to stay on the cutting edge of law enforcement in the information age. 

Computer upgrades began in the early months of 1 999. By fiscal year's end, about one-third of the 
agency's computers were upgraded and the internal electronic mail system migration to Lotus Notes was com- 
pleted. Also, the Information Technology Division ensured that all computers and systems throughout the 
agency were Y2K compliant. All agency computers were also outfitted with high-sp)eed desktop Internet 
access, which enabled staff to conduct research from their desktop computers. This provided both conve- 
nient and timely disemination of current statutes and case law. 

COMMUNICATIONS 

The Communications Office spearheads and coordinates all press related matters for the Attorney 
General's Office. The chief responsibility of the Communications Office is to operate as a centralized 
public voice for the agency. To that end, the Communications Officers work with executive staff and 
bureau chiefs to ensure the Attorney General's priorities are reflected in all public materials, including 
press releases, advisories, public statements, interviews, and other public appearances and events. 

Addressing that need to improve communication within the agency, the Communications Office 



EXECUTIVE BUREAU 



established protocols for dealing with the media in a consistent and unified manner. The inter-agency 
communication system between and among bureaus establishes how best to publicize cases and 
initiatives. 

WEB SITE 

Realizing the value in the broad range and scope of the Internet's audience, work began in FY99 
to develop the official web site for the Attorney General's Office. The website will include bureau by 
bureau profiles of issues and initiatives. Plans are also in place to provide on-line access to publications, 
legal materials, and career opportunities within the Agency. The site is expected to launch in FYOO. 



HUMAN RESOURCE MANAGEMENT 

The need for a full-service Human Resource Management Office [HRM] was recognized as a top 
internal priority in January of 1 999 in order to improve service to existing staff, new hires and applicants. 
To that end, HRM brought services to both legal and non-legal staff in a consolidated system that ad- 
dressed their needs in a unified and consistent manner. The scope of HRM was also broadened and now 
includes new staff orientations, benefits administration, and time and attendance oversight ] 

Improved new-hire processing began in Fiscal Year 1 999, which established a consistent forum for the 
dissemination of information, policies and procedures for all new staff. Streamlined employee processing 
on the first day of employment includes new hire orientation, where office representatives fi-om HRM, 
Budget and Payroll, Information Technology, Operations and other pertinent divisions share useful infor- 
mation regarding office program and policies. 

REVISED PERSONNEL MANUAL 

Work began immediately in 1 999 to revise the Attorney General's Personnel Manual and create a 
comprehensive policy guide for employees. This reference book aims to provide staff with an easy refer- 
ence tool, to help them better understand policies, procedures, and practices. A fmal "Human Resource 
Manual" will be completed and issued by Fiscal Year 2000. The new manual will address issues such as 
the administration's part-time status policy, the new cancer screening leave allowance, and the improved 
personal leave policy. 



EXECUTIVE BUREAU 



PROFESSIONAL DEVELOPMENT 

The Attorney General's Office demonstrated its commitment to meeting the needs of attomeys' pro- 
fessional development by offering membership to all Assistant Attomeys General in both the Massachu- 
setts and Boston Bar Associations at no cost to employees. In this way, attomeys are encouraged to 
pursue other endeavors that will give them the benefit of diverse professional experience both inside and 
outside the office. 

ANTI-DISCRIMINATION AND SEXUAL HARASSMENT POLICY 

In FY99, the Attorney General revised the Office's Anti-Discrimination and Sexual Harassment Policy. 
The Office is committed to maintaining a workplace free of discriminatory behavior. To that end, the 
Attomey General's Office has established mandatory training sessions that educate and familiarize staff" with the 
Office's anti-discrimination and sexual harassment policy. Trainings are designed for both supervisory and non- 
supervisory personnel and legal and non-legal staff They further underscore the Administration's pledge to 
ensure a safe and productive work environment, while also meeting an inherent obligation of the Attomey 
General's Office to take the lead on such important policy matters. 

DIVERSITY COMMITTEE 

hi addition to this new, proactive policy, the Attomey General has whole heartedly supported and expanded 
the efforts of the Diversity Committee, a cross-bureau initiative aimed at raising awareness of diversity, tolerance, 
and cultural sensitivity. The Committee's efforts foster a welcoming work environment, where people of 
diverse backgrounds are valued and respected. 

MINORITY RECRUITMENT 

Attomey General Reilly and the Diversity Committee have introduced initiatives and sponsored events 
in order to attract and retain employees of diverse backgrounds and experiences. In June of 1 999, the 
Committee hosted the first annual Minority Recruitment Reception for minority lawyers in an effort to 
attract talent and legal expertise from a wide range of backgrounds and walks of life. The reception, 
attended by over 80 prospective employees, resulted in the direct hiring of five new staff attomeys. 



EXECUTIVE BUREAU 



OPERATIONS 



REGIONAL OFFICES 

One of the Attorney General's stated missions upon taking office in January of 1 999 was to bring 
the services of the Attorney General's Office to every regionof the Commonwealth. Recognizing that 
local residents are in the best position to identify and provide valuable input as to solutions to local 
problems, work began early in Attorney General Reilly ' s term to secure legislative approval for such 
expansion. This legislative support was designed to support the Office's expansion to Southeastern 
and Central Massachusetts. 

SURVEILLANCE EQUIPMENT FOR MAILROOM 

As a precautionary step that unfortunately was necessitated by modem security threats. Attorney 
General Reilly instituted a system to centralize mail delivery and x-ray packages prior to distribution to 
staff. Equipment was installed in the McCormack Building, the Portland Street Building, and the Western 
Massachusetts Office, meeting the need for intensified precautionary measures in public office buildings. 

TREASURY INVESTIGATION 

In January of 1 999, the Attorney General's Office requested and was granted by the Legislature 
supplemental funding to meet the demands of an intensified Treasury investigation related to the theft of 
funds from the Unclaimed Check Fund. A matter of weeks into Attorney General Tom Reilly' s administra- 
tion, nearly $ 1 million was discovered missing from the State Treasury's Unclaimed Check Fund. The 
investigation was complex and thus necessitated substantial internal attention, in addition to the need for the 
outside services of an accounting firm and a legal team of forensic investigation experts, both of which were 
secured in an extremely timely and efficient manner. The prompt intemal response to these fiscal needs 
enabled the Attomey General's Criminal Bureau to focus on bringing those responsible to justice and on 
recovering as much of the missing funds as possible. 

NEW SUPPORT SERVICES PROCEDURES MANUAL 

The Attomey General's Office Support Services released a revised Procedures Manual outlining their 
role within the agency, from mail processing and distribution, to supply operation and inventory control, to 
bulk copying and binding. The guide delineates ever>' service and also delineates the processes that have 
been put in to place to ensure that ser\'ices are provided in a timely, efficient and cost effective manner. 



EXECUTIVE BUREAU 



NEW BUDGET POLICY 

Realizing the need for increased controls in the area of budget and finance as a matter of example for 
other state agencies and offices throughout the Commonwealth, the Budget Office, under the administra- 
tion of the Operations Division, instituted a number of new policies and procedures. This included the 
redesignation of specific duties as they relate to the management of the Budget Office. 



EXECUTIVE BUREAU 



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 1 assistant attorneys general, three civilian investigators, four paralegals, three 
Massachusetts State Police Officers, and additional support staff. In addition, two assistant attorneys 
general assigned to the Municipal Law Unit of the Administrative Law Division, one assistant attorney 
general assigned to the Insurance Fraud Division, one assistant attorney general assigned to the Safe 
Neighborhood Initiative (SNI) Program 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, addi- 
tionally, handles a large number of consumer-related complaints for area residents. The Western Massa- 
chusetts Division also takes part in a variety of community -oriented public safety, consumer, and violence 
prevention programs such as Springfield College's Consumer Education Forums, AARP Consumer Pro- 
grams, Baystate Medical Center Senior Education Classes, TRIAD Training Programs and the Springfield 
City-Wide Violence Prevention Task Force. Last year the Office of the Attorney General extended the 
Safe Neighborhood Initiative (SNI) Program to Western Massachusetts through a collaboration with the 
Northwestern District Attorney's Office, which established an SNI Program in Franklin County. In 
addition, efforts are being made towards the establishment of a Department of Justice Weed and Seed 
Program in Springfield. This program is being operated in partnership with the United States Attomey's 
Office, the District Attomey's Office, and the Hampden County Sheriffs Office. 

Additionally, the Attorney General's Municipal Law Unit (MLU) was moved to Western Massachu- 
setts during the last fiscal year and the centralization of its fijnctions and personnel was completed this year. 
The MLU's primary responsibility is to perform the Attorney General's statutory review of municipal by- 
laws and charter amendments to ensure that these laws are consistent with the constitution and laws of the 
Commonwealth. 

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. 

In FY"99, 66 new cases were assigned. In addition, 33 new cases were assigned to special assistant 



EXECUTIVE BUREAU 



attorneys general and WMAS assistant attorney general were assigned to supervise the litigation and 
handling of those cases. The 60 cases assigned fall into the following categories: 

Administrative Law 21(31.8%) 

Torts 13(19.7%) 

Civil Rights/Employment Discrimination 1 5 (22 . 7%) 

Declaratory Judgment 9(13 .6%) 

Eminent Domain 2 (3.0%) 

Miscellaneous 6 (9.1%) 

Total New Cases 66 ( 1 00%) 

As of June 30, 1999, there were a total of 1 22 cases open in WMAS. 

During FY'99, fifty-seven (57) cases were closed in WMAS. A total of $339,398.00 was paid 
through settlements, with a total of $ 1 7 1 ,050.00 paid to claimants in defensive cases and $228,348.00 
paid in eminent domain cases. 

DEFENSIVE HIGHLIGHTS 



The following cases represent the nature and scope of the cases being handled by the WMAS Divi- 
sion: 

• Judy E. Morris, M.D. v. UNUM Insurance Company of America (and 60 named 
defendants, including the Department of Insurance and four of its employees; the 
Division of Consumer Protection; [former] Attorney General Scott Harshbarger; a 
state senator and the Commonwealth|. U.S. District Court for the District of Massa- 
chusetts (Western Division), Civ. Ac. No. 9-30204-FHF. In a 300-plus-page complaint, 
the pro se plaintiff alleged a far-ranging conspiracy of private and governmental defen- 
dants, the goal of which was to permit the insurance company defendant to unfairly 
deprive the plaintiff of disability insurance benefits allegedly owed to her as a result of chronic 
fatigue and immune dysfunction syndrome and fibromyalgia On behalf of all Commonwealth 
defendants, this Office moved to dismiss the complaint on several grounds: lack of federal jurisdiction 
by operation of the Eleventh Amendment, failure to plead RICO (Racketeer Influenced Criminal 
Organizations) allegations with the requisite particularity, the immunity of the Commonwealth fi-om 
intentional tort claims, and the failure to have presented any negligence-based tort claims to the 
Commonwealth in accordance with the Tort Claims Act. The Court dismissed the claims 



EXECUTIVE BUREAU 



against all defendants, but allowed the plaintiff to file an amended complaint with a more narrow 
focus which did not involve the Commonwealth, which the Court indicated was likely immune 
from the claims. The amended complaint set out no claims against any Commonwealth defen- 
dant. 

• Riverplace, Inc. v. Commonwealth of Massachusetts By and Through Its De- 
partment of Public Works (Hampden Superior Court, Civ.Ac.No. 96-368). The settle- 
ment of this eminent domain case concerning the temporary use by the Commonwealth of 
three acres located on the Connecticut River in Springfield resulted in significant savings 
to the Commonwealth. The Commonwealth used the land for three years (plus a three- 
month holdover period) as a staging area for the reconstruction of Memorial Bridge. The 
owner had been awarded $55,000 for the temporary taking but asserted that the loss was 
much higher. The plaintiffs appraiser valued the property at $775,000 and concluded 
that the fair market rental totaled $265,000. An earlier bank appraisal which valued the 
property at $1 .1 million was produced and utilized to increase the alleged fair market 
rental to $375,000. Despite these evaluations, the Commonwealth was able to negotiate 

a settlement of $45,000 in "new money"' (beyond the original award), which figure 
included the Commonwealth's exposure to 5.9 years of pre-judgment interest. 

• Nicole Thayer v. Commonwealth of Massachusetts, Massachusetts Highway 
Department, and Joseph Superneau, as former Director of District Two Massachu- 
setts Highway Department (Hampden Superior Court, Ciy.Ac.No. 97-396) and 
Jason M. Rimbold v. Daniel O'Connell's Sons, Inc.; The Commonwealth of Massa- 
chusetts, City of Holyoke, and Town of South Hadley (Hampden Superior Court, 
Civ.Ac.No. 97-365). These companion cases arose ft-om serious injuries sustained by two 
teenagers who fell 30-45' when a section of sidewalk of the "Old County Bridge" col- 
lapsed. The bridge, which carried state highway Route 1 1 6 over the Connecticut River, 
was slated for demolition after the nearby "New County Bridge" was completed. The 
sidewalk had been barricaded, but barriers and warning signs had been removed by 
vandals, perhaps as long before the incident as a few months. The plaintiffs sought to 
avoid the application of the "defective-way" statute, which immunized the Common- 
wealth from liability for injuries sustained upon the sidewalk of a state highway, but the 
Court allowed the Commonwealth's motions for summary judgment on that ground. 



10 



EXECUTIVE BUREAU 



SUMMARY OF AFFIRMATIVE CIVIL CASES 

In the area of affirmative litigation, the Western Massachusetts Division prosecutes pro-active ci\al 
rights, consumer protection, and criminal cases. 

CONSUMER PROTECTION MATTERS 



The Westem Massachusetts Division fields thousands of consumer inquiries and complaints. By law, 
the Attomey General can only bring an aflfmnative action against a business for violations of the Consumer 
Protection law when it is "in the public interest" to do so and cannot litigate on behalf of individual consum- 
ers. By effectively using a weekly case intake process in which attorneys, investigators, and a coordinator 
participate, potential "public interest" consumer protection cases are identified, reviewed, investigated, 
and screened-in for further development and litigation. Individual consumer cases are referred to Local 
Consumer Programs for mediation and resolution. An assistant attomey general acts as the coordinator 
between the Attomey General's Office and the Local Consumer Protection Offices in the four westem 
counties in order to provide oversight in the handling and resolution of consumer cases. During FY'99, the 
Division referred at least 85 complaints to the local consumer programs. This figure does not include 
"walk-ins" who are also sent to the local consumer program. The local consumer programs referred at 
least four cases to the Division involving a pattern of unfair or deceptive trade practices for evaluation by 
our office. 

As a result of the intake of matters from various sources, between June 1 , 1 998 and June 30, 1 999, 
33 consumer protection investigations were opened. In FY'99, an average of nine actual court cases 
were open at any given time, two of which were Superior Court 93 A Consumer Protection Act cases. In 
FY'99, one consumer civil litigafion case was closed. 

The Westem Massachusetts Division estimates that the staff assisted 1 0,000 callers and 350 people 
who had made written requests for assistance or information. Approximately 29% of the callers sought 
written information and over 2,000 brochures or information sheets were distributed to members of the 
public who had requested consumer information and/or assistance. In addition, through consumer educa- 
tion efforts in the community, investigators assigned to the unit participated in numerous consumer-oriented 
programs, training sessions and seminars, and distributed over 14,000 consumer-protection pamphlets. 



11 



EXECUTIVE BUREAU 



AFFIRMATIVE CIVIL CASE HIGHLIGHTS 

• Commonwealth v. Echo Hill Townhouse Condominium Trust, et. al, Hampshire 
Superior Court, C. A. 98-073. This was a housing discrimination case in which an Hispanic 
mother of two young children was told that she could not rent a condominium apartment in ' 
Amherst because the condominium association bylaw prohibited young children from the 
complex. After the Massachusetts Commission Against Discrimination found probable cause 

that the mother was discriminated against, the Commonwealth sued the Trust, the Trustees in 
their fiduciary capacities, and the management company, Congate Enterprises. The trustees 
thereafter sued their counsel, who intum, countersued Congate. The mother subsequently 
brought an action against several of the defendants in United States District Court. The Com- 
monwealth and the mother had settled v^ith Congate for $20,000 in damages (which included 
$5,000 paid by the property owners while the case was still under the jurisdiction of MCAD). 
Following numerous depositions arising from the counter-claims and cross-claims, the Com- 
monwealth reached a global settlement of both the state and federal actions in which the mother , 
received $20,000 in additional damages. | 

SUMMARY OF CRIMINAL LITIGATION 

In the area of criminal litigation, the Western Massachusetts Division investigates and prosecutes a 
variety of cases, ranging from bank fraud, public integrity, credit card fraud, and attomey defalcation to 
narcotics and illegal weapons cases. Many of these cases involve complex and labor-intensive investiga- 
tions. In some cases, appropriate dispositions that did not involve prosecution were reached. Nine cases 
for which process had ensued (seven indictments, two District Court complaints) were resolved. Numer- 
ous additional cases were investigated but closed without prosecution. 

CRIMINAL CASES 

• Commonwealth v. Louis Dukette , Hampden County Superior Court No. 98-1697- 
98. This insurance fraud case arose out of an accident that took place at Brightside, Inc., 
Holyoke, in April 1996. The defendant claimed to have fallen down a flight of stairs and 
to have been paralyzed from the waist down as a result. He was hospitalized and then 
underwent rehabilitation at the Weldon Center. He claimed that he was confined to a 
wheelchair and that he was totally disabled. Brightside paid workers' compensation 
benefits to him and contacted a private investigator, who placed the defendant under surveil- 
lance. His claims of paraplegia were found to be fraudulent and his benefits were terminated. 

12 



EXECUTIVE BUREAU 



He appealed to the Division of Industrial Accidents. At a subsequent conference, he and his 
attorney were shown videotapes which had been taken by the private investigator. He with- 
drew his claim for benefits. The Commonwealth thereafter indicted the defendant on charges of 
larceny and filing a false claim. The defendant pled guilty to a term of six months to be served in 
the Hampden County House of Correction, which term was suspended for two years on 
condition of payment of $7500 in restitution. 

• Commonwealth v. Pino, Santiago & Rivera District Court, Springfield Division, Nos. 
981 7CR 003927, 3926, 3924. In this insurance fraud case, the defendants claimed to have 
been involved in an automobile accident. Investigation revealed that the accident never took 
place. The defendants entered into a submission on the criminal charges. Each defendant was 
ordered to pay restitution in the amount of $6,000.00. Defendant Rivera's case was continued 
without a finding, and defendants Santiago and Pina were placed on probation for a period of 
four years. 

• Commonwealth v. Hernandez . Hampshire County Superior Court, Nos. 96-2487, 
2488. On October 23, 1998, the defendant pled guilty to trafficking in cocaine, 14 to 28 
grams, and was sentenced to a three years to three years and one day term, to be served 
at MCI Cedar Junction. 

• Commonwealth v. Wickham , Franklin County Superior Court Nos. 98-027-028. In this 
case, a landlord was charged with presentation of false claims to the Commonwealth and 
larceny over $250 as a result of scheme in which he co-habitated with a Section 8 tenant and 
fi^udulently collected $24,000 from the Franklin County Regional Housing Authority. The 
defendant pled guilty and the Court sentenced him to serve a term of probation, with a special 
condition that he make $24,000 restitution. 



13 



BUSINESS AND LABOR 
PROTECTION BUREAU 

Unemployment fraud division 

Fair Labor and Business Practices Division 

Insurance Fraud Division 

Medicaid Fraud Control Unit 



BUSINESS AND LABOR PROTECTION BUREAU 



Business and Labor Protection Bureau 

The Business and Labor Protection Bureau, which was created in April of 1 995, consists of the Fair 
Labor and Business Practices Division, the Insurance Fraud Division, the Medicaid Fraud Control Unit 
and the Unemployment Fraud Division. The common goal of the four divisions is to eliminate fraudulent 
activities in the marketplace with an eye toward leveling the playing field in the economic sector for busi- 
nesses and individuals alike. 

The combining of these four divisions as part of a coordmated Bureau allows for the sharing of inves- 
tigative and legal resources. This coordination results in greater efficiency and productivity and, thus, 
provides the Office with increased opportunities to detect fraud by businesses which in the past have 
shown a propensity to disregard multiple statutory obligations. 

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

The Bureau' s primary oflSces are located at 200 Portland Street, Boston and 1 65 Liberty Street, Springfield. 

UNEMPLOYMENT FRAUD DIVISION 

INTRODUCTION 

WTien operating at fiill capacity, the Unemployment Fraud Division ("UFD") is comprised of 1 1 , full- 
time staff members: a division chief, managing attorney, four assistant attorneys general, two investigators, 
a paralegal, an office manager, and an administrative assistant. The UFD enforces the provisions of the 
Massachusetts Employment Security Law pursuant to its authority under Massachusetts General Laws 
Chapter 1 5 1 A, Section 42A. The UFD primarily receives its referrals from the Division of Employment 
and Training ("DET') for actions involving employer tax fraud and larceny of unemployment benefits. 

The UFD also generates its own independent actions. Through cross references from other divisions 
in the Business and Labor Protection Bureau, the UFD targets complex and sophisticated schemes involv- 
ing various combinations of employment security fraud, prevailing wage, and workers' compensation 
violations. This interdisciplinarv' effort has been instrumental in the UFD's investigation and successful 
prosecution of egregious violators. Strong interagency communication and collaboration between the 

14 



BUSINESS AND LABOR PROTECTION BUREAU 



UFD and the DET, and between the UFD and other federal and state agencies has been a key ingredient 
to the UFD's success. 

During Fiscal Year 1 999, the UFD was especially active. In addition to significantly increasing the 
number of cases addressed in court and of cases closed and returned to DET from Fiscal Year 1 998, the 
UFD's staff recovered and retumed an impressive amount of restitution to the coffers of the Commonwealth's 
Unemployment Trust Fund. Specifically, the UFD addressed 4 1 5 cases in District and Superior Courts 
throughout the Commonwealth, closed and retumed 1 85 cases to the DET, and recovered $ 1 ,028,869.7 1 
in restitution owed to the Commonwealth. 

HIGHLIGHTED EFFORTS & SIGNIFICANT ACTIVITIES 

EMPLOYMENT SECURITY FRAUD 

• Commonwealth v. Weylu's Palace, Weylu's Too, Weylu's Wharf, and Weylu's 
Woburn , Boston Municipal Court - Rick Chang of Lynnfield, president and owner of 
Weylu's Palace, Weylu's Too, Weylu's Wharf and Weylu's Woburn, pled guilty to 
nineteen counts of knowingly failing or refusing to pay employer tax contributions 
totaling nearly $160,000. 

Chang, who has declared bankruptcy and whose Chinese restaurant chain is now defunct, failed 
to pay unemployment taxes for 1 9 quarters between January 1 993 and March 1 999. Chang 
was ordered to serve 20 days of a one-year sentence in jail, with the balance of his sentence 
suspended for a three year probationary period. In addition to his commitment, Chang must 
pay $36,000 in restitution to the Division of Employment and Training. 

• Resolution of three Lincoln Elementary School Construction Cases : During 
fiscal year 1999, the Unemployment Fraud Division resolved three cases of fraudulent 
employment practices by corporate officers and companies involved in the construction 
of the Lincoln Elementary School in Brookline between 1992 and 1994. Five companies 
were originally indicted by a Suffolk County Grand Jury in a number of violation areas, 
including unemployment tax, worker's compensafion, and prevailing wage. The three 
cases resolved this fiscal year were: 

• Commonwealth y. Lawrence Craffey & Quinn Construction Co. , Suffolk Supe- 
rior Court - Lawrence Craffey, Sr. of Brockton pled guilty to three counts of Failure to 



15 



BUSINESS AND LABOR PROTECTION BUREAU 



Provide True and Accurate Payment Records, one count of Failure to pay the Prevailing Wage 
and one count of Workers' Compensation Fraud. 

Craffey worked as an "unofficial" subcontractor to Jeffrey Construction, which was an 
official subcontractor on the Lincoln Elementary School project in Brookline. Craffey 
paid his carpenters between $10 and $12.50 per hour for prevailing wage jobs that were 
designated at a rate of $30.79 per hour. Craffey also failed to keep payroll records or to 
provide workers' compensation insurance for any of his employees. 

In addition to a 90-day commitment in the House of Correction, Craffey 's sentence 
included a period of debarment from public works projects and three years of probation. 

• Commonwealth v. David A. Horton & H. M. Horton Co. , SufToIk Superior Court 

- Walpole contractor H. M. Horton Company and its sole corporate officer David A. 
Horton of Norwell pled guilty to four counts of fraudulent employment practices, includ- 
ing: Worker's Compensation Fraud, Failing to Produce True and Accurate Records and 
Making False Statements to Avoid or Reduce Unemployment Contributions. 

Horton under reported the number of employees working for Horton Company during the 
construction of the Lincoln Elementary School in Brookline. He also failed to report the accu- 
rate amount of payroll to his insurance carrier and therein avoided the payment of premiums and 
proper coverage for employees working on the construction site. 

Horton was sentenced to three years probation, ordered to pay a total of $8,397.97 in restitu- 
tion and a $5,000 fine. Both he and Horton Company were debarred from public works 
projects for a term of three years. 

• Commonwealth v. Peter S. Davidson, Wayne A. Kimball, and Davidson Form 
Construction , Suffolk Superior Court - Rowley Contractor Davidson Form Construc- 
tion, president Peter S. Davidson of Ipswich, and vice president Wayne A. Kimball of 
Wakefield, pled guilty to five counts of fraudulent employment pracfices, including: 
Failure to Pay the Prevailing Wage to Employees and Failure to Keep True and Accurate 
Payroll Records. 

The violations occurred between 1992 and 1993 while Davidson Form Construction 
was a subcontractor on the Lincoln Elementary School in Brookline. Davidson paid 



16 



BUSINESS AND LABOR PROTECTION BUREAU 



workers $7.89/hour less than the prevaiHng wage. Davidson Construction kept payroll 
records that did not accurately reflect employees' hours, pay and job classifications. 

Davidson and Kimball were each sentenced to six months probation, ordered to pay 
$22,000 in restitution, a $500 fine, and were debarred from public works projects for the 
probationary period. 

• Christine Dalton v. PET , Massachusetts Appeals Court - Petitioner Christine 
Dalton of South Boston appealed a determination by the Division of Employment and 
Training that she was ineligible to receive extended retraining benefits for her failure to 
file an application timely with the provisions of General Laws c. 151 A, sec. 30. After 
ftill briefing and oral argument, the Massachusetts Appeals Court affirmed the decision of 
the lower court (South Boston District Court) to uphold the DET determination. 

• National School Bus Service, Inc. v. DET , Massachusetts Appeals Court - Peti- 
tioner National School Bus Service ("National") appealed the decision of the Boston 
Municipal Court to affirm the Division of Employment and Training Review Examiner's 
and Board of Review's determination that National was not entitled to "successor" status 
within the meaning of General Laws c. 1 5 1 A, sec. 1 4(n)( 1 ). National argued in its brief that it 
should have been entitled to "successor" status when it was awarded a contract with Boston 
Public Schools to provide transportation service for its students. This matter has been briefed 
by both parties and awaits a hearing date. 

• Commonwealth v. Bridget Hickson , Suffolk Superior Court - Bridget Hickson of 
Dorchester pled guilty to larceny over $250 and uttering counterfeit checks. Hickson had 
intentionally cashed stolen Division of Employment and Training checks. Hickson was 
sentenced to three months in the House of Correction, suspended for one year, and was 
ordered to continue her drug treatment program. 

• Commonwealth v. Alvin Snow , Roxbury District Court - Alvin Snow of Newton 
pled guilty to a larceny charge. He was sentenced to eighteen months in the House of 
Correction, eight months to be served concurrent with his then-current sentence, with the 
remaining 10 months suspended for two years and full restitution of $2,986. Snow 
served eight months, subsequently violated his probation, and was committed for the 
remaining 10 months. The restitution order was remitted upon his being re-committed. 



17 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Albert Gallo , Boston Municipal Court - Albert Gallo of 
Swampscott admitted to sufficient facts on 22 felony counts of unemployment fraud. 
Gallo failed to pay employer taxes for 22 quarters between 1992 and 1997. The case was 
continued without a finding for three years, with an order to pay restitution to the Divi- 
sion of Employment and Training in the sum of $99,700.17, at a rate of $700 per month. 

• Commonwealth v. Douglas Lyman , Boston Municipal Court - Douglas Lyman, 
President, Treasurer, Clerk and Director of Pediatric Care of America, pled guilty to six 
counts of failure to pay unemployment tax between 1995 and 1996 after a bench trial 
began in this matter. The case was continued without a finding for 22 months, with an 
order to pay restitution to the Division of Employment and Training in the sum of 
$19,800, at a rate of $900 per month, with a Duquette alternative sentence of six years 
committed in the House of Correction, full restitution and interest. 

• Commonwealth v. Rosier Herode , Roxbury District Court - Rosier Herode of 
Dorchester admitted to sufficient facts on 17 felony counts of unemployment fraud. 
Herode failed to correctly report his earnings for a period of nine months while receiving 
unemployment benefits. The case was continued without a finding for six months with 
an order to pay restitution in the sum of $3,000 to the Division of Employment and 
Training. Two days following the issuance of the Court Order, Herode paid the fiill 
restitution amount. 

• Commonwealth v. Air Balance, Inc. , Boston Municipal Court - Charles A. Corlin, 
Jr. of Burlington admitted to sufficient facts on 12 counts of failure to pay employer tax 
contributions. Corlin, as president of Air Balance, Inc., failed to pay employer taxes for 
12 quarters between 1992 and 1998. The case was continued without a finding for two 
years with an order to pay restitution in the amount of $21,716 at a rate of $500 per 
month. 

• Commonwealth v. Jeffrey T. Derby , Lowell District Court - Jeffrey Derby of 
Dracut admitted to sufficient facts on eight counts of larceny of unemployment benefits. 
Derby admitted to working in self-employment at Derby's Auto from October 1996 to 
January 1997 while collecting unemployment benefits. The case was continued without a 
finding for one year with an order to pay restitution in the sum of $5,558 to the Division 
of Employment and Training. 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Michael Calore and Joseph Calore , Boston Municipal Court - 

Michael Calore of Exeter, R.I., and Joseph Calore of Wakefield, R.I., each admitted to 
sufficient facts on five counts of failure to pay employer tax contributions. Michael 
Calore, president, and Joseph Calore, treasurer, of both C.F.S. Air Cargo, Inc. and Calore 
Express, Inc., failed to pay unemployment tax for 5 quarters between 1994 and 1995. 
The case was continued without a finding for three years with an order to pay restitution 
to the Division of Employment and Training, joint and several, in the sum of $41,463 for 
C.F.S. Air Cargo and $7,595 for Calore Express. 

PRISONER CROSS MATCH INITIATIVE 



The Unemployment Fraud Division, in collaboration with the Division of Employment and Training and 
the Department of Corrections, has continued its successful identification, investigation and prosecution of 
state prisoners who fraudulently collect unemployment benefits while incarcerated. The UFD initiated this 
interagency effort in fiscal year 1 998, by facilitating the creation of a computer CROSS MATCH program 
between the DET and the DOC. Since the inception of this program, over 20 present or former prisoners 
have been caught and prosecuted. Among those prosecuted in fiscal year 1 999 were: 

• Commonwealth v. Stanley Duval , Brockton District Court - Stanley Duval of 
North Easton admitted to sufficient facts on eight counts of unemployment fraud. With 
the assistance of a girlfriend, Duval fraudulently collected $ 1 . 1 04 in unemployment 
benefits between March and May 1 997 while incarcerated at the Plymouth County House 
of Correction. The case was continued without a finding for one year with an order to 
pay restitution to the Division of Employment and Training in the sum of $1,104. A 
Duquette alternative of a guilty finding with a six month commitment at the House of 
Correction and full restitution was also imposed. 

• Commonwealth v. Raymond Soraghan . Haverhill District Court - Raymond 
Soraghan of Groveland pled guilty to 12 counts of unemployment fraud. With the assis- 
tance of his father, Soraghan fraudulently collected $1,182 between December 1996 and 
March 1997 while incarcerated at the Essex County House of Correction. Upon his 
guilty plea, Soraghan was sentenced to six months in the House of Correction, suspended 
for six months, with an order to pay restitution to the Division of Employment and 
Training in the sum of $1,182. Six months following the issuance of the Order, Soraghan 
paid the full resfitution amount and his probation was terminated by the Court. 



19 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Joseph Papaleo , Worcester District Court - Joseph Papaleo of 
Clinton pled guilty to nine counts of unemployment fraud. With the assistance of a 
girlfriend, Papaleo fraudulently collected $900 between May and June 1997, while 
incarcerated at the Worcester County House of Correction. Upon his guilty plea, Papaleo 
was sentenced to one year in the House of Correction, suspended for one year, with an 
order to pay restitution to the Division of Employment and Training in the sum of $900. 

SPECIAL PROJECTS 

CASE EVALUATIONS 

Each of the Unemployment Fraud Division's open cases and investigations in inventory was reviewed I 
and evaluated by the staff Cases are either moving forward in the criminal process, or are being returned j 
to the Division of Employment and Training pursuant to the Memorandum of Understanding between the 
UFD and the DET. In the last year alone, the UFD has closed and returned to the DET 1 85 cases. 

LARCENY DEFAULT EVALUATIONS 

Each of the Unemployment Fraud Division's larceny cases that have been on default for five or mor 
years was reviewed and evaluated by staff investigators. Additional attempts to investigate and locate t 
whereabouts of missing defendants, to determine whether default warrants were still outstanding, and to' 
correspond with any counsel of record were made. Pursuant to the Memorandum of Understanding 
between the UFD and the DET, larceny cases that have been on default five or more years must be closed 
and returned to the DET. 

TRAINING AND EDUCATION 

DET TRAINING OF UFD STAFF 



During fiscal year 1 999, Unemployment Fraud Division staff attended a comprehensive training given 
by the Division of Employment and Training. This training was organized at the request of the UFD to 
ensure continued successfiil invesfigation and prosecution of the Division's cases. This hands-on training 
covered: ( 1 ) the Unemployment Insurance Program, Policies and Procedures; (2) the Unemployment 
Benefit Payment Control Process; (3) the Tax Audit Process; and, (4) the Employer Tax Process. 



20 



BUSINESS AND LABOR PROTECTION BUREAU 



UFD TRAINING MANUAL 

Unemployment Fraud Division staff drafted and compiled a comprehensive UFD Policy and Training 
Manual. In addition to providing a general overview of the UFD and its statutory authority for the pros- 
ecution of unemployment fraud matters, this Manual includes detailed information on: the roles and re- 
sponsibilities of the UFD staff; the DET's laws and procedures; the prosecution of employer tax and 
larceny cases; sample pleadings, court forms and internal division forms; courtroom protocol; legal re- 
search; GAG personnel information; and the special grand jury process. 



DIVISION STATISTICAL SUMMARY 



MONIES COLLECTED BY UFD 






July 1998 






$ 188,766.33 


August 






42,567.33 


September 






66,462.75 


October 






57,632.64 


November 






66,336.44 


December 






68,832.21 


January 1999 






42,224.66 


February 






100,774.55 


March 






62,528.47 


April 






28,831.60 


May 






57,347.67 


June 






46,565.06 


Total Monies: 






$1,028,869.71 


DET CASE REFERRALS RECEIVED BY UFD 






Larceny Referrals 


Tax Referrals 


July 1998 




3 


5 


August 










September 




8 





October 




5 





November 




4 






21 



BUSINESS AND LABOR PROTECTION BUREAU 



December 


3 


January 1999 


5 


February 


3 


March 


4 


April 


1 


May 


3 


June 





Total Referrals: 


39 


CASES PENDING AS OF JUNE 30, 1999 


Criminal Employee Claims 




Criminal Employer Claims 




Other* 




Total Pending Cases 




CASES ON DEFAULT AS OF JUNE 30, 1999 


Criminal Employee Claims 




Criminal Employer Claims 




Other* 




Total Defaults 




CASES CLOSED AND RETURNED TO DET 


Criminal Employee Claims 




Criminal Employer Claims 




Other* 




Total Closed Cases 





6 

6 
4 
1 
1 

_0 
23 



330 

369 (505 Defendants) 

57 
756 



166 

97 

3 

266 



76 

95 

14 

185 



22 



BUSINESS AND LABOR PROTECTION BUREAU 



COMPLAINTS ISSUED 

Criminal Employee Claims 12 (130 counts) 

Criminal Employer Claims 43 (341 counts) 

Other* L (12 counts) 

Total Complaints Issued 56 (483 counts) 

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

FAIR LABOR & BUSINESS PRACTICES DIVISION 

INTRODUCTION 

The Fair Labor and Business Practices Division ("FLBP") is comprised of the Division Chief, Manag- 
ing Attorney, Westem Massachusetts Deputy Managing Attorney, Director of Safety, 1 additional assis- 
tant attorneys general,24 inspectors, one financial investigator, seven hodine/intake members, two parale- 
gals, an outreach coordinator and six support personnel. FLBP staffs full-time offices in Boston and 
Springfield as well as satellite offices in Fall River, Worcester and Pittsfield. 

FLBP is responsible for enforcing the Massachusetts wage and hour laws, including the prevailing 
wage, minimum wage, overtime and nonpayment laws as well as the child labor and workplace safety 
laws. In addition to investigating and prosecuting or civilly citing offenders for these violations, FLBP 
investigates and prosecutes offenders for workers' compensation and unemployment fraud violations in 
instances where violation of these laws are combined with violation of the wage and hour laws. Often 
times employers who do not pay their employees also fail to contribute to the Unemployment Compensa- 
tion Trust Fund and/or fail to provide workers' compensation. Such potential violations are checked in 
every FLBP investigation and, to the extent instances of these types of fraud are discovered, they are 
included in any prosecutions FLBP subsequently pursues. FLBP also staffs a Bid Protest Unit that arbi- 
trates public construction bid disputes through office hearings. 

FLBP investigated 5,955 complaints during fiscal year 1 999. Prosecutions and debarments increased 
significantly over last year's efforts. The majority of cases that were not prosecuted were resolved suc- 
cessfiilly with full restitution paid to the complainants. During the fiscal year, a total of $3,607,579 in owed 
wages was collected for employees as a direct result of FLBP's efforts. 



23 



BUSINESS AND LABOR PROTECTION BUREAU 



Since the Spring of 1 998. FLBP's Inspectional and Legal Staffs have been assigned to specific geo- 
graphical areas determined by court jurisdictions. The Inspectors work proactively in their districts at least 
one day a week. The AAGs prosecute cases in the same courts on a regular basis. This allows the 
respective courts and surrounding communities to become more familiar with the FLBP staff who serve 
their districts and also enables the FLBP to create a better public awareness of the work it does, the 
assistance it can offer, and the laws it enforces. 

HIGHLIGHTED EFFORTS & SIGNIFICANT ACTIVITIES 

CIVIL ENFORCEMENT IMPLEMENTATION TEAM 

On November 5, 1 998 significant new amendments to the wage and hour laws took effect enhancing 
criminal penalties for violations of certain of the wage and hour laws and at the same time gave the Attomey 
General the alternative authority to issue civil citations for such violations. 

Pursuant to this new legislation, FLBP can now issue a citation to an employer who does not pay its 
employee wages, overtime or the minimum wage, fails to pay the prevailing wage or fails to provide true 
and accurate certified payroll records. This citation can require the employer to comply with the law, pay 
restitution to the employees, and/or pay a civil penalty. 

FLBP created a team responsible for developing policies and protocols to achieve effective and effi- 
cient implementation of the new law. To provide guidance to employers and employees, the team also 
issued an advisory summarizing the new legislation and advising employers and employees of their rights 
and responsibilities thereunder. 

CENTRAL ARTERY/TUNNEL ENFORCEMENT TEAM 



The Division's Central Artery/Tunnel ("CAyT') Enforcement Team continues to focus on monitoring 
wage compliance at the country's largest public construction project. The team is responsible for investi- 
gating and prosecuting or civilly citing employers for violations of the wage and hour laws, primarily those 
involving failure to pay the prevailing wage, as well as other criminal offenses. The team continues to work 
with other divisions within the Office of the Attomey General, as well as with the Massachusetts Highway 
Department in their education and enforcement efforts. Members of the team directed by the Division 
Chief, include two assistant attomeys general, four inspectors and one paralegal. 



24 



BUSINESS AND LABOR PROTECTION BUREAU 



PREVAILING WAGE ENFORCEMENT TEAM 

FLBP created a Prevailing Wage Enforcement Team in June of 1 998. The team is comprised of eight 
Inspectors whose primary responsibilities are the proactive enforcement of the Massachusetts prevailing 
wage law. The Prevailing Wage Enforcement Team investigates referrals, anonymous tips and employee 
complaints received by FLBP. The Prevailing Wage Enforcement Team also conducts unannounced site 
inspections at numerous public construction projects throughout the Commonwealth. During this fiscal 
year, the team conducted over 350 site inspections throughout the Commonwealth. 

BID UNIT 

The Attorney General's Office serves to provide a fair and accessible forum for the resolution of 
public construction bidding disputes. The Attorney General's main enforcement efforts in this area are 
undertaken by the Bid Unit, a unit within the Fair Labor and Business Practices Division. Efforts under- 
taken in Fiscal Year 1999 included: (i) the receipt and resolution of filed bid protests, (ii) the receipt of 
telephone calls fi-om the public contracting community seeking assistance concerning the public bidding 
laws, (iii) the receipt and resolution of appeals from the Commonwealth's contractor pre-qualification 
process, and (iv) the education of public contract participants (e.g. architects, contractors, municipal and 
public agency officials). During Fiscal Year 1 999, the Attorney General resolved bid protests for public 
construction contracts ranging in cost from $ 1 1 thousand to $90 million. 

The Division's bid enforcement efforts also include an educational component that provides public 
contracting participants with necessary information regarding the public bidding laws. The Bid Unit's 
educational approach is multifaceted, so that the effect of the educational initiative may be maximized. An 
example may be found in the availability of the written bid protest decisions which continue to be compiled 
and made available at the Francis X. Bellotti Library of the Attorney General's Office, located at One 
Ashburton Place in Boston. Also, the bidding seminars which the Division sponsors or participates in 
provide the substantive and procedural information necessary to properly solicit or submit public construc- 
tion bids. Such proactive efforts serve many usefiil purposes, not the least of which is to decrease the 
number of filed bid protests. 

The receipt of, and response to, telephone inquiries and correspondence also serves an educational 
function. During Fiscal Year 1999, over 3,000 telephone calls concerning public bidding questions were 
received and answered by the Bid Unit. The Bid Unit's telephone support has become an established and 
important resource for contractors, as well as awarding authorities. Telephone support and assistance also 
provides a significant prevention tool, often delivering the information necessary to prevent (or quickly 

25 



BUSINESS AND LABOR PROTECTION BUREAU 



remedy) a violation of the public bidding laws. 
SAFETY 

FLBP investigates reports of fatalities and serious injuries that occur at the workplace. FLBP inspec- 
tors work in cooperation with representatives from the United States Occupational Safety and Health 
Administration (OSHA), the Massachusetts Department of Public Health's Fatality Assessment and Con- 
trol Evaluation Program, the State Police Crime Prevention and Control Unit, local police and fire depart- 
ments, and other federal, state and local agencies. 

In addition, the Division investigates all reports of serious injuries and safety complaints that occur in 
the public sector. The Division retains statutory authority to enforce safety standards in municipal and 
county workplaces. 

The following investigations were conducted during FY99: 

Service Industries 9 

Constmction 1 7 

Manufacturing 1 5 

Public Employees 9 

Fatalities ii 

TOTAL 61 

CHILD LABOR 



The Massachusetts Child Labor Laws protect workers under the age of 1 8. No other workplace! 
safety laws acknowledge the special vulnerabilities of young workers. The laws allow young workers to 
optimize their educational opportunities by restricting the number of hours minors of certain ages may 
work. Hazardous tasks and equipment are prohibited in recognition of the increased rate of workplace 
injury among teenaged workers. In addition, the permitting process creates a structure for school super- 
intendents who issue permits to review the intended employment to ensure that it is safe, is consistent with 
the child labor laws, and serves the general welfare of the minor. 

FLBP investigates reports of child labor violations, conducts site inspections and educates employers 
about their legal obligations, confirming their compliance. During FY99, Inspectors visited 171 businesses 
where minors were employed, noting some 155 violations that were subsequently rectified by the employ- 
ers. 



26 



BUSINESS AND LABOR PROTECTION BUREAU 



INDUSTRIAL HOMEWORK 

FLBP enforces the industnal homework laws (work performed for a company in the employee's 
home) by issuing permits to the employers and certificates for each employee. FLBP also monitors these 
companies to ensure compliance with the minimum wage and overtime laws. During F Y99, FLBP issued 
21 permits and 202 certificates. 

WAIVERS 



The Fair Labor and Business Practices Division is charged with the authority to waive certain require- 
ments of the labor laws under conditions specified within the statutes. Each request for a waiver is carefiiily 
reviewed before a determination is made to either grant or deny the request. Three areas of waiver focus 
are worthy of note: 

Following a review of the criteria for issuing exemptions for the requirement that employers allow 
employees a day of rest in seven, the number of such exemptions granted decreased from 76 in F Y98 to 
3inFY99. 

The Division has rewritten the standards for employment in summer camps based upon changes in the 
minimum wage regulations. The written standards are distributed each spring to all camps requesting to 
pay subminimum wage. Because of significant changes in the Department of Public Health's camping 
regulations, FLBP no longer includes the DPH regulations in the materials it distributes. 

The Division no longer grants exemptions to the three-hour minimum daily hours requirement. This 
change resulted from an amendment to the minimum wage regulations. 

WAIVER STATISTICAL REPORT 



TYPE OF WAIVER FEE FOR WAIVER AMOUNT GRANTED FEE COLLECTED 

Meal $100.00 $57.00 $5,749.52 

7-Day 100.00 3.00 300.00 

Theatrical 100.00 23.00 2,300.00 

Employer 50.00 123.00 6,150.00 

Seasonal 100.00 28.00 2,800.00 



27 



BUSINESS AND LABOR PROTECTION BUREAU 



3 hr. Minimum 


50.00 


5.00 


250.00 


Sheltered Workshop 


50.00 


22.00 


1,100 


TOTAL FIGURES 


S550.00 


$261.00 
SIGNIFICANT CASES 


$18,649.52 



The follo\\ing list provides an overview of 63 prosecution efforts undertaken by FLBP during Fiscal 
Year 1999: 

• Commonwealth v. Matthew Connolly, Commonwealth Trucking, Inc. (Suffolk 
Superior Court) - Matthew Connolly, president of Commonwealth Trucking, Inc., was 
convicted by a jury of workers' compensation fraud, failure to provide workers' compen- 
sation insurance, failure to pay the prevailing wage, and submitting false certified payroll records 
in connection with work on the Central Artery /Tunnel Project. He was sentenced to two years 
probation, ordered to pay $1 7, 1 89.44 in restitution to a former employee, $2,500 in fines, and 
debarred ft"om bidding or participating on government contracts for three years. 

• Commonwealth v. Edlin Almeida, Jr. (Suffolk Superior Court) - Edlin Almeida, the 
owner of a trucking company, pled guilty to failure to pay the prevailing wage rate, 
failure to submit certified payroll records and filing false certified payroll records for 
work performed by his truck drivers on the Central Artery/Turmel Project. He was placed 
on probation for seven months and ordered to pay $20,919.99 in restitution to four em- 
ployees. Almeida was also debarred from participating or bidding on public works 
construction projects for six months. 

• Commonwealth v. Daniel Amaral/Amaral Excavating, Inc. (Suffolk Superior 
Court) -Amaral Excavating and its president, Daniel Amaral pled guilty to seven counts 
of violating the state's prevailing wage law, one count of failure to keep true and accurate 
records of employees working at the Central Artery/Tunnel Project, seven counts of 
failure to pay overtime, one count of failure to file with the Division of Employment and 
Training and pay contributions to the Unemployment Compensation Trust Fund, and one 
count of failure to provide worker's compensation coverage. Amaral was sentenced to 
nine months in the House of Correction and was ordered to serve 14 days of that sentence 
with the balance suspended for three years. He was also ordered to pay a total of 
$ 1 07, 1 20.69 in restitution to his employees and $7,700 in fines. Amaral will be debarred fi-om 
public works construction for three years. The defendant corporation also pled guilty to the same 



28 



BUSINESS AND LABOR PROTECTION BUREAU 



charges and was debarred from public works construction in Massachusetts for three years. 

• Commonwealth v. Bartholomew Molloy (Suffolk Superior Court) - Bartholomew 
Molloy, the owner of a trucking company, pled guilty to indictments charging him with 
failure to pay the prevailing wage, failure to pay wages in a timely manner, and failure to 
pay overtime in connection with work performed on the Central Artery /Tunnel Project. 
The defendant was placed on probation for three years. He was also ordered to pay 
$11, 488 in restitution to one employee and was debarred from public works construction 
for six months. 

• Commonwealth v. Noel St. George, Jr. (Suffolk Superior Court) - The defendant 
pled guilty to failure to pay the prevailing wage rate, filing false certified payroll records 
and failure to provide workers' compensation insurance for work performed by his 
trucking company on the Central Artery/Tunnel Project. St. George was placed on 
probation for two years, ordered to pay a $500 fine and was debarred from participating 
or bidding on public works projects for three years. He was also ordered to pay 
$23,319.77 in restitution for wages owed to his drivers. 

• Commonwealth v. Lvnden Wright (Suffolk Superior Court) - Lynden Wright, co- 
owner of L&D Trucking, pled guilty to failure to pay the prevailing wage rate for work 
performed by his employees on the Central Artery /Tunnel Project, failure to file certified 
payroll records, failure to pay wages in a timely manner, failure to pay unemployment 
taxes, and failing to provide workers' compensation coverage for his employees. He was 
placed on probation for one year and ordered to pay $20,985.74 in restitution. Wright 
was also ordered to pay $1,000 in fines and was debarred from participating or bidding 
on government contracts for three years. 

• Commonwealth v. Diane Wheatlev (Suffolk Superior Court) - Diane Wheatley, co- 
owner of L&D Trucking, pled guilty to failure to pay the prevailing wage rate, failure to 
submit certified payroll records, failure to pay wages in a timely manner, failure to pay 
unemployment taxes, and failing to provide workers' compensation coverage for her 
employees. Wheatley was placed on probation for one year and ordered to pay a $500 fine. She 
is also debarred from participating or bidding on government contracts for three years. 

• Commonwealth v. Michael Walorz (Suffolk Superior Court) - Michael Walorz, 
president of Walorz Trucking, pled guilty to failure to pay the prevailing wage rate and 
failing to file certified payroll records for work performed by his truck drivers on the 

29 



BUSINESS AND LABOR PROTECTION BUREAU 



Central Artery /Tunnel Project. He was placed on pre-trial probation for one year, and ordered 
to pay $2 J2 1.21 in back wages to his employees. 

• Commonwealth v. Arthur L. Norris, Jr. (Suffolk Superior Court) - Arthur 
Norris was charged with failure to pay the prevailing wage rate and failure to file certified 
payroll records for work performed by his truck drivers on the Central Artery /Tunnel 
Project. He was placed on pre-trial probation for one year and ordered to pay $2,83 1 .23 
in restitution for wages owed to his employees. Norris was also ordered to pay $1,000 in 
fines and was debarred from participating or bidding on public works construction 
projects for six months. 

• Commonwealth v. Thomas P. Morabito (Suffolk Superior Court) - Owner of T.P. 
Morabito Trucking, Thomas P. Morabito pled guilty to failure to pay overtime and failure 
to pay wages in a timely mamier for work performed on the Central Artery. He was 
ordered to pay $2,700 in fines and $317.20 in restitution. 

• Commonwealth v. Ralph Caruso, Jr. (Suffolk Superior Court) - The defendant was 
charged with failure to pay the prevailing wage rate and filing false certified payroll 
records for trucking work performed by his employees on the Central Artery/Tunnel 
Project. He was placed on pre-trial probation for one year and ordered to pay $244 in 
restitution for wages owed to his employees. 

• Commonwealth v. Tom Bowley/Tewksbury Industries (Middlesex Superior Court) 
- Tom Bowley, corporate president of Tewksbury Industries, was charged with two 
counts of manslaughter following the deaths of two workers. Prior to the injuries, the 
defendant had been informed of general defects regarding the safety of his scrap metal 
yard by OSHA, insurance companies and various consultants. The defendant pled guilty 
to two counts of assault & battery, and was sentenced to 400 hours community service 
and three years probation. 

• Commonwealth v. James Verni, DBA Lube Express (New Bedford District 
Court) - James Verni, the owner of Lube Express, a car service center, admitted to suffi- 
cient facts for findings of guilty on charges of non-payment of wages and failure to pay 
unemployment contributions. The charges were continued without a finding for one year 
and Verni was ordered to pay $2,810 in restitution to three former employees and $2,000 
to the Division of Employment and Training. 



30 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Joseph Lewis and Boston Towing Inc. (Boston Municipal 
Court) - Boston Towing and its president, Joseph Lewis, admitted to sufficient facts for 
findings of guilty on charges of non-payment of wages and failure to obtain workers' 
compensation insurance. The charges were continued without a finding for one year. 
The defendants were placed on probation and ordered to pay $ 1 , 1 54 in restitution to two 
former employees who worked as tow truck drivers, $500 in court costs with an alterna- 
tive sentence of guilty findings and 10 days in the house of correction. 

• Commonwealth v. D&R General Contracting Inc. and Richard Morello (Wobum 
District Court) - D&R General Contracting and its president, Richard Morello, admitted 
to sufficient facts for findings of guilty on charges of failure to pay the prevailing wage 
rate and failure to pay the correct overtime rate. The corporation also admitted to suffi- 
cient facts for a finding of guilty on charges of failure to provide true and accurate payroll 
records and failure to provide payroll records. The charges were continued without a 
finding for two years. The corporation was ordered to pay $21,463.79 in restitution to 
four former employees, $10,000 in court costs and $40,000 in community service 
projects. Morello was ordered to pay $1,000 in court costs and debarred for six months. 

• Commonwealth v. Janice Falcone (New Bedford District Court) - Janice Falcone, 
the owner of a hair and beauty salon, admitted to sufficient facts for findings of guilty on 
charges of non-payment of wages, failure to pay unemployment contributions and failure 
to provide workers' compensation coverage. The charges were continued without a 
finding for one year. Falcone was placed on probation and ordered to pay $2,461 in 
restitution to five former employees, $3,525 to the Division of Employment and Training 
and $3,000 in court costs, with an alternative sentence of up to 60 days in the house of 
correction on the non-payment claims, up to one year on the unemployment claim and up 
to two and one-half years on the workers' compensation claim. 

• Commonwealth v. Michael Brulport (Chelsea District Court) - Michael Brulport, 
the president and owner of Northern Insulation, Inc., admitted to sufficient facts for 
findings of guilty on charges of non-payment of wages, failure to pay unemployment 
contributions and failure to provide workers' compensation coverage. The charges were 
continued without a finding for one year. Brulport was ordered to pay $3,000 in restitu- 
tion to one former employee, $1,000 to the Division of Employment and Training and 
$100 in court costs. 



31 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Kingsberry Building Technologies Inc. and Charles Martin 

(Maiden District Court) - Kingsberry Building Technologies, Inc. and its president, 
Charles J. Martin, admitted to sufficient facts for guilty findings on charges of failure to 
pay the prevailing wage, workers' compensation fraud, unemployment tax fraud, failure 
to provide true and accurate payroll records and failure to provide pay stubs to employ- 
ees. The charges were continued without a finding for one year. The defendants were 
ordered to pay $10,980 in restitution to two former employees, restitution of $28,600 to 
Eastern Casualty Company and $5,500 in court costs with an alternative sentence of six 
months in the house of correction committed. The defendants were also debarred from 
bidding on public works construction projects for one and one-half years. 

• Commonwealth v. Carmelina's Waterfront, Inc. and David S. Arsenault (Salem 
District Court) - Carmelina's Waterfront and its president, David S. Arsenault, admitted 
to sufficient facts for guilty findings on charges of failure to pay unemployment contribu- 
tions and failure to provide workers' compensation coverage. The cases were continued 
without a finding for 18 months and the defendants were ordered to pay $2,638.03 in 
restitution to the Division of Employment and Training and $2,000 in court costs. 

• Commonwealth v. Northeast Sweeping & Asphalt Paving Corporation, EMP 
Sweeping & Asphalt Corporation, Deanna Zucchari, Peter Maggio and Edward 
Crasco (Maiden District Court) - Both corporations worked in concert to hire and pay 
employees for work on various highway maintenance projects. The corporations were 
both managed by Peter Maggio. Northeast, Deanna Zucchari and Edward Crasco all 
admitted to sufficient facts for findings of guilty on charges of non-payment of wages and 
failure to provide workers' compensation coverage. Zucchari also admitted to sufficient 
facts on charges of failure to register with the Division of Employment and Training, 
failure to provide true and accurate payroll records and failure to pay the correct prevailing wage 
rate. Crasco also admitted to sufficient facts on a charge of larceny by check. Maggio admitted to 
suflBcient facts on charges of non-payment of wages. The cases were continued without a finding for 
one year. All parties were ordered, jointly and severally, to pay $ 1 9,26 1 .66 in restitution to 1 
former employees and all parties were debarred from public works projects for three years. Crasco 
was required to pay court costs of $2,000 and Zucchari was ordered to pay court costs of $385. 
EMP pled guilty to charges of non-payment of wages, failure to register with the Division of Employ- 
ment and Training, failure to provide tme and accurate payroll records and failure to pay the correct 
prevailing wage rate. The corpx)ration was placed on probation for one year and debarred from 



32 



BUSINESS AND LABOR PROTECTION BUREAU 



public works projects for three years. 

• Commonwealth v. Sentry Corporation and John T. Jacobus (Hingham District Court) - 
Sentry Corporation and its president, John T. Jacobus, pled guilty to seven counts of failure to 
pay the prevailing wage and two counts of failure to provide true and accurate payroll records. 
The defendants were placed on probation for one year and were ordered to pay $ 1 5,3 1 9.69 in 
restitution to four employees and $2,000 in fines. They were also debarred for six months. In 
addition, the defendants admitted to sufficient facts for findings of guilty of workers' compensa- 
tion fraud. This charge was continued without a finding for two years and the defendants were 
ordered to pay a $2,000 fine and $3 1 ,2 1 8 in restitution to Wausau Insurance Company. 

• Commonwealth v. Timothy Croft and Advanced Craftmans Co. (Ayer District 
Court) - Timothy Croft, owner of Advanced Craftsman Co., pled guilty to three counts of 
failing to file a business certificate and was ordered to pay $ 1 50 in fines. Croft also 
admitted that there were sufficient facts to find him guilt>' of three counts of failure to 
pay the prevailing wage rate. These matters were continued without a finding for six 
months with the condition that the defendant be debarred from public works construction 
for that period of time. The defendant was also ordered to pay $3,720.06 in restitution to 
three employees. 

• Commonwealth v. Skyline Roofing and Contracting and Lester Hooben (Taunton 
District Court) -Skyline Contracting and Roofing, Inc. and its president, Lester Hooben, 
pled guilty to six counts of failure to pay the prevailing wage rate, one count of submit- 
ting false payroll records, three counts of failure to pay wages in a timely manner, and 
three counts of failure to pay overtime. Hooben was sentenced to 30 days in the House of 
Correction, suspended for one year. He was also ordered to pay $8,238.48 in restitution, 
$2,150 in fines, and was debarred from public works construction for six months. Sky- 
line was also debarred from public works construction for six months. 

• Commonwealth y. Brentwood Construction and John Fein (Barnstable District Court) 
- John Fein, the operator of a Hyannis construction company, was charged with failure to pay 
the prevailing wage rate and failure to provide true and accurate records. The defendant 
admitted to sufficient facts for findings of guilty . The case was continued without a finding for 
three months and the defendant was debarred for six months, and was ordered to pay $ 1 0,000 
in back wages to two employees. 

• Commonwealth v. Diversified Contracting, Inc. (Dorchester District Court) - 



33 



BUSINESS AND LABOR PROTECTION BUREAU 



Diversified was found guilty of four counts of failure to pay the prevailing wage rate and 
one count of failure to file true and accurate certified payroll records following a bench trial. 
The defendant was ordered to pay $ 1 3,000 in fines. 

• Commonwealth v. Medical Weight Loss Center, Inc. (Brighton District Court) - 
Medical Weight Loss was found guilty of failure to pay wages following a bench trial. 
The defendant was ordered to pay $1,000 in fines and $804 in restitution to one em- 
ployee. 

• Commonwealth v. J & G Electric, Inc. and Joseph Gauthier (Peabody District 
Court) - J & G Electric and its president, Joseph Gauthier, pled guilty to charges of 
failure to pay the prevailing wage rate to one employee and failure to pay overtime to five 
others. The defendants were placed on probation for two years and ordered to pay 
$18,059 to the employees. Both defendants were debarred for six months. 

• Commonwealth v. Quality Insulation, Inc. and William L. White, Jr. 

(Framingham District Court) - Quality Insulation pled guilty to two counts of failing to 
pay the prevailing wage rate and one count of failure to provide true and accurate certi- 
fied payroll records. Quality's compliance officer, William White, Jr., admitted to suffi- 
cient facts for a finding of guilty on the charge of failing to provide true and accurate 
certified payroll records. The charge against him was continued without a finding for six 
months. The company was debarred from public works construction for six months. 
Quality and White were ordered to pay $7,220.45 in restitution to two employees. 

• Commonwealth v. Hickox School of Information Technology and Ralph Covino 

(Brockton District Court) -The former Hickox School of Information Technology, Inc. 
and its president/treasurer, Ralph Covino, admitted to sufficient facts for findings of 
guilty on charges of failure to pay wages to four instructors, failure to make unemploy- 
ment insurance contributions, and failure to provide workers' compensation insurance 
coverage. The complaints were continued without a finding for one year. The defendants 
were ordered to pay $1 ,913 in restitution to the instructors of the former computer train- 
ing school, $1,500 to the Division of Employment and Training, and $100 in court costs. 

• Commonwealth v. Naratoone Security, Inc., Okey Chikere and Emmanuel Onos 

(Dorchester District Court) - Naratoone Security Inc. was charged with failure to make 
unemployment contributions. Its president, Okey Chikere, was charged with four counts 



34 



BUSINESS AND LABOR PROTECTION BUREAU 



of failure to pay wages. Both admitted to sufficient facts for a finding of guilty on eigh- 
teen complaints. The cases were continued without a finding for one year, and the defen- 
dants were ordered to pay $22,960 in unemployment insurance contributions to the 
Division of Employment and Training. Chikere and the company's Chief Financial 
Officer, Emmanuel Onos, were also ordered to pay a total of $3,918.98 to four employees 
who failed to receive their wages and earned vacation pay when they were laid off fi-om 
their positions as security officers. 

• Commonwealth v. Pedigree Career Institute Educational Services, Inc. and 
Kevin Hallinan (Lynn District Court) - Pedigree Career Institute and its president and 
treasurer, Kevin Hallinan, admitted to sufficient facts for findings of guilty on thirteen 
counts of failure to pay wages. Pedigree was found guilty and the charges against 
Hallinan were continued without a finding for three years. Both defendants were placed 
on supervised probation and ordered to pay $13,500 in restitution to thirteen employees. 
PCI and Kevin Hallinan are also charged with failure to make unemployment insurance 
contributions. Those charges are currently scheduled for trial. 

• Commonwealth v. Maria Fatima Carmo d/b/a Sunrise Restaurant (Fall River 
District Court) - Maria Fatima Carmo, owner of the Sunrise Restaurant, was found guilty 
on one count of failure to provide workers' compensation insurance coverage. Carmo 
also admitted to sufficient facts for a finding of guilty on four counts of failure to pay 
wages to four employees. The defendant was placed on supervised probation for one 
year and was ordered to pay $2,327 in restitution to the employees. 

• Commonwealth v. American Transportation and Kevin O'Brien (Peabody Dis- 
trict Court) - Kevin O'Brien, president and treasurer of American Transportation, pled 
guilty to two counts of failure to pay wages to two employees who worked for him as 
drivers. In addition, both defendants pled guilty to one count each of failure to provide 
workers' compensation insurance coverage. O'Brien was placed on probation for one 
year and was ordered to pay $ 1 ,400 in restitution to the two employees. He and the 
company were fined $500 for the workers' compensation insurance violations. 

• Commonwealth v. Body by L.A.W., Inc./Brian Tanguy (Quincy District Court) - 
Brian Tanguy, the president and treasurer of Body by L.A.W., pled guilty to two charges 
of failing to pay wages to two employees. He was ordered to pay $266 in restitution and 
was placed on probation for three months. 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Cambodian Community of Massachusetts (Chelsea District Court) 
-The company admitted to sufficient facts for a finding of guilty on one charge of failing to pay 
wages to one employee. The charge was dismissed upon the company's payment of $2,1 52.89 
in wages due the employee. 

• Commonwealth v. Champion-Maisons, Inc./Raymond Peveri (Lynn District 
Court) - Champion-Maisons and its president, Raymond Peveri, admitted to sufficient 
facts for findings of guilty on charges of failing to provide workers' compensation insur- 
ance coverage. Raymond Peveri and the corporation were ordered to pay $500 in fines. 

• Commonwealth v. Allied Weatherproofin^ (Lawrence District Court) - Allied 
Weatherproofing was charged with failure to pay overtime and failure to provide true and 
accurate payroll records. The workers had been paid in full, so the overtime charges were 
dismissed upon payment of $200 in court costs. The charge of failure to provide true and 
accurate records was continued without a finding for one year. 

• Commonwealth v. Dr. Peter Stathoulopoulos (Worcester District Court) - Dr. Peter 
Stathoulopoulos, a Worcester dentist, admitted to sufficient facts on one count of failure 
to provide workers' compensation insurance. The charge was continued without a find- 
ing for three months and the defendant was ordered to pay $ 1 ,000 in court costs. 

• Commonwealth v DAM Concrete Forms, Inc, Sean Dormandy and Michael 
Dormandy (Hingham District Court) -Three co-defendants, DAM Concrete Forms, Inc., 
Sean Dormady, the president, and Michael Dormady, the de facto head of the corpora- 
tion, operated a concrete forms company. DAM Concrete and Michael Dormady were 
charged with one count of workers' compensation insurance fraud, two counts of failure 
to pay prevailing wages and two counts of failure to provide true and accurate payroll 
records. The corporation pled guilty and was ordered to pay $30,000 in restitution to 
Eastern Casualty Insurance Co. and was debarred from engaging in any public works 
projects for six months. Michael Dormady was placed on pre-trial probation and is 
jointly and severally liable for the restitufion. His son, Sean Dormady, was charged with 
two counts each of prevailing wage and records violations. He admitted to sufficient 
facts and the charges were continued without a finding for six months. 

• Commonwealth v. Stafford Lewis d/b/a Atlantic Masonry (Dorchester District 



36 



BUSINESS AND LABOR PROTECTION BUREAU 



Court) - Stafford Lewis, the owner of Atlantic Masonry, was charged with failure to pay 
the prevailing wage and provide payroll records. The charges were continued without a 
finding for six months. Lewis was ordered to pay $23,000 in restitution and he was also 
fined $1,500 for failing to provide true and accurate records. 

• Commonwealth v. Franny's Landscape and Francis Venuto (Lawrence District 
Court) - Franny's Landscape and its president, Francis Venuto, were charged with one 
count of failure to pay prevailing wage rates and one count of failing to provide true and 
accurate records. These matters were continued without a finding for one year. The 
defendant was ordered to pay $15,000 restitution to two employees and debarred for three 
months. 

• Commonwealth v. J.S. Luiz and Joseph Luiz (New Bedford District Court) - J.S. 
Luiz and its president, Joseph Luiz, were charged with failure to pay prevailing wages 
and failure to provide true records. The court continued all matters without a finding for 
two years and ordered the defendants to pay restitution of $62,132.77 to its employees. 

• Commonwealth v. Marquee Restaurant and Ron Mochi (Boston Municipal 
Court) - Ron Mochi, owner of Marquee Restaurant, was charged with one count of non- 
payment of wages. He admitted to sufficient facts and was ordered to pay restitution in 
the amount of $1 ,800. The charges were continued without a finding for three years. 

• Commonwealth v. Jennie Woo (Maiden District Court) - Jennie Woo, the 
president of a Maiden restaurant, was tried and convicted of failure to pay wages to three 
employees. She was placed on probation for one year and ordered to pay $9,216.90 
restitution to her former employees. A charge of failure to provide workers' compensa- 
tion insurance was continued without a finding for one year. 

• Commonwealth v. William Berneburg (Quincy District Court) - William 
Bemeburg, the president of an office machine business, pled guilty to failing to pay 
wages to one employee. He was placed on probation for six months and ordered to pay 
$1,875 in restitution to his employee, plus $100 for court costs. 

• Commonwealth v. Yao Feng (Cambridge District Court) -Yao Feng, the president of 
a Cambridge computer company, was charged with failure to pay wages to an employee 
and failure to pay unemployment insurance contributions. Both charges were continued 



37 



BUSINESS AND LABOR PROTECTION BUREAU 



without a finding for six months while the defendant paid $1,730.76 in restitution to the 
employee and $3,344.50 to the Division of Employment and Training. 

• Commonwealth v. Richard Cox and J.C.Bostonian Enterprises, Inc. (Roxbury 
District Court) - Richard Cox, the president of a Boston landscaping business, pled guilty 
to charges of failure to pay the prevailing wage and failure to pay wages to five employ- 
ees. The corporation was convicted of failure to provide true and accurate payroll 
records. Cox was sentenced to 60 days in the House of Correction suspended for two 
years with probation, and ordered to pay restitution to his employees totaling $2,907.70. 
He was debarred from public works construction for six months. The company was 
debarred for 1 2 months. 

• Commonwealth v Together Health Care and Terri Eldridge (Wareham District 
Court) - Terri Eldridge, the former owner of Together Health Care Service, pled guilty to 
charges of non-payment of wages and failure to pay unemployment contributions. 
Eldridge was ordered to pay $513 restitution to one employee and $1,289 to the Division 
of Employment and Training and received a two month house of correction sentence, 
suspended for one year with probation. 

• Commonwealth v. D.W. White & Sons, Inc. and David White (Lowell District 
Court) - David White, the president of D.W. White & Sons, Inc., pled guilty to four 
prevailing wage charges. The company pled guilty to four counts of failure to pay the 
prevailing wage and one count of failure to provide true and accurate payroll records; the 
company and White were debarred for six months. The defendant was ordered to pay 
$36,258 restitution. Companion cases in Concord and Ipswich courts were continued 
without a finding. 

• Commonwealth v. Tuff Turf Landscaping (Hingham District Court) - The defen- 
dant admitted to sufficient facts for finding of guilty, for failing to pay wages to 12 
employees. The case was continued without a finding for two years and the defendant 
was ordered to make restitution for back overtime wages owed to the 12 employees. 

• Commonwealth v. J.F. Esposito and John Esposito (Hingham District Court) - 
John Esposito, owner of J.F. Esposito, admitted to sufficient facts for findings of guilty 
for failure to pay wages and failure to remit DET in 1997. The charges were continued 
without a finding. Esposito was ordered to pay $700 restitution to the employee and 



38 



BUSINESS AND LABOR PROTECTION BUREAU 



$10,473 to the Division of Employment and Training. 

• Commonwealth v. Mike Shastany (Barnstable District Court) - Mike Shastany, the 
owner of a carpentry contractor, pled guilty to one count of non-payment of wages. 
Shastany was placed on probation for six months, and ordered to pay $275 restitution to 
the one employee and a $35 victim witness fee. Shastany also admitted to not paying 
workers' compensation insurance and received a continuance without a finding for six 
months. 

• Commonwealth v. Olympic Painting and George Vasiliades (Peabody District 
Court) - George Vasiliades, president of Olympic Painting, admitted to sufficient facts to 
charges that three employees were not paid wages for their work as painters. Vasiliades 
also admitted to engaging in workers' compensation fraud for under reporting his payroll 
during certain periods and failing to keep workers' compensation coverage at other times. 

• Commonwealth y. Dollar King Stores and Joshuad Peled (Dorchester District 
Court) - Joshuad Peled, the former owner of the now closed Dollar King stores in 
Brockton, Dedham and Dorchester, was charged with two counts of failure to pay wages 
and unemployment taxes, failure to maintain workers' compensation and failure to 
maintain employment taxes. He was placed on five years' supervised probation and 
ordered into a drug treatment program. He was ordered to pay $9,320.74 restitution to 
two employees and back taxes to the Division of Employment and Training. 

• Commonwealth y. Lee's Rebar and Steel and Roy Lee (Springfield District Court) 
- Roy Lee, owner of Lee's Rebar and Steel Company, pled guilty to failure to pay the 
prevailing wage, failure to keep proper records, failure to provide workers' compensation 
and failure to pay unemployment insurance. Lee was sentenced to six months in the 
House of Correction, suspended for three years. He was ordered to pay $13,632 restitu- 
tion to the Unemployment Compensation Trust Fund and $4,000 in fines. 

• Commonwealth y. Robert Bolduc and Pride Convenience, Inc. (Springfield 
District Court) - Robert Bolduc, president of Pride Convenience, Inc., pled guilty to eight 
counts of non-payment of wages. He was placed on probation for one year and ordered 
to pay $4,785.07 in restitution to eight employees and $4,000 in fines. 

• Commonwealth v. Douglas LaBelle (Springfield District Court) - Douglas LaBelle, 
president of Healthy Habits, Inc., admitted to sufficient facts for findings of guilty on 12 



39 



BUSINESS AND LABOR PROTECTION BUREAU 



charges of non-payment of wages when his health club was closed. The charges were contin- 
ued without a finding for three months and the defendant was ordered to pay $4, 1 56 in restitu- 
tion to the employees. 

• Commonwealth v. Richard Williams (Springfield District Court) - Richard Will- 
iams, president of Sentinel Investigations, formerly known as Sentinel Security, admitted 
to sufficient facts for a finding of guilty on charges of non-payment of wages. The 
charges were continued without a finding for six months. The defendant was ordered to 
pay $350 in restitution and $500 in court costs. 

• Commonwealth v. Donald Edwards (Springfield District Court) - Donald P. 
Edwards admitted to sufficient facts for a finding of guilty on charges of failure to pay 
wages to one employee, failure to pay into the unemployment trust fund, and failure to 
provide workers' compensation insurance. The charges were continued without a finding 
for 1 8 months. Restitution to the victim was ordered in the amount of $6,057.70. Resti- 
tution to the trust fund was to have been determined at a restitution hearing, but the 
defendant failed to appear and a warrant was issued. 

• Commonwealth v. Marlene Meiuller (Palmer District Court) - Marlene Meiuller 
admitted to sufficient facts for a finding of guilty to one charge of non-payment of wages. 
She was placed on probation for one year and ordered to pay $1,458 in restitution to the 
employee. 

• Commonwealth v. Dean P. Todd d/b/a Eagle Home Improvement Co. (Pittsfield 
District Court) - Dean P. Todd, admitted to sufficient facts for a finding of guilty on one 
charge of failure to pay wages. The charge was continued without a finding for one year 
and the defendant was ordered to pay $327 in restitution to the employee. 

• Commonwealth v. McCauIay Roberts Jacquesalliez d/b/a Australian Love Bagels 

(Ware District Court) - McCaulay Roberts Jacquesalliez, owner of Australian Love Bagels, 
admitted to sufficient facts for a finding of guilty on charges of non-payment of wages and failure 
to provide workers' compensation. The charges were continued without a finding for one year 
and the defendant was fined $500 on the workers' compensation charge. The judge allowed 
the defendant to make a $500 donation in food to a food pantry within three months in lieu of 
the fine. The defendant was also ordered to pay $4,573 restitution to four employees. 



40 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Francis A. Waterman d/b/a Waterman Excavating & Landscap- 
ing (Adams District Court) - Francis Waterman d/b/a Waterman Excavating and Landscaping 
pled guilty to four charges of failure to pay prevailing wages to employees and one charge of 
failing to pay overtime. He was placed on probation for one year and ordered to pay $3,000 in 
restitution to the four employees. He was also fined $500 and debarred for six months. 

SIGNIFICANT SETTLEMENTS 

• Commonwealth v. Waste Management, Inc . (Suffolk Superior) - Waste Management 
Corporation entered into settlement agreement following a decision by the Suffolk Superior 
Court on the Commonwealth's Motion for Summary Judgement in a civil action for declaratory 
judgement. The defendant agreed to begin using proper deductions in calculating the appropri- 
ate prevailing wage rate for municipal solid waste hauling. The court's decision reaffirmed that 
municipal solid waste haulers are subject to the prevailing wage law. 

• George E. Frotton Trucking Co., Inc. - Frotten Trucking Company entered into a 
settlement agreement resolving claims of failure to pay the prevailing wage rate. The 
company agreed to transfer equipment appraised at $27,500 to a former employee. The 
employee worked as a truck driver on the Central Artery /Tunnel Project and was not paid 
the correct prevailing wage rate. The company also agreed to a six month debarment 
from public works. 

• Commercial Epoxy Flooring Co., Inc. - Commercial Epoxy Flooring Company 
entered into a settlement agreement resolving claims of failure to pay the prevailing wage rate to 
five employees. The company agreed to pay $ 1 0,774. 1 1 in restitution to the former employees, 
and to a six month debarment. 

• Viking Systems, Inc. and Brian L. Straub - Viking Systems Company, and its 
president, Brian Straub, entered into an settlement agreement to pay restitution of 
$8,843.54 to four former employees and entered into a payment plan with the Division of 
Employment and Training to pay $67,386.37 plus 6% simple interest in 72 monthly 
payments of $1,1 16.78. 

• Jodv Reale and Reale Associate, Inc. - Reale Associates and its president, Jody Reale, 
entered into a settlement agreement resolving a prevailing wage issue. The company agreed to 



41 



BUSINESS AND LABOR PROTECTION BUREAU 



pay restitution of $ 1 8,897.7 1 to five former employees. The employees worked as equipment 
operators on several public works projects and were not paid the correct prevailing wage rate. 

• Sophia Poutous and Poutous Contracting, Inc. - Poutas Contracting and its president, 
Sophia Poutous, entered into a settlement agreement regarding not paying employees for all 
hours worked on various public works projects. The company agreed to pay restitution of 
$15,713.09 to three employees. 

• Quality Care Centers of Massachusetts, Inc. d/b/a Franville Nursing and Reha- 
bilitation, President, Bruce A. Shear - Franville Nursing and its president, Bruce Shear, 
entered into a settlement agreement resolving allegations of non-payment of wages. The 
company agreed to pay a total of $86,863.74 in restitution to70 former employees. 

• Paul A. Haves and P.H. Mechanical Corporation - The company and its president, 
Paul A. Hayes, entered into a settlement agreement to resolve allegations of prevailing 
wage violations due to misclassification of employees as apprentices on public works 
projects. The agreement requires the defendant to pay $1 0,540.3 1 in restitution to five 
employees. In addition, the company agreed to perform a self-audit on apprentices and to 
voluntarily pay all other amounts due its employees. 

• Markings, Inc. and Stephen R. Stella . - The company and its president, Stephen R. 
Stella, entered into a settlement agreement to resolve allegations of prevailing wage 
violations. The company agreed to pay $150,633 in back wages to 44 current and former 
employees, 

• G.D. Sheehan Trucking, Inc. - G.D. Sheehan Trucking, Inc. entered into a settle- 
ment agreement to resolve allegations that truck drivers were not paid for travel time 
enroute to and from the Central Artery in 1997 and 1998 as required. The company 
agreed to pay $2,340 in back wages. 

• HusCo., Inc. - HusCo., Inc. entered into a settlement agreement to resolve allega- 
tions of failure to pay the prevailing wages. The owner agreed to pay $4,279 in restitu- 
tion to a former employee. 

• Castagna Construction - Castagna Constmction entered into a settlement agreement to 
resolve allegations of failure to pay the prevailing wage. The defendant agreed to pay $2,852 in restitu- 



42 



BUSINESS AND LABOR PROTECTION BUREAU 



tion and signed a settlement agreement regarding future conpliarK^ 

• GSP. Inc .- GSP, Inc. entered into a settlement agreement to resolve prevailing wage 
allegations. The company paid $6,401 in restitution to the employees and agreed to a 
voluntary six month debarment. 

• Griffin Electric - Wayne Griffin, the owner of an electrical contracting company, 
agreed to resolve prevailing wage allegations that arose from an improper calculation of 
benefits contributions. He agreed to correct this practice and make appropriate restitu- 
tion. 

• Andreassi Brothers, Inc. -Rocco and Richard Andreassi, president and treasurer, 
respectively, entered into a settlement agreement to resolve prevailing wage and over- 
time violations. They agreed to pay $5,989 in restitution to their employees and to 
comply with the prevailing wage laws. 

• Connecticut Valley Institute, Inc. d/b/a Charles River Hospital - Charles River 
Hospital and its president, Frederick J. Thacher, entered into a settlement agreement to 
pay wages to employees after the hospital closed in the amount of $147,500 and make 
40 IK contributions in the amount of $1 1,732.48. 

• Riverside Park - This amusement company entered into a settlement agreement to 
pay over $37,000 in overtime to year-round employees. 

DEBARMENTS 

Thirty-five (35) companies and individuals were debarred from public works as a direct result of the 
Division's enforcement efforts. The following list provides an overview of debarments obtained by FLBP 
in Fiscal Year 1999: 

• Caruso & McGovern Construction, Inc ., Gerald J. McGovem, President, and 
Steven J. Caruso, Treasurer, One Industrial Way, Georgetown, MA 01833 - debarred for 
a period of six months beginning July 17, 1998 through January 17, 1999. 

• Roy Lee, Jr. . 269 Stonyhill Road, Building G- 1 Apt. 1 09, Wilbraham, MA 1 095 - 
debarred for a period of one year beginning August 6, 1 998 through August 6, 1 999. 



43 



BUSINESS AND LABOR PROTECTION BUREAU 



• Francis A. Waterman , 97 Main Street. Cheshire. MA 1 225 - debarred for a period of 
six months beginning September 10, 1998 through March 10, 1999. 

• K & J Mechanical, Inc ., Adalgisa Donnellan, President, 9 1 Hibiscus Avenue, Weymouth, 
MA 02 1 88 - debarred for a period of six months beginning September 2 1 , 1 998 through 
March 2 1,1999. 

• Sentry Corporation and John T. Jacobus, President , 2 1 Fottler Road, Hingham, 
MA 02043 - debarred for a period of six months beginning September 24, 1998 through 
March 24, 1999. 

• Bremco, Inc.. and Reginald Morse. President . P.O. Box 1491, Claremont, NH 
03743 - debarred for a period of six months beginning October 8, 1998 through April 8, 
1999. 

• Lvnden G. Wright and Diane Wheatley d/b/a L&D Trucking , Bellingham MA, - 
debarred for a period of six months beginning October 16, 1998 through April 15, 1999. 

• GSP, Inc. , Gregory Pimenta, President, 140 Rear Fremont Street, Taunton, MA 02780 - 
debarred for a period of sk months beginning October 20, 1 998 through April 20, 1 999. 

• George Vasiiiades d/b/a Olympic Painting , George Vasiliades, President, 4 Samos 
Circle, Peabody, MA 01960 - debarred for a period of three years beginning October 19, 
1998 through October 19, 2001. 

• Northeast Sweeping & Disposal Corporation , Edward Crasco, President, 1 Porter 
Avenue, Revere, MA 02151 - debarred for a period of three years beginning November 
20, 1998 through November 20, 2001. 

• EMP Sweeping & Asphalt Paving Corporation . Deanna Zucchari, President, 20 
Production Road, Bay #8, Walpole, MA 02081 - debarred for a period of three years 
beginning November 20, 1998 through November 20, 2001 . 

• Arthur L. Norris . Jr., 2 Riverside Drive, Marblehead, MA 01945 - debarred for a 
period of six months beginning December 3, 1998 through June 2, 1999. 



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BUSINESS AND LABOR PROTECTION BUREAU 



• Noel St. George. Jr. . d/b/a NSG Trucking, 1 4 Meade Street, Coventry, RI 028 1 6 - 
debarred for a period of three years and two months beginning October 15, 1998 through 
December 20, 2001. 

• Frannv's Landscape Co., Inc., Francis A. Venuto, President, 8 Arlington Place, 
Framingham, MA 01702 - debarred for a period of three months beginning December 15, 
1998 through March 15, 1999. 

• Timothy Croft . Owner of Advanced Craftsman Co., 51 Tyler Road, Townsend, MA 
01469 - debarred for a period of six months beginning December 16, 1998 through June 
16, 1999. 

• Kingsberry Building Technologies, Inc .. and Charles J. Martin, President, 10 
Winship Drive, Wakefield, MA 01880 - debarred for a period of eighteen months begin- 
ning June 1, 1999 through December 1, 2000. 

• Skyline Contracting & Roofing, Inc. . and Lester Hooben, President, 399 Washing- 
ton Street, Taunton, MA 02780 - debarred for a period of six months beginning January 
1 2, 1 999 through July 12,1 999. 

• Amaral Excavating, Inc ., 17 Hammond Street, Somerville. MA 02145, and Daniel 
P. Amaral, President, 47 Governor Winthrop Road, Somerville, MA 02143 - debarred for 
a period of three years beginning February 3, 1999 through February 3, 2002. 

• JT&C Construction, Inc ., Josephine Cristaldi, President, and Angelo Cristaldi, 
Manager, 14 Appleton Street, North Andover, MA 01845, - debarred for a period of six 
months beginning January 1, 1999 through July 1, 1999. 

• J.C. Bostonian Enterprises, Inc .. 60 Winthrop Street, Roxbury, MA 021 19, - 
debarred for a period of one year beginning March 10, 1999 through March 9, 2000; and 
Richard Cox, President, debarred for a period of six months beginning March 1 0, 1 999 
through September 9, 1999. 

• Ji&G Electric, Inc. and Joseph O. Gauthier . President, 15 Atherton Circle, 
Lynnfield, MA 01940, - debarred for a period of six months beginning March 18, 1999 
through September 18, 1999. 



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BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth Trucking, Inc. , Matthew Connolly, President, 3 1 Taylor Street, North 
Quincy, MA 02 1 70, - debarred for a period of six months beginning March 22, 1 999 through 
September 2 1,1999. 

• Matthew Connoily , 3 1 Taylor Street, North Quincy, MA 02 1 70, - debarred for a 
period of three years beginning March 22, 1999 through March 21, 2002. 

• Diversified Contracting, Inc ., 192 Walnut Street, Dorchester, MA 02124 (former 
address), - debarred for a period of six months beginning April 5, 1999 through October 
4, 1999. 

• Richard F. Morello , 1 3 West Park Drive, Wakefield, MA 1 880, - debarred for a 
period of six months beginning April 15, 1999 through October 15, 1999. 

• Quality Insulation, Inc ., Joseph Jillson, President, 2 Industrial Road, Milford, MA 
01757, - debarred for a period of six months beginning April 26, 1999 through October 
26, 1999. 

• Dam Concrete Forms, Inc ., Michael L. Dormady, Operations Manager, 577 Circuit 
Street, Hanover, MA 02339, - debarred for a period of six months beginning April 27, 
1999 through October 26, 1999. 

• A.C. Equipment Co., Inc .. Angelo Ciardiello, President, 5 Collins Road, Wakefield, 
MA 01880, - debarred for a period of three months beginning May 15, 1999 through July 
15, 1999. 

• Finish Line Construction or any company owned by Michael Mullen, 52 Mahogany 
Run, Leominster, MA 01453-3485, - debarred for a period of six months beginning May 
18, 1999 through November 17, 1999. 

• Finish Line Construction or any company owned by David Angelli, Owner, 25 
York Terrace, Lynn, MA 01902, - debarred for a period of six months beginning May 18, 
1999 through November 17, 1999. 

• Sunrise Restaurant . Maria Fatima Carmo, Owner, formerly 982 Eastern Avenue, Fall River, 



46 



BUSINESS AND LABOR PROTECTION BUREAU 



MA, - debarred for a period of three years beginning June 1 0, 1 999 through June 1 0, 2002. 

• Bartholomew Mollov. 378 Centre Street, Dorchester, MA 02 1 24, d/b/a Molloy Excavat- 
ing, 79 EHot Street, Norwood, MA 02062, - debarred for a period of six months beginning 
June 15, 1999 through December 15, 1999. 

• Brentwood Construction and John Fein , President, 27 Fresh River Lane, Falmouth, 
MA 02540, - debarred for a period of six months beginning June 14, 1999 through De- 
cember 14, 1999. 

• Commercial Epoxy Flooring Co., Inc. , Robert Attenello, President, 23 Old Windsor 
Road, Bloomfield, CT 06002, - debarred for a period of six months beginning June 8, 
1999 through December 8, 1999. 

• George E. Frotton Trucking Co., Inc ., George E. Frotton, President, 1 16 Old 
Boston Road, Tewksbury, MA 01 876 - debarred for a period of six months beginning 
June 1 8, 1 999 through December 1 8, 1 999. 

OUTREACH EFFORTS 

OUTREACH AND EDUCATION INITIATIVES 

Outreach and education continue to be a priority for the Division. In May of 1 999, the Attorney 
General appointed a new Outreach Coordinator to expand the dialog with employers, employee groups 
and the community. The Coordinator acts as a liaison with the community, encouraging an open dialogue 
between FLBP, employers, and employees about their rights and responsibilities, as well as about the 
Division's enforcement efforts. Through proactive outreach and ongoing communication, the Division is 
able to both foster a higher level of understanding of the laws throughout the employment arena and better 
respond to issues as they arise in the field. The Division's Assistant Attorneys General and Inspectors also 
act as liaisons to the business and labor communities. They are available to answer questions and address 
concems relative to the Division's enforcement efforts and other responsibilities of the Office. 

SPEAKING ENGAGEMENTS/TRAININGS 



Since July 1 998, the Fair Labor and Business Practices Division staff has presented at numerous 
speaking engagements, seminars and conferences for business, labor and other concerned constituent 



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BUSINESS AND LABOR PROTECTION BUREAU 



groups including: 

Western Massachusetts Employer Association 

Boston University School of Public Health 

Chinese Progressive Association 

Massachusetts Bar Foundation 

Boston Bar Association 

Western Massachusetts Auditors 

American Payroll Association, Boston Chapter 

Labor Guild of Boston 

South Shore Chamber of Commerce 

Massachusetts Continuing Legal Education 

North Central Massachusetts Chamber of Commerce 

University of Massachusetts at Lowell 

Small Town Administrators Association 

Massachusetts Arborists Association 

Associated Industries of Massachusetts 

Utility Contractions Association ofNorth America 

City Solicitors and Town Counsel Association 

PaySTUBS 

Massachusetts Safety Council 

Massachusetts Camping Association 

Massachusetts Association of Municipal and Town Councils 

City of Somerville 

Tri-County Department of Public Works 

Massachusetts Association of Retarded Citizens 

Massachusetts Food Association 

Quincy College 

Emerson Hospital 

Massachusetts Bui Iding Trades Council 

Associated Builders and Contractors 

Northeast Payroll Conference 

Urban Schools Summit 

Massachusetts Certified Public Purchasing Official (MCPPO) Program 

Woman in Constmction 



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BUSINESS AND LABOR PROTECTION BUREAU 



FLBP HOTLINE 

FLBP staffs a Hotline in the Boston Office, providing information and taking complaints from the 
general public. Hotlme personnel include three intake clerks and a duty officer from the inspectional staff. 
The Hotline received over 82,000 telephone calls during Fiscal Year 1 999 and also directly assisted 
numerous walk-ins. This daily contact with the public is an important aspect of FLBP's education and 
outreach efforts. 

REGIONAL OFFICES 

In addition to the Boston Office, FLBP staffs four satellite offices. The Springfield Office operates full- 
time with four inspectors, a deputy managing attorney and a secretary. Offices in Worcester, Fall River, 
and Pittsfield are open one day a week and are staffed by experienced inspectors. These offices allow 
FLBP to assist workers and employers throughout the Commonwealth by providing them with direct local 
access to services and resources. When the satellite offices are not staffed, a call forwarding system in 
each of the part-time offices forwards calls to the Boston Office This service provides callers with imme- 
diate assistance and local access at no additional cost. 

CENTRAL REGISTER PROJECT 

FLBP regularly provides the Secretary of State with notice of debarments so that information can be 
published weekly in the Central Register notifying awarding authorities, general contractors and other 
interested parties. In addition, whenever a contract is open for bid or awarded, the Division sends award- 
ing authorities and contractors letters and information advising them of their rights and obligations under the 
prevailing wage law. 

PUBLICATIONS AND ADVISORIES 

FLBP issues a variety of publications detailing the wage and hour laws. These include brochures, 
posters, booklets, letters and advisories containing information to assist employers and employees throughout 
the Commonwealth. The Attorney General has also undertaken a translation initiative to make this litera- 
ture available in a number of languages. 

FLBP issued three comprehensive advisories this year addressing: the Small Necessities Leave 
Act; the Amendments to the Wage and Hour Laws; and Vacation Policies. 



49 



BUSINESS AND LABOR PROTECTION BUREAU 



INSURANCE FRAUD DIVISION 



INTRODUCTION 

The Insurance Fraud Division ("IFD") currently consists of eight Assistant Attorneys General, one 
Special Assistant Attorney General, one paralegal, and one secretary. The Insurance Fraud Division 
works in conjunction with other divisions in the Business & Labor Protection Bureau to investigate and j 
prosecute illegal activities that adversely aifect local businesses and fair competition. 

Members of the IFD are devoted to the investigation and prosecution of all types of fraudulent activity i 
perpetrated against insurers and public entities. The IFD's cases vary widely, and include multi-million 
dollar premium fraud cases, major conspiracies by medical and legal professionals, fraudulent schemes in 
auto repair businesses, staged motor vehicle accidents, inflated claims against homeowner's policies, and 
cases involving claimants working while collecting workers' compensation benefits. While many of the; 
targets and defendants tend to be private citizens, the IFD also prosecutes insurance agents, claims adjust- 
ers, and damage appraisers. 

The IFD receives referrals from a number of sources. The largest source of referred cases is the 
Massachusetts Insurance Fraud Bureau. In addition, the IFD receives referrals from the Human Re- 
sources Division, the Governor's Auto Theft Strike Force, the Department of Industrial Accidents, the 
Workers' Compensation Rating and Inspection Bureau, the National Insurance Crime Bureau, and the 
Social Security Administration. It is noteworthy that the IFD also receives many complaints and referrals 
from concerned citizens, private attorneys, clerk-magistrates, and judges. Clearly, this indicates that the 
Division's efforts in fighting insurance fraud are appreciated throughout the Commonwealth. 

HIGHLIGHTED EFFORTS & SIGNIFICANT ACTIVITIES 

The Insurance Fraud Division obtained charges in 47 new cases in Fiscal Year 1999 and closed 49 
cases. In addition, the IFD has approximately 80 cases currently under investigation and pending formal 
charges or indictments. Cases prosecuted include charges of workers' compensation fraud, motor vehicle 
insurance fraud, insurance fraud, as well as larceny, conspiracy, tax evasion, corporate bribery, home 
improvement fraud, and forger>'. New cases charged in Fiscal Year 1 999 include allegations that defen- 
dants obtained in excess of $ 1 ,432,591 in fraudulent insurance payments. The 49 cases resolved in Fiscal 
Year 1 999 resulted in orders requiring restitution payments totaling $256, 1 47. 1 6. 



50 



BUSINESS AND LABOR PROTECTION BUREAU 



SIGNIFICANT CASES 

MOTOR VEHICLE INSURANCE FRAUD 

• Commonwealth v. Charlayne Wilson and Charles Edekpayi (Middlesex and 
Norfolk Superior Courts) - Charlayne Wilson was an academic counselor at the North- 
eastern School of Criminal Justice. Working with Charles Edekpayi, she submitted 
motor vehicle insurance claims in connection with a series of 1 6 accidents involving two 
cars. According to the claims files, the same damage was reported in each successive 
claim. Wilson was indicted in both Norfolk Superior Court and Middlesex Superior 
Court on a number of charges, including motor vehicle insurance fraud, larceny over 
$250, and forgery. After consolidating those cases, she pled guilty and was sentenced to 
five years probation, suspended for two years and ordered to pay $13,489 in restitution. 
Charles Edekpayi was charged with larceny over $250, motor vehicle insurance fi-aud, 
and attempted larceny. He pled guilty and was sentenced to 2'/2 years in the House of 
Correction, suspended for 4 years and was ordered to pay $37,977 in restitution. 

• Commonwealth v. Scott Gaumond and Robert Newell (Suffolk Superior Court) -- 
Scott Gaumond and Robert Newell were indicted, along with three other co-defendants, 
following an investigation by the Insurance Fraud Bureau. The multiple insurance fraud 
charges against Gaumond and Newell resulted from their orchestration of and participa- 
fion in the filing of 12 falsified lost wage claims to insurance companies. In nearly all the 
cases, they represented to the insurance companies that as a result of motor vehicle 
accidents they lost wages from their jobs at a company called Able Industries, Inc. To 
corroborate these claims, they submitted fraudulent lost wage statements fi-om Able, 
falsifying salary, start date, and time lost from work. In addition, Gaumond submitted 
falsified tax returns and fraudulent IRS withholding forms to support his claims. 

Scott Gaumond entered guilty pleas to 3 1 counts of insurance fraud, motor vehicle insur- 
ance fraud, larceny over $250, and conspiracy. For the insurance fraud charges, he was 
sentenced to two years in the House of Correction and ordered to pay $ 1 5,000 in restitution. 
On the remaining charges, he was sentenced to 2 '/a years in the House of Correction, sus- 
pended for five years. 

Robert Newell also entered guilty pleas to multiple charges of motor vehicle insurance fraud, 
larceny over $250, and conspiracy. He was sentenced to IVi years in the House of Correction, 



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BUSINESS AND LABOR PROTECTION BUREAU 



suspended for two years and ordered to pay $ 1 4.600 in restitution. 

Both Gaumond and Newell, along with two other co-defendants, were indicted again 
during fiscal year 1999. They were each indicted on 26 counts of larceny over $250 and 
home improvement contractor violations for a pattern of defrauding elderly homeowners. 
The defendants allegedly defrauded eleven victims, ten of whom are over the age of 65, 
by charging them greatly inflated prices for home improvements that were far below the 
acceptable standards of quality. Of the ten victims over the age of 65, the average age at 
the time of the fraud was 80. 

• Commonwealth v. James J. Tello (Somerville District Court) ~ James Tello alleged 
that his car had been stolen from his residence. He then filed a theft report with the 
Medford Police department and a claim with his insurer. Metropolitan Insurance Com- 
pany. He was paid $5,904.46 as a result of that claim. An investigation revealed, how- 
ever, that Tello had concealed his vehicle at his place of business in Tewksbury prior to 
the date of the reported theft. He was charged with motor vehicle insurance ft-aud, lar- 
ceny over $250. filing a false theft report, and concealing a motor vehicle. He pled guilty 
and was sentenced to IV2 hears in the House of Correction, with 18 months to serve, the 
balance suspended for two years. He was also ordered to pay restitution in the amount of 
$7,200. 

• Commonwealth v. John Lennox (Wareham District Court) ~ John Lennox filed a 
motor vehicle insurance claim seeking personal injury protection benefits for wages lost 
as a result of an accident. However, the defendant was not employed at the time of the 
accident and, thus, his claim for lost wages was false. He was charged with motor ve- 
hicle insurance fraud and larceny over $250. A jury found him guilty on both charges. 
However, ruling that the statute only applies to theft or damage claims, the judge reversed 
the guilty finding for the motor vehicle insurance fraud charge. We have filed a notice of 
appeal to the Appeals Court seeking reinstatement of the conviction. 

• Commonwealth v. Wendv Home a/k/a Wendy Early (Springfield District Court) ~ 
WTiile Wendy Home was employed at the Monson Developmental Center in 1994, she 
reported a work related injury. After treating for a period of time with a physician, she 
was told that she could return to work and that she was no longer disabled. In order to 
continue collecting disability payments from her employer's disability insurer. Provident 
Life and Accident insurance Company, she forged her doctor's signature on a health care claim 



52 



BUSINESS AND LABOR PROTECTION BUREAU 



form which falsely documented disability. In addition, Horn forged her employer's signature on 
a wage and salary verification form in connection with an automobile accident, which she then 
submitted to the Commerce Insurance Company. Horn pled guilty to larceny over $250, motor 
vehicle insurance fraud, and attempted motor vehicle insurance fraud. She was sentenced to 
nine years probation and ordered to pay $7,200 in restitution. 

• Commonwealth v. Alan Viera (New Bedford District Court) ~ In order to fraudu- 
lently obtain money from the Plymouth Rock Insurance Company, Alan Viera and a co- 
defendant staged the theft of Viera's motor vehicle. Viera filed a stolen motor vehicle 
report with his insurance company. An investigation revealed that the theft was, in fact, 
staged and the insurance company denied the defendant's claim. He was charged with 
motor vehicle insurance fraud, conspiracy, and attempt to commit larceny over $250. 
Viera pled guilty and was sentenced to 2/4 years in the house of correction, suspended for 
three years with probation. In addition, he was ordered to pay $ 1 ,000 in restitution as 
reimbtirsement to the insurance company for the cost of their investigation. 

WORKERS' COMPENSATION FRAUD 

• Commonwealth v. Shelley Keirstead (Worcester Superior Court) - Shelley 
Keirstead began collecting temporary total workers' compensation benefits after report- 
ing that opening and closing the door of the school bus she was driving caused an injury 
to her shoulder. She was indicted after it was discovered that during this period of al- 
leged incapacity she was being paid for entertaining around the Worcester area as 
"Boom-Boom the Clown." In addition, it was discovered that during the same period she 
had been working as a personal care assistant for disabled adults. Keirstead was charged 
with workers' compensation fraud. She pled guilty and was sentenced to six months in 
jail, suspended for five years, and ordered to pay $20,000 in restitution. 

• Commonwealth v. Charles and Christine Caswell (Middlesex Superior Court) ~ Mr. 
Caswell reported a work related injury that he incurred while working for his family's business. 
He and his wife, Christine, submitted wage verification forms in which they grossly overstated 
the amount of his actual income. Charles Caswell claimed to have earned almost $90,000 a 
year. Mrs. Caswell, as treasurer of the corporation, verified the $90,000 income. In fact, his 
actual earnings were allegedly only $3,000 a year. Both were charged with workers' compen- 
sation fraud, insurance fraud, and larceny over $250. Due to the terminal illness of Mr. Caswell, 
the defendants were placed on pre-trial probation and ordered to pay $50,000 in restitution. 



53 



BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Dr. Robert Fitzgerald (Worcester Superior Court) — Robert 
Fitzgerald was a chiropractor in Clinton, Massachusetts who aided a patient in the filing 
of fraudulent workers' compensation claims. His patient, Federico Williamson, claimed 
he was injured while at work. Williamson treated with Dr. Fitzgerald for this alleged 
injury. Despite the fact that Fitzgerald had treated this patient in the past for the same 
injury sustained during a motor vehicle accident, he documented that the patient had no 
previous medical history or injuries. Based on these statements, the insurance company 
paid Williamson's workers' compensation claim. Dr. Fitzgerald was charged with 
workers' compensation fraud and larceny over $250. He was placed on pre-trial proba- 
tion for two years and ordered to pay $5,000 in restitution and $2,000 in fines. 

• Commonwealth v. Moses Kbreab (Ayer District Court) - Moses Kbreab, while a 
security guard at First Security Service, reported to supervisors and medical staff at a job 
site that he had sustained a head injury while ducking under a trailer. Kbreab collected 
$4,170.16 in total disability payments from his employer's workers' compensation 
insurer. Sentry Insurance. Sentry then canceled payments due to inconsistencies in 
Kbreab' s statements. However, soon after, Kbreab refiled his total disability claim with 
Sentry. Unbeknownst to both Sentry and First Security Service, during the period of time 
in which Kbreab was claiming total disability he ran the Cape Cod Marathon, the New 
Bedford Half-Marathon, and the Boston Marathon. He was charged with workers com- 
pensation fraud, larceny over $250, and attempted larceny. He admitted to facts suffi- 
cient for a finding of guilty and was sentenced to one year probation. He was ordered to 
pay full restitution in the amount of $4,170.16. 

• Commonwealth v. Thomas Lightbody - Thomas Lightbody sustained a laceration 
to his hand while working as a mason on the Central Artery Project. Investigation showed that 
during the time in which he was collecting workers' compensation benefits for this injury, he was 
also working and getting paid as a construction worker. Lightbody was sentenced to two years 
probation and ordered to pay $ 1 ,400 after pleading guilty to charges of larceny over $250 and 
workers' compensation fraud. 

• Commonwealth v. George Vinciguera - Vinciguera filed a claim for benefits after he 
suffered a fractured sternum as he was operating a front-end loader while working on the 
Central Artery Project. At the same time that Vinciguera maintained his claim of total disability, 
a private investigator observed him working at an apartment building moving ftimiture, mat- 



54 



BUSINESS AND LABOR PROTECTION BUREAU 



tresses, and debris. Vinciguera was charged with larceny over $250 and workers' compensa- 
tion fraud. His case was continued without a finding and he was ordered to pay $500 in 
restitution. 

• Commonwealth v. Hiram Ibanez -- Hiram Ibanez was working on the Central 
Artery Project as an apprentice carpenter. He claimed he had been injured when he 
slipped and dislocated his arm. He was paid total disability benefits for the injury. 
Meanwhile, investigator observed that Ibanez was working at a day care center at the same 
time he was collecting disability benefits. He was charged with workers' compensation fraud 
and larceny over $250. Ibanez admitted to sufficient facts and was placed on probation and 
ordered to pay $4,000 in restitution. 

OTHER SIGNIFICANT CASES 

• Commonwealth v. Michael Dow (Boston Municipal Court) — Michael Dow was an 
insurance agent and the owner of his own insurance agency in Boston and Framingham. 
He accepted insurance premium payments from clients and then converted those monies 
to his ovm use, while falsely telling the clients he had purchased their insurance. He also 
filed forged premium finance applications to a finance company and kept the proceeds of 
those loans. Dow pled guilty to 13 counts of larceny over $250 and agreed to surrender 
all of his insurance licenses and securities broker licenses. He was ordered to not reapply 
for such licenses for 10 years, to pay $25,000 in restitution and $20,000 in fines, and to 
perform 400 hours of community service. Finally, the defendant was required to partici- 
pate in a videotaped interview explaining the details of how he committed his crimes. 
That videotape will be used by the Office of the Attorney General in training programs 
and seminars on the subject of fraud by insurance agents. 

• Commonwealth v. Marc Laroque (Uxbridge District Court) - Marc Laroque was 
an insurance agent and office manager at the East Douglas Insurance Agency. Mr. 
Laroque forged a Certificate of Insurance for Perkins Trucking, a subcontractor of one of 
his clients, in order to artificially lower its workers' compensation premiums. This 
certificate was then given to Liberty Mutual during a 1996 workers' compensation insur- 
ance audit for Perkins Trucking, and relied upon in setting the workers' compensation 
rates. The defendant was charged with larceny, forgery, and uttering. He entered a guilty 
plea and was sentenced to one year probation and ordered to pay $500 in fines. 

• Commonwealth v. Ella Cox (Natick District Court) - Ella Cox was an insurance claims 



55 



BUSINESS AND LABOR PROTECTION BUREAU 



representative who defrauded Liberty Mutual Insurance Company by issuing unauthorized 
company checks to several of her relatives. Ms. Cox reopened claims which had been closed 
by the company and issued settlement checks in the names of her daughter, sister, and ten month 
old grandson. Her relatives cashed eight checks totaling $37,000. Cox was charged with 
forgery, larceny over $250, and attempted larceny. She pled guilty to these charges and was 
sentenced to two years in the house of correction, suspended for five years. In addition, she 
was ordered to pay $ 1 2,000 in restitution and perform 480 hours of community service. 

• Commonwealth v. Peter and Irene Dolnick (Dedham District Court) ~ Mr. and 
Mrs. Dolnick endorsed and cashed a series of total disability checks that were issued to 
Mr. Dolnick's mother. Mr. and Mrs. Dolnick failed to notify they insurer that the true 
recipient of the disability checks was deceased. Entitlement to workers' compensation 
benefits terminates at death and the recipient's estate is not entitled to further weekly 
benefits. Both defendants were charged with larceny over $250 and forgery. Peter 
Dolnick pled guilty and was sentenced to one year probation and ordered to pay $3,854 in 
restitution. Irene Dolnick's case was continued without a finding for nine months and she 
was ordered to pay $3,855 in restitution. 

OTHER EFFORTS 



• Commonwealth v. James N. Ellis, Jr., et. al (Worcester Superior Court) - A 
considerable amount of the time and effort of the IFD continues to be spent on the pros- 
ecution of James N. Ellis, Jr., Nicholas Ellis and other partners, employees and clients of 
the former Ellis & Ellis law firm of Worcester. During FY 1999, the following matters 
concerning the pending prosecutions were addressed. 

Defendants ' Motions to Dismiss Due to Lack of Disinterested Prosecutor — Superior Court 
Judge Robert Bohn, Jr. decision denying the defendants' motion to dismiss because of a lack of 
"disinterested" prosecutors was upheld by the Supreme Judicial Court of Massachusetts. This 
motion was based on the contention that, due to the nature of the funding of the IFD, its pros- 
ecutors are not "disinterested" and are, therefore, unconstitutionally biased. Judge Bohn 
rejected this argument, endorsed the funding mechanism as constitutionally sound, and found the 
prosecutors of the IFD unbiased. AAG Erin Olson successfully argued the appeal before the 
Supreme Judicial Court. The SJC unanimously upheld the denial of the motion to dismiss 
finding that there were no constitutional violations in the stamtory fiinding mechanism. 
Defendants ' Motion to Dismiss Due to Selective Prosecution - Judge Bohn denied the 



56 



BUSINESS AND LABOR PROTECTION BUREAU 



defendant's motion to dismiss based on the claim that they were the victims of selective pros- 
ecution because the IFD does not prosecute insurance companies, but only claimants against 
insurance companies. Judge Bohn held that the defendant had not made even a prima facie 
showing of selective prosecution and there was nothing improper in the prosecution of the 
defendants. 

Defendant 's Motion to Dismiss Due to Violation of Marital Privilege Before the 
GrandJury - Judge Bohn denied the defendant's motion to dismiss the indictments against 
former Ellis & Ellis client and employee, James Economou. Massachusetts Lawyers Weekly 
declared this one of the 20 most important decisions of 1 998. 

Defendant 's Motion to Suppress Identifications — After a three day evidentiary 
hearing, Judge Bohn also denied the defendants' motion to suppress die identification of two 
nurses that were employees of the firm. The nurses were identified by former clients as coach- 
ing them on how to exaggerate their injuries during independent medical exams. 

Defendant 's Motion to Change Venue ~ Judge Bohn also denied the defendants' 
motion to change venue of the trial from Worcester County to Suffolk County. The basis for 
their motion was that the jury pool in Worcester County had been tainted and biased by the 
news coverage of the indictments and criminal prosecution of the defendants. 

Defendant 's Motion to Suppress all Evidence Obtained During the Search -- The 
defendants filed a motion to suppress the evidence obtained during the search of the Ellis & Ellis 
law offices. They contend that the search warrant was overly broad and the evidence seized 
exceeded the scope of the warrant. The evidentiary hearing on this motion lasted nearly a 
month. We are still awaiting Judge Bohn's decision on the motion. 

Defendant 's Motion to Dismiss on Account of Prior Adjudication — The defendant James 
N. Ellis, Jr. filed a motion to dismiss his indictments in the Formoso/Milan case claiming that the 
prior dispositions before the Department of Industrial Accidents and in Federal District Court 
precluded the present criminal prosecution. Judge Bohn denied this claim. 

Commonwealth 's Motion for Protective Order — The Commonwealth filed a motion for 
protective order during two separate evidentiary hearings seeking to prevent the required 
production of investigators and expert's notes. In a written opinion. Judge Bohn allowed both 
motions and entered the protective order. 



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BUSINESS AND LABOR PROTECTION BUREAU 



• Commonwealth v. Gary Sbordone (Middlesex Superior Court) -- Judge Charles 
Barrett denied the defendant's Motion to Dismiss based on Commonwealth v. McCarthy 
and Commonwealth v. O'Dell groimds. Defense coimsel argued that the Commonwealth 
had not presented sufficient evidence to support the indictments and that the Grand Jury 
presentation was unfair and misleading. Judge Barrett found that there was ample 
probable cause to support the indictments and that there was nothing improper or mis- 
leading about the Grand Jury presentation. 

• Central Artery/Harbor Tunnel Project - The IFD continues to work with legal 
counsel and the administration of the Central Artery /Harbor Tunnel Project ("Project") in 
recognizing, reporting, investigating, and prosecuting insurance fraud associated with the 
Project. In FY 1999 the IFD charged and closed three cases of workers' compensation 
fraud by workers in the Project. A number of additional cases are currently under investi- 
gation and awaiting formal charges. 

• A gency Liaisons — The IFD has established ongoing relationships with a number of 
agencies and has designated Assistant Attorneys General to act as liaisons. The goal of 
these relationships is to increase state and federal cooperation in fraud cases. The follow- 
ing is the list of attorneys that are agency liaisons: 

Social Security Administration - AAG Erin Olson 
Board of Registration in Medicine ~ AAG Erin Olson 
Board of Bar Overseers - AAG Erin Olson 
Division of Registration - AAG Joshua Krell 
Division of Insurance ~ AAG Amy Sharff 
Division of Standards - AAG Brian Burke 
Human Resources Division ~ AAG John Crimmims 

• Repair Shop Registration Revoked - On February 24, 1 999, the Office of Con- 
sumer Affairs and Business Regulation revoked the repair shop registration of Mario 
Marenghi. AAG Brian Burke requested the revocation and argued at the hearing that 
arenghi and his shop engaged in a history of fraudulent accidents and claims for auto rentals. 

SPEAKING ENGAGEMENTS AND TRAININGS 



58 



BUSINESS AND LABOR PROTECTION BUREAU 



• Attorneys in the IFD participated in a number of speaking engagements and trainings 
throughout FY 1999. The following is a list of trainings and workshops that members of 
the IFD facilitated. 

Insurance Premium Avoidance Seminar — The Office of the Attorney General and 
the Insurance Fraud Bureau hosted a premium avoidance fraud seminar in Worcester. 
AAG John Ciardi and AAG John Crimmins were presenters to the many adjusters, 
attorneys, and investigators in attendance. 

Insurance Agent Fraud Seminar ~ AAG David Marks and AAG Amy Sharff were 
presenters at the Insurance fraud Bureau sponsored seminar on insurance agent fraud. 
AAG Sharff spoke about the Armand Arce case she prosecuted in FY98 and AAG 
Marks discussed the Michael Dow case. The seminar was attended by attomeys, insurance 
adjusters, and investigators. 

Licensed Private Detectives Association -- Annual Holiday Meeting — AAG Brian 
Burke addressed 150 licensed private detectives at their annual meeting at the 
Braintree Sheraton Tara Hotel. AAG Burke described the role of the IFD, as well as 
the ways in which this office develops cases for prosecution. He also discussed the 
issue of insurance company vendor fraud. 

Batterers Intervention Training Conference — In September, AAG Amy Sharff 
was a presenter at the Batterers Intervention Certification Training. This conference 
is affiliated with the Department of Public Health and is a certification program for trainers in 
batterers intervention. AAG Sharff spoke about the prosecution of domestic violence cases 
in front of attomeys, social workers, clergy, and others who provide intervention for 
batterers. 

Annual Attorney GeneraFs Office Domestic Violence Training -- AAG Amy 

Sharff spoke before 300 police officers, attomeys, and other members of the law 
enforcement community. The topic of her presentation was investigation and docu- 
mentation in cases of reported domestic violence. 

Harvard Trial Advocacy Workshop - In January, AAG Steve Thomas participated 
for a fifth time as a teaching team member in Harvard Law School's Trial Advocacy Work- 



59 



BUSINESS AND LABOR PROTECTION BUREAU 



shop. The workshop is an intensive three week course for second and third year students 
on preparing for and Htigating civil and criminal cases. 



DIVISION STATISTICAL SUMMARY 



NEW CASES CHARGED IN FY99 



Motor Vehicle Insurance Fraud 
Workers' Compensation Fraud 
Workers' Compensation Premium Fraud 
Other Insurance Fraud 
TOTAL 



16 

17 

3 

11 
47 



CASES CLOSED IN FY99 



Motor Vehicle Insurance Fraud 

Workers' Compensation Fraud 

Property Insurance Fraud 

Workers' Compensation Premium Fraud 

Other Insurance Fraud 

TOTAL 



26 

17 

1 

1 

A 
49 



MEDICAID FRAUD CONTROL UNIT 



INTRODUCTION AND CURRENT INITIATIVES 

The Massachusetts Medicaid program administers approximately $5 billion of healthcare services to 
over 700,000 members. It is a state-administered, federally financed, program that provides healthcare i 
for the indigent and disabled. 

The Attorney General's Medicaid Fraud Control Unit operates separately from the Medicaid program 
and prosecutes healthcare providers who commit crimes that adversely affect the Commonwealth's Med- 
icaid program as well as individuals who abuse, neglect, or mistreat elderly and disabled residents of the 
Commonwealth's 550 Medicaid fimded long term care facilities. 

Recognizing that Medicaid fraud is complex and costly to prosecute, the federal government provides i 



60 



BUSINESS AND LABOR PROTECTION BUREAU 



fimding for the Medicaid Fraud Control Unit's operation in every state. The Massachusetts Unit continues 
to aggressively pursue healthcare fraud as it sets the national pace in regards to the number of successful 
prosecutions and affirmative civil actions it produces. 

Consistent with its mission to conduct a state wide program for the investigation of healthcare fraud, 
the Medicaid Fraud Control Unit uses a "strike force" concept of investigators, auditors, nurses, pharma- 
cists and attorneys seeking to have a significant deterrent impact on those healthcare providers that de- 
fraud the Medicaid program. Through the extensive use of Special Grand Juries, as well as its statutory 
and regulatory discovery authority, the Unit has obtained convictions and recovered monies for the Med- 
icaid program exceeding the Unit's annual expenditures. 

During Fiscal Year 1 999, the Medicaid Fraud Control Unit brought both criminal and civil enforce- 
ment actions against nursing home owners, pharmacies, physicians, dentists, home healthcare companies, 
billing intermediaries, and other medical providers. These enforcement actions focused on providers that 
misrepresented to the Medicaid program the services they provided, inflated the costs of their services, 
provided medically unnecessary services, or violated Medicaid's anti-kickback laws. As a result, the Unit 
recovered $1 .4 million, completed 45 investigations, brought 24 indictments, obtained several convictions 
and initiated 69 new investigations. 

The Medicaid Fraud Control Unit also investigates hundreds of patient abuse incidents each year 
referred from the Department of Public Health as well as incidents involving sexual assaults, financial 
exploitation, and long term care facilities that knowingly provide substandard care. During fiscal year 
1999 alone, the Medicaid Fraud Control Unit investigated over two hundred cases, and brought several 
significant prosecutions against individuals that assaulted nursing home residents. The Unit obtained sev- 
eral convictions including the incarceration of a nurses aide for repeated abuse and assault of five elderly 
Alzheimer patients over a four month period. 

In addition, the Medicaid Fraud Control Unit investigates physicians and psychiatrists that prescribe 
controlled substances for non-medical reasons, not supported by medical diagnosis or necessity. The Unit 
investigates dentists and durable medical equipment companies for upcoding and unbundling their services. 
It investigates pharmacy chains and pharmaceutical companies that overcharge the Medicaid program and 
inflate the costs of prescription drugs. And, the Medicaid Fraud Control Unit investigates the relationships 
between physicians, hospitals, and laboratories to detect illegal referrals, kickbacks and conflicts with 
patient care. 

HIGHLIGHTED EFFORTS & SIGNIFICANT ACTEVITIES 



61 



BUSINESS AND LABOR PROTECTION BUREAU 



CRIMINAL/CIVIL PROVIDER FRAUD AND ANTI-KICKBACK CASES 

• Hyde Park and Medford Nursing Home Operator : Two nursing home corporations, its 
owner, treasurer and chief financial officer were sentenced in Suffolk Superior Court after 
pleading guilty to multiple felony counts of filing false Medicaid claims and larceny. The trea- 
surer and CFO were sentenced to one year in the house of correction, house arrest and placed 
on probation for four years and ordered to pay $ 1 00,000 in restitution. 

In a related civil disposition, the nursing home's owner and two other partners entered 
into a civil settlement agreement with the Attorney General's Office to repay an addi- 
tional $263,000 to the Medicaid program. As part of the civil settlement, all parties are 
permanently banned from owning nursing homes or participating as Medicaid providers with any 
long-term care facility in the Commonwealth. 

• Two Boston Dentists Settle Fraud Allegations : Two Boston dentists agreed to pay 
$300,000 in civil penalties and restitution to settle allegations of fraudulent abuse in their 
billing practices to the Medicaid program in connection with their dental practices in 
Lowell and Lawrence. 

The civil complaint alleged that from September 1994 through September 1998, the 
corporation's president and his partner billed Medicaid for more expensive services than 
they actually performed, misrepresented the services they provided and billed for services 
that are non-reimbursable through the Medicaid program. The complaint further alleged 
that the corporation allowed a dentist, a non-provider in the Medicaid program, to ille- 
gally bill her services through the company's group provider number. 
It was also alleged that neither the two defendants nor the corporation kept accurate 
records to report the reasons that their patients needed certain services that were covered by 
Medicaid. 

Under the terms of the settlement, one of the dentists will pay $140,000 and withdraw from 
participating in the Medicaid program for four months. Following the four month period, the 
dentist must submit an approved pre-treatment plan to Medicaid for the first six months after 
returning to the Medicaid program. 

The settlement requires the other dentist to reimburse $160,000 to the Medicaid program, 
on behalf of the corporation, for over billing that allegedly took place during the four year 



62 



BUSINESS AND LABOR PROTECTION BUREAU 



period. 

• Pharmacy Voluntary Disclosure/Amnesty Program : The Massachusetts MFCU 
recovered more than $450,000 as a part of an amnesty initiative involving hundreds of 
pharmacies that overcharged the Massachusetts Medicaid program for prescriptions. 

The Attorney General's "Voluntary Disclosure Program" began after a six-month investi- 
gation by the MFCU found that more than 600 Massachusetts pharmacies had charged 
the state Medicaid program full price for partially filled prescriptions and prescriptions 
that were ordered but never delivered. 

The MFCU investigators found that pharmacies were dispensing partially filled prescriptions to 
customers when they lacked sufficient stocks of a drug. After distributing the partial prescrip- 
tion, the pharmacies would tell the customers to come back for the remainder of their prescrip- 
tion the following day. 

In many instances, the recipients of the medication would not return, but the pharmacies' 
automatic computer billing system billed the Medicaid program the cost of the full prescription. 

In February 1998, near the end of the MFCU probe, all of the state's 1,100 pharmacies 
were notified in writing that they were required by state law to review and report any 
potential overcharges that may have occurred as a result of prescriptions billed to Medic- 
aid but not dispensed. 

• Jamaica Plain Dentist : A Jamaica Plain dentist will be prohibited from discriminat- 
ing against HIV patients and has agreed to pay $60,000 to settle discrimination and 
Medicaid fraud charges. 

As part of the discrimination case, the Jamaica Plain dentist and his office manager 
agreed to a consent judgment and a $20,000 penalty. The dentist also entered into a 
separate judgment in which he agreed to pay $40,000 in civil penalties and restitution to 
settle allegations of fraudulent billings to the Medicaid program. 

Under the terms of the consent judgment, the dentist and office manager are prohibited 
from retaliating against or mistreating HIV patients and the dentist will treat HIV positive people 
who have no dental insurance or whose dental insurance has run out, free of charge. The 



BUSINESS AND LABOR PROTECTION BUREAU 



program will be monitored by the HIV Dental Ombudsman Program of the Boston Public 
Health Commission and will equal 1 05 free visits. 

Of the $40,000 civil penalty and restitution, $20,000 will be paid to the Medicaid pro- 
gram, $1 1,550 will be distributed in the form of $150 each to the 77 Medicaid recipients 
that paid cash for an upgraded service, and $8,450 will be donated to the Battered Chil- 
dren and Women's Program at the Elizabeth Stone House in Jamaica Plain in the name of 
those Medicaid recipients who were entitled to a refund but could not be located. 

The case was coordinated by the Medicaid Fraud Control Unit and the Consumer Protec- 
tion and Antitrust Division. 

• Boston Dermatologist : A Boston physician was found guilty of Medicaid false 
claims after a two week jury trial in Suffolk Superior Court. The physician was con- 
victed of charges that arose from a state police undercover investigation that focused on 
the physician's prescribing habits. 

The physician was sentenced to one year probation and, as result of his convictions, the 
physician's license to practice medicine, which is currently suspended, is awaiting revocation 
proceedings at the Board of Medicine. The charges were the result of a multi-state/federal 
investigation by the MFCU, the State Police, the Boston Police Department, the Federal 
Bureau of Investigation's Healthcare Fraud Squad and the Drug Enforcement Administration's 
Drug Diversion Control Unit. 

• Methuen Nursing Home : The MFCU and a Methuen Nursing Home reached an 
agreement in which the nursing home will pay $125,000 to settle charges that the nursing 
home overcharged the Medicaid program and misrepresented the acuity level of patients in its 



The nursing home was a 4 1 bed long-term care facility in Methuen which provided nursing 
home care for individuals from the Greater Lawrence area. It closed at the end of August 1 996. 

The two count civil complaint alleged that the nursing home misrepresented the level of 
care it provided to its patients which resulted in the nursing home being reimbursed at a 
higher Medicaid rate. The complaint alleged that nursing home employees were instructed to 
rewrite documents resulting in misrepresentations of the amount of care the patients received. 



64 



BUSINESS AND LABOR PROTECTION BUREAU 



By using this scheme, the nursing home fraudulently received a higher rate of reimbursement 
from the Medicaid program. 

• Emergency Room Billing Services Global Settlement : An Emergency Room 
Billing Service agreed to repay $3.1 million in a national settlement for allegedly over- 
billing Medicaid, Medicare and other Federal programs for emergency room services. 
The Massachusetts' Medicaid program received $285,344 as a result of the settlement. 

The settlement was the result of a civil lawsuit filed in Oklahoma City by a former 
employee of the Oklahoma-based emergency room billing service. The litigation fo- 
cused on claims for services provided in 1 1 states -- Arkansas, Louisiana, Maryland, 
Massachusetts, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Texas 
and West Virginia - from 1992 to 1994. 

Emergency room services are billed to state and federal programs using five codes which 
describe the complexity of a patient's illness. The alleged over-billing occurred when the 
Emergency Room Services Company upcoded the severity of the services actually ren- 
dered. 

The Director of the Maryland MFCU and the Director of the Massachusetts MFCU 
coordinated the multi-state settlement efforts through the National Association of Medic- 
aid Fraud Control Units. 

• Marlborough Home Health Company : A Marlborough home health care company 
reimbursed the state's Medicaid program $195,000 to settle allegations related to its 
prescription drug billing practices. 

The home health care company entered into a settlement agreement with the MFCU to 
resolve charges that it over billed Medicaid for extra units of prescription drugs and billed 
Medicaid the full price for prescription products that were discounted by the manufac- 
turer. 

Instead of crediting Medicaid for the manufacturers discounted coupons on certain merchandise, the 
pharmacy allegedly profited by charging full price for the purchase of the marked down items. 
The company was also cited for allegedly billing for the wrong Medicaid recipients and for 
failing to have the proper documentation to support refills to certain recipients. In total, MFCU 



BUSINESS AND LABOR PROTECTION BUREAU 



investigators identified hundreds of situations where the pharmacy had allegedly billed Medicaid 
without producing valid documentation. 

• Medford Audiologist : A Medford audiologist paid $100,000 in restitution, penalties 
and damages to settle allegations that he overcharged the state's Medicaid program. 

Under the terms of the settlement agreement, filed with a civil law suit in Suffolk Supe- 
rior Court, the audiologist agreed to pay $100,000 in connection with his role as president 
of his Medford corporation for failing to pass on manufacturers' discounts that he re- 
ceived to the Medicaid program. The MFCU also alleged that the audiologist over- 
charged Medicaid for medical ear molds and accessories used in dispensing hearing aids. 

• New Jersey Pharmaceutical Company : A New Jersey pharmaceutical company 
that provides insulin delivery systems to Massachusetts' hospitals and pharmacies agreed 
to settle anti-kickback allegations. The pharmaceutical company paid $100,000 in goods 
and fines to resolve the allegations that the company's promotional practices violated the 
Massachusetts Medicaid anti-kickback law. 

The agreement requires that the pharmaceutical company pay a $ 1 0,000 fine and to 
distribute $90,000 of its patented insulin delivery systems, as well as insulin, free of 
charge to Medicaid recipients. 

The Attomey General conducted an investigation of the pharmaceutical companies promotional 
practices and alleged that the company instituted a "draft advantage" marketing program. The 
program offered rebates to independent pharmacists based on the volume of pharmaceutical 
company products that the pharmacist purchased. 

The Attomey General alleged that the cash refiands violated the state's Medicaid anti- 
kickback statute by offering rewards as an inducement to pharmacists to purchase the 
company's products. 

After being notified by the MFCU that the alleged practice was against the law, the 
company immediately discontinued its rebate program in Massachusetts and cooperated 
with the Attomey General's investigators. 

The pharmaceutical company also has agreed to develop a corporate compliance plan to review 
its national marketing program and to discontinue those promotional practices that violate state 



66 



BUSINESS AND LABOR PROTECTION BUREAU 



and federal laws. The company will distribute insulin and insulin delivery systems to Massachu- 
setts state hospitals and the Massachusetts General Hospital. 

• Salisbury Nursing Home : The Massachusetts MFCU reached a civil settlement 
agreement with a Salisbury nursing home's operator to remedy problems identified with a 
bank account for the facility's residents' personal needs allowance money. The nursing 
home corporation and its president paid a total of $2 1 ,600 in restitution, administrative 
fines, and costs of investigation. 

The MFCU investigation focused on the nursing home's management of the residents' 
bank accounts. Each nursing home resident in the Commonwealth receives $60 per 
month as an allowance for personal needs that can be spent by the residents in any way 
they see fit. The fiands usually are spent on such things as clothing, hair cuts or beauti- 
cian services or to attend social outings outside the facility. Many nursing homes manage 
these monies in a trustee bank account set up for the patients. 

The MFCU's investigation uncovered that on several occasions, the nursing home used 
the ftmds from the residents' bank account to meet business expenses at the facility 
amounting in essence to interest free loans. 

The settlement agreement also includes a compliance component to insure the proper 
administration of the account in the future. According to the terms of the agreement, the 
nursing home's president is required to bear the expense of conducting quarterly audits of 
the account by a certified public accountant. 

PATIENT ABUSE PROSECUTIONS 

• Wilmington Nurses Aide : A former nurses aide was sentenced to four to five years 
in state prison for abusing elderly residents at a Wilmington nursing home, including 
slapping, kicking and spitting on patients who lived at the facility. 

The aide also received a suspended two-year House of Correction sentence and three years 
probation on the patient abuse charges. After the aide was sentenced at Middlesex Superior 
Court, she was immediately imprisoned at MCI Framingham. 

The aide was convicted on seven counts of patient abuse and two counts of felony elder abuse. 
The aide physically and mentally mistreated five elderly patients under her care at the special 



67 



BUSINESS AND LABOR PROTECTION BUREAU 



Alzheimer's Unit at the Wilmington nursing home. 

Witnesses testified that the aide assaulted the five elderly residents, all of whom were 
over 80 years of age, on seven different occasions between October 1 997 and February 
1 998. The charges of felony elder abuse involved an incident in which another employee 
witnessed the aide forcing an 83-year-old female patient to eat her own feces and a second 
incident in which the aide was witnessed kicking and stomping on the crotch of an 8 1 -year-old 
resident resulting in severe bruising to the patient. The aide also slapped an elderly woman in 
the head and kicked her in the shins and, in another incident, pushed a patient out of her wheel- 
chair onto the floor, grabbed her arms and dragged her to her bedroom. 

The nurses aide was also convicted of other incidents of patient abuse including spitting directly 
into the face of a 92-year-old patient, pulling the hair of an 86-year-old patient, and assaulting 
an 87-year-old male resident. All of the victims suffered from severe medical conditions 
including Alzheimer's Disease and senile dementia. 

• Boston Nursing Home Security Guard : A former nursing home security guard pled 
guilty in Suffolk Superior Court to assault and battery on an elderly person. 
The security guard admitted to forcefully shoving a 77-year-old nursing home resident to 
the concrete pavement. The resident suffered a fractured left hip and a laceration to his 
forehead which required stitches. 

At the time of the incident, the security guard had been hired by the nursing home to 
protect the Roxbury facility. 

During unauthorized hours, the 77-year-old resident was smoking in a designated outside 
smoking area when the guard told him to put out his cigarette. When the resident at- 
tempted to put the cigarette to his lips, the guard grabbed the burning cigarette from his 
hands, threw it to the ground and crushed it with her foot. When the resident became 
agitated at the guard's actions, the guard grabbed his wxists, swung at him and forcefully 
shoved him to the ground. 

The guard was sentenced to one year of probation with the condition that she undergo 
anger management counseling. In sentencing the guard to probation, the court considered 
that the guard had served 35 days in jail after she had been arraigned and placed on bail. 



68 



BUSINESS AND LABOR PROTECTION BUREAU 



• Saugus Nurses Aide : A former nurses aide at a Saugus nursing home pled to suffi- 
cient facts on charges that he illegally restrained, neglected and harmed an Alzheimer's 
patient. 

The nurses aide restrained a 63 year old resident by binding him to his bed with a blanket that 
was tightly drawn across his chest and tied to the bed frame. Due to the alleged restraint, the 
patient was unable to sit up, turn to his side, or get up out of bed. The aide then left the 
patient's floor without checking on him for several hours. The patient was later found suffering 
from respiratory distress after inhaling his own vomit into his lungs. 

• Lynn Behavior Specialist : A former nursing home behavior specialist admitted to 
patient abuse and assault and battery in Lynn District Court. 

The behavior specialist admitted to forcefully shoving a 45-year-old nursing home patient 
at a Lynn nursing home. 

The resident had problems communicating effectively due to a severe traumatic brain 
injury and a history of drug abuse. He was known to play a game of "hide and seek" with 
the staff. The patient engaged in his form of "hide and seek" leading the defendant and 
another behavior specialist to search for him on the lower floor. After the defendant had 
called to the other employee indicating that he had found the patient, the other employee 
witnessed the accused forcefully grab the disabled patient by the arm and flipped him 
hard to the floor. 

The defendant was fired following the facility's investigation and the court placed the 
defendant on supervised probation for one year. 

• Ludlow Nurse : A Ludlow nurse admitted in Holyoke District Court that she struck 
an 85 year old man in the face at a local nursing home. 

The nurse admitted to sufficient facts to support a finding of guilty to one count of patient 
abuse and one count of assault and battery. 

The Ludlow nurse was a Licensed Practical Nurse (LPN) at the Mount Marie Health Care 
Center in Holyoke when she struck an 85 year old male patient, who suffered from dementia, in 
the face. Two Certified Nurses Aides witnessed the incident and notified the Director of 



69 



BUSINESS AND LABOR PROTECTION BUREAU 



Nursing. The LPN admitted to the nursing home administrator that she slapped the resident. 
The court sentenced her to one year probation. 

DIVISION STATISTICAL SUMMARY 

STATISTICAL SUMMARY 

Formal Investigations Initiated 69 

Investigations Completed and Closed 45 

Individual Indictments 24 

Convictions 9 

PATIENT ABUSE/NEGLECT CASES 

Abuse & Neglect Referrals 568 

Abuse & Neglect Investigations 252 

Total Criminal Complaints & Indictments 8 

Prosecutions Completed and Closed 5 

Individuals Convicted 5 

Pending Prosecutions 1 9 



CIVIL/CRIMINAL FINANCL\L RECOVERIES 



Number of Civil Recovery Cases 
Civil Recovery 


17 

$1,267,271.54 


Number of Criminal Recovery Cases 
Criminal Recovery 


3 
$100,185.00 


Total Recovery 


$1,367,456.54 


TASK FORCES AND OUTREACH EFFORTS 





70 



BUSINESS AND LABOR PROTECTION BUREAU 



Recognizing that the vast majority of healthcare providers in the Commonwealth are eager to provide 
quality healthcare, the Massachusetts Medicaid Fraud Control Unit has continued to educate the provider 
community regarding Medicaid program regulations, their application to fraud alerts and the use of effec- 
tive corporate compliance plans. In pursuit of those providers that operate outside legal boundaries, the 
Medicaid Fraud Control Unit has participated with several enforcement associations. 

The National Association of Medicaid Fraud Control Units initially was conceived and founded in 
1 978 as a means by which the Medicaid Fraud Control Units could provide health care fraud training to 
investigative personnel, and thus comply with federal requirements. In the early 1 980' s there was little 
emphasis placed on health care fraud and few programs that offered any kind of health care fraud training, 
let alone that which was specific to the highly regulated Medicaid program. Training has continued to be 
the organization's most important and time-consuming function over the years, and increasingly has be- 
come more sophisticated and professional. The National Association of Medicaid Fraud Control Units 
has offered approximately 70 training programs altogether, sponsoring or co-sponsoring seven in 1 998 
alone. The Unit directors meet regularly to discuss emerging trends in fighting healthcare fraud. In con- 
junction with the Federal Department of Justice, the National Association of Medicaid Fraud Control 
Units has brought several prosecutions against healthcare corporations resulting in millions of dollars re- 
turned to the Medicare and Medicaid programs nationwide. 

The Northeast Healthcare Law Enforcement Association consists of chief investigators from Medicaid 
Fraud Control Units in New England, and those from New York and New Jersey, the Massachusetts 
State Police Diversion Investigative Unit and federal law enforcement agencies, including the Drug En- 
forcement Administration, the Federal Bureau of Investigations, the Internal Revenue Service and the 
Office of the Inspector General. The group shares investigative strategies, develops joint state/federal 
health care fraud investigations and prosecutions, and sponsors quarterly training programs. 

The Medicaid Fraud Control Unit 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 enforcement, including the sharing of investigative resources to develop com- 
prehensive prosecutions. 

The Medicaid Fraud Control Unit's Chief Investigator meets with representatives from the Bureau of 
Special Investigations, the agency within the Executive Office of Public Safety responsible for the investigation 
of frauds committed by Medicaid's members, to discuss welfare fraud and inter-agency investigations. 

The Medicaid Fraud Control Unit also coordinates enforcement actions with representatives from 
the Division of Registration's Health Care Fraud Unit, the agency responsible for bringing complaints 



71 



BUSINESS AND LABOR PROTECTION BUREAU 



against health care professionals before various professional licensing boards seeking license suspensions 
or revocations. 

The Medicaid Fraud Control Unit's Patient Abuse Investigative Team coordinates with officials from 
the Department of Public Health to discuss the investigation and prosecution of nursing home owners that 
fraudulently bill Medicaid for substandard care and individuals who abuse, neglect and mistreat residents 
of long term care facilities. 

The Medicaid Fraud Control Unit's Pharmacy Coordinator provides training opportunities to the 
state's registered pharmacists instructing and educating them on the Medicaid Fraud Control Unit's phar- 
macy enforcement program and the latest trends, laws, and regulations affecting the pharmacy community. 

The Medicaid Fraud Control Unit meets quarterly with the New England Anti-Fraud Association, 
which consists of private insurance health care fraud investigators, and also meets monthly with the Divi- 
sion 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. 



72 



CRIMINAL BUREAU 

i\ppELLATE Division 

Criminal Investigations Division 

Environmental Crimes Strike Force 

Economic Crimes Division 

Financial Investigations Division 

High Tech and Computer Crimes Division 

Public Integrity Division 

Safe Neighborhood Initl\tive 

Special Investigations and Narcotics Division 



CRIMINAL BUREAU 



Criminal Bureau 



The mission of the Criminal Bureau is to protect the citizens of the Commonwealth and advance the 
law enforcement priorities of the Attorney General through the prosecution of individuals who violate state 
criminal laws, particularly in the areas of computer crime, economic crime, environmental crime, narcotics 
violations, and public corruption. In addition to prosecuting significant cases, the Criminal Bureau devel- 
ops criminal justice policy, establishes on-going partnerships with communities and law enforcement through- 
out the Commonwealth, and provides training and assistance to state and federal agencies. The Bureau is 
comprised of highly-specialized legal teams, forensic experts, and individuals who serve as resources both 
within the Office of the Attomey General and to prosecutors, law enforcement agents, and members of the 
public throughout the Commonwealth. 

The Criminal Bureau is organized into ten divisions, each of which reflects an area of specialization and 
expertise: 1) Appellate; 2) Criminal Investigations; 3) Economic Crimes; 4) Environmental Crimes Strike 
Force; 5) Financial Investigations; 6) High-Tech and Computer Crimes; 7) Public Integrity; 8) Safe Neigh- 
borhood Initiative; 9) Special Investigations and Narcotics; and 1 0) Victim/Witness Assistance. 

Assistant Attomeys General in the Criminal Bureau who serve as trial lawyers represent the Common- 
wealth in criminal prosecutions throughout the state, primarily in the areas of computer crime, economic 
crime, environmental crime, narcotics violations, and public corruption. On the appellate side. Assistant 
Attomeys General conduct post-conviction proceedings, including representing the Commonwealth in 
appeals of criminal convictions, and defending against federal habeas corpus challenges to state criminal 
convictions. Appellate attomeys also appear on behalf of state officials, members of the judiciary, pros- 
ecutors, and other law enforcement agents named as defendants in state and federal civil suits generated by 
prisoners. Assistant Attomeys General in the Bureau further serve the public by responding to inquiries 
and complaints on myriad issues from citizens, reviewing extradition documents from executive officers of 
the 50 states, and sponsoring and participating in training programs on criminal justice issues. 

An important component of the Criminal Bureau has been the Safe Neighborhood Initiative (SNI), a 
collaborative community prosecution effort among the Office of the Attomey General, the Boston Police 
Department, the Mayor of Boston's Office, the Suffolk County District Attorney's Office, the U.S. Attorney's 
Office, and community residents. During the past six years, the SNI has been found to reduce crime, 
increase economic stability, and improve the quality of life in the neighborhoods where it has been estab- 
lished. The SNI operates on a community prosecution model now in place in Dorchester, Roxbury, 
Chelsea, Brockton, Taunton and Montague-Turner's Falls. 



73 



CRIMINAL BUREAU 



In addition to combating urban violence and reducing crime. Attorney General Reilly's other law 
enforcement priorities include protecting families, children and the elderly, and fighting High Tech Crime 
and fmancial fraud. The resources of the Criminal Bureau are continually channeled in ways that further 
these priorities. 

The Chief of the Criminal Bureau is Gerard T. Leone, Jr., formerly Deputy First Assistant District 
Attorney in Middlesex County. Kurt N. Schwartz, Deputy Bureau Chief, is a veteran prosecutor and 
former police officer in the Commonwealth. Mark D. Smith serves as Senior Litigation Counsel. 

The Division Chiefs and Directors within the Criminal Bureau are: Appellate Division, Pamela L. Hunt; 
Criminal Investigations Division, Detective Lieutenant Mark Delaney; Economic Crimes Division, Carol 
A. Starkey; Environmental Crimes Strike Force, Martin E. Levin; Financial Investigations Division, Paul 
Stewart; High-Tech and Computer Crimes Division, T. Gregory Motta; Public Integrity Division, James H. 
O'Brien; Safe Neighborhood Initiative, Susan Spurlock; Special Investigations and Narcotics Division, 
William T. Bloomer; and VictimAVitness Assistance, Kathleen Morrissey. During a significant part of 
FY99, Jeremy Silverfme served as the Public Integrity Division Chief, and Massachusetts State Police 
Captain John D. Kelly served as the commanding officer of the Criminal Investigations Division. 

The Criminal Bureau also has two Bureau Attomeys. Mary A. Phillips, Bureau Attorney for Training 
and Administration, coordinates the Attorney General's grand jury process throughout the Common- 
wealth, develops training programs for the Criminal Bureau, serves as the 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, produces the : 
Law Enforcement Newsletter, serves as Co-Chair of the Diversity Committee for the Office of the Attor- 
ney General, and is a member of the Supreme Judicial Court's Standing Committee on Substance Abuse. 

Currently, there are 43 prosecutors, seven fmancial investigators, 1 2 support staff, two victim witness 
advocates, and two program coordinators for the Safe Neighborhood Initiative. In addition, 29 members 
of the Massachusetts State Police are assigned to the Bureau to investigate criminal conduct in the Com-| 
monwealth. 



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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 
caseload includes appeals and post-convictions matters in criminal cases prosecuted at the trial level by the 
Attomey General's Criminal Bureau and from convictions of criminal contempt throughout the Common- 
wealth, all habeas corpus petitions filed in federal court that challenge Massachusetts convictions, parole 
surrenders, civil commitments, and renditions, and appeals in the First Circuit Court of Appeals from the 
denial or granting of habeas corpus relief The Division also engages in civil litigation defending judges, 
clerks, probation officers and other court personnel. District Attomeys, Assistant District Attomeys and 
other prosecutorial personnel sued civilly in state or federal court for actions taken during the criminal 
justice process. The Division defends the constitutionality of criminal statutes and challenges to statutes, 
court rules, practices and procedures concerning all aspects of the criminal justice system, represents the 
interests of prosecutors when subpoenaed to testify or provide documents in civil cases, supervises agency 
staff attomeys handling litigation involving the Department of Correction and the Parole Board, and handles 
appeals and federal court litigation concerning the Parole Board and Probation Department. 

The Appellate Division's caseload reflects the Attomey General's commitment to representation of the 
interests of the state's prosecutors in both criminal and civil arenas. Well over half of the cases handled by 
the Division during F Y99 concerned District Attorneys' offices in some way. Through centralization in the 
Appellate Division of all litigation concerning the state's prosecutors and all cases in the Office that affect 
the validity of convictions or impact the criminal justice system, the development of an amicus brief pro- 
gram and participation in other criminal justice initiatives, the Appellate Division plays a leadership role in 
the Commonwealth and is able to maximize 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 1 996 amendments to the federal habeas corpus statute has continued to result 
in a substantial increase in not only the number of petitions filed by Massachusetts prisoners, but also in the 
amount of work required to defend these cases. 

In addition to their case work, Division attomeys participate in and present training programs both for 
the Criminal Bureau and officewide, as well as provide assistance to otiier Criminal Bureau attomeys on a 
variety of matters, including investigations, motions, trials, post-conviction proceedings, and single justice 
actions. The Division also works closely with tiie District Attomeys' offices, especially their Appellate 
Divisions, in identifying and acting as a clearinghouse on criminal law issues of statewide importance and 
interest. 



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CRIMINAL BUREAU 



During FY99, the following attorneys and support personnel were assigned to the Appellate Division 
for part or all of the year: Annette Benedetto, AAG; William Duensing, AAG; David Edmonds, AAG; 
Bonny Gilbert, AAG; Ellyn Lazar, AAG; Susanne Levsen, AAG; Gregory Massing, AAG; William Meade, 
AAG; CathrynNeaves, AAG; Kenneth Steinfield, AAG; Catherine Sullivan, AAG; William Weinreb, 
AAG; Pamela Hunt, AAG and Division Chief; Daneka Barbour and Kelli Murray, support staff. 

CASE STATISTICS 

CASES HANDLED 

During Fiscal Year 1 999, Appellate Division attorneys handled 603 cases, 1 5% fewer than in receif 
years, but still over 40% greater than the number of cases handled in F Y92. Over 3 1 2 new cases were 
opened and 253 were resolved during the year. Over the last eight years, there has been an increase in 
every kind of case handled by the Division. 

The number of new cases has remained constant for the last seven years despite the fact that during 
that time increasing numbers and types of cases have been referred to agency counsel to handle under the 
supervision of the Appellate Division. The 3 1 5 new cases opened in FY99 is nearly a 1 00% increase over 
the 161 new cases opened in FY91 . In addition, in FY99, 171 cases were referred by the Appellate 
Division to agency counsel at the Department of Correction or the Parole Board who defend these cases 
as Special Assistant Attorneys General, as well as to the District Attorneys, or the various sheriffs' depart- 
ments. 

The following is an outline of the case activity for the Appellate Division for FY99: 





Cases Opened 


Cases Disposed 


Total Cases Handled 


A. Federal Habeas 


146 


104 


300 


B. Federal Civil 


22 


18 


41 


C. State Civil 


35 


55 " 


113 


D. State Habeas 


20 


34 


51 


E. Criminal 


84 


32 


82 


F.G.L.c.211§3and 


5 


5 


5 


Other Single Justice Cases 






G. Other 


3 


7 


li 


TOTALS 


315 


255 


603 



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


years: 




FY 1999 


FY 1998 


FY 1997 


FY 1996 


FY 1995 


FY 1994 


FY 1993 


FY 1992 


Total Cases 


315 


360 


343 


344 


341 


307 


351 


222 


Opened 
Total Cases 


255 


365 


370 


406 


515* 


213 


282 


206 


Disposed 
Total Cases 


603 


721 


715 


778 


747 


652 


649 


428 


Handled 



















* INCLUDES 125 OLD CASES. 

APPELLATE BRIEFS AND MAJOR SUBSTANTIVE FILINGS 

During FY99, the Appellate Division filed over 45 appellate briefs in the United States Supreme 
Court, Court of Appeals for the First Circuit, Supreme Judicial Court and Massachusetts Appeals Court. 
Two briefs were written at the request of the United States Supreme Court in opposition to petitions for 
certiorari in federal habeas corpus cases. After briefing, certiorari was denied in both cases. 

Nine briefs were filed in the United States Court of Appeals for the First Circuit, all in federal habeas 
corpus cases. Twelve briefs were filed in the Supreme Judicial Court in a variety of criminal and civil cases 
including the constitutionality of the DNA database statute; interpretation of immunit>' provisions of the 
Massachusetts Tort Claims Act; the burden of proof of criminal responsibility; proper procedures when a 
clerk magistrate denies an application for criminal complaint; whether trial and appellate courts may im- 
pose a nominal filing fee for filing civil lawsuits upon inmates who can afford to pay; constitutionality of 
arraignment procedures in Plymouth County; whether a state court can order police to return to a criminal 
defendant money that had been forfeited in federal proceedings; whether a person charged with failing to 
pay child support may be extradited; and the Commonwealth's appeal fi-om a verdict that an individual 
was no longer sexually dangerous. The 1 9 briefs filed in the Appeals Court primarily involved appeals 
fi-om criminal convictions, but also concemed state civil and habeas corpus cases on such issues as the 
powers and authority of the Parole Board in determining parole eligibility, civil motor vehicle violations and 
civil rights actions brought against state prosecutors. 

The Appellate Division continued its practice of filing amicus briefs on behalf of the Attorney General 
in cases having broad impact and importance to the criminal justice system, consistent Vtith the Attorney 
General's statutory responsibility as the chief law enforcement officer of the Commonwealth. To that end, 
three amicus briefs were filed in the state appellate courts in F Y99. One brief was written in response to 
the Supreme Judicial Court's request for special briefing on whether the court should retain the "presump- 



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tion of sanity" or alter the method by which cases involving the insanity defense should be tried, and the 
constitutional implications of such a change. Amicus briefs were also written in cases involving the proper 
procedure by which a criminal defendant may seek to correct a sentence, and the statutory construction 
and application of the sentence structure under the home invasion statute. 

The Appellate Division also prepares and files lengthy substantive memoranda in opposition to peti- 
tions for habeas corpus relief, in support of motions to dismiss or for summary judgment in civil cases or 
trial and post-trial proceedings in criminal cases, most of which are the equivalent of full appellate briefs. 
During FY99, in addition to appellate briefs. Division attorneys filed 1 56 substantive legal memoranda; 89 
were filed in federal habeas corpus cases and 67 in other civil and criminal cases. 

RENDITIONS 



Attorneys from the entire Criminal Bureau, at the request of the Governor's office, render opinions to 
the Governor on the legal sufficiency of applications for the Govemor's warrants sought by other states, as 
well as requests by Massachusetts District Attomeys, the Department of Correction and the Parole Board 
to rendite fiigitives to Massachusetts. From July 1, 1998, through June 30, 1999, 151 cases were re- 
viewed. Criminal Bureau attomeys also handle the habeas corpus cases brought by an individual challeng- 
ing the validity of a Govemor's warrant in the state and federal trial and appellate courts, and coordinate 
extradition of the fugitive of the requesting state. 

CASE HIGHLIGHTS 

HISTORY 



The Division's caseload has changed over the last eight years. Since 1 99 1 , there has been a substan- 
tial increase in criminal and federal habeas corpus cases, and the Division has transferred much of its civil 
litigation, primarily involving prisoners, including Treatment Center litigation and annual petitions for release 
from the Treatment Center, and appeals in unemployment benefit cases, to the Government Bureau or to 
agency counsel at DOC or the Parole Board. The Division only handles these types of cases when a novel 
or substantial issue is involved. The Division has retained those civil cases which directly or indirectly 
involve challenges to criminal convictions, the actions of those in District Attorneys' offices or the criminal 
justice system, and has taken over handling other similar cases which were previously handled in the 
Government Bureau, including some State Police and Public Safety cases. 



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In a number of areas, including expungement motions in criminal cases and matters where members of 
a District Attorney's office are subpoenaed to provide documents or testimony in civil cases, the Division 
has worked to develop the legal principles and establish the law. These cases, however, have become so 
prevalent that it became necessary to transfer them to the District Attorneys or the Probation Department. 
The Division continues to represent the District Attorneys' offices in federal court cases. 

FEDERAL HABEAS CORPUS 

One of the Appellate Division's primary missions is representing the Commonwealth's interest in fed- 
eral habeas corpus cases challenging state criminal convictions and custody. These cases represent ap- 
proximately 50% of the Appellate Division's caseload and require a substantially high percentage of the 
attomeys' time. Most cases require the filing of lengthy and complex memoranda and occasionally, evi- 
dentiary hearings are held in federal court in these cases. 

During the course of the fiscal year, the Appellate Division carried 300 federal habeas cases, a number 
well exceeding those handled in previous years. In the last decade, the Attomey General's Office has seen 
a 400% increase in the number of federal habeas corpus cases filed. For example, in FY87, only 30 new 
federal habeas corpus cases were handled by six staff attomeys and a Division Chief, compared to the 1 46 
new cases handled by nine staff attomeys and a Division Chief in FY99. 

The April, 1 996, amendments to the federal habeas corpus statute remain largely responsible for the 
increased number of cases. The number of new federal habeas filings has continued to rise in FY98 and 
FY99 where the approximately 1 50 new cases that were filed in each of those years reflect more than a 
30% increase over FY97, the first fiill fiscal year after the new law went into effect, and a 78% increase 
over the number of cases filed prior to the amendments. 

The Division has been particularly successftil in defending against habeas corpus challenges. In the last 
eight years, only four cases from over 765 disposed were ultimately unsuccessful from the Commonwealth's 
perspective. The habeas corpus cases handled by the Division involve challenges to a wide variety of state 
court convictions obtained throughout the Commonwealth, including a number of first degree murder and 
other high profile cases. Most of the Division's federal habeas cases also continue to involve the interpre- 
tation and application of the substantial revisions to the statute and in FY99, the Division successfully 
litigated several important cases involving the various provisions of the new federal statute, and its applica- 
tion to Massachusetts convictions. This year, the Division was successful in every federal habeas corpus 
case decided by the First Circuit. In two cases, one involving a Worcester County murder conviction from 
the 1 970s, and the other involving a Hampden County rape conviction, the Division was successful in 



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convincing the First Circuit to reverse orders of District Court judges that would have issued the writ and 
required new trials. In a third case, the Division won reinstatement of a Suffolk County murder conviction 
Another case involved the successful defense of an attack on the constitutionality of the new juvenile court 
jurisdiction statute applicable to murder cases. 

STATE HABEAS CORPUS CASES 

During F Y99, the Appellate Division handled 5 1 state habeas corpus actions by prisoners seeking 
immediate release from confinement in such matters as challenges to validity of governor's warrants and 
extradition, challenges to criminal convictions, claims that parole surrenders were unlawful, and attacks on 
civil commitments to the Treatment Center. 

In one state habeas corpus case, on behalf of the Parole Board, the Division successflilly appealed an 
adverse ruling by a Superior Court judge concerning the calculation of parole eligibility for sentences that 
have mandatory minimum and non-mandatory terms. In another case, the Division convinced the court to 
reject a challenge to the statute concerning sentencing and incarceration of juveniles convicted of murder. 
In a third case, a matter of first impression in Massachusetts, the Supreme Judicial Court agreed with the 
Division's arguments that permitted extradition of a man charged in Oregon with failing to support his minor 
children for prosecution in that state. 

STATE AND FEDERAL CIVIL CASES 



The Appellate Division handled 41 federal civil matters, which primarily involved civil rights actions 
brought against state prosecutors, public defenders, judges and other criminal justice system officials, and 
actions against the Parole Board by inmates denied parole. Despite the variety of defendants and claims, 
Division attorneys were successful in obtaining dismissals prior to any time-consuming and burdensome 
discovery. Several cases involved representation of prosecutors who were subpoenaed to testify or 
produce their investigative or trial files, or cases where the integrity or validity of state criminal prosecutions 
were at issue. In one case, we successfully resisted the efforts of a federal postal supervisor charged in 
Bristol County with assaulting a female employee to remove the criminal prosecution from state to federal 
court. 

The Appellate Division's state civil caseload of 1 1 3 cases include appeals in all cases handled at the 
trial court level by agency counsel at the Parole Board which challenge Parole Board practices, policies 
and decisions, while 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. The Division 



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CRIMINAL BUREAU 



also actively seeks to prevent collateral attacks on criminal convictions in cases where defendants bring 
civil or tort claim actions against prosecutors, courts, and witnesses for their actions relating to prosecu- 
tions, and has intervened on behalf on the various District Attomey offices to stay civil proceedings until 
related criminal cases are concluded, or to oppose efforts by criminal defendants seeking the return of 
money or property subject to forfeiture proceedings. 

During F Y99, the Appellate Division, along with the Government Bureau, successfully defended a 
number of cases which made various constitutional challenges to the state's statute creating a DNA data- 
base. We convinced the Supreme Judicial Court to vacate an injunction which had halted implementation 
of the statute, and to find the statute constitutional. In another case, involving the Tort Claims Act relating 
to actions of a state prosecutor, the Division was successful in convincing the SJC to reverse the trial court 
and also to declare that the Commonwealth can take an immediate appeal from an adverse ruling on an 
immunity defense. In another case, where the Commonwealth appealed from a jury verdict that an indi- 
vidual ^^'as no longer sexually dangerous, the Supreme Judicial Court agreed that the Commonwealth can 
take such an appeal, but rejected our argument that the judge's instructions precluded the jury from con- 
sidering extensive evidence of the petitioner's sexual misconduct. 

CRIMINAL CASES 

The majority of criminal cases handled by the Appellate Division are appeals fi-om criminal convictions 
in prosecutions brought by the trial divisions of the Criminal Bureau. The number of cases handled this 
year, 82, continues to reflect the volume of the Criminal Bureau trials and convictions. The Division also 
represents the Commonwealth when a defendant petitions the United States Supreme Court for a review 
of a state conviction and handles all appeals fi-om trial court judgments of summary criminal contempt. 

During F Y99, the Division handled criminal appeals fi-om convictions or fi-om the denial of motions for 
i a new trial in a variety of cases including narcotics, arson, tax evasion, election law violations, and larceny 
and fi-aud. Most of the Division's criminal cases were successful, although the Appeals Court ordered a 
new trial in a narcotics case and remanded a tax prosecution to the trial court for additional findings. In 
addition, the Appeals Court reversed a trial court fmding of summary contempt in one case and ordered a 
lesser sanction in another. In a case of first impression, the Division prosecuted a successful appeal from 
atrial court ruling that had ordered the State Police to retum $38,000 to a criminal defendant even though 
the money had already been ordered forfeited in federal proceedings. The Division's most significant 
criminal case was the first degree murder conviction for the 1 995 murder of Assistant Attomey General 
Paul R. McLaughlin. The Appellate Division Chief worked jointly with Special Prosecutor Thomas Brennan 
for nearly four years in the investigation, prosecution, and trial of that murder case which resulted in a 



81 



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conviction in May, 1 999. 

G.L. C. 21 1 §3 AND OTHER SINGLE JUSTICE MATTERS 

The Appellate Division handled a number of cases in the single justice session of the Supreme Judicial 
Court. These matters frequently involve representation of the courts and judges, in defense of some aspect 
of the criminal justice process or system. 

Among the cases handled in FY99 were the successful defense to challenges involving: the practice in 
Plymouth County of holding arraignments at the jail in order to save the various cities and towns the 
expense of housing and transporting arrestees who were unable to make bail after weekend arrests; a 
challenge to an order of immunity; litigation involving the role of a clerk's hearing and whether there is a 
right to appeal to a judge when a clerk magistrate denies the issuance of a complaint; the trial and appellate 
courts' powers to impose a reduced filing fee on a prisoner seeking to file or take an appeal in a civil case, 
where the prisoner has adequate funds in his prison account to pay the nominal fee; procedures under the 
state's bail statute; and matters concerning media coverage of a high-profile murder trial. 

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 Attorneys General Cathryn Neaves and William Duensing served on the 
National Association of Attorneys General (N AAG) working group on corrections and 
inmate litigation. 

Assistant Attorney General William Meade serves as a member of the Editorial Board 
of the Massachusetts Law Review . 

Assistant Attorney General Pamela Hunt is a member of the Massachusetts Sentenc- 
ing Commission and serves as chairperson of the Commission's Committee on Interme- 
diate Sanctions. AAG Hunt is also a member of the Supreme Judicial Court's Standing Advi- 
sory Committee on the Criminal Rules, and is on the NAAG Criminal Law Committee. She 
was appointed a member of the Criminal Justice Section Council of the Massachusetts Bar 
Association and Vice Chairperson of the Appellate Bench Bar Committee. 



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CRIMINAL BUREAU 



• Division attorneys are active members of the Commonwealth' s Appellate Attorneys Action 
Project and work closely with the District Attomeys' offices on matters of statewide interest 
and impact. 

• The Division has provided information on behalf of the Attorney General to the 
Parole Board and the Governor's Council relevant to their consideration of pardon, 
commutations, and parole decisions for those serving parole-eligible sentences. 

• Division attomeys actively participate in officewide initiatives such as the Abandoned 
Property Project and the Diversity Committee. 

SAAG SUPERVISION 

PAROLE BOARD 

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

DEPARTMENT OF CORRECTION 

Department of Correction attomeys, 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. Agency counsel handle petitions filed by sexually dangerous persons for discharge from 
the Treatment Center, while Appellate Division attomeys defend cases which attack the validity of original 
SDP commitment or the underlying criminal conviction. 

DISTRICT ATTORNEYS 



Whenever a District Attomey has a conflict of interest in an appellate case or in a case involving a 
parole hearing, the Commonwealth's interests are represented by either Assistant Attomeys General or by 



83 



CRIMINAL BUREAU 



an Assistant District Attorney who is designated a Special Assistant Attorney General and is supervised by 
attorneys in the Appellate Division. In addition, Assistant District Attorneys in Berkshire County are 
designated Special Assistant Attorneys General to handle challenges to renditions pursuant to governor's 
warrants in that county. 

COMMISSIONER OF PROBATION 

During F Y99, 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. 



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CRIMINAL BUREAU 



CRIMINAL INVESTIGATIONS DIVISION 



The Criminal Investigations Division provides the Criminal Bureau with highly trained and experienced 
investigators from the ranks of the Massachusetts State Police, as well as a core of civilian investigators. 
The Division investigates a variety of crimes, predominantly in the area of organized crime, narcotics 
trafficking, public corruption, firearm violations, money laundering, securities violations, tax fi^ud, com- 
puter crime, 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 in such areas as handwriting analysis and 
photography /video expertise. The Criminal Investigations Division has developed outstanding cooperative 
working relationships with many law enforcement agencies throughout the Commonwealth, as well as 
throughout the country. 

The State Police Unit assigned to the Criminal Bureau is commanded by Detective Lieutenant Mark 
Delaney; Lieutenant Steve Matthews serves as the Executive Officer. Lieutenant Frank Matthews oversee's 
the Public Integrity /Special Investigations unit in Boston. Lieutenant Joe Flaherty commands the High- 
Tech and Computer Crimes Division, and oversees the Springfield Special Investigations Unit run by 
Sergeant John Gibbons. Sergeant Rich Prior commands the Narcotics Unit with the assistance of Ser- 
geant Tom Coffee. Collectively, the State Police assigned to the Criminal Bureau bring over 1 00 years of 
investigative experience through a variety of backgrounds and experience. 

Several significant investigations have been initiated since January of 1 999. One in particular, which 
has kept the Office operating at a blazing pace, is the investigation into theft and corruption within the State 
Treasury. A Special Grand Jury is looking into the widespread corruption and theft of more than nine 
million dollars from the State coffers. Indictments from the first phase of the investigation are expected 
within the next several months. 

The High-Tech and Computer Crimes Division continues to lead the way in the Commonwealth through 
their assistance to other agencies and tiieir continued pursuit of hackers, child pomographers and Internet 
thieves. A recent e-mail bomb threat to the Secretary of State's office resulted in the arrest of an individual 
from the Leominster area. The threat was made by a disgruntled individual who threatened to blow up a 
state office building. A quick response by the High-Tech and Computer Crimes Division resulted in an 
arrest and search of the defendant's home by State Police bomb experts. 



85 



CRIMINAL BUREAU 



During FY99, the Criminal Investigations Division accomplished the following: 

Investigations 1 86 

Arrests 77 

Search Warrants 47 

Assistance to other Agencies 60 

Drug Money Seized $775,432.84 

Background Investigations 1 049 



ENVIRONMENTAL CRIMES STRIKE FORCE 

MAKING THE GOVERNMENT WORK TO PROTECT THE ENVIRONMENT 

The Massachusetts Environmental Crimes Strike Force, a collaborative effort of the Attorney Gen- 
eral, the Secretary of Environmental Affairs, Department of Environmental Protection, Environmental Po- 
lice, and State Police, continued to pull together available government resources in the service of enforcing 
the state's environmental laws. The Strike Force also worked with the U.S. Environmental Protection 
Agency and the U.S. Attomey's Office for the District of Massachusetts, pursuing joint state and federal 
environmental crimes investigations. The Strike Force's enforcement efforts included cases in Berkshire 
County, Middlesex County, and Worcester County. 

Fiscal Year 1 999 saw successful trials in the largest asbestos dumping case in the Commonwealth to 
date, and the first criminal prosecution for interfering with a hazardous waste site cleanup action pursuant 
to G.L. c. 2 IE. The Strike Force also won the Commonwealth's first criminal conviction of a public 
official for environmental violations. i 



During Fiscal Year 1 999, the Strike Force unit operating out of the Criminal Bureau of the Attomey 
General's Office opened investigations in 24 matters, and concluded 1 7 investigations. The Strike Force 
resolved cases against three defendants, convicting all. 

CRIMINAL CASE HIGHLIGHTS 

CASES INITIATED IN FISCAL YEAR 1999 

• Commonwealth v. Stepping Stone Realty, Inc. & James Harritv, Jr. : This real estate 
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CRIMINAL BUREAU 



company and its president were charged in Worcester District Court with violating state air 
pollution and solid waste laws in connection with the renovation of a residential property in 
Worcester. The defendants allegedly operated an unpermitted asbestos removal project in the 
basement of the residential property and failed to comply with air pollution regulations intended 
to prevent the emission of asbestos fibers. The asbestos waste was then allegedly buried in the 
basement. 

CASE DISPOSITIONS IN FISCAL YEAR 1999 

• William Bertrand : This Billerica contractor was convicted by a Middlesex County 
jury for illegally disposing of hazardous waste and illegally interfering with a hazardous 
waste site cleanup action pursuant to G.L. c. 21E. The defendant was hired to transport 
approximately 1200 tons of oil contaminated soil from a 21E site in Wilmington to an 
asphalt recycling company in Maine. Evidence showed that the defendant delivered only 
105 tons to the recycling facility, which charged $28 a ton to accept the contaminated 
soil. The defendant dumped much of the remaining contaminated soil at a Carlisle home, 
having offered it to the unsuspecting homeowners for use as fill. The defendant kept the 
approximately $30,000 that he would have had to pay to the recycling company. The 
defendant was sentenced to two and a half years in the House of Correction, six months 
to serve, with two years probation. 

• Commonwealth v. Jonathan Gabriel The president of New England Demolition, 
Inc. of Worcester was convicted by a Worcester County jury for illegally removing and 
disposing of asbestos and violating a DEP solid waste cleanup order. The evidence 
showed that at demolition jobs in Holden and Worcester, the defendant and his company 
failed to follow required asbestos removal procedures to insure that the asbestos was not 
released to the ambient air. The defendant also ordered his employees to illegally dispose 
of asbestos waste in a smokestack at a commercial building in Worcester. The employees 
ordered to perform the job were not protected from exposure to the asbestos. The asbes- 
tos dimiped in the stack filled approximately 250 bags, making this the largest asbestos 
disposal prosecution in the Commonwealth. The defendant was sentenced to two years in 
the House of Correction, with an additional two years suspended, two years with proba- 
tion. 

• Commonwealth v. Leo Senecal The Department of Public Works Chief for the City of 
North Adams plead guilty in Berkshire Superior Court to charges of illegally disposing of 



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CRIMINAL BUREAU 



hazardous waste without a license and in a manner which could endanger the environment. The 
defendant admitted to having ordered City employees to dig a trench on DPW property and 
dump three 50-gallon drums of waste oil in the trench. He instructed one of his employees to 
cover the trench with dirt. The defendant thereafter misled DEP inspectors about the incident 
and the whereabouts of the dumping. The defendant was sentenced to five years probation with 
the special condition that he step down as DPW superintendent and that he not have any 
supervisory authority over any DPW employee or any work of the DPW for five years. 

BROADENING ENVIRONMENTAL IMPACT 

Strike Force activities continued to extend the impact of its environmental prosecution efforts beyond : 
the deterrence and remediation achieved in particular cases. Strike Force members participated in educa- 
tional efforts reaching other law enforcement agencies, the private bar, and the community as a whole. 
These efforts included seminars attended by Massachusetts local law enforcement agencies, hazardous 
waste inspectors fi"om states throughout the northeastern United States, and members of the Massachu- 
setts Bar, as well as a symposium on emerging environmental trends sponsored by New England School of ! 
Law. The University of Massachusetts Work Environment Justice Fund, created as a result of the Strike 
Force's 1 994 prosecution of a Somerville lead smelting company, granted its fifth annual awards to seed 
projects for improving workplace health and safety among low income workers. A total of $1 00,000 was i 
awarded to seven non-profit agencies across the state. 

The members of the Environmental Crimes Strike Force for all or part of F Y99 were: Martin Levin, 
Chief, AAG; Michael Dmgle, AAG; Pamela Talbot, AAG; Irfan Nasrullah, Volunteer AAG; Gail Larson, 
Lieutenant; John Lapan, Trooper; Michael Moore, Environmental Police Officer; Michael Sweeney, Ser- 
geant; and Pat Haley, Environmental Police Officer. 



CRJMINAL BUREAU 



ECONOMIC CRIMES DIVISION 



INTRODUCTION 

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 seriousness of the cases prosecuted by the Division 
demonstrates the crippling impact of economic crime as it 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 
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 through private sector 
fraud. Since Fiscal Year 1 995, the Economic Crimes Division has obtained 250 convictions and disposi- 
tions totaling over $70 million dollars in private stolen funds from victims throughout the Commonwealth. 
The statistics contained within this report paint a portrait of the battle waged by a group of qualified 
professionals against private sector fraud, committed to making offenders accountable for their financial 



Throughout the past year, the Economic Crimes Division focused on three priority areas: ( 1 ) lawyer 
fraud, (2) tax crimes, and (3) 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 addition to civiUan financial investigators and state police officers. The members of the 
Division during part or all of the year consist of the following: Carol Starkey, Chief, AAG; Molly Parks, 
AAG; Kevin Brekka, AAG; Sarah Hartry, AAG; Lori Balboni, AAG; Phillip McGovem, AAG; Mark 
Mulligan, AAG; Andy Zaikis, SAAG; Olivia Blanchette, Secretary; James McFadden, Investigator; Patrick 
Ormond, Investigator; Brad Chase, Investigator; David Baker, Investigator; and SallyannNelligan, Inves- 



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CRIMINAL BUREAU 



tigator. Paul Stewart, Director of Financial Investigators, and the State Police Unit assigned to the Crimi- 
nal Bureau, have been invaluable to the successful work of the Division. 

In Fiscal Year 1 999, the Economic Crimes Division commenced another 10 complex criminal pros- 
ecutions against those individuals, entities, and corporations that took advantage of positions of power in 
the private sector to the detriment of the working men and women of the Commonwealth. EXiring the same 
time, 36 convictions were obtained against white collar criminals and corporations, including those defen- 
dants wiio were not charged within this fiscal year. The attached charts reflect the statistics for the financial 
and tax prosecutions indicted for the past fiscal year, and all cases completed by the Division throughout 
the last four fiscal years. 



PRIVATE SECTOR FRAUD: THE FINANCIAL AND TAX PROSECUTIONS 
HANDLED BY THE ECONOMIC CRIMES DrVTSION 

Economic Crimes Division 

1995-1999 
250 Dispositions 



Traditional White 
Collar Crime 

(GuUty) 

54% 




Traditional White 
Collar Crime 

{Acquittals/Dismissals} 
1% 


f^ 




r^A 


^-.Jf^ 




TaxCj 

(Acquittals/D 
0% 


V 
ises 

smissals} 


Tax Cases 

1 Guilty} 
45% 



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CRIMINAL BUREAU 



THE DIVISION'S AGENCY LIAISONS 



The Economic Crimes Division receives referrals from 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 
("BBO"), the Client Security Board ("CSB"), the Criminal Investigations Bureau of the Department of 
Revenue ("CIB" of "DOR"), the F.D.I.C, the Secretary of State of the Commonwealth ("SOS"), the 

Economic Crimes Division 
Agency & Case Referral Relationships 




Judges, 
Attorneys & 
Private Parties 



United States Attorney's Office ("USAO"), and various District Attomey's Offices across the state. 
THE FINANCIAL PROSECUTIONS 

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 fraud, extensive interviews and testimony must be obtained from all people involved or affected 
by the theft. In addition, most cases require the use of an expert vsdtness to aid an assistant attomey general 
or investigator in evaluating the perpetrator's handwriting, the financial formula employed, or the mental 
state which enabled the defendant to perpetrate the crime. 



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CRIMINAL BUREAU 



To answer the challenging goals of the Economic Crimes Division in prosecuting the most elaborate of 
financial schemes, law enforcement techniques have grown more sophisticated in response to the changing 
face of private sector fi-aud over the passage of time. Computer technology and enhanced litigation tools 
are fi-equently employed by Division members to explain often complicated financial matters to a grand 
jury or a trial jury . The significant effect of such efforts sends the message that our evolving technological 
age will be embraced by law enforcement officials to prosecute even the most sophisticated felon as we 
advance to the next century. 

CATEGORIES OF FINANCIAL CASES PROSECUTED 
BY THE ECONOMIC CRIMES DIVISION 

The following is a synopsis of the types of cases accepted for investigation and prosecution 
within the Economic Crimes Division, utilizing the Division's law enforcement techniques, 
resources and initiatives. 

Types of Cases and Case Highlights 

Within the broad focus areas of lawyer fi-aud and other types of financial crimes, there are 
essentially six categories of white collar crime that are investigated and prosecuted by the Office 
of the Attorney General's Economic Crimes Division. They are: (1) Organizational Fraud; (2) 
Fiduciary Fraud; (3) Investment/Securities Fraud; (4) Health Care Fraud; (5) Identity Fraud; and 
(6) Tax Fraud. While these types of schemes overlap in a number of ways, they are distinguish- 
able by the position of the perpetrator within the scheme, the type of victim and/or the manner in 
which the fraud is perpetrated. 

Organizational Fraud : This refers to crimes committed by an employee, agent, representative or 
contractor of an organization. The victim of these schemes is the organization which generally is a 
corporation. The crimes that are usually the subject of the investigation are larceny or embezzlement, 
false entry in corporate books, forgery and uttering. The fi^audulent conduct often appears in the form of 
a false billing scheme. The perpeti-ator uses his access to a payroll system or to payment documents, 
such as purchase orders, to cause payments for services not provided or to create unauthorized checks 
for his own personal use. 

CASE HIGHLIGHTS 



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• Commonwealth v. John Curtis, et. al (Suffolk Superior Court) This Canton resident was 
indicted on charges that he stole more than one million dollars from Star Market through an 
elaborate scheme involving fake purchase orders, bogus billings and other alleged deceptions. 

; John Curtis, 54, was the head of the maintenance department for Star Market until November, 
1 995 and responsible for the maintenance and purchase of equipment for all of Star Market's 
39 stores. Linda Christmas, and Carole and Bill Melanson were also indicted for conspiring 
with Curtis in one of his false billing schemes in return for a kickback of tens of thousands of 
dollars. The matters were resolved against all parties, and the court ordered substantial incar- 
ceration, restitution or probation sentences for each defendant. 

• Commonwealth v. Brian P. Psota (Suffolk Superior Court) A former payroll 
specialist for Media One, Brian P. Psota, plead guilty to stealing over $225,000 while 
employed as the corporate accounting manager over a five-year period, spending the 
money on lavish vacations and building a new home. The defendant was sentenced to 
two years in the House of Correction, one year to serve, with a $50,000 restitution pay- 
ment to be made forthwith to the victim corporation on the date of the plea, and 20 hours 
of community service to be completed per month during his probation. 

Fiduciary Fraud : This refers to crimes committed by individuals in positions of trust, such 
as attorneys, trustees, executors and guardians. The Division receives a majority of its BBO 
referrals alleging lawyer fraud, one of the Division's focus areas. The victims are those who 
entrusted their assets to the fiduciary and those who were the beneficiaries of the trusts or estates. 
The crimes charged include larceny, embezzlement, forgery, uttering and perjury. Forgery, 
uttering and perjury are frequently charged because part of the scheme often includes the submis- 
sion of false signatures on payment instruments and/or the submission of false statements to a 
probate court, banking institution or insurance company. These crimes are especially egregious 
j because the perpefrator will often be a fiiend of the family or someone who has had a relation- 
' ship with the victim for many years. The defendant will steal from individuals all the while 
porfraying himself as a protector, friend or confidant of the victim, many of whom are elderly or 
I infirm. 

Case Highlights 

Commonwealth v. Charles Victor. II (Suffolk Superior Court) 
Commonwiealth v. Thomas Cargill (Suffolk Superior Court) 
Commonwealth v. Walter Palmer (Suffolk Superior Court) 



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Commonwealth v. John Conroy (Suffolk Superior Court) 
Commonwealth v. Jeffrey Boxer (Norfolk Superior Court) 

Five Massachusetts attorneys were recently indicted or plead guilty to larceny and tax indict- 
ments, their combined alleged fraud totaling over $4.45 million from multiple victims. The cases 
of Thomas Cargill, Walter Palmer, Charles Victor, II and John Conroy, involved stealing large 
sums of money. Cargill and Palmer are alleged to have plundered the accounts and estates of 
multiple clients, misappropriating millions of dollars. In Conroy's case, the defendant admitted 
to stealing from trusts established for charities, and in the Victor matter, the defendant plead 
guilty to stealing nearly half a million dollars from estates of children suffering from lead paint 
poisoning. The final matter involved a disbarred attorney, Jeffrey Boxer, who stole $188,000 
from four clients, comprised of both elderly and disabled victims. 

Investment/Securities Fraud : This refers to crimes committed by individuals serving in the 
capacity of financial advisers. It also involves whole organizations set up as fraudulent invest- 
ment houses. The victims are individuals who have handed over money based on the under- 
standing that the money will be invested on their behalf This type of financial fraud is usually 
in the form of a "ponzie" scheme where the perpetrator is returning just enough money to his 
victims to persuade them that their investments are profitable, all the while depleting the majority 
of the equity for the defendant's own use. The fraudulent investment house conspirators accom- 
plish their theft by persuading the victims that they can be trained to make money through 
securities trading, while engaging the victim in a fixed market. This scheme also uses its victims 
to lure in others, such as fiiends and associates, by requiring them to recruit other investors, 
much like a pyramid scheme. The crimes charged include larceny, embezzlement, securities 
fraud, false statement of corporate assets, bucketing, conspiracy, forgery and uttering. 

Case Highlights 

• Commonwealth v. Albert Levesque (Bristol Superior Court) A former Metropoli- 
tan Insurance agent and financial advisor, Albert Levesque, indicted for stealing approxi- 
mately $200,000 by coercing an elderly widow into transferring assets into trust accounts 
from which he later embezzled, plead guilty and received two years in the House of 
Correction, committed, with a two year House of Correction sentence, suspended, to run 
from and after the incarcerated portion of his sentence. 

• Commonwealth v. Jeffrey Maniff (Norfolk Superior Court) The Commonwealth 
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CRIMINAL BUREAU 



received one of its strongest sentences after conviction in a financial crimes case involv- 
ing an Easton man charged with allegedly stealing more than $325,000 from an elderly 
woman who lives in a nursing home. Jeffrey 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, stole the money 
after befiiending two elderly women, ages 97 and 90, offering to perform tax work and 
banking transactions for them. He was sentenced to nine to ten years in state prison, in addition 
to paying back the fiill amount of restitution. 

Health Care Fraud : This refers to crimes committed by individuals working on behalf of 
health and science foundations or health care providers who, through their position of authority, 
are able to convert monies for their own use. The perpetrator is generally an individual in a 
position of high authority in the organization, such as a department chief, a member of the board 
of trustees or chairman of a foundation. The schemes include converting the institution's funds 
through a false billing scheme, embezzling fiinds received for research purposes, or converging 
premiimis paid for insurance coverage. The victims in these matters are not only the institutions 
but also the claimants and service providers, for example physicians. 

Case Highlight 

Although the Division currently has matters of this category under investigation, an example 
of a past completed prosecution handled within this category is Commonwealth v. Bernardo 
Nadal-Ginard . Suffolk Superior Court. Dr. Nadal-Ginard held the positions of Chief of Cardiol- 
ogy at Boston Children's Hospital, President of the non-profit corporation known as the Boston 
Children's Heart Foundation, tenured Professor at Harvard Medical School and Howard Hughes 
Investigator. In his various positions of authority. Dr. Nadal-Ginard was entrusted with hundreds 
of thousands of dollars for research and treatment of children with heart disease and defects. At 
the conclusion of a month-long jury trial in Suffolk Superior Court, Dr. Nadal-Ginard was 
convicted of 1 2 counts of larceny. He was sentenced to a year in the House of Correction with three 
years of probation. He was further ordered to complete two full yeais of community service, working 
fiill-time for free, and to pay full restitution to the victim foundation. 

Identitv Fraud : This refers to crimes where the initial object of theft is the "identity" of the 
victim ~ their name, credit card number, social security number or bank account number, cell phone 
number or computer station. Once the identity is usurped, it then becomes the instrument through which 
money is stolen or other crimes are committed. The victims are limitless as are the avenues through 



95 



CRIMINAL BUREAU 



which an identity can be stolen. The identity can be acquired through telephone gimmicks, electronic 
scanning of cell lines or as an offshoot of a con game. 

Case Highlight 

• Commonwealth v. Kerrin Alfonso (Suffolk and Norfolk Counties) This case 
involves a woman known as the "Queen of Identity Fraud," who is alleged to have used 
identifying information from family, friends, former employers and acquaintances to 
create counterfeit checks and to open fraudulent credit accounts. Alfonso is alleged to 
have stolen several hundred thousand dollars in fraudulent credit purchases. 



TAX FRAUD PROSECUTIONS 



Although each Assistant Attorney General in the Economic Crimes Division handles a 
caseload including tax cases, one Assistant Attorney General, with the assistance of one Special 
Assistant Attorney General concentrates fiill time on this subject area. Since July of 1 995, 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 Attor- 
ney 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, particularly in 
the area of analysis of documentation relating to potential tax violations. Additional cases were devel- 
oped by the Tax Prosecution Unit as a result of referrals from other agencies. 

Case Highlights 

• Commonwealth v. Paul Cacchiotti (Suffolk Superior Court) After a Middlesex jury 
trial completed in late July of 1998, the jury found CPCS attorney Paul Cacchiotti guilty 
of extortion, larceny, tax evasion and filing false income tax returns. The defendant was 
convicted of extorting money from his indigent criminal clients while being paid by the 
Commonwealth for his legal services. In addition, Cacchiotti failed to report on his 
income tax returns the legal fees that he had earned from his private clients. The defendant was 
sentenced to two years in the House of Conrection, committed, with a from and after sentence 
of two years probation during which time he must complete 400 hours of community service 
and make $ 1 ,500 in restitution to the family of the attempted extortion victim. Due to the 



96 



CRIMINAL BUREAU 



extensive tax charges in the case, the investigation and the prosecution was a joint effort of both 
the Economic Crimes Division and the PubUc hitegrity Division. 

• Commonwealth v. Gary Burris (Suffolk Superior Court) This matter involves a 
Pittsfield vending machine business which was the subject of a search warrant executed 
from western Massachusetts. Burris and several restaurant owners were subsequently 
indicted upon the completion of a grand jury tax investigation. Burris recently plead 
guilty and received, on an imagreed plea, two years probation, 250 hours of community 
service and a $50,000 fine. 



CASES CHARGED BY THE ECONOMIC CRIMES DIVISION 



INDICTMENT DATE 



CASE DESCRIPTION 



9/10/98 Commonwealth v. Brian P. Psota 

(Larceny Prosecution) 
COURT: Suffolk Superior 

DESCRIPTION: Brian Psota is alleged to have stolen over $220,000 from Continental 
Cable-vision, Inc., now Media One, while employed as a payroll clerk and corporate 
accounting manager over a five year period using three different ft-audulent schemes. 



CHARGES: 



10/2/98 



Larceny Over $250 (3 Counts) 

False Entries in Corporate Books (3 Counts) 

Attempted Larceny over $250 (1 Count) 

(AAG C. Starkey) 

Commonwealth v. Walter Palmer 

(Larceny Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: The defendant, a disbarred attorney, is alleged to have embezzled at 

least two million dollars from his former clients through his abuse as trustee, guardian 

and executor to at least six former clients. 

CHARGES: Embezzlement (6 Counts) 

(AAG K. Brekka) 



10/29/98 



Commonwealth v. Neil R. McCrystal 

(Larceny Prosecution) 



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CRIMINAL BUREAU 



COURT: Bristol Superior 

DESCRIPTION : The target was a property manager for the Hamilton Company, who alleg- 
edly stole approximately $ 1 04,000 by ( 1 ) creating a fictitious company and approving payment 
by Hamilton clients of the invoices for work never performed or for work actually performed by 
employees on the company payroll, and (2) stealing various checks payable to Hamilton clients 
and depositing them directly to his personal bank account. 
CHARGES: Larceny Over $250 (8 Counts) 

Larceny Over $250 (3 Counts) 



(AAG M. Parks) 



10/21/98 



Commonwealth v. Castro Aristis 

(Narcotics Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: Aristis is charged with Hector Florian in a drug trafficking operation in 

the Chelsea and possibly Fitchburg areas. He lives in Chelsea and lists his employment 

as Mario's Fruit Company. 

CHARGES: Trafficking Cocaine (2 Counts) 

Conspiracy to Violate Drug Law (1 Count) 

(AAG P. McGovem) 



10/27/98 



Commonwealth v. Hector Florian 

(Narcotics Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: Florian is charged with Aristis in a drug trafficking operation in the 

Chelsea and possibly Fitchburg areas. He lives in Chelsea and has stated that he works in 

customer service for ATA American Trans Air at Logan Airport. 

CHARGES: Trafficking Cocaine (2 Counts) 

Conspiracy to Violate Drug Law (1 Count) 

(AAG P. McGovem) 



12/16/98 



Commonwealth v. Dermot P. Q^Brien 

(Larceny Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: This defendant is alleged to have stolen over $250,000 from a non- 
profit charitable organization, Morgan Memorial Goodwill Industries, while operating as 
a Payroll Specialist, and then converting the money to pay for his own gambling debt. 
CHARGES: Larceny Over $250 (3 Counts) 

False Entries in Corporate Books (3 Counts) 

Forgery (7 Counts) 



98 



CRIMINAL BUREAU 



(AAG C. Starkey) 



3/10/99 



Commonwealth v. Dermot P. O'Brien 

(Tax Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: This defendant is alleged to have filed false tax returns and failing to 
file tax returns due to his theft of over $250,000 firom a non-profit charitable organization, 
Morgan Memorial Goodwill Industries. 

CHARGES: Filing False State Income Tax Returns (3 Counts) 

Willftil Failure to File (3 Counts) 

(AAG C. Starkey) 



3/16/99 



Commonwealth v. Neil McCrystal 

(Tax Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: The defendant is alleged to have stolen money while operating as the 

property manager for the Hamilton Company, using a scheme to falsely bill the company 

for work he never performed totaling approximately $500,000. 

CHARGES: Willful Filing of False Income Tax Returns (2 Counts) 

(AAG M. Parks) 

3/16/99 Commonwealth v. Arnold Brandyberry 

(Tax Prosecution) 

COURT: Suffolk Superior 

DESCRIPTION: As the President and CEO of a Western Mass corporation, Berkshire 
Paper Co., Inc., the defendant is alleged to have failed to file non-resident income tax 
returns fi'om 1993 through 1996. During this period, he earned between $145,000 to 
$190,000 in salary which he failed to report as Massachusetts source income. 
CHARGES: Willftil Failure to File State Income Tax Returns (4 Counts) 

(AAG L. Balboni) 



6/3/99 



Commonwealth v. Richard T. Cousins 

(Tax Prosecution) 



COURT: Suffolk Superior 

DESCRIPTION: The defendant was the sole corporate officer for Trenton Construction 

Corp., a pile driving business. He is alleged to have failed to pay and file returns for state 

income tax withheld from his employees' paychecks. 

CFIARGES: Willftil Failure to Account for and Pay Over Withholding Taxes (2 Counts) 



99 



CRIMINAL BUREAU 



(AAGM. Parks) 
CASES DISPOSED BY THE ECONOMIC CRIMES DIVISION 



CONVICTION DATE CASE DESCRIPTION 

7/16/98 Commonwealth v. Steven Derrick 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Bohn 

DESCRIPTION: This matter involves a husband and wife who leased cabs through 
various corporations while failing to report and pay all of their collected sales taxes. 
CHARGES: Willful Attempt to Evade and Defeat Sales Taxes (7 Counts) 

Willful Failure to Account For and Pay Over Sales Taxes (4 Counts) 
SENTENCE: The defendant plead guilty on all counts. He was sentenced to two years in 
the (edit 6) House of Correction, suspended for two years probation, with the completion 
of six months of home confinement. The defendant was further ordered to pay $30,000 
in fines and surfines, $10,000 of which must be paid within one week of imposition of the 
sentence, and the balance to be paid during the first six months following the completion 
of his sentence. Finally, the defendant was ordered to file all past due tax returns and 
new tax returns. $60 Victim/witness fee. 

(SAAG A. Zaikis) 

7/16/98 Commonwealth v. Susan Derrick 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Bohn 

DESCRIPTION: This matter involves a husband and wife who leased cabs through 
various corporations while failing to report and pay over all of their collected sales taxes. 
CHARGES: Willfiil Attempt to Evade and Defeat Sales Taxes (1 Count) 

Willful Failure to Account For and Pay Over Sales Taxes (2 Counts) 
SENTENCE: Placed on file without change of plea. 

(SAAG A. Zaikis) 

7/30/98 Commonwealth v. Paul Cacchiotti 

(Tax Prosecution) 

COURT/JUDGE: Middlesex Superior/Fremont-Smith 

DESCRIPTION: After a Middlesex jury trial completed in late July of 1998, the jury 
found CPCS attorney Paul Cacchiotti guilty of extortion, larceny, tax evasion and filing 
false income tax returns. The defendant was convicted of extorting money from his 



100 



CRIMINAL BUREAU 



indigent criminal clients while being paid by the Commonwealth for his legal services. 
In addition, Cacchiotti failed to report on his income tax returns the legal fees earned 
from his private clients. Due to the extensive tax charges in the case, the investigation and 
the prosecution was a joint effort of both the Economic Crimes Division and the Public 
Integrity Division. 
CHARGES: Attempted Extortion (3 Counts) 

Larceny Over $250 (1 Count) 

Tax Evasion (1 Count) 

Filing of False Tax Return (1 Count) 
SENTENCE: The jury returned not guilty verdicts on the first two (edit 7) counts of 
the Attempted Extortion Indictment. The jury returned guilty verdicts as to all other 
counts. The defendant received two years House of Correction, committed, with a from 
and after two year probation sentence. Defendant was ordered to complete 200 hours 
community service with each year of probation. The defendant was further ordered to 
make restitution of $1,500 to the victim of the attempted extortion charge. $60 Victim/ 
witness fee. 

(AAGs L. Balboni/A. Lawlor) 

8/6/98 Commonwealth v. John Curtis 

(Larceny Prosecution) 

COURT/JUDGE: Suffolk Superior/Borenstein 

DESCRIPTION: The defendant admitted that he stole in excess of $ 1 million from Star 
Market through his position as the head of their maintenance department. 
CHARGES: Larceny Over $250 (24 Counts) 

Larceny Over $250 (1 Count) 

False Corporate Records (24 Counts) 

False Corporate Records (1 Count) 

Conspiracy to Commit Larceny (2 Counts) 

Conspiracy to Commit False Corporate Records (2 Counts) 

Larceny Over $250 (1 Count) 
SENTENCE: The defendant plead guilty to all charges. He admitted he stole in 
excess of one million dollars from Star Market Corporation, and was sentenced to two 
and-a-half years in the House of Correction, five years probation, and restitution through 
surrender of two residences (valued at over $325,000). Court offered less incarceration 
than the Commonwealth's recommendation based on defendant's statement that he would 
make above described restitution. Victim/ witness fee waived over Commonwealth's 
objection. 

(AAG K. Brekka) 

8/11/98 Commonwealth v. Jeffrey Maniff 

(Larceny/Securities Fraud Prosecution) 



101 



CRIMINAL BUREAU 



COURT/JUDGE: Norfolk Superior/Houston 

DESCRIPTION: The defendant met the victims, two elderly sisters, while doing their 
taxes, and then proceeded to use the money to fund his luxury rental car business as well 
as purchase other items for his home and family. 
CHARGES: Larceny Over $250 (3 Counts) 

SENTENCE: Defendant received a sentence of four and one half years State Prison 
committed, with four and-a-half years State Prison committed from and after on the first 
two indictments. On the next two counts, the defendant was sentenced to 1 years proba- 
tion, from and after, with a condition of probation being the payment of $321,658 in 
restitution, and prohibition from work as an accountant or fiduciary. The court also 
issued a Stay-Away order from the victims. The rest of the charges were guilty filed. 
$60 Victim/witness fee. 



(AAGs S. Hartry and M. Mulligan) 



8/14/98 Commonwealth v. Paul Cacchiotti 

(Tax Prosecution) 

COURT/JUDGE: Middlesex Superior/Bennett 

DESCRIPTION: After a Middlesex jury trial in late July of 1 998, the jury found CPCS 

attorney Paul Cacchiotti guilty of extortion, larceny, tax evasion and filing false income 

tax returns. The defendant was convicted of extorting money from his indigent criminal 

clients while being paid by the Commonwealth for his legal services. In addition, 

Cacchiotti failed to report on his income tax returns the legal fees that he had earned from 

his private clients. Due to the extensive tax charges in the case, the investigation and the 

prosecution was a joint effort of both the Economic Crimes Division and the Public 

Integrity Division. 

CHARGES: Tax Evasion (I Count) 

Attempted Extortion (1 Count) 

False Tax Return (1 Count) 
SENTENCE: The defendant was sentenced to two years in the House of Correction, 
committed, with a from and after sentence of two years probation during which time he 
must complete 400 hours of community service and make $1,500 in restitution to the 
family of the attempted extortion victim. 

(AAGs L. Balboni/A. Lawlor) 

8/20/98 Nancy Burgess v. Commonwealth 

(Petition for Writ of Habeas Corpus) 

COURT/JUDGE: Middlesex Superior/Zobel 

DESCRIPTION: This defendant, convicted of larceny, is sought by Connecticut for a 
probation violation following completion of her Massachusetts sentence. The defendant 
unsuccessfully challenged a Governor's Warrant and sought release on bail. 



102 



CRIMINAL BUREAU 



SENTENCE: Disposition: Petition for a writ of habeas corpus denied. 
(AAG M. Parks) 

9/8/98 Commonwealth v. Philip J. Tavares 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Volterra 

DESCRIPTION: Tavares lived in New Hampshire and worked as a physician in Massa- 
chusetts during the years 1991 through and including 1996, and failed to file non-resident 
income tax returns. Tavares earned approximately $497,775 income, and he owed 
approximately $29,833 in tax liability. 

CHARGES: Willful Failure to File Non-Resident State Income Tax Returns (6 

Counts) 

SENTENCE: The defendant received a sentence of pre-trial probation for one year, 
with a from and after sentence of unsupervised probation for one year, and $5,000 court 
costs over the Commonwealth's objection. All other counts were sentenced concurrently. 

(AAG S. Hartry) 

9/18/98 Commonwealth v. Dan Beliveau 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Ball 

DESCRIPTION: This defendant was a salesman who worked and lived in Massachu- 
setts while failing to file income tax returns and falsely claiming his wages were earned 
out of state. 
CHARGES : Willful Filing of a False Income Tax Return ( 1 Count), 

Willful Failure to File State Income Tax Returns (4 Counts) 
SENTENCE: The defendant was sentenced to a $1 0,000 fine, and one year unsuper- 
vised probation. The rest of the charges were guilty filed. $60 Victim/witness fee. 

(SAAG A. Zaikis) 

9/23/98 Commonwealth v. Joseph Haven 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Ball 

DESCRIPTION: This matter involves an employee who collected worker's compensa- 
tion payments while being paid imder the table by his employer. 
CHARGES: Willftil Filing of False Income Tax Returns (2 Counts) 

SENTENCE: $ 1 00 fine, two years probation. $60 Vicfim/witness fee. 

(AAG A. Zaikis) 



103 



CRIMINAL BUREAU 



10/20/98 Commonwealth v. 770 Broadway, Inc. 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Quinlan 

DESCRIPTION: 770 Broadway, Inc. operated five retail bedding and furniture stores in 
Southeastern Massachusetts under the name of Off-Track Bedding. Marie Campbell was 
the corporation's bookkeeper. The defendants filed 31 false and fi-audulent monthly sales 
tax returns for the periods of March 1992 through December 1994. Campbell prepared 
and filed each of the false and fraudulent returns and in doing so, used four distinct 
schemes to underreport the sales tax owed, including subtracting a round number or 
excluding the sales and taxes owed by one of the five stores. 

CHARGES: Willftil Failure to Account For and Pay Over Sales Tax (3 Counts) 

SENTENCE: Defendant plead guilty. On each count, court imposed fine of $7,500 
plus surfine of $2,500. Total fines and surfines $30,00, including $ 60 Victim/Witness 
fee. (Edit 8) 

(AAG M. Mulligan) 

10/20/98 Commonwealth v. Marie Campbell 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Quinlan 

DESCRIPTION: 770 Broadway, Inc. operated five retail bedding and ftimiture stores in 

Southeaster Massachusetts under the name of Off-Track Bedding. Marie Campbell was 

the corporation's bookkeeper. The defendants filed 31 false and fraudulent monthly sales 

tax retums for the periods of March 1 992 through December 1 994. Campbell prepared 

and filed each of the false and fraudulent retums and in doing so, used four distinct 

schemes to underreport the sales tax owed, including subtracting a round number or 

excluding the sales and taxes owed by one of the five stores. 

CHARGES: Willful Failure to Account For and Pay Over Sales Tax (3 Counts) 

Willful Filing of False Sales Tax Retums (3 Counts) 
SENTENCE: The defendant was sentenced to one year House of Correction, sus- 
pended for one year of probation with 500 hours community service. $60 Victim/witness 
fee. 

(AAG M. Mulligan) 

10/27/98 Commonwealth v. Alan S. Katz 

(Larceny/Forgery /Uttering Prosecufion) 

COURT/JUDGE: Middlesex Superior/Worcester Superior/White 
DESCRIPTION: The charges relate to a sophisticated course of criminal conduct in 
which Katz used aliases, phony business names, an answering service, fake letterhead and 
business cards, and counterfeit checks drawn on non-existent banks (created by him using 
computers and laser printers) to steal thousands of dollars' worth of computers from 



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small computer businesses all over the country. Katz defaulted in 1 994 and was recently 
picked up by the Oregon authorities. He is now held on $100,000 cash bail. 
CHARGES: Larceny Over $250 (4 counts) 

Receiving Stolen Property (2 Counts) 

Forgery (4 Counts) 

Uttering (3 Counts) 

Attempted Larceny (1 Coimt) 
SENTENCE: The defendant was adjudicated a common and notorious thief, and 
given a sentence of 12 to 20 years, seven years to serve, the balance suspended for five 
years probation, with $27,921.70 in restitution, 1000 hours of community service, and 
enrollment in a compulsive gambling program. All others charges were guilty, and 
concurrent with the larceny charge. $50 Victim/witness fee. 

(AAG C. Starkey) 

10/28/98 Commonwealth v. Irving Morg an 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/McHugh 

DESCRIPTION: This case involves Morgan's alleged failure to file and pay taxes for 

the years during 1991 up to and including 1995, in an amount totaling approximately 

$22,757.25 and $400,000 in income. 

CHARGES: Willful Failure to Pay State Income Taxes (5 Counts) 

SENTENCE: Defendant plead guilty to all counts. He was sentenced to five years 

probation and $3,000 per count, total fine $5,000 to be paid over the term of probation. II 

fme is paid within four years, probation will be terminated. Probation supervision fee 

imposed for first year only. $60 Victim/Witness Fee (edit 9) 



(AAG L. Balboni) 

10/29/98 Commonwealth v. Arthur J. Bradley 

(Larceny Prosecution) 

COURT/JUDGE: Essex Superior Court/Van Gestel 

DESCRIPTION: The defendant is an attorney (disbarred in August 1 997) who acted 

under a power of attorney for an elderly client and proceeded to embezzle all of his funds 

- roughly $63,000. After the matter was referred to Elder Services of Merrimack Valley, 

the defendant sold a piece of real estate and substantially repaid the victim. 

CHARGES: Larceny Over $250 (5 Counts) 

SENTENCE: The defendant was sentenced to three years of probation with the 

following conditions: $2,000 restitution, payable in monthly installments, and 100 hours 

community service. On four of the counts, the defendant received three years probation, 

to run concurrently. $60 Victim/witness fee. 



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CRIMINAL BUREAU 



(AAG M. Parks) 

11/10/98 Commonwealth v. Paul E. Hardy 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Bali 

DESCRIPTION: The defendant is a close associate of Robert Lockwood, a Beverly 
Farms businessman, who was indicted for failure to file income tax returns. When he 
finally filed five years worth of delinquent tax returns, they were all fabricated. 
CHARGES: Filing False Tax Returns (3 Counts) 

Failure to File Tax Returns (2 Counts) 
SENTENCE: The defendant plead guilty to all charges. He received a sentence of 
two years probation and a $6,000 fine. $60 Victim/Witness fee 

(SAAG A. Zaikis) 

1 1/20/98 Commonwealth v. Josephine Lontok 

(Larceny Prosecution) 

COURT/JUDGE: Suffolk Superior/Doerfer 

DESCRIPTION: The defendant is the former supervisor of Filene's Basement's Trans- 
portation Department. Between 1991 and 1996, she allegedly stole in excess of $230,000 
through a false billing scheme. 
CHARGES: Larceny Over $250 (6 Counts) 

False Filing in Corporate Books (1 Count) 

Attempt to Commit a Crime (1 Count) 
SENTENCE: Defendant plead guilty to all charges, and was sentenced to one year 
home confinement with furlough to work 40 hours per week, and placed on 1 years 
probation. She was further ordered to pay $238,242.04 restitution, $60,000 to be paid 
immediately, and 800 hours commimity service to be performed within four years. On 
the False Filing in Corporate Books and Attempt to Commit a Crime charges, the defen- 
dant received 1 years probation to run concurrently with the Larceny Over. $60 Victim/ 
witness fee. 

(AAG K. Brekka) 

11/30/98 Commonwealth v. Mark N. Schlafman 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Ball 

DESCRIPTION: The defendant is a business executive who filed false tax returns for 

several years. 

CHARGES: Willfiil Filing of False Income Tax Returns (3 Counts) 

SENTENCE: The defendant plead out along the terms of a plea agreement under 

which he will cooperate in our upcoming trial against Robert Lockwood and his associ- 



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ated coqDorations. 



(SAAG A. Zaikis) 



12/10/98 Commonwealth v. Aivin Goldstein 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Quinlan 

DESCRIPTION: Goldstein is president and treasurer of Barb-Al, Inc., a corporation 
which owns and operates a retail card and gift shop in Randolph under the name 
Barbara's Hallmark. The retail store has been in existence for more than 10 years, and 
since its inception, no withholding or sales tax returns have been filed and no amounts for 
sales or withholding taxes were paid to DOR. 

CHARGES: Willftil Failure to Account For and Pay Over Sales Taxes (5 Counts) 

Willful Failure to Account For and Pay Withholding Taxes (5 Counts) 
Willftil Making and Subscribing False Tax Returns (4 Counts) 
WiMil Making and Subscribing False Withholding Tax Returns (1 Count) 
SENTENCE: The defendant plead guilty to all charges. He received a sentence of 
two years House of Correction, suspended for five years probation. The conditions of 
probation are as follows: first 90 days of probation to be served as home confinement, 
curfew Monday through Friday - 6:00 p.m.-8:00 a.m., except Monday, Wednesday, 
Thursday - 9:30 a.m.-8:00 a.m, to allow to teach at Northeastern, 24 hour confinement 
Saturday and Sunday, 5,000 hours of community service to be performed at a senior 
citizen's center in Randolph. All other charges to run concurrently. $60 VicUm/wimess 
fee. 

(AAG L. Balboni) 

2/8/99 Commonwealth v. Albert Levesque 

(Fiduciary Embezzlement Prosecution) 

COURT/JUDGE: New Bedford Superior/Tiemey 

DESCRIPTION: The defendant was a sales representative for Metropolitan Life Insur- 
ance Company who handled life insurance and mutual funds. The defendant assisted an 
elderly couple in establishing a trust for which the defendant became trustee. After the 
husband's death, the defendant convinced and pressured the wife to cash in her invest- 
ments and bonds and deposit the proceeds in the Trust accounts. Once the money was in 
the Trust accounts, the defendant proceeded to deplete the accounts for his own personal 
use and gambling habit. Levesque stole over $200,000. 
CHARGES: Fiduciary Embezzlement (3 Counts) 

SENTENCE: The defendant plead guilty to all charges and received a sentence of 
two years in the House of Correction, committed, with two years probation, suspended, 
from and after count one Probation fee $45 per month while on probation. $60 Victim/ 
witness fee. 



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CRIMINAL BUREAU 



(AAG M. Mulligan) 

2/12/99 Commonwealth v. Paul MacDonald 

(Tax Prosecution) 

COURT/ JUDGE: Suffolk Superior/Lopez 

DESCRIPTION: The defendant is a close associate of Robert Lockwood, a Beverly 
Farms man indicted on tax charges, who was paid off the books but who attached fabri- 
cated tax forms to his tax returns to get credit for withholding taxes that were never paid 
over on his behalf. 

CHARGES : Willful Filing of False Income Tax Returns (5 Counts) 

SENTENCE: Over the Commonwealth's objection, Judge Lopez placed the defen- 
dant on pre-trial probation for a period of three years. 

(AAG A. Zaikis) 

2/22/99 Commonwealth v. Charles A. Victor. II 

(Larceny Prosecution) 

COURT/JUDGE: Suffolk Superior/Lopez 

DESCRIPTION: The defendant was an attorney who, while serving as trustee, misap- 
propriated over $45,000 from seven trusts established for children who suffered lead 
poisoning injuries. The defendant used the money from the trusts to finance his various 
business ventures, fund his failing law practice and to purchase items for his personal use. 
CHARGES: Fiduciary Embezzlement (6 Counts) 

Larceny Over $250 
SENTENCE: The defendant plead guilty to all charges, and received a sentenced of 
two to four years in State Prison, with a sentence of five years probation, from and after 
Count 1, with fiall restitution of $446,936.60. Execution of sentence stayed until March 
8,1999. $60 Victim/witness fee. 

(AAG M. Mulligan) 

2/19/99 Commonwealth v. Domingo Pena 

(Tax Prosecution) 

COURT/ JUDGE: Suffolk Superior/Volterra 

DESCRIPTION: The defendant was the former owner-operator of Domingo's Olde 
Restaurant. In December 1996, he plead guilty to Failure to Account for and pay over 
Meals Tax and Tax Evasion. He was sentenced to two years House of Correction, sus- 
pended, six months home confinement, and supervised probation with the condition that 
he cooperate with DOR to settle his tax obligations. 

CHARGES: Failure to Account For and Pay Over Meals Taxes (2 Counts) 

Tax Evasion (2 Counts) 



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SENTENCE: The defendant was sentenced to two years HOC, suspended for six 
months home confinement, supervised probation with condition that he cooperate with 
DOR to settle his tax obHgations. 

(AAG K. Brekka) 

2/15/99 Commonwealth v. Wajahat Malick 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Lopez 

DESCRIPTION: The defendant was the Controller of Prestige Imports, Inc. In that 

capacity, between April 1989 and January 1991, the defendant stole in excess of 

$1,016,000. The defendant plead guilty on March 8, 1993, and was sentenced as a 

common and notorious thief to 18-20 years, committed, 12-15 years imprisonment, on 

and after. 

CHARGES: Willfiil Filing of False Income Tax Returns (5 Counts) 

SENTENCE: Over the objection of the Commonwealth, the defendant was placed on 

pre-trial probation for three years. 

(AAG K. Brekka) 

3/2/99 Commonwealth v. John P. Conrov 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Lopez 

DEFENDANT DESCRIPTION: The defendant, a Boston accountant/lawyer, was 

charged with stealing funds from several charities and filing numerous income tax returns 

over the years. 

CHARGES: Willfiil Filing of False Tax Returns (3 Counts) 

Embezzlement by a Trustee (1 Count) 
SENTENCE: The defendant plead guilty to all charges and received a sentence of 
two years House of Correction. $60 Victim/witness fee. 

(SAAG A. Zaikis) 

3/29/99 Commonwealth v. Jeffrey Boxer 

(Larceny Prosecution) 

COURT/JUDGE: Norfolk Superior/Graham 

DESCRIPTION: This matter involves an attorney (now disbarred) who solicited clients 

with investment losses and then embezzled the settlements he obtained for them. He 

embezzled a total of roughly $188,000 from four separate clients, several of whom are 

elderly and one of whom is disabled. He repaid about $41,000 after complaints to the 

BBO. 

CHARGES: Larceny Over $250 (5 Counts) 



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CRIMINAL BUREAU 



Embe2zlement by Fiduciary (1 Count) 
SENTENCE: The defendant plead guilty to all charges. He was sentenced to 18 
months House of Correction, committed, with three years probation, from and after 
Count 1 . $60 Victim/witness fee. 

(AAG M. Parks) 

4/14/99 Commonwealth v. Brian P. Psota 

(Larceny Prosecution) 

COURT/JUDGE: Suffolk Superior/Lopez 

DESCRIPTION: Brian Psota is alleged to have stolen over $225,000 from Continental 

Cable vision. Inc., now Media One, while employed as a payroll clerk and corporate 

accounting manager. Over a five-year period, the defendant is alleged to have used three 

different fraudulent schemes in order to convert the money for expensive trips, clothes 

and improvements for his family home. 

CHARGES: Larceny Over $250 (3 Counts) 

False Entries in Corporate Books (3 Counts) 

Attempted Larceny Over $250 (1 Count) 
SENTENCE: The defendant plead guilty to all charges. He was sentenced to two 
years House of Correction, one year to serve, balance suspended for three years with the 
following conditions of probation: payment forthwith of $50,000 to the corporate victim, 
and 20 hours per month of community service to be served for the three years of proba- 
tion. On the False Entries in Corporate Books, the defendant received two years House 
of Correction, suspended for three years of probation, to run concurrent with the larceny 
charge. The defendant ftirther received two years House of Correction, suspended for 
three years of probation, to run concurrent on the Attempted Larceny Over $250 charge. 
$60 Victim/witness fee. 

(AAG C. Starkey) 

4/14/99 Commonwealth v. Robert Flater 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Lopez 

DESCRIPTION: This is a failure to file investigation against an individual who worked 
in Massachusetts for a number of years while failing to file any tax returns. 
CHARGES: Failure to Account for Withholding Taxes 

Failure to File Income Tax Returns 

Failure to File Excise Tax Returns 
SENTENCE: The defendant plead guilty. Two years pre-trial probation, $50,000 
fine. $60 Victim/witness fee. 

(SAAG A. Zaikis) 



110 



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4/14/99 Commonwealth v. Susan Teixeira 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior Court/Quinlan 

DESCRIPTION: Mario and Susan Teixeira are a married couple who ran a jewelry store 

on Nantucket Island. They did not file income tax returns for several years and have 

grossly under- reported their taxable sales on their business tax returns. 

CHARGES: Failure to File Income Tax Returns 

SENTENCE: One year pre-trial probation. 

(SAAG A. Zaikis) 

4/14/99 Commonwealth v. Mario Teixeira 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior Court/Quinlan 

DESCRIPTION: Mario and Susan Teixeira are a married couple who ran a jewelry store 
on Nantucket Island. They did not file income tax retiuns for several years and have 
grossly under-reported their taxable sales on their business tax returns. 
CHARGES: Failure to File Income Tax Returns 

SENTENCE: The defendant plead guilty to all charges. He was sentenced to one 

year probation, $31,250 fine, 500 hours of community service. $60 Victim/witness fee. 

(SAAG A. Zaikis) 

4/14/99 Commonwealth v. S. J. Patten. Inc. 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior/Quinlan 

DESCRIPTION: Mario and Susan Teixeira are a married couple who ran S.J. Patten, 

Inc., a jewelry store on Nantucket Island. They did not file income tax returns for several 

years and have grossly underreported their taxable sales on their business tax returns. 

Therefore, the corporation was also charged. 

CHARGES: Failure to File Excise Tax Returns (1 Count) 

SENTENCE: Defendant plead guilty. Sentenced to $7,500 fine. 

(SAAG A. Zaikis) 

5/13/99 Commonwealth v. Carole Melanson 

(Larceny/Conspiracy Prosecution) 

COURT/JUDGE: Suffolk Superior/Barrett 

DESCRIPTION: The defendant conspired with John Curtis, the former head of the 
maintenance department for Star Market, to defraud the corporation. This defendant was 
a bookkeeper for Melanson and Sons and in that capacity, submitted false records alleg- 
ing that the company had provided refrigeration equipment. In actuality, no equipment was 



111 



CRIMINAL BUREAU 



delivered. The bulk of the monies received from Star were kicked-back to Curtis. 
CHARGES: Larceny Over $250 (1 Count) 

Conspiracy to Commit Larceny Over $250 (1 Count) 
Conspiracy to Make False Entry in Corporate Books (1 Count) 
SENTENCE: The defendant plead guilty and received a sentence of pre-trial proba- 
tion with the stipulation of underlying facts and $5,000 in restitution. $35.00 Victim/ 
witness fee. 

(AAG K. Brekka) 

5/13/99 Commonwealth v. Linda Christmas 

(Larceny/Conspiracy Prosecution) 

COURT/JUDGE: Suffolk Superior/Barrett 

DESCRIPTION: Defendant conspired with Curtis to defraud Star Market Corporation. 
The defendant was a bookkeeper for Melanson and Sons and in that capacity, submitted 
false records alleging that the company had provided refrigeration equipment. In actual- 
ity, no equipment was delivered. The bulk of the monies received from Star were kicked- 
back to Curtis. 
CHARGES: Larceny Over $250 (1 Count) 

Conspiracy to Commit Larceny Over $250 (1 Count) 
Conspiracy to Make False Entry in Corporate Books (1 Count) 
SENTENCE: The defendant plead guilty, and after admission to sufficient facts, 
received a sentence of one year pre-trial probation, and a $5,000 restitution order. $35.00 
Victim/witness fee. 

(AAG K. Brekka) 

5/25/99 Commonwealth v. Bill Melanson 

(Larceny/Conspiracy Prosecution) 

COURT/JUDGE: Suffolk Superior/Barrett 

DESCRIPTION: Defendant conspired with Curtis to defraud Star Market. Defendant 
was a bookkeeper for Melanson and Sons and in that capacity, submitted false records 
alleging that the company had provided refrigeration equipment. In actuality, no equip- 
ment was delivered. The bulk of the monies received from Star were kicked-back to 
Curtis. 
CHARGES: Larceny Over $250 (1 Count) 

Conspiracy to Commit Larceny Over $250 (1 Count) 
Conspiracy to Make False Entry in Corporate Books ( 1 Count) 
SENTENCE: The defendant plead guilty after a jury trial. He received a one year 
House of Correction sentence, 90 days to serve, the balance suspended for three years 
probation, and ordered to pay $8,500 in restitution. $35.00 Victim/witness fee. 



112 



CRIMINAL BUREAU 



(AAG K. Brekka) 

6/21/99 Commonwealth v. Charles Weekes 

(Tax Prosecution) 

COURT/JUDGE: Suffolk Superior Court/ Donovan 

DESCRIPTION: This matter involves a former state resident who used many false New 
Hampshire addresses to avoid state withholding and taxation. Weekes is Vice President 
of U.S. and European Sales for Zilog, Inc., a national and international semi-conductor 
company headquartered in California with a regional office in Chelmsford, Mass. 
CHARGES: Willful Attempt to Evade and Defeat Income Taxes (5 Counts) 

Willful Making and Subscribing a False income Tax Return (1 Count) 
Willful Failure to File State Income Tax Returns (4 Counts) 
SENTENCE: The defendant plead guilty, and received a sentence of two years in the 
House of Correction, suspended for three years probation, with a $25,000 fine paid 
forthwith. Payment to DOR of approximately $ 1 1 2,000 and probation to be supervised until 
paid in full. All other charges concurrent or filed without change of plea. $60.00 Victim/wimess 
fee. 

(AAG K. Brekka) 

6/28/99 Commonwealth v. Robert S. Zawadski 

(Larceny/Fraud Prosecution) 

COURT/JUDGE: Suffolk Superior/ Donovan 

DESCRIPTION: Defendant is a Boston Police officer who is alleged to have submitted false 

insurance claims alleging fictitious lost wages. 

CHARGES: Larceny Over $250 (2 Counts) 

Motor Vehicle Insurance Fraud (2 Counts) 

Uttering (2 Counts) 

Attempt to Commit a Crime (2 Counts) 
SENTENCE: Defendant plead guilty, and on an unagreed upon plea, the defendant 
was sentenced to two years House of Correction, seven months to serve, balance suspended 
for two years of probation, and $ 1 0,000 restitution. All other charges filed without change of 
plea or received concurrent sentence. $60 Victim/Witness fee. 

(AAGs K. Brekka/M. Parks) 



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FINANCIAL INVESTIGATION DIVISION 



The Financial Investigation Division provides the Criminal Bureau with six experienced 
civilian investigative professionals who investigate and assist in the prosecution of white-collar 
criminal cases. These investigations include larceny, public corruption, campaign finance viola- 
tions, securities fraud, bucketing, tax fraud and all other white collar frauds which are referred to 
the Division. The investigators bring to the Division many years of experience from investigat- 
ing cases in local, state and federal government as well as private sector venues. 

This fiscal year, the Division was comprised of three Certified Fraud Examiners, one Certi- 
fied Public Accountant, two lawyers and two investigators from the banking and insurance 
industry. 

During FY99, the members of the Division for all or part of the year were: David Baker; 
Brad Chase, Esq.; Peter Darling, Esq.; Bill Frugoli, CFE; Jim McFadden, CFE; Sallyann 
Nelligan; Patrick Ormond, CPA; and, Paul Stewart, CFE, the Division's Director. 

INVESTIGATIVE RESPONSIBILITIES 

The investigators assigned to this Division work closely with Criminal Bureau prosecutors 
and also Massachusetts State Police assigned to the Criminal Investigation Division. Investiga- 
tors may also be asked to work on a case by case basis with investigative or audit personnel from 
referring agencies such as the Securities Division of the Secretary of State's Office (SOS), Board 
of Bar Overseers (BBO), Criminal Investigations Bureau of the Department of Revenue (CIB), 
and the Office of the State Auditor (OS A). 

All investigators are responsible for designing and implementing investigative plans which 
assess allegations of criminal conduct. These investigations require extensive review and analy- 
sis of business, personal and banking records to document the illegal activities of the white collar 



114 



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criminal. In addition, investigators conduct interviews of victims, witnesses and targets, and 
provide summary witness testimony before Superior Court special grand juries and in trial 
settings. Further, utilizing modem computerized technology, investigators are able to scan a 
wide array of informational databases to track and profile potential subjects of criminal investi- 
gations. 

In addition to working active investigative caseloads, each Division investigator is respon- 
sible for screening a portion of the hundreds of matters received annually which fail to meet 
guidelines of a respective division or whose allegations do not rise to the level of a criminal 
investigation. 

The majority of the Division's investigative assignments come from the Bureau's Economic 
Crimes Division. The Division works closely with the Economic Crimes Division Chief during 
the screening process and then with the assigned AAG when a matter has been accepted for 
formal investigation. 

Another source of investigative assignments for the Division is the Public Integrity Division. 
Our primary involvement in Public Integrity Division matters is in the screening and investiga- 
tion of matters referred from the OS A. 

The Division also commits investigative resources to the Special Investigations and Narcot- 
ics Division and to the Bureau's investigative efforts of the Central Artery Third Harbor Tunnel 
iProject. Since the Division's inception in 1995, it has also performed investigative assignments 
.for the Bureau's Environmental Crimes Strike Force and the Appellate Division. 

ADMINISTRATIVE FUNCTIONS 

In addition to our investigative tasks, the Division also performs many administrative duties 
for the Bureau with respect to cars, seized evidence and the spending of forfeited fimds. We are 
responsible for the assignment, maintenance and reporting on the usage of all Bureau cars. The 
Division maintains a log of all money seized by the State Police in association with any arrest. 
iThe seized money is kept in a safety deposit box and the contents are inventoried on a quarterly 
! basis by Division staff. Additionally, we prepare an accounting of all forfeited frmds of die 
Special Investigations and Narcotics Division which are disbursed in accordance with the 
Commonwealth's forfeiture laws. The accounting system is designed as a management tool for 
the Bureau, not only to retrospectively track spending but also to project ftiture needs. 



115 



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OUTREACH 

The staff is an integral part of the Bureau's outreach to referral agencies. We maintain con- 
tact with the Chief Investigator at CIB and the BBO's Senior Financial Investigator to update 
them monthly on the status of all referrals from their respective agencies. CIB and BBO cases 
are referred through the Economic Crimes Division. Our outreach efforts are designed to 
complement those of the Chief of the Economic Crimes Division. 

TRAINING 

Division members have prepared and delivered training sessions to their colleagues through 
the officewide training program, personnel from outside referral agencies and also to groups such 
as The Arson Investigators Association, Massachusetts Society of Certified Public Accountants, 
The Southeastern Massachusetts Fraud Investigators Association, Suffolk University, The Check 
Fraud Clearinghouse, and local school districts. 

Presentations include: 

• How to Perform Title Searches of Registered and Recorded Land, and Review Pro- 
bate Court Records 

• Interview and Report Writing Techniques 

• Financial Investigative Techniques 

• Investigative Resources for the Financial Investigator 

INTERN PROGRAM 

The Division's intern program seeks to provide a valuable one semester training experience 
for interested students who have a background in accounting, finance, business law or criminal 
justice. Through the efforts of our intern coordinator, the Division has been provided with a 
steady stream of talented interns from Boston area schools. 



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CRIMINAL BUREAU 



HIGH TECH AND COMPUTER CRIMES DIVISION 



The High-Tech and Computer Crimes Division (HT&CC) is charged with the responsibility 
of investigating or assisting in the investigation of the commission of crimes facihtated through 
the use of computers, the Internet, or other unusual technology (so-called "high tech") and, 
where appropriate, prosecuting such offenses. The HT&CC, formally known as the High-Tech 
Crime Unit of the Special Investigations and Narcotics Division, was raised to Division status 
within the Criminal Bureau in order to signify its expanded role in assisting all divisions within 
the Bureau as well as to reflect the Attorney General's priorities to appropriately enforce the 
Commonwealth's laws on the Internet. The HT&CC has primary original jurisdiction over those 
offenses which are committed solely through the use of computers including: 

1. Unauthorized Computer Access (Hacking); G.L. c. 268, § 120F; and 

2. Possession and Dissemination of Child Pornography (including the use of child 
pornography by child "predators" to lure children for sex; G.L. c. 272, §§ 29, 29B 

The HT&CC assists Divisions and Bureaus throughout the Office in the investigation of 
other crimes facilitated with the use of a computer, the most common examples of which in- 
clude: 

1 . Larceny (e-commerce via stolen credit cards and identity theft) 

2. Fraud (Internet Auction fraud) 

3. Assault (hate e-mail) 

4. Internet Gambling 

5. Illegal Sales via the Internet (Alcohol, Firearms, prescription drugs) 

6. Malicious Destruction of Personal Property (computer data destroyed by viruses) 

7. Theft of Trade Secrets 

8. Wholesale Pirated Copyrighted Software 



DIVISION ORGANIZATION AND OBJECTIVES 

The HT&CC Division's structure is unique within the Office of the Attorney General. The 
HT&CC has a Division Chief, Thos. Gregory Motta, who serves as the full-time prosecutor of 
the Division and coordinator of the Division's investigations and prosecutions. In FY2000, the 
Division will be expanded to include two additional full-time attorneys. Currently, as investiga- 



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CRIMINAL BUREAU 



tions and prosecutions arise, attorneys from other Divisions are assigned to matters that fall 
within the purview of the HT«&CC Division in order to augment its capabilities or, in the ahema- 
tive, the HT&CC Division Chief will assist the attorneys in other Divisions as the need arises. 

The HT&CC is comprised of three specially trained, full-time investigators: Tpr. Kevin | 

Bibeau, Tpr. David McSweeney and Tpr. Matthew G. Murphy. In addition, Det. Eric Lunberg of 
the Easton Police Department is detailed full time to the Division for on-going investigations and 
is similarly experienced in forensic computer examinations as well as on-line investigations. 
During FY99, Sgt. J.J. McLean of the Medford Police Department served as both Supervisor of 
Investigations and Technical Advisor to the Division. Although Sgt. McLean has returned to his 
duties in Medford, he continues to serve as a Technical Advisor to the Division. Currently, State 
Police Lt. Joseph Flaherty supervises the Division's investigators and assists in investigations. 
In FY2000, the HT&CC Division will be adding two additional troopers who will be provided 
special training in On-line Internet investigations as well as forensic computer data recovery and 
analysis. t 

INVESTIGATIVE INITIATIVES 

A significant portion of the HT&CC Division's time and resources are dedicated to providing 
direction and counsel to criminal and civil investigators throughout the state and the country. 
Assistance is provided to: 

1 . Area prosecutors in the drafting of appropriate language for search warrants to seize 
and recover evidence stored in computers; 

2. Area law enforcement agencies in identifying whether computers will retain evidence 
of criminal wrong-doing and where in the computer such evidence is most likely to be 
recovered; and 

3. Companies providing Internet access to citizens in the Commonwealth (so-called 
Internet Service Providers, or ISPs) in order to facilitate assistance to law enforcement in 
conformity with the Electronic Communications Privacy Act. 

The HT&CC also engages in on-going evaluations of new and emerging computer software 
application and hardware being publicly marketed to law enforcement for use in computer 
investigations. Moreover, the HT&CC assists the Office of the Attorney General with the 
drafting of legislation aimed at addressing and resolving issues raised by advances in technology. 



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INVESTIGATIVE HIGHLIGHTS 

InFY99, the HT&CC significantly assisted the Economic Crimes Division of the Bureau with the 
pecovery of evidence relating to the on-going investigation of former officials of the Treasurer's and 
Receiver General's Offices of the Commonwealth. This assistance included the seizure of numerous 
computers and the forensic review and recovery of evidence. The task was complicated as some of 
these computers included unusual databases and unique operating systems devised to service the special 
needs of the Treasury Office. 

At the same time, in FY99, the HT&CC Division continued to be involved in a number of 
child exploitation cases arising out of the Internet for the dissemination of child pornography 
and, in some cases, the luring of children by adults for sexual contact. On a regular basis, inves- 
tigators of the HT&CC Division go "on-line" posing as teenage children in various commercial 
and non-commercial chat rooms or chat channels. During these investigations, various subjects 
will contact the investigator and either propose sexual contact outright or begin by attempting to 
sexually titillate the curiosity of their young prey by sending, via e-mail, sexually explicit images 
of children engaged in sexual intercourse as a means of breaching inhibitions. In some such 
cases, these investigations were handed over to officials in the jurisdictions where the offenders 
resided for prosecution. In at least five of the cases, the offenders were prosecuted by the 
HT&CC Division resulting in convictions which have yielded varying periods of incarceration, 
forfeiture of computer equipment, counseling, no-contact with minors conditions and registration 
in the state DNA database. 

Numerous threatening e-mail investigations are conducted by the HT&CC Division. These 
include "hate" e-mail aimed at members of specific groups or bomb threats. The HT&CC 
Division has investigated the senders of constitutionally un-protected anti-gay, anti-Jewish or 
sexually harassing e-mail and, where appropriate have referred matters for civil or criminal 
enforcement. In a similar type of case in FY99, an employee of a major computer company in 
the Commonwealth used his company's e-mail service to send sexually harassing e-mails to 
several women in the company and, ultimately to attempt to extort sexual favors from at least 
one of the women. That individual was arrested when he appeared at a local hotel for a coerced 
sexual rendezvous only to learn that the female co-worker was replaced by a Massachusetts State 
Trooper. The offender has recently plead guilty to the felony charge of Attempted Extortion and 
is awaiting sentencing. 



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In FY99, the HT&CC investigated and prosecuted the use of the Internet for the transmission of 
bomb and death threats including threats transmitted to elected officials of the Commonwealth and 
threats made by high school students to harm or injure fellow students and/or teachers posted over 
Internet news groups. At least three such threats were deemed specific and credible enough after the 
Littleton, Colorado tragedy to merit the assistance of the HT&CC Division in the evaluation and identifi- 
cation of the students posting such threats. More recently, the HT&CC Division investigated a dis- 
gruntled Gulf War Veteran who responded to the denial of certain claimed benefits by implicitly threat- 
ening to blow up government buildings in the Commonwealth. That individual is awaiting trial. 

Perhaps the most challenging of the investigations conducted by the HT&CC during FY99 
involve "hacking." Typically, the majority of "hacking" offenders tend to either be disgruntled 
former employees (usually former IT personnel) or computer literate juveniles. In either in- 
stance, the offenders tend to possess a much greater knowledge of computer skills than other 
offenders and go to greater lengths to destroy evidence, conceal their identities and otherwise 
cover their tracks. There have been approximately five such investigations conducted by the 
HT&CC Division in FY99 resulting in two prosecutions by the HT&CC and referral of the 
others. 

In many other instances, the HT&CC Division provides forensic recovery advice relative to 
the recovery of e-mails of evidentiary significance. This advice has ranged fi-om the recovery of 
maliciously deleted data for victims of hackers to the recovery of e-mail of suspects engaged in 
conspiracy to commit murder. 

In short, the HT&CC Division is charged with the formidable task of empowering the 
Commonwealth's law enforcement community with the capability to detect, prosecute and deter 
crimes committed with new and emerging technologies. 



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PUBLIC INTEGRITY DIVISION 



The Public Integrity Division's mission is to criminally prosecute and convict those who 
attempt to personally profit at the public's expense, or who in some other manner breach the 
public's trust or safety, in violation of the criminal laws of the Commonwealth. Towards that 
end, in FY99, the Public Integrity Division commenced nine criminal prosecutions against public 
officials and others who violated the public trust and/or safety. During that same period, over 38 
criminal prosecutions were resolved. The criminal prosecutions that were initiated this past year 
ranged from crimes of larceny by police officers to bribery by a Clerk-Magistrate in Middlesex 
County. 

During all or part of FY99, the members of the Division were: Jeremy Silverfine, AAG and 
Division Chief; Elisabeth Ditomassi, AAG; Audrey I-Wei Huang, AAG; John Grossman, AAG; 
Andrew Lawlor, AAG; Jonathan Mitchell, AAG; Michael Zullas, AAG; Sheila Connolly and 
Kelli Murray, support staff. 

CRIMINAL CASE HIGHLIGHTS 

HIGHLIGHTS OF CASES DISPOSED IN FISCAL YEAR 1999 

1 . A captain with the Taunton Police Department was found guilty of stealing one or 
more firearms from the City's gun buy back program. After a four-day trial, a Bristol 
County jury found the police captain guilty. The Superior Court judge sentenced the 
captain to a two-year House of Correction term, suspended for a period of two years, with 
probation and restitution. The Commonwealth had recommended a two year committed 
sentence. 

The evidence indicated that beginning in 1994, the City of Taunton ran several gun 
buy back programs. During the first gun buy back program, six weapons were missing 
from the list of weapons which were supposed to have been destroyed by the police. The 
Commonwealth was able to identify four of the six weapons and connect them to the 
defendant. The evidence indicated that two of the handguns were given to the captain's 
daughter and the daughter's then boyfriend. 

2. After a six-day jury trial in Middlesex Superior Court, a Middlesex County defense 
attorney from Manchester-by-the-Sea was found guilty of extorting money from an 
indigent defendant who had been charged with drug trafficking. The attorney was found 



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guilty of charges he extorted cash payments from the defendant by threatening that he 
would not do his job as a court-appointed attorney unless the client paid him $3,000. 

The jury also convicted the attorney of one count of tax evasion, one count of filing a 
false tax return and one count of larceny over $250. The larceny charge arose from the 
attorney's receipt of $1,500 in cash extorted from family members of the indigent client. 
The attorney had submitted four bills to the state claiming he had performed work for the 
client, which falsely certified that he had not received money from anyone else for the 
work. As a result of the four false bills, the state paid the attorney $2,250. Under a 
scheme to evade state income taxes on the extra income he was receiving, the attorney 
filed a false tax return for 1 993 that omitted the extortion money he had received and 
some $46,000 in income he had received from private clients. He had only reported on 
his tax returns the income he received from the state for his public defender work. 

The attorney was sentenced to two years committed to the House of Correction, with 
two years probation on and after his committed term, 200 hours of community service, 
and $1 ,500 restitution. Several weeks after the conviction and subsequent sentencing, the 
attorney also plead guilty to two additional counts of tax evasion and two counts of false 
tax returns. He was sentenced to 30 days committed in the House of Corrections to run 
concurrent with the other committed sentences. 

3. A former assistant clerk-magistrate in Middlesex Superior Court plead nolo conten- 
dere to charges he accepted cash gifts and a vacation from a lawyer and private investiga- 
tor. The assistant clerk-magisfrate had been indicted in Suffolk Superior Court on two 
counts of accepting illegal gratuities. He was sentenced to one year in the House of 
Corrections, 60 days to serve, the balance suspended with 300 hours of community 
service as a condition of his probation. 

From 1992 to 1995, the clerk-magistrate routinely received at Christmas and at the 
time of his spring vacations cash gifts ranging in size from $100 to $300 from a former 
private investigator and a criminal defense lawyer. One cash gift was delivered by a 
former Middlesex Court Clerk-Magistrate. The criminal defense lawyer also gave the 
clerk free use of a Pompano Beach, Florida condominium for two one- week periods. As 
an assistant clerk-magistrate in Middlesex Superior Court, the clerk-magistrate often 
tracked down motions filed by the defense lawyer or involving the private investigator 
and then prompted judges to act on the motions. He received the cash payments as 
gratuities or tokens. 

4. A Winchendon woman plead guilty in Worcester Superior Court to charges of steal- 



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ing $21,679 from the state by making false representations to the Department of Transi- 
tional Assistance ("DTA"). She plead guilty to one count of larceny over $250 and one 
count of making false representations. Between 1991 and 1996, the defendant submitted 
false landlord verification forms to the DTA stating that she had paid rent to a landlord. 
In actuality, the defendant was living with the father of her child who earned more than 
$60,000 a year. 

She was sentenced to two years in the House of Corrections, suspended for five years, 
during which time she will be on probation. In addition, she was ordered to pay $21,679 
restitution and serve 300 hours of community service. 

5. A West Roxbury man plead guilty to assaulting a Suffolk Superior Court judge, 
disrupting court proceedings and resisting arrest. A different Suffolk Superior Court 
Judge sentenced the West Roxbury man to two years in the House of Corrections, com- 
mitted, for attacking the judge, along with four years probation for resisting arrest. He 
was also ordered to undergo drug and alcohol counseling. The charges arose when the 
defendant attended his cousin's sentencing in Suffolk Superior Court for unrelated 
charges. Soon after sentencing, this defendant stormed out of the courtroom yelling 
profanities. He then re-entered the courtroom seconds later through a private door near 
the judge's bench and began charging the judge. Courtroom officers intercepted the 
defendant before he reached the judge. He then struggled with the court officers and 
resisted their attempts to handcuff him. No one was injured in the incident. 

6. An insurance executive from Beverly who had once managed one of the student 
health plans at tlie University of Massachusetts, Amherst, plead guilty in Hampden 
Superior Court to stealing more than $600,000 from school accounts established to pay 
for student health benefits. He had been indicted in 1995 by grand juries in Hampshire 
County and Essex County on 30 counts of larceny over $250, six counts of procurement 
fraud, four counts of making false claims, one count of forgery, one count of uttering a 
forged instrument and four tax charges. He was sentenced to nine to 1 1 years in state 
prison. 

The defendant's theft and other crimes occurred from the insurance company for 
which he was one of two principals. The company had held a contract with University 
Health Services at UMASS-Amherst to manage claims payments for the University's 
Supplemental Health Benefits Plan, which paid for off-campus medical care for students. 
Acting on behalf of the insurance company, the defendant created and submitted inflated 
invoices to UMASS-Amherst to embezzle school funds to operate the insurance agency. 



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He inflated the invoices by about $200,000. He used the stolen money to cover his 
business's overhead expenses. In addition, on two occasions the defendant created 
fraudulent checks to use school funds to pay for personal expenses, including the monthly 
rent for his three-bedroom luxury Beverly apartment and the Beverly Golf and Tennis 
Club. All totaled, about $633,000 was stolen. 

7. Four bail commissioners admitted to their involvement on tax evasion and filing false 
returns relative to their income earned as bail commissioners. They received suspended 
sentences and fines. One of the defendants, from Dennisport, plead guilty to six counts 
of tax evasion and filing a false return. He served as a bail commissioner for Harwich, 
Dennis, Yarmouth and the State Police. Between 1991 and 1996 he understated his 
income by $126,190. He admitted to the Department of Revenue that he had understated 
his income and lied to his tax preparer. A Suffolk Superior Court judge imposed a two- 
year House of Correction term suspended for two years, 300 hours of community service, 
and a $9,000 fine. The Commonwealth had recommended a two-and-a-half year sentence 
to the House of Corrections with six months to serve and a $30,000 fine. 

A second defendant, from Wobum, plead guilty to six counts of tax evasion and filing 
a false tax return. He served as a bail commissioner in the Wobum District Court. He 
failed to report the $108,029 in fees he collected between 1991 and 1996. A Suffolk 
Superior Court judge imposed a sentence of two years to the House of Corrections sus- 
pended for two years, 300 hours of community service and a $13,000 fine. The Com- 
monwealth had recommended a two-and-a-half year sentence to the House of Corrections 
with six months to serve. 

8. A Millbury man who got paid for being a "no-show" park ranger while he was moon- 
lighting as a Special Police Officer in Millbury was sentenced after pleading guilty to 
illegally earning more than $4,000 from the Commonwealth. The defendant, who was 
employed by the Department of Environmental Management as a park ranger at 
Cochituate and Callahan State Park in Wayland since 1990, plead guilty to one count of 
stealing from the state by a continuous scheme, one count of making false statements to 
get paid, and one count of making false claims to the state. 

A Boston Municipal Court judge sentenced the defendant to two-and-a-half years in 
the House of Corrections, suspended, with two years of probation, and ordered him to pay 
$4,273.10 in restitution to the state, a $5,000 fine and to perform 100 hours of community 
service. 



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9. A Winthrop probation officer plead guilty to charges that he ran a booicmaking 
operation in 1 995 from his home. The defendant had been indicted in Suffolk County in 
December of 1996 on two illegal betting charges: possession of betting apparatus and 
using a telephone for gaming purposes. He also was charged in a separate indictment in 
Hampden County on an additional charge of using a telephone for gaming purposes 
which was later consolidated with the Suffolk County charges. The probation officer 
was assigned to serve as a Family Service Officer in Middlesex Probate and Family 
Court. A State Police search of his home and safe deposit box yielded extensive gam- 
bling records, including betting slips, cuff lists, and wagering sheets that detailed bets on 
hundreds of sporting events. His safe deposit box contained more than $100,000 cash. 
He was sentenced to a two-year suspended sentence followed by two years of probation 
and was fined $3,000. 

10. Two Southeastern Massachusetts men were sentenced after pleading guilty to trying 
to cheat on their civil service police examination. The men plead guilty in New Bedford 
District Court to one count of altering or substituting examination papers. Both men had 
tried to switch their identities when they took their police exams in April, 1997, to ensure 
that one of them would score well. They were each sentenced to one year probation and a 
$200 fine. 

11 . A prisoner of a work release program plead guilty in the middle of a jury trial to 
stealing laptop computers from a state office building. The prisoner was sentenced to an 
additional two years, committed, from and after the term he was serving. 

12. The former head of the Westport Police Department's detectives plead guilty to 
embezzling $5,300 from the town's DARE program to pay for a home entertainment 
center. The former detective was sentenced to two years in the House of Corrections, 
suspended for two years with probation, and a $10,000 fine. 

HIGHLIGHTS OF CASES INITIATED IN FISCAL YEAR 1999 

1 . A former New Bedford elementary school principal was indicted for stealing fiinds 
from student fundraisers. In 1994, a group of New Bedford elementary school student's 
parents began to criticize the principal's handling of a fiindraising account of the school's 
library. At the parent's request, the then Superintendent conducted an "audif of the 
library account and found no wrongdoing. The parents persisted with their complaints to 



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the elected School Committee. In April, 1996, the School Committee adopted a policy 
requiring principals to keep detailed records of student fundraising. Unsatisfied, the 
parents continued their complaints, and a new Superintendent referred the matter to the 
police in July, 1996. The police helped one parent swear out a forgery complaint against 
the principal in the New Bedford District Court in August, 1997. In July, 1998, the local 
District Attorney's office requested the Attorney General's Office take over the prosecu- 
tion on the grounds that it had a conflict of interest. 

The principal was charged with embezzlement. Over a three-year period, the princi- 
pal allegedly embezzled over $20,000 from a school bank account. The money was 
raised by school children to pay for extra educational activities, and by parents to fund 
improvements to the school library. The principal also failed to report the receipt of the 
embezzled funds on her state income tax returns. 

2. A Corrections Officer at MCI/Norfolk was indicted for soliciting and receiving a 
series of payments from the wife of an inmate. The corrections officer was indicted on 
one count of bribery and one count of delivering articles to an inmate. 



INDICTED CASES JULY 1, 1998 TO JUNE 30, 1999 



DATE 
9/25/98 



DEFENDANT'S NAME 



Randolph Mogren 

one count larceny over $250 
one count false written statements 
one count false claims 



10/1/98 



Timothy Sousa 

one count altering/substituting examination papers 



10/1/98 



Edward Mello 

one count altering/substituting examination papers 



10/22/98 



Douglas Whitlow 

one count forgery 
one count uttering 
one count larceny over $250 



12/29/98 



Cynthia Mello 



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4/20/99 



one count larceny 

one count forgery 

one count larceny 

three counts false tax returns 



4/30/99 



4/30/99 



5/6/99 



5/26/99 



William Turtle 

one count larceny over $250 

Patricia Romano 

one count larceny over $250 

Robert Federico 

five counts perjury 

John Lennon 

one count bribery 

one count delivering articles to an inmate 



CASE CONVICTIONS/DISPOSITIONS JULY 1, 1998 TO JUNE 30, 1999 



DATE 



DEFENDANT'S NAME 



6/22/98 Wanda Estes 

Found guilty of one count of larceny over $250 and one count of making false representa- 
tions, sentenced to two years in the House of Correction, suspended for five years proba- 
tion, ordered to pay $21,679 restitution and perform 300 hours of community service. 

7/2/98 Glenn Essler 

Plead guilty to 30 counts of larceny over $250; seven counts of procurement fraud; four 
counts of making false claims; one count of forgery; one count of uttering a forged 
instrument; one count of filing false tax returns; one count of failure to appear after 
release on bail; and three counts of failure to file an income tax return. Sentenced to a 
total of nine to 1 1 years in state prison. 

8/5/98 Paul Cacchiotti 

Found not guilty on two counts of attempted extortion. Foimd guilty on one count of 
attempted extortion. Sentenced to two years in the House of Correction committed. 



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Found guilty on one count of larceny over $250 and one count of tax evasion. Sentenced to 
one year in the House of Correction to run concurrent. Found guilty of one count of filing false 
tax return. Sentenced to two years probation from and after his sentence. Ordered to com- 
plete 200 hours of community service each year during the probation period. Also ordered to 
pay restitution to the extortion victim when able. Defendant plead guilty to two counts of false 
tax returns after trial. Sentenced to 30 days committed to the House of Correction to run 
concurrent with other committed sentences. 

8/12/98 Brian Kelly 

Plead guilty to one coimt of assault on a public employee; one count of disrupting court 

proceedings; and one coimt of resisting arrest. Sentenced to two years in the House of 

Correction, committed, with four years probation; ordered to undergo drug and alcohol 

counseling. 

8/98 Raymond Blanchard 

Plead guilty to six coimts of tax evasion; and six counts of filing false tax returns. Sen- 
tenced to a two year House of Correction term, suspended for two years; 300 hours of 
community service; and a $9,000 fine. 

8/98 Joseph McCarthy 

Plead guilty to six counts of tax evasion; and six counts of filing false tax returns. Sen- 
tenced to a two year House of Correction term, suspended for two years; 300 hours of 
community service; and a $13,000 fine. 

8/98 John Kowalski 

Admitted to sufficient facts of four counts of false tax returns. Case continued without a 
finding for two years and defendant ordered to pay $3,000 in court costs and perform 300 
hours of commimity service. 

8/98 Patrick Toshach 

Admitted to sufficient facts of four counts of filing false tax returns. Case continued 
without a finding for two years and defendant ordered to pay $2,000 in court costs and 
perform 1 00 hours of commimity service. 



8/28/98 William Michael Batson 

Nol Pros entered on assault and battery on a minor. 



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9/2/98 Ruthanne Farnsworth 

Admitted to sufficient facts of six counts of false tax returns; six counts of tax evasion. 
Case continued without a finding for two and a half years; defendant ordered to pay 
$15,000 in court costs and perform 300 hours of community service. 

9/16/98 Paul Lo Conte 

Plead guilty to six counts of filing false tax returns; six counts of tax evasion. Sentenced 
to two years in the House of Correction, suspended for two years; a $12,000 fine and 300 
hours of community service. 

9/25/98 Frederick Hamlett 

Plead guilty to two counts of larceny over $250; one count of creating false corporate 
records; and procurement fraud. Sentenced to serve six to eight years in state prison; and 
restitution. 

9/25/98 J. Russell Tillman 

Plead guilty to two covmts of larceny over $250; one count of creating false corporate 
records; and procurement fraud. Sentenced to serve six to eight years in state prison; and 
restitution. 

10/98 Robert Shell 

Plead nolo contendere to two counts of accepting illegal gratuities. Sentenced to one year 
in the House of Correction, 60 days to serve, the balance suspended with 300 hours of 
community service as a condition of probation. 

10/16/98 Gaetano Morello 

Plead guilty to defrauding the state. Sentenced to 30 days in jail, suspended with one 
year probation; $5,000 fine and community service. 

11/6/98 Timothy Sousa 

Plead guilty to one count of altering or substituting examination papers. Sentenced to 
one year probation and a $200 fine. 

11/12/98 David A. Lee 

Found guilty of procurement fraud. Sentenced to two years probaUon; 500 hours of 
community service and a $10,000 fine. 



129 



CRIMINAL BUREAU 



11/30/98 Randolph Mogren 

Plead guilty to one count of larceny over $250; one count of false written statements; and 
one count of false claims. On the larceny charge, sentenced to two years in the House of 
Correction, suspended for two years probation; $4,273 restitution; $5,000 fine; 100 hours 
of community service. On the false written statement charge, one year in the House of 
Correction, suspended for two years to run concurrent with the larceny charge. On the 
false claims charge, two and a half years in the House of Correction, suspended for two 
years, $60 victim witness fee, to run concurrent with the other charges. 

12/2/98 Edward Mello 

Plead guilty to one count of altering or substituting examination papers. Sentenced to 
one year probation and a $200 fine. 

12/18/98 Charles Sillari 

Plead guilty to one count of possession of betting apparatus; two counts of unlawful use 
of telephone. Sentenced to two years in the House of Correction, suspended; $3,000 fine 
on the possession of betting apparatus charge. On the unlawful telephone use charge, 
three months in the House of Correction, suspended, with two years probation to run 
concurrent with the betting apparatus charge. 

12/29/98 Brown University 

Admitted to submitting inaccurate invoices and payment vouchers to the state. Agreed to 
pay $300,170 to the Commonwealth in a civil settlement. 

1/25/99 Paul Hicks 

Found not guilty on larceny over $250; and false claims. 

1/25/99 Rosemarie Hicks 

Found not guilty on larceny over $250; and false claims. 

1/27/99 Stephen Sirabella 

Plead guilty to larceny; submitting false claims; procurement fraud; and filing false tax 
returns. Sentenced to three years probation; 55.000 fine; and full restitution. 

2/1/99 Joseph Rotondi 

Plead guilty to three counts of larceny; one count of conflict of interest; three counts of 



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CRIMINAL BUREAU 



submitting false claims; one count of procurement fraud; and three counts of filing false 
tax returns. Sentenced to three years probation; $5,000 fine; and full restitution. 

2/8/99 Sothat Sisouthone 

Found guilty of illegal possession of a firearm and conspiracy for illegal possession of a 
firearm. Sentenced to two years in the House of Correction, one year committed manda- 
tory. 

2/8/99 Tan Phuoc Le 

Found guilty of illegal possession of a firearm. Sentenced to two years in the House of 
Correction, one year committed mandatory. 

3/4/99 Richard Pimental 

Found guilty of larceny of one or more firearms. Sentenced to two years probation. 

3/8/99 WilUam Jewer 

Found not guilty of larceny over $250; false claims; larceny of a motor vehicle; forgery 
assignment of title; false statement of application for title; fraud in motor vehicle insur- 
ance claim; fraud by city officer; and false written statements. 

4/8/99 John Colton 

Found not guilty of interference with a witness; false written reports; and obstruction of 
justice. 

4/26/99 James Bourget 

Plead guilty to larceny over $250. Sentenced to two years to two years and a day, from 
and after his current committed sentence. 

4/27/99 Mark Langevin 

Case continued without a finding for six months on assault, and breaking and entering in 
the daytime. 

5/3/99 Anthony Ellison 

Placed on pre-trial probation for one year for assault and assault and battery; alcohol and 
marital counseling for six months. 



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5/6/99 Lawrence Shetler 

Defendant found in default and remains a fugitive on procurement charges. 

5/10/99 Mario Lewis 

Plead guilty to larceny. Sentenced to two years in the House of Correction, suspended for 
a two year period of probation and $10,000 fine. 

5/13/99 Patricia Romano 

Plead guilty to larceny and uttering charges. Case continued without a finding for six 
months. 

5/13/99 William Turtle 

Plead guilty to larceny and uttering charges. Six months suspended sentence, one year 
probation; and $8,176 in restitution. 

6/11/99 Francis Noone 

Found not guilty on 27 armed robbery and related charges. 



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SAFE NEIGHBORHOOD INITIATIVE 



Established in February, 1993, by the Attorney General's Office, the Suffolk County District 
Attorney's Office, the Mayor's Office of the City of Boston and the Boston Police Department, 
the Dorchester Safe Neighborhood Initiative (SNI) celebrated its sixth anniversary in February of 
1999. Successful SNI models have also been established in Grove Hall, Brockton, Chelsea, 
Taunton and the Turners Falls Village of Montague. 

The SNI has developed into a truly effective coalition among community residents, state and 
local government officials, law enforcement personnel and human service providers to solve a 
variety of community problems. Based on the premise that no one group can resolve all the 
problems faced by urban neighborhoods, the SNI model works to stem violence and improve the 
quality of life by developing multi-disciplinary approaches to community issues. 

Since those who live in a community know best what problems neighborhoods face and how 
they can be addressed, residents are vital members of SNI partnerships which revolve around the 
core principles of coordinated law enforcement, prevention, intervention and treatment and 
neighborhood revitalization. The richness of the SNI is a direct result of the program compo- 
nents and the individuals involved who collaborate in numerous ways, existing not as discrete 
entities but as essential pieces of the big picture of community health and safety. Thus, our 
projects often overlap in ways that significantly enhance the SNIs ability to respond to commu- 
nity needs. 

While we worked to nurture new SNI efforts across the Commonwealth, the more mature 
projects continued to grow and flourish during Fiscal Year 1999. Our model project in 
Dorchester continues to be led by zealous community leaders who put forth considerable efforts 
to sustain the peace and well-being of the SNI target area and its residents. Our Grove Hall 
project has come a long way. By cementing formerly tenuous relationships between community 
partners and law enforcement officials, the GHSNI enjoys a great deal of success in reaching 
more and more community residents and addressing pressing issues in that community. In 
addition to the four-year Byrne grant from the Executive Office of Safety received by the 
Brockton SNI last year, they have received "Official Recognition" from the Executive Office for 
Weed and Seed. The grant submission for the Brockton Weed and Seed site is currently in the 
budget process and funding notifications will happen soon. The Taunton SNI has once again 
experienced positive results in Fiscal Year 1999. From 1995 to 1998, the City of Taunton's 
overall crime statistics decreased 33% and the number of juvenile complaints decreased from 



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CRIMINAL BUREAU 



1,335 to 75 1 . Our newest SNI effort in Montague gets much of its structure and focus from SNI 
Prosecutor, Assistant Attorney General Linda DelCastilho, who has done a tremendous job over 
the last year to move that project forward. 

Throughout the year, the SNI had the fortunate opportunity to work with Catherine M. Coles, 
J.D., Ph.D., of Harvard University's John F. Kennedy School of Government to generate an 
outcome measurement development process for the SNI. Her work is funded by the National 
Institute of Justice. Catherine divided her time among four SNI programs in the greater Boston 
area: Grove Hall, Dorchester, Chelsea, and East Boston. Participation in Catherine's project was 
very high - citizens, neighborhood development organizations, government partners, police, 
prosecutors and court representatives all played an active role in cultivating the outcome mea- 
surement process. 

The exciting conclusion from Catherine's project is that the SNI program is working for 
communities. Each SNI has a different approach to problems - some are law enforcement driven 
while others are community driven, but all of the programs are infused with the three core prin- 
ciples: neighborhood revitalization, coordinated law enforcement and prevention, and interven- 
tion and treatment. Common themes that emerged as the programs considered the ftiture of the 
SNI were: the need to institutionalize the Safe Neighborhood Initiative; improve the overall 
quality of life for each community; increase safety and the perception of safety in the target 
areas; and revitalize the economy. 

STATEWIDE EXPANSION EFFORTS 

INNOVATION GRANTS 

In Fiscal Year 1998, the Office of the Attorney General awarded SNI Innovation Grants to 
ten cities across the state. Taunton, New Bedford, Fall River, Lowell, Maiden, Somerville, 
Lawrence, South Boston, Springfield, and Pittsfield were the beneficiaries of this funding. The 
Attorney General's commitment to youth issues prompted the decision to focus the Innovation 
Grants on the needs of young people. Agencies in each of the selected cities were asked to 
develop concept papers detailing how they would creatively utilize funds to provide prevention, 
intervention and/or treatment services for youth in their communities. 

The first to receive an Innovation Grant, the Taunton Department of Human Services, 
utilized their funds to provide random drug testing and electronic monitoring for offenders at 
Taunton Juvenile Court as well as providing Spanish language courses for police officers. The 



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funding allowed for 156 random drug screenings for 93 court involved adults and juveniles, 122 
days of electronic monitoring were provided to home confined offenders, and an eight- week 
course in conversational Spanish was made available to Taunton Police Officers. 

The YMCA of Southeastern Massachusetts developed a program called "Youth Night Out" 
that took place in their child care facility in New Bedford. Youth ages 9-15 were invited to 
participate in weekly night sessions from 6:00-9:00 p.m. on Wednesdays. Attendance varied 
from 1 5 to 30 youngsters each session. As the program developed, one night each month was 
designated as a special event - in October, there was a Halloween party with a magician and in 
June, a cookout. The project was successful in providing a safe place for youth from the neigh- 
borhood to gather together and take part in fun, multi-cultural activities. 

Big Brother/Big Sister of Greater Lowell extended their "ADAM Project", a program to 
engage at-risk young men in life skills training, violence prevention and leadership development, 
including Outward Bound excursions. Of the 45 young men enrolled in the program, 30% are 
first time offenders, 15 % are foster children or DSS involved and 65% are from single parent 
homes. The program helped the youth with academics, communication skills and community 
outreach. The YMCA interviews all participants three times a year to gather input about the 
program and also tracks the students' academic achievements. 

Fall River's Innovation Grant was awarded to the YMCA of Greater Fall River to initiate the 
"Streetwise Players," a 25-member teen performing arts troupe addressing substance abuse. The 
Troupe is open to all teens between the ages of 1 3 - 1 7, with special recruitment efforts targeting 
low income 13-15 year old teens fi^om culturally diverse backgrounds. The plays, followed by 
teen developed discussion activities, have been presented as a service to 1 ,000 sixth through 
eighth grade students. Subjects explored in the plays are: peer pressure, using substances to 
escape difficult realities, addiction in the home and its effects on the family, substance abuse and 
: driving, and where to find resources for help with substance abuse. In addition to the performing 
I arts troupe, the teens are implementing a community-wide campaign, "Fall River Free" to reach 
I 30,000 youth and their families with information on the dangers of substance abuse. The cam- 
! paign will use 250 posters, 30,000 flyers, two radio ads and two TV broadcasts to spread their 
message. 

Holy Family Hospital in Lawrence developed a program to address the issue of adolescent 
dating violence with students at Lawrence High School. Both male and female students partici- 
pated in the program to learn the signs of an abusive relationship, various types of abusive 



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behavior, and the effects on children who witness domestic violence. The program ran from 
October through May, but attendance was a problem from the start. When students did come to 
class, participation was high, but the same students did not attend regularly. Despite this ob- 
stacle, the program ended up educating twice as many students as originally anticipated. 

Young women from the Newiand Street and Linden Public Housing Developments in 
Maiden were the targets of the Maiden YMCA Innovation Grant. The women were involved in a 
peer intervention program combining peer leadership, adventure-based activities, and art-based 
learning experiences to foster self-expression, self-esteem, trust, communication, and problem- 
solving skills. The program aimed to increase adolescent girls" resiliency to substance abuse, 
interpersonal and dating violence and other related risks facing young women today. The pro- 
gram combines adventure activities such as hiking, cross country' skiing, snow shoeing, mountain 
biking, rock climbing, canoeing and ropes courses vvith expressive arts activities such as 
storytelling, journal writing and self portraits. Sixty-eight girls participated and the program was 
a rousing success. 

Springfield's South End Community Center utilized their Innovation Grant to double the 
capacity of their Community Access Project and train young people to become community 
leaders. The community center has a three-year plan to develop after school programming and 
expand their "safe passage" zone which is a coordinated law enforcement effort to create a safe, 
crime-free area through which residents can go to work and school. A part-time coordinator and 
part-time communit\' organizer were hired to oversee the program. Reports from area residents 
indicate that the Community Access Project is a success - there is less graffiti in the neighbor- 
hood, out of state cars are less prevalent around the project, strangers are not hanging around as 
much and children are safer as a result of the After School Program. 

One hundred young people were employed \\-ith Innovation Grant funding awarded to the 
South Boston Neighborhood House for their "Rent-a-Kid" youth worker program. In addition to 
employment opportimities, the program also provided the young people with weekly counseling 
sessions around issues such as suicide, grief, substance abuse, conflict resolution and stress 
management. Additionally, the program placed 1 interns in local part-time positions with area 
businesses. 

Youth in Somerville's Mystic Public Housing Development operated the "Teen Choice 
Club." The suicide of a young man in the development prompted youth to speak up about the 
lack of productive after school activities in the area, resulting in a club to provide recreational. 



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educational, leadership development, and self esteem-enhancing activities for youth in the 
development. The Club is staffed by an adult advisor and three peer leaders. They meet on 
Tuesdays, Thursdays and Fridays from 6:00 - 9:00 p.m. at the new Mystic Activity Center. So 
far, a total of 120 youth, ages 11-19, have participated in various activities that include: com- 
puter literacy workshops, field trips, video screenings, photography training, reading groups, 
HIV/ AIDS prevention efforts and game/movie nights. 

In total, the SNI Innovation Grants will assist more than 550 young people across the Com- 
monwealth. 

ACCOMPLISHMENTS UNDER SNI CORE COMPONENTS 
PREVENTION, INTERVENTION AND TREATMENT 

SNI JOBS FOR YOUTH PROGRAM 

One of the major efforts aimed at prevention and inter\'ention is our Safe Neighborhood 
Initiative Jobs for Youth Program. The program, which started in 1996, has grown from employ- 
ing 23 youth in five communities to employing more than 100 young people in 1 1 conmiunities 
throughout the state. Massachusetts communities have placed youth issues at the top of their 
agenda. To embrace this effort, the Office of the Attorney General supported enrichment and 
employment programs for youth this year. 

Eighteen youth from SNI target areas in Grove Hall, Fields Comer and Uphams Comer are 
employed through Boston Communit>- Centers (BCC). Partnering with local businesses and 
agencies, BCC places young people in a variet>' of capacities allowing them to learn a multitude 
of skills including entrepreneurship, leadership and civic duty. Boston CommunitN- Centers 
recently conducted a survey of current and former SNI Jobs for Youth participants and discov- 
ered that youth who have participated in the program are more likely to be in school, have higher 
grade point averages, and are more likely to secure sustainable employment. 

The Old Colony YMCA in Brockton just completed their third year of Jobs for Youth fund- 
ing. Over the three years, they employed 27 teens beuveen the ages of 14-17. This year, they 
employed five interns who were placed in various communit>' based agencies. All the teens are 
currently in high school and four of them have plans for attending college. All of the youth who 
participated in this program were able to market their new skills to secure jobs in the private 
sector. 



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This year marks the fourth year of funding for the Chelsea Jobs for Youth program. Through the 
Department of Health and Human Services, the city provides positions for seven Chelsea teens at several 
area businesses and city agencies including: Chelsea Cable TV, the Chelsea YMCA, the Chelsea Public 
Library, the Chelsea Human Services Collaborative, and Chelsea Neighborhood Housing Services. The 
teens' responsibilities include community service, office support and clerical assistance. The SNl Jobs for | 
Youth program participants also receive instruction on writing resumes, career exploration, peer leader- 1 
ship, and confl ict resolution. I 

Ten young people are placed in year-roimd jobs through the Taunton Department of Human j 
Services. The 10 youth workers were assigned to the following human service agencies: the I 
Department of Human Services, the Boys and Girls Club, Taunton High School, Bristol Ply- 
mouth Regional Technical High School, the Old Colony YMCA in Taunton, and the Taunton ' 
Public Library. The partnerships created from this have been tremendous. Melissa, a graduate 
of the SNl Jobs for Youth program and now a college student, was hired as a "Youth Supervisor" 
for the program and notes that, "The Jobs for Youth Program awakened in me a new confidence 
in my abilities and a sense of pride in my city." 

"Buen Trabajo" is the program developed by the Holyoke Youth Alliance for implementation i 
of their SNl Jobs program. This program reinforces literacy by training 12 youth to be teen j 

educators and to read to young children in the waiting room of a large pediatric practice in the 
city. The Holyoke Youth Alliance reports that 1 00% of their participants went on to jobs in the 
private sector, 85% completed the year-long program, and 57% of the students went on to col- 
lege. 

The 1999 Jobs for Youth program in the City of Worcester enjoyed an outstanding year. In 
only the second year of funding, 14 youth were employed throughout the city. More impressive 
is that each of the youth employees accumulated 1200 hours of volimteer work. All together, the 
youth volunteered a total of 16,800 hours throughout the course of the school year. During the 
course of the summer, four teens from the Worcester program will attend the YMCA Interna- 
tional Youth Exchange Program in Scotland. The other 10 youth workers will be attending a 
week-long leadership development conference in New York. 

The city of Lynn collaborates with Girls Inc. to provide a thorough job preparedness program 
for seven students in Lynn. These seven students are provided quality training through the Girls 
Inc.'s Career Learning Center. The teens are taught about effective communication, problem 
solving, computer information and decision making. Upon completion of their training, students 



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are employed at the Community Minority Cultural Center as well as Lynn Arts, Inc. and Raw Arts, Inc. 

Twenty-five young people in New Bedford receive comprehensive job readiness training 
through UMass Dartmouth's Neighborhood College. Training provided is specific to the needs 
of area employers who actually pay the salaries of the young people, rather than relying on grant 
funds. The New Bedford program reports that of those young people who attended this pre- 
employment training which included a "real-world" internship experience, 80% are now em- 
ployed. 

The Springfield SNI Jobs for Youth program is implemented through the Springfield South- 
west Community Health Center. The program is called VISIONZ, which is a six member, peer 
health education group that utilizes plays, city-wide special events and outreach as its mechanism 
for disseminating violence prevention and public health information. The peer educators write, 
direct and star in skits used as teaching tools on such issues as HIV/ AIDS, teen pregnancy, self 
esteem, decision making, and youth violence. 

The SNI Jobs for Youth program is a solid demonstration of the Attomey General's commit- 
ment to young people and comprehension that prevention is one of the best and least expensive 
ways for communities to reduce juvenile crime. In addition to reducing juvenile crime, the 
program also enhances self-esteem, life skills, work ethic and decision-making abilities of young 
people allowing them the opportunity to make a successful transition into adulthood. 

DORCHESTER SNI 



Dorchester continues to be Boston's most culturally diverse neighborhood. Now in its sixth 
year, the Dorchester SNI continues to focus on issues that have consistently plagued the area - 
truancy and youth violence. The Boston Police Department targets the truancy issue while other 
subcontracted programs provide enhanced opportunities for young people to effectively use the 

i time when they are not in school through an array of recreational and educational programming. 
Additionally, community workers strive to empower and comprehensively address the needs of 
the large and growing Cape Verdean and Vietnamese communities. To supplement these under- 

, takings that are critical to the overall health and well-being of the target area, the Dorchester SNI 
has also created a strong network of support for other emerging immigrant groups, children who 
witness violence and the local business community. 

The Dorchester SNI Advisory Council continues to meet regularly. A top agenda item again this 



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year was funding. At the beginning of April, SNI Division Chief Susan Spurlock received word that 
Dorchester's Executive Office of PubHc Safety Byrne grant funding would be cut significantly. In 
response, members of the Dorchester SNI, including representatives from each subcontracted agency 
and the Attorney General's Office, met with the Director of the HOPS Programs Division, Michael 
O'Toole; Assistant Director of the Programs Division, Kevin Sullivan; and the HOPS Program Coordi- 
nator for the Dorchester Project, Jane Zuroff The Dorchester community members made presentations 
about the devastating effects any funding cuts would have on the community. Michael O'Toole commit- 
ted to making the recommendation to Jane Perlov, the Secretary of Public Safety, that the project not 
be cut but receive level funding. Mr. O'Toole's recommendations were accepted - The Dorchester 
SNI received level funding of $250,000 with a dollar for dollar hard cash match. 

As mentioned above, there continues to be concern about the violence erupting in the Cape 
Verdean community. The Dorchester SNI has been trying to address this issue through coordi- 
nated law enforcement and community service efforts. The Cape Verdean community is very 
close-knit and distrustful of many of the efforts of law enforcement officials. This lack of trust 
and communication between the Cape Verdean community and law enforcement has slowed 
investigations and the acquisition of solid information about the "riffs" in this community. The 
Dorchester SNI Advisory Council is working on ways to facilitate better relationships and 
improve communication to help prevent further violence. 

The truancy project with the Grover Cleveland Middle School worked well in identifying 
chronically truant youth - in fact, it worked so well that the project received more referrals than 
expected. There has been continued discussion about expanding the project to other police 
districts to help ensure that youth who live outside of the target area still have access to services. 

The Dorchester Safe Neighborhood Initiative continues to work effectively to address quality 
of life issues identified by the community. Through a productive coalition of community stake- 
holders, problems are identified, discussed and then plans for improvement are implemented. 
The Dorchester Safe Neighborhood Initiative continues to set an example for other, newer SNIs 
throughout the state. 

GROVE HALL SNI 

The Grove Hall Safe Neighborhood Initiative (GHSNI) has made tremendous strides this 
year. The success of this project can be attributed to its persistence in addressing issues in a 
coordinated community and law enforcement partnership effort. During 1 999, the GHSNI 



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received $250,000 from the Department of Justice, Executive Office for Weed and Seed. The 
money funded several community-based programs that helped to address needs and concerns 
identified by the community. 

This year, as a part of our Weed and Seed grant, the GHSNI was able to fund several out- 
standing programs through both the Seed-Mini Grant and the Special Emphasis Initiative grant 
funds. The Roxbury Multi-Service Center's Community Programs Against Sexual Assault 
(CPASA) services as many as 35 people per month through this program. CPASA addresses 
violence prevention education and intervention strategies to empower elders in the community 
and further reduce incidences of victimization in the Grove Hall community. 

Children's Services of Roxbury received a $9,000 grant from the GHSNI to address the issue 
of domestic violence by providing education and training to middle and high school students. 
They worked closely v^th the Jeremiah Burke High School and the Martin Luther King, Jr. 
Middle School to provide training on domestic violence, violence prevention, and conflict 
resolution. 

The "WAR" project out of Roxbury Comprehensive Health Center, another GHSNI funded 
program, reported that 1200 people received service. The WAR project was designed to provide 
HIV/ AIDS outreach, service, and education to women in the sex industry in the Grove Hall area. 
They also provided information to known "Johns" and addicts in the area. 

The Youth Development and Early Intervention Program (YDEIP) of the Grove Hall Resi- 
dents Association and the Franklin Park Development I & II assessed its increased one-to-one 
academic tutoring. The results have been extremely positive regarding the enroUees' general 
academic performance. Since the implementation of the tutoring program, not one student has 
received a failing grade. On average, 25-30 students participate in the program per month. 

The Jewish Memorial Hospital and Rehabilitation Center convened a Safe Seniors/Safe 
Neighborhoods educational seminar and luncheon for seniors. The hugely successful workshop 
taught seniors how to identify elder abuse, how to recognize and stop fraud against seniors, and 
provided information about senior health and safety issues. 

A significant predictor of future criminal activity, truancy, is another issue that was addressed 
in our Grove Hall target area this year. Through implementation of the initiative Opening Doors, 
the Boston Urban Youth Foundation (BUYF) has an active case load of 86 young people in its 



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program. The Foundation is pleased to report that 90% of the young people involved in the program 
improved their attendance by 35%. BUYF states that 50% of their participants also improved their 
grades. 

COORDINATED LAW ENFORCEMENT 

SNI COMMUNITY PROSECUTION 

Our community prosecution program is critical to our coordinated law enforcement compo- 
nent. SNI prosecutors at the Superior and District Court levels continued to serve in non-tradi- 
tional roles, allowing them to provide outstanding service to target communities and perform as 
even better advocates for the Commonwealth. Attending community meetings and special 
events, developing joint initiatives with other law enforcement agencies, and utilizing sentencing 
and probation options not only to penalize offenders but also to rehabilitate them so they do not 
return to the criminal justice system are just a few of the ways SNI prosecutors work to serve 
their respective target communities. 

AAG Shelley Richmond is a strong testament to the depth of involvement SNI prosecutors 
have in the community. AAG Richmond consistently looks to the commuruty for impact state- 
ments to help in the sentencing phase of many of her cases. As a result, judges often treat cases 
that would otherwise seem routine much more seriously. The community's input has had a 
tremendous impact on the residents' sense of participation in the justice system and the direct 
impact on their neighborhood. There are noticeably fewer street level drug and gang activities in 
the target area. AAG Richmond has also been cultivating a powerfiil working relationship with 
Boston Police detectives to solve several unsolved crimes. Similar efforts were put forth by 
AAGs Marcia Jackson, Neil Tassel, and Katherine Hatch who work on the Dorchester project, 
and Glenn MacKinley who works on the Brockton SNI. Prosecution teams are critical to the 
SNI's efforts to create healthier communities and to demonstrate that community residents 
should play an active role in the justice process. 

Another key element of the SNI's coordinated law enforcement component is community 
policing. High-ranking police officials are actively involved in SNI Advisory Councils and meet 
regularly with community groups and individual residents to address concems. Community 
policing projects of SNI target areas have demonstrated a strong impact on crime statistics in 
target communities. In addition to falling crime rates, an unprecedented level of cooperation and 
collaboration with the police is reported by residents, merchants and social service agencies. 



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The Grove Hall project is using its coordinated law enforcement approach to address illegal 
rooming houses and other "hot-spots" in the target area. Through our effective law enforcement 
intervention, including community impact statements, the Carousel Lounge and an unlicensed 
lodging house were shut down. The Carousel Lounge was notorious for illegal activity and the 
illegal rooming house at 146 Stan wood Street was the site of two stabbings in a six-week period 
prior to the collaboration between the community and law enforcement to close the building. 

As part of its coordinated law enforcement efforts, the Brockton SNI executed 75 search 
warrants, 80% of which have been in the SNI target area. This intense effort resulted in over 187 
arrests for violations of the Controlled Substance Act. Additionally, 14 firearms have been 
seized during the year, resulting in 30 defendants being charged with weapons offenses. There 
have been approximately 75 narcotics investigations conducted within the city of Brockton, 90% 
of which were within the SNI target area. These narcotic investigations resulted in 76 arrests. In 
addition to the drug-related arrests, there were also 28 arrests for sexual conduct for a fee. 

Joint investigations with federal agencies are another important piece of our coordinated law 
enforcement component. A good example of this type of joint investigation is "Operation Scor- 
pion" run out of the Grove Hall project. The Boston Police Department, Area B2, utilizes the 
combined resources of state and federal agencies including the state police and the Drug Enforce- 
ment Agency. The operation will target drug distributors, dealers and buyers. 

NEIGHBORHOOD REVITALIZATION 

ABANDONED PROPERTY PROJECT 

A major part of our neighborhood revitalization efforts throughout the various SNI communi- 
ties is the Abandoned Property Project. The project aims to use a Receivership Statute enacted in 
[Massachusetts in 1993 to undertake and oversee the rehabilitation of residential properties with 
persistent, unremedied code violations or properties being used for illicit activities, such as drug 
dealing. The legislation was originally intended to permit tenants and other occupants of residen- 
tial properties to seek the appointment of a receiver who would have the independent authority to 
authorize repairs, after notice and an opportunity to cure was provided to the landlord and credi- 
tors of record. The most significant features of the statute are twofold: 1) it provides a limited 
scope of receivership liability related solely to the work actually undertaken at the property; and 
2) the costs and expenses incurred by the receiver become a priority lien, recoverable against 



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both the landlord and the property prior to any pre-existing liabilities other than outstanding real estate ! 
taxes. j 

I 
Stuart Rossman, the former Chief of the Attorney General's Business and Labor Protection I 
Bureau, successfully implemented this project throughout the state, targeting Dorchester, New | 
Bedford, Roxbury (Grove Hall), Worcester, Orange, Chelsea, Montague, Taunton, Springfield, ' 
Brockton and Melrose. Individuals from throughout the Office of the Attorney General partici- 
pate in the various cities and towns. Teams consisting of AAGs, civil investigators, paralegals 
and staff are assigned to specific communities. We continue to get support and approval from 
Housing Court and District Court judges in jurisdictions across the Commonwealth. The Aban- 
doned Property Project was the subject of a Massachusetts Continuing Legal Education Seminar 
Program held in October, 1998. Working with former Representative Charlotte Golar Richie, we : 
were able to secure a line item in the Housing Bond Bill to set aside monies to be used to frmd 
receiverships. The Attorney General's Office co-sponsored a bill to expand and improve upon 
procedural elements of the Receivership Statute based upon the knowledge gathered throughout 
Abandoned Property efforts. The bill was reported favorably out of the Housing and Urban 
Affairs Committee, but never reached the House of Representatives. We hope to refile again this ; 
year. 

In addition to the prospect of restoring properties that have been blights in the community, 
the other exciting aspect of this initiative is that the community is guided through the process by 
the Attorney General's Office in order to enhance the community's implementation of the neces- 
sary procedures on its own. By providing this guidance, the community becomes empowered 
which is vital to our efforts to increase the sustainability of the project. 

CONCLUSION 

Fiscal Year 1 999 was distinguished by many successes. SNI community partners worked tirelessly 
to ensure that the SNI projects are continued and sustained with full integrity. We also sought ways to 
undertake new initiatives to broaden the scope and services of the SNIs throughout Massachusetts and 
to foster new growth. The SNI continues to be a strong model of how communities and law enforce- 
ment can work together effectively to improve the quality of life for community residents throughout the 
Commonwealth. 



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SAFE NEIGHBORHOOD INITIATIVE STAFF 

Staff members assigned to the SNI as of the end of FY99 are Division Chief Susan Spurlock; 
Assistant Attorneys General Marcia Jackson, Neil Tassel, Katherine Hatch, Shelley Richmond, Glenn 
MacKinlay, and Linda DelCastilho; SNI Program Coordinators Sandra McCroom and Marcy Bouley; 
Administrative Assistant Nancy Tavilla; and Community-Court Liaisons Christina Dilorio-Sterling and 
Lori Parris. 

SPECIAL INVESTIGATIONS AND NARCOTICS DIVISION 

The Special Investigations and Narcotics (SI&N) Division coordinates and prosecutes com- 
plex, multi-jurisdictional criminal cases targeting non-traditional organized criminal entities and 
career felons for prosecution. In addition, the Sl&N Division investigates and prosecutes large- 
scale drug trafficking organizations and individuals or groups involved in the illegal sale or 
possession of firearms. The Division also proactively investigates traditional organized crime 
groups for offenses ranging from "murder for hire" plots to extortion networks to gaming enter- 
prises. SI&N further aids in the drafting of narcotics and gang-related legislation and the devel- 
opment and implementation of community education and outreach programs. 

The SI&N Division, through its Asset Forfeiture Unit, initiates and 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. 

OrSTSION ORGANIZATION AND OBJECTFV^S 

The Division presently consists of seven attorneys and two full time support staff personnel. 
Members of the Division for all or part of FY99 were: William F. Bloomer, AAG, Chief; David 
Breen, AAG; Carole Conley, Support Staff; Eliot Green, AAG; John Grossman, AAG; Joanna 
Kennifick, Support Staff; Karen Kleiman, AAG; Ramon Melendez, AAG; Gregory Motta, AAG; 
Lori Parris, AAG; Robert Sikellis, AAG, former Chief; and Karen Wells, AAG. 

Approximately one dozen Massachusetts State Troopers are assigned to the Sl&N Division 
within the Attorney General's Office. That unit falls under the direction of Detective Lieutenant 



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Mark Delaney. Lieutenant Stephen Matthews, second-in-command, and Lieutenants Joseph 
Flaherty and Frank Matthews, with the assistance of Sergeants Richard Prior and Thomas 
Coffey, form the central core of the command structure. 

Among the general categories of crimes the SI&N Division investigated and/or prosecuted 
during FY99, were the following: narcotics trafficking and related offenses, extortion, weapons 
trafficking and related offenses, identification fraud, arson, money laundering, solicitation to 
commit murder, possession of counterfeit currency, intimidation of witnesses, threats, fraud, 
habitual criminals, breaking and entering, larceny, receiving stolen property, gaming, and utter- 
ing forged instruments. 

By way of background, in 1994, the Criminal Bureau's Narcotics and Organized Crime 
Division merged with the Special Investigations Division to form the unit that is now entitled the 
Special Investigations and Narcotics Division. Eventually, two subunits ~ the Asset Forfeiture 
and High Technology Crime Units — emerged to meet the demands placed on law enforcement 
by these rapidly growing areas of law. 

With the change of administrations in January of this year, the Division underwent an organi- 
zational restructuring. Though the Asset Forfeiture Unit remains an integral part of SI&N, the 
High Technology Crime Unit became a separate entity known as "The High-Tech and Computer 
Crimes Division" imder the direction of AAG Gregory Motta. Both divisions continue to work 
closely with one another in investigating and prosecuting computer crimes as well as organiza- 
tions that use computers to facilitate a broad array of traditional criminal activities. 

The advent of the new administration also ushered in a different approach to dismantling 
illegal drug operations. The SI&N Division has shifted its previous focus on narcotics "street 
sweeps" — investigations targeting small, street-level drug distributors in specific geographic 
areas — to identifying, investigating, and prosecuting the large scale organizations that supply 
these street dealers with illicit contraband. 

An effort to broaden the scope of the Division's responsibilities is also underway. The SI&N 
Division recently pledged its assistance to the Massachusetts State Police Gang Unit, the State 
Fire Marshall's Office, and the State Police Violent Fugitive Arrest Squad. The primary goal of 
this initiative is to assist these police agencies in proactive investigations and prosecutions, and 
to assist in addressing crimes committed in these organizations' respective areas of concern 
which occur in multiple counties. 



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INVESTIGATIVE INITIATIVES 

ELECTRONIC SURVEILLANCE 

A significant weapon that the Division utilizes to penetrate and dismantle complex illegal 
enterprises is electronic surveillance. Over the past year, troopers assigned to this Division have 
on numerous occasions equipped themselves with electronic body wires, pursuant to so-called 
Blood warrants, to intercept and record criminal conversations with unsuspecting targets. These 
recordings have proven invaluable in securing the convictions of narcotics and firearms traffick- 
ers. 

Since April of 1999, the SI&N Division has executed court authorized wiretap warrants on 
four cellular telephones. The warrants authorized law enforcement officers to intercept, monitor, 
and record criminal conversations occurring over these cellular phones. Individuals fi-om two 
separate but related organizations, utilized these telephones to further extortion activities and to 
distribute vast quantities of percocet pills, designer "ecstasy" pills, and hundreds of pounds of 
marijuana, in and around the Greater Boston area. 

During the course of that investigation, members fi-om the Division also applied for and 
received court permission to install and monitor a "Global Positioning System" (GPS) and a 
"roving cellular bug" inside a target's motor vehicle. The GPS allows law enforcement officials 
to calculate the position of a vehicle through a system of satellites, while the roving bug permits 
officers to intercept and record oral communications within the vehicle by means of a cellular 
transmission device. 

Most noteworthy, in the course of that investigation, members of the SI&N Division received 
court authorization to conduct electronic surveillance of communications occurring over the 
target's "Interactive Paging Device" (IPD). An IPD is a portable wireless communication device 
which has a read-out screen and a fiill alphabetical and numerical keypad that enables its users to 
communicate with one another similar to an e-mail system. The wiretap warrant in this investi- 
gation authorized law enforcement personnel to intercept and record criminal communications 
occurring over these Interactive Paging Devices by means of a "clone pager" and a specially 
designated e-mail site. Based on information obtained from a number of law enforcement 
sources and the carrier of the IPD itself, it is believed that the wiretap of these communication 
-devices was the first of its kind in the country. 

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The electronic surveillance, coupled with traditional investigative techniques, pierced these highly ') 
secretive organizations and ultimately led to their demise. The SI&N Division will continue to avail itself j| 
of this potent investigative tool. 

f 

INVESTIGATIVE HIGHLIGHTS | 

I 
i 

As described above, members of the SI&N Division conducted a two-year investigation into j 
drug trafficking and extortion that included the use of electronic surveillance. The investigation I 
commenced in Middlesex County under the direction of then District Attorney Tom Reilly, and ] 
continued and expanded after his election as Attorney General. At the conclusion of the investi- j 
gation in June of 1 999, State Police assigned to the SI&N division executed over 20 search ! 

warrants in the Greater Boston area. An additional five search warrants were executed in New 
Hampshire and Arizona with the assistance of the respective state and local police departments ini 
those states. The participation of law enforcement in this collaborative effort resulted in the 
seizure of the following contraband and assets: approximately 1,000 pounds of marijuana; 
thousands of percocet pills; over 1,000 ecstasy pills; several handguns, with at least one bearing 
obliterated serial numbers; hundreds of steroid pills and needles; approximately $250,000 in U.S. 
currency; approximately $2,700 in counterfeit currency; one dozen motor vehicles; and one 
powerboat. 

As a result, 17 individuals stand charged with a variety of offenses including trafficking in 
marijuana and percocets, possession of firearms and ammunition, conspiracy, and possession of 
counterfeit currency. Assistant Attorneys General Karen Wells and William Bloomer presently 
are assigned to the investigation. 

Assistant Attorney General Eliot Green is currently prosecuting a case against three individu- 
als who were arrested by State Police in August of 1 998 as a result of an undercover narcotics 
investigation. During this investigation. State Police assigned to the Attorney General's Office 
conducted controlled purchases ranging from one to four ounces of cocaine from each of the 
three defendants. At the conclusion of the investigation. State Police executed search warrants at 
five locations where nearly four kilograms of cocaine, over $250,000 in cash, three vehicles, and 
two motorcycles were seized. The cenfral target of the investigation stands charged with traf- 
ficking in over 200 grams of cocaine, which carries a mandatory minimum of 1 5 years in state 
prison, while the two remaining individuals each face a mandatory minimum 10 year term of 
imprisonment for trafficking in over 100 grams of cocaine. 



148 



CRIMINAL BUREAU 



In May of 1 999, the Division obtained indictments against two Hampshire County men for running 
illegal bookmaking operations. These individuals were each charged with possession of betting appara- 
tus, illegal use of a telephone, and two counts of conspiracy. The indictments stemmed from a lengthy 
investigation into illegal gaming in Hampshire and Hampden counties conducted by the State Police 
Special Services Section, the Hampden County District Attorney's Office, and the Office of the Attor- 
ney General. This investigation, which made extensive use of court-approved wiretaps, has akeady 
netted the convictions of several individuals on illegal gaming charges. Assistant Attomeys General John 
Grossman and Matthew Shea are handling the two remaining prosecutions. 

CRIMINAL CASE HIGHLIGHTS 

In 1998, the Attorney General's Office agreed to prosecute an individual for narcotics traf- 
ficking at the behest of the Drug Enforcement Administration. The defendant in that case en- 
gaged in two hand-to-hand sales of over 200 grams of cocaine per transaction with a cooperating 
informant. In early April of 1999, following a week-long trial before a jury. Assistant Attorney 
General Lori Parris secured guilty verdicts on both counts. The defendant was sentenced to a 
minimum mandatory term of 1 5 years in state prison. 

In 1997, then District Attorney Tom Reilly commenced the prosecution of 10 individuals for 
the gang-related murder of a 17-year-old Hispanic youth in Lowell. William Bloomer, an assis- 
tant district attorney at the time, headed the prosecution against 10 members of a street gang 
called the "Laos Boyz" or "LBZ". On November 20, 1 997, the Commonwealth alleged, the 
defendants went "hunting" for members of rival gangs to attack. After flipping a car onto its side 
and smashing hs windows, and after attacking the family of a member of the rival "Tiny Rascal 
Gang", the defendants lined up alongside a diner in a darkened alleyway armed with makeshift 
weapons. Their faces disguised by bandanas and ski masks, the defendants waited in ambush for 
the victim, who was not a member of any gang, and his two unsuspecting friends. As the three 
youths walked passed the diner, the defendants attacked the trio with two hammers, a shovel, the 
"Club" anti-theft device, and boards. The victim was knocked to the ground and smashed repeat- 
edly in the head by the individuals wielding the hammers and shovel. After the attack, the group 
drove to an eating establishment and ordered food while bragging and celebrating about their 
accomplishments. The victim died three days later of multiple blunt trauma to the head. Follow- 
ing a month long trial in November and December of 1998 that featured the testimony of three of 
the participants in the attack, the jury convicted the two hammer wielding assailants of first 
degree murder. They were sentenced to life without parole. Thereafter, the defendant who 
struck the victim repeatedly with the shovel pleaded guilty to murder in the second degree and 



149 



CRIMINAL BUREAU 



was sentenced to life in state prison. With the change of administrations in January, Assistant Attorney 
General Bloomer continued the prosecution of the four remaining gang members in his capacity as a 
special assistant district attorney. In April and May of 1 999, these defendants each plead guilty to the 
charge of manslaughter and received sentences ranging from five to 1 4 years in state prison. 

In mid-May of 1 999, Assistant Attorney General David Breen prosecuted an individual for 
trafficking in over 200 grams of cocaine and possession with intent to distribute cocaine within 
1 ,000 feet of an elementary school. The Commonwealth proceeded against the defendant in that 
case under a joint venture theory — alleging that he stood "guard" over a large quantity of co- 
caine in a stash pad while his co-conspirators left to consummate deals on the street. At the 
completion of the nearly two-week trial, a jury returned guilty verdicts on both counts. The 
Court then sentenced the defendant to a minimum mandatory of 1 5 years in state prison on the 
trafficking count with an additional two years from and after the 15-year period of incarceration 
for the school zone violation. 

That same month. Assistant Attorney General Philip McGovem, on assignment from the 
Economic Crimes Division, tried a case before a jury in Suffolk Superior Court and convicted 
the defendant of trafficking in over 100 grams of cocaine. The Court sentenced the defendant to 
a minimum mandatory term of 10 years in prison. 

LANDLORD TRAINING PROGRAMS 

Under the previous administration, the Division's Asset Forfeiture Unit conducted landlord 
training seminars. These seminars were designed to educate landlords about their rights and 
responsibilities with respect to tenants who are utilizing property as a drug distribution site. The 
SI&N Division will continue to offer these trainings to interested organizations such as Section 8 
Housing Administrators. 

In conjunction with these landlord training seminars, the Asset Forfeiture Unit distributes 
manuals for reference. These manuals, which include discussions ranging from proper tenant 
screening methods to the legal consequences for landlords who fail to evict drug-dealing tenants, 
have proven highly useftil and popular in the past. 

LAW ENFORCEMENT SUPPORT 



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CRIMINAL BUREAU 



Assistant Attorneys General, State Police Officers and investigators assigned to the SI&N Division 
also continue to work with and provide technical, legal, and other forms of investigative support and 
assistance to numerous federal, state, and local law enforcement agencies. These agencies include 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, 
Department of Corrections, District Attorneys' offices, court house security personnel and various state 
and local police departments and task forces throughout the Commonwealth and in some circumstances 
across the country. These joint undertakings include investigations of major money laundering and drug 
distribution organizations, identification fraud enterprises, and counterfeit currency producers. 

Presently, the Division is establishing an ongoing relationship with the State Police Gang 
Unit, the Violent Fugitive Arrest Squad, and the State Fire Marshal's Office. The goal of the 
development of these interagency relationships is to enhance law enforcement's effectiveness in 
(1) dealing with gang intervention and prosecution, (2) capturing and prosecuting violent fiigi- 
tives from justice, and (3) investigating arson rings and so-called arson-for-hire plots and ensur- 
ing successful prosecution. 

NON-CASE RELATED INITIATIVES 

Members of the Division also participate in a number of training programs to enable them to 
better serve the law enforcement community and the public in general. In April of 1999 for 
example. Assistant Attorneys General John Grossman and Eliot Green attended a three-day 
course on arson investigations and prosecutions. Also, in June of 1999, Assistant Attorney 
General William Bloomer attended a week-long course in Washington D.C. sponsored by the 
National Association of Attorneys General which addressed the proliferation of computer crimes 
and the use of computers to facilitate fraditional criminal acfivity as well as the proposed strate- 
gies for dealing with "cyber criminals." 

In addition to performing their traditional duties as prosecutors. Assistant Attorneys General 
assigned to SI&N Division also act as point persons for the office on a variety of topics that 
require specialized knowledge in certain areas of law. For instance. Assistant Attorney General 
John Grossman provides advice and assistance to attorneys and police officers across the state in 
rendition matters. In addition. Assistant Attomey General William Weinreb fields inquiries 
directed to the Division on matters concerning the Criminal Offender Records Information 
(CORI) Act. 



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CRIMINAL BUREAU 



Similarly, Assistant Attorneys General assigned to SI&N Division provide service and assistance 
both in and out of the office that exceed the scope of traditional prosecutorial responsibilities. Assistant 
Attorney General William Bloomer presently serves on a legislative subcommittee that is gathering 
information and studying various legislative and programmatic issues within the area of gang prevention, 
intervention, and prosecution. Assistant Attorney General Eliot Green is the Division's Intem Coordina- 
tor who supervises and monitors the progress of the legal interns assigned to the SI&N Division. 

SUMMARY OF SI&N DIVISION ACTIVITIES 

During FY99, the SI&N Division initiated over 80 separate criminal cases. The Division 
also disposed of approximately 92 criminal cases during this time period.' At any given time, the 
Division generally has 50 prosecutions or more pending in various courts throughout the Com- 
monwealth, over 15 ongoing investigations, and a handful of post trial motions that require 
written responses and court appearances. Also during FY99, the SI&N Division's Asset Forfei- 
ture Unit initiated 29 separate drug related civil forfeitures. 



This figure is based upon an extrapolation of data from January through July of 1999. 



152 



FAMILY AND COMMUNITY 
CRIMES BUREAU 

Victim Compensation and Assistance Division 



FAMILY AND COMMUNITY CRIMES BUREAU 



Family AND Community Crimes Bureau 



The Family and Community Crimes Bureau develops and coordinates policy, programs, 
legislation and training for law enforcement, educators and other professionals on behalf of the 
Attomey General in the following areas: family violence, juvenile justice and youth violence 
prevention, victim rights, and the protection and education of children. The Bureau also houses 
the Victim Compensation and Assistance Division which reviews and awards claims for com- 
pensation filed by victims of violent crimes. 

Throughout FY'99, the Family and Community Crimes Bureau continued its efforts to 
provide training and assistance to law enforcement. In September, the Attomey General hosted 
the Eighth Annual Domestic Violence Conference titled "Domestic Violence Enforcement: 
Where Do We Go From Here?" Over 300 police officers from across the state attended the 
conference. In the Fall, the Bureau consulted with Project Harmony, a non-profit cultural organi- 
zation which implements training and education programs for law enforcement and criminal 
justice experts in Russia and the Ukraine. An Assistant Attomey General assigned to the Bureau 
was a team member from Massachusetts which provided training to multi disciplinary providers 
in Kiev and Odessa, Ukraine as part of their Domestic Violence Community Partnership Pro- 
gram. In July, 1998, a staff member, along with the Jewish Community Relations Council, 
Combined Jewish Philanthropies, and others from Massachusetts presented a Domestic Violence 
Training Program in Haifa, Israel. Training efforts continued as the Attomey General's staff 
participated in a Hate Crimes Training Seminar for police in Lowell MA, sponsored by the 
Department of Justice on March 10, 1999. Victim rights and victim compensation training was 
provided to police officers at Tufts University and Norwood Police academies in March and 
April 1999 by a member of the staff at a training program for sexual assault detectives. The 
Bureau continued to respond to issues facing law enforcement and criminal justice professionals 
by providing a Domestic Violence Update in the Law Enforcement Newsletter which was distrib- 
uted to police departments across the state. 

j As part of its ongoing efforts on behalf of crime victims, members of the Bureau participated 
in the Annual Victim's Rights Conference sponsored by the Massachusetts Office of Victim 
Assistance (MOV A). In addition to attending the conference. Bureau staff members participated 
on panels at the conference workshops. Additionally, a staff member serves on the Crime 
Victims Working Group of MOV A, which is reviewing the state of victim services in Massachu- 
setts. 



153 



FAMILY AND COMMUNITY CRIMES BUREAU 



The Office continued its commitment to youth safety and education by pubUshing its bi-annual Safe 
Schools Newsletter. The newsletter informed school administrators about safety issues and programs 
and provided an update on pertinent legal issues. In Fall 1 998, the Attorney General hosted a confer- 
ence entitled " Safe Schools: Beyond the Metal Detector" for school administrators and law enforce- 
ment officials. It addressed a variety of issues including at-risk youth and effective prevention and 
intervention strategies. The Bureau published a resource guide for schools and communities, "More 
Than Child's Play: Preventing Truancy and Promoting Success," and a guide to community based 
services for truant youth. Bureau staff contributed to the Boston Bar Association's Report on Truancy 
issued in the summer of 1 998. The report outlined specific recommendations to prevent truancy in the 
Boston Public Schools. 

The Bureau actively participated in several organizations throughout the year. The Bureau 
joined other employers to support "Employers Against Domestic Violence". This organization, 
under the leadership of the Boston law firm, Mintz, Levin, Cohen, Ferris, Glovsky and Popeo, 
provides training, education and guidance to employers on protecting victims of domestic vio- 
lence and responding to their needs. 

Assistant Attorneys General continued to represent the Attorney General on, and actively 
participate in, the work of the Governor's Commission on Domestic Violence. Bureau staff 
members continue to attend and actively participate in Commission sponsored subcommittee 
meetings. These subcommittees include the Legislation, Community Education, and Training 
Subcommittees and the Children's Working Groups. Additionally, Bureau members attend 
monthly Statewide Prosecutor and Advocate Group meetings. These meetings address domestic 
violence issues raised by advocates and prosecutors working in this area. Further, members of 
this organization participate in the planning for the Annual Statewide Conference, scheduled for 
November 1999. 

The Bureau continued to review and draft legislative proposals. Some examples include the 
information sharing bill, designed to enhance inter-agency communication in criminal proceed- 
ings regarding juvenile and youthful offenders. To further protect victims of domestic violence, 
a proposal was introduced to protect the confidentiality of addresses and telephone number of 
individuals who obtain abuse prevention orders. 

Bureau attorneys were active in the passage of the new gun control law, passed on July 23, 
1998 and effective October 21, 1998. The comprehensive statute. An Act Relative to Gun 
Control in the Commonwealth, made significant changes to the then-existing firearms law. In an 



154 



FAMILY AND COMMUNITY CRIMES BUREAU 



effort to aid police departments in understanding and implementing the provisions of the new act, 
Bureau staff prepared and distributed to the law enforcement community documents summariz- 
ing the law and its major provisions. In addition, the Bureau participated in a seminar on the 
new firearms law, sponsored by the Massachusetts Chiefs of Police Association. 

Bureau staff also participated, along with staff members of other bureaus, in the development 
of the new sex offender registry law, An Act Improving the Sex Offender Registry and Establish- 
ing Civil Commitment and Community Parole Supervision for Life for Sex Offenders. As part 
of this process, Bureau attorneys considered and analyzed legal issues arising out of the proposed 
legislation. The staff also reviewed and commented upon related bills sponsored by various 
members of the Senate and House of Representatives. 

The Child Witness to Domestic Violence Project, a collaboration of the Office of the Attor- 
ney General and the Child Witness to Violence Project at Boston Medical Center, continued the 
trainings that were started in January 1998. The goals of the conferences were to raise awareness 
among multi disciplinary providers of the impact of exposure to domestic violence on children, 
to increase identification of these children, to enhance the skills of multi disciplinary providers to 
intervene safely and effectively with them, and to foster collaboration on the community level 
and knowledge of existing resources. In Fall 1998, four one-day regional trainings were pre- 
sented in the Bristol, Cape and Islands, Norfolk, and Plymouth counties, completing the goal of 
providing one in each county throughout the Commonwealth. A total of over 2300 providers 
fi-om the fields of law enforcement, domestic violence, health, mental health, education, commu- 
nity services, early childhood education, legal services, and child protection participated. Each 
training was developed and implemented in coordination with the local District Attorney, the 
Department of Social Services' Domestic Violence Unit, and area programs. Three two-day 
clinical seminars were presented for providers in Northeastern, Southeastern, and Western 
Massachusetts. Over 1 70 mental health providers participated in this advanced course on inter- 
vention strategies with children and families exposed to domestic violence. 

In January 1999, the Office of the Attorney General and Child Witness to Violence Project at 
Boston Medical Center issued a Project Report which contained the information gathered on a 
I regional basis fi-om conference participants. This information included the unmet needs of 
I providers in helping families affected by domestic violence within their communities and poten- 
f tial action steps that they could take on a local level. The report was distributed to all members 
■ of the Governor's Commission on Domestic Violence, presenters at the conferences, and other 
providers within the Commonwealth. 



155 



FAMILY AND COMMUNITY CRIMES BUREAU 



The Child Witness to Domestic Violence Project is funded through a federal Violence Against 
Women Act grant administered through the Executive Office of Public Safety, hi October 1998, a 
proposed Phase II was funded through November 1 999, enabling the project to continue its clinical 
trainings and to expand upon its efforts to give providers guidance within their particular fields. In May 
1 999, over 60 mental health providers participated in a clinical seminar. The development of specialized j 
trainings for law enforcement and school professionals, to be presented in Fall 1 999, was started. 

In June 1999, the Project Coordinator participated in and presented the Child Witness to 
Domestic Violence Project's accomplishments at Safe from the Start: A National Summit on 
Children Exposed to Violence, sponsored by the United States Department of Justice and the 
United States Department of Health and Human Services. 

VICTIM COMPENSATION AND ASSISTANCE DIVISION 

The Victim Compensation and Assistance Division provides financial compensation, refer- 
rals 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, funeral and 
burial and other crime-related expenses. Since 1 994, the Division has assumed legal and admin- 
istrative responsibility for receiving, investigating and determining all compensation claims in 
accordance with the requirements of G. L. C. 258C. Previously, compensation claims were 
determined through a litigation-based process in the district courts. 

Fiscal Year 1 999 reflects a general consistency with previous years in expenditures, numbers 
of claims received and claims processing patterns. Despite the fact that fewer violent crimes were' 
committed in the Commonwealth, and the program operated throughout much of the year with a 
reduced number of staff, the Division was able to maintain a stable caseload, most likely due to 
expanded outreach efforts. 

The Victim Compensation Program received an Innovations award at the annual Victim 
Rights Conference at the State House. The staff were honored for programmatic reforms, making: 
the process of applying for compensation less cumbersome. 

CLAIMS ACTIVITY 

The Victim Compensation and Assistance Division received 1 125 claims in FY 99. This 
figure reflects a slight decrease from the previous year (1139). 



156 



FAMILY AND COMMUNITY CRIMES BUREAU 



I Of all of the claimants who were determined eligible during the year, 626 were awarded 
compensation for crime-related expenses. There were 477 claims reopened this year for compen- 
sation of additional expenses. This number reflects a 23% increase over last year's reopenings. 

Under G. L. C. 258C, claimants who are not satisfied with decisions made on their claims, 
either to award or deny compensation, have the opportunity to request an administrative and/or 
judicial reconsideration of their claim. In 1999, 63 claimants, approximately 5% of all claimants, 
requested administrative review. Forty one of those claims were reviewed and decisions were 
affirmed. The remaining 22 were modified or reversed. Only three claimants requested judicial 
review. 

! The number of homicide claims increased slightly from 1 12 last year to 116 this year. Six- 
teen percent (19) of these homicides were related to domestic violence. 

EXPENDITURES 

In FY 99, the Commonwealth paid $2,246,954 in compensation claims to crime victims. This 
marks a reduction of $496,203 from last year and the third consecutive year there has been 
adequate fimding to support expenditures. 

Although claimants are statutorily able to receive up to $25,000 for compensable expenses, 
only 25 claimants received the maximum allowed during FY 99. Compensation for lost wages 
^ and loss of support continues to be the category of expense with the highest expenditure (39%). 
Hospital, medical and dental is the second highest expenditure (31%), and mental health counsel- 
ing expenses next (13%). 

OUTREACH AND TRAINING 



Outreach and training remained a primary focus for FY 99. Training was provided to numer- 
ous programs including Clinical and Support Options, the Victims of Violence Program, Cam- 
; bridge Hospital's Community Crisis Response Team, Beth Israel/Deaconess, Behavioral Health 
i Collaborative, Charles River Hospital, Mothers Against Drunk Driving, Lowell General Hospital 
and Noble Hospital. 

I Victim Compensation staff provided training to several of the District Attorneys' Victim Witness 



157 



FAMILY AND COMMUNITY CRIMES BUREAU 



Assistance programs and advocates in the Department of Correction's Victim Service Unit. Victim 
Compensation staff also did presentations for several police departments and police training academies. 

With Victim of Crime Act (VOCA) fianding, additional outreach materials were printed: 
8,000 posters, 50,000 pocket cards, 26,000 applications in English and Spanish and 2,000 calen- 
dars for distribution at the Victim Rights Conference. 

Letters from the Attorney General, with materials, were sent to all of the police chiefs, 
district attorneys and victim/witness program directors. A radio public service announcement 
was produced and distributed throughout the Commonwealth. 

AUTOMATION 

The Division invested a great deal of time and effort to implement a newly created, auto- 
mated claims processing system. With one complete year of operation, staff will continue to 
work to refme the processing of claims. 

PROGRAM EVALUATION 

An applicant survey is sent to each claimant with decisional letters. The Division received 
426 completed surveys from claimants. Surveys were overwhelmingly positive, with more than 
90% of claimants agreeing or strongly agreeing that applications are easy to complete, letters 
easy to understand, victim compensation staff treated them with courtesy and respect, their 
questions were answered, they were satisfied with the decision on their claim and the amount of 
time it took to process their claim. 

LEGISLATIVE ACTIVITY 

A bill to further amend the Victim Compensation Law was filed by Representative John 
Rogers. This bill would expand certain benefits under G. L. c. 258C. The Division will continue 
to seek passage of this bill which would assist crime victims to pay for most requested crime- 
related costs. 



158 



GOVERNMENT BUREAU 



Administrative Law Division 

TrialDivision 

Environmental Protection Division 



GOVERNMENT BUREAU 



Government Bureau 

The Government Bureau provides representation for the Commonweakh and its agencies and 
officials in all types of civil litigation, and for employees of the Commonwealth with respect to 
certain civil claims made against them resulting from the performance of their duties. The 
Attorney General's environmental enforcement function also falls within the Goverrunent Bu- 
reau. In addition, the Bureau includes a special unit that focuses on civil cost recovery in the 
$10.8 billion Central Artery/Tunnel Project. 

A major priority of the Bureau is improving the fimctions of government. Many of the cases 
and initiatives discussed below reflect that priority. In addition, bureau attorneys have advised 
agencies in nimierous 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 uimecessary litigation. As in 
previous years, the Bureau in fiscal year 1 999 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 coimsel was 
held in May of 1999. 

The Government Bureau consists of an Administrative Law Division, a Trial Division and an 
Environmental Protection Division. During fiscal year 1 999, 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 re- 
sponsible for the legal review of all newly enacted town by-laws; the preparation of legal opin- 
ions for constitutional officers, heads of agencies, and certain other officials concerning issues 
arising from the performance of their official duties; and the review of proposed statewide 
initiative and referendum questions imder amendment article 48 of the Massachusetts Constitu- 
tion to determine whether such questions are of the type that may lawfully appear on the ballot. 

159 



GOVERNMENT BUREAU 



The Trial Division defends suits seeking damages or other relief for alleged wrongful acts of govern- 
ment 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 envirormiental laws and in defensive litigation 
challenging those agencies' regulatory and enforcement activities. The Envirormiental Protec- 
tion Division also plays a key role under the Clean State initiative to ensure that the 
Commonwealth's ovm agencies abide by state and federal environmental laws, and in doing so 
the Division may bring enforcement actions against those agencies where the Attorney General, 
in his enforcement discretion, deems such action necessary. 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 
agencies. The organization of these divisions within one bureau promotes the sharing of re- 
sources and expertise, and the coordination of positions taken in cases. In addition, this organi- 
zation makes the substantive expertise of the Environmental Protection Division more readily 
available to other agencies in environmental matters. 

Finally, the work of the Central Artery/Tunnel Project ("CA/T Project") Civil Cost Recovery 
unit, presently made up of an attorney director and support staff, often is performed jointly with 
the Criminal Bureau or the Business and Labor Protection Bureau. The unit has diverse respon- 
sibilities with respect to the CA/T Project in addition to the investigation and prosecution of 
fraud cases and other cost-recover>' matters, including: participation in the activities of the CA/T 
Project Oversight Coordination Commission; working with CA/T Project personnel and counsel 
to implement effective cost-contairmient and anti-fraud measures, including procedures to reduce 
the incidence and cost of defensive litigation; and the promotion of legislation that would facili- 
tate civil cost-recovery actions by the Commonwealth. 

AFFIRMATIVE LITIGATION 

The Government Bureau maintained an active docket of affirmative litigation in fiscal year 
1 999 to assert the public interest and the interests of its state agency clients. 

In Commonwealth v. Harvard Pilgrim Health Care , the Attorney General filed suit in state 



160 



GOVERNMENT BUREAU 



court challenging the federal Medicare preemption of Massachusetts laws requiring outpatient prescrip- 
tion drug benefits for senior citizens enrolled in Massachusetts health maintenance organizations. In a 
companion case, Mass. Assoc, of HMO's v. Commissioner of Insurance , the federal court ruled that 
the Massachusetts laws were preempted. The Attorney General has filed an appeal in the First Circuit 
Court of Appeals. In Commonwealth v. TLT Construction Co., an action filed on behalf of the Trial 
Court and the Division of Capital Asset Management to recover damages for the poor indoor air quality 
arising fi-om the renovation of the exterior of the Suffolk County Courthouse, the Commonwealth 
received nearly $1.5 million in partial settlements with the architect and product manufacturer. The 
remainder of die case is scheduled for trial in October, 1 999. 

I In Attorney General v. McHatton , a quo warranto action challenging whether a candidate 
elected as a Chelsea City Councillor could take office despite city charter provisions making 
persons previously convicted of misconduct in office ineligible to serve, the Supreme Judicial 
Court held that the defendant was barred from taking office. 

I After extensive discovery and mediation in Commonwealth v. Ruggles Center Joint Venture 
etak, the Commonwealth received a settlement of more than $4.5 million in compensation for its 
losses in connection with the indoor air quality problems that required the Registry of Motor 
Vehicles to vacate its headquarters at Ruggles Center. As part of the same settlement. Common- 
wealth employees received an additional million dollars to compensate them for their losses. 

In the Electric Mutual Life Insurance Company (EMLICO) litigation, the Supreme Judicial 
Court denied the Commissioner of Insurance's petition to establish a Massachusetts receivership 
for EMLICO, a Massachusetts insurer that moved to Bermuda. The Commonwealth has appealed 
the Superior Court's decision in Commonwealth v. Smith (Robie Properties) that the Massachu- 
setts Highway Department was not entitled to recover the costs of environmental cleanup at a site 
taken by eminent domain. 

In Attorney General v. MHRI , the Commonwealth is seeking to recover proceeds from the 
development of medical products at the state's biological laboratories. In Commonwealth v. 
Boston Community Services, Inc. , the Attorney General filed suit against a Boston non-profit 
group for allegedly overcharging more than $200,000 under state contracts to provide clinical 
and residential mental health services to clients of the Department of Mental Health, Department 
of Mental Retardation, Department of Public Health, Department of Social Services, and the 
Massachusetts Rehabilitation Commission. 

The Unisys litigation, in which the Attorney General raised contract and performance issues 



161 



GOVERNMENT BUREAU 



arising from a computer system installed for the Secretary of State, was successftilly settled. 
AMICUS CURIAE BRIEFS 

The Attorney General filed an amicus curiae brief in the Supreme Judicial Court in the case 
of Commonwealth v. Maxim , supporting the enforcement by the District Attorney of a shell 
fishing regulation for the Town of Bourne. The Court held that the statute authorizing local 
towns to regulate shell fishing did not authorize them to regulate subsistence shell fishing by 
Native Americans. 

Tuper V. North Adams , SJC. In this case of first impression in which the Attorney General 
filed an amicus curiae brief, the court decided that, based upon the clear and unambiguous 
language of G. L. c. 151, §46, a discharged employee could not use an administrative decision by 
the Department of Employment and Training offensively against his former employer in a 
subsequent civil action for wrongftil termination. 

ADMINISTRATIVE LAW DIVISION 

The Administrative Law Division has three functions: (1) defense of lawsuits against state 
officials and agencies concerning the legality of governmental operations, particularly those 
seeking injunctive or declaratory relief; (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 1999, significant events occurred in each of these areas. 

DEFENSIVE LITIGATION 

During fiscal year 1999, the Division opened 1,114 cases and closed 1,391 cases. At the 
close of the fiscal year, 2,312 cases were pending in the Division. Cases handled by Division 
attorneys resulted in 24 reported decisions of the Supreme Judicial Court, 14 reported decisions 
of the Massachusetts Appeals Court, 5 reported decisions of the United States Court of Appeals 
for the First Circuit, and 10 reported decisions of the United States District Court for the District 
of Massachusetts. Division attorneys also were involved in many cases in those courts and in 
state trial courts that resulted in unpublished decisions. 

Fiscal year 1999 marked the termination of three 25-year-old consent decrees, in King v. 



162 



GOVERNMENT BUREAU 



Greenblatt and Williams v. Lesiak , governing the administration of the Bridgewater Treatment 
Center for sexually dangerous persons. Early in the fiscal year, the Court of Appeals for the First 
Circuit upheld the District Court's modification of the decrees to allow the Department of Cor- 
rection to assume responsibility for the Treatment Center in place of the Department of Mental 
Health, as provided by a state statute. At the end of the year, after discovery and an evidentiary 
hearing, the District Court terminated the decrees entirely, finding that the constitutional harm 
underlying the decrees had been remedied and that the defendant state officials had complied 
with the decrees in good faith for a reasonable period of time. 

This year, the Division again spent significant time and resources defending the sex offender 
registry statute and other sex offender related litigation. In John Doe, Sex Offender Registry 
Board No. 972 v. Sex Offender Registry Board , the Supreme Judicial Court held that the Sex 
Offender Registry Board itself, rather than the Superior Court, may hold the constitutionally 
required evidentiary hearings before classifying sex offenders' risk of reoffense for purposes of 
community notification. The court further held that the Board may use the preponderance-of- 
the-evidence standard in determining an offender's risk of reoffense, rather than the clear-and- 
convincing evidence standard advocated by the plaintiff offenders. In John Doe. Sex Offender 
Registry Board No. 5350 v. Sex Offender Registry Board , the Supreme Judicial Court reversed 
an order of a Single Justice of the Appeals Court refusing to allow the Board to voluntarily 
dismiss an interlocutory appeal. In a case involving security classification of prisoners, Lyman 
V. Commissioner of Correction , the Appeals Court upheld as constitutional, under federal and 
state constitutional provisions concerning self-incrimination, ex post facto laws, equal protection, 
and double jeopardy, a policy of the Department of Correction requiring a sex offender to admit 
guih to crimes for which he was incarcerated as a condition of moving to a lower security classi- 
fication. 

In two other cases brought by prisoners, the Division, along with the Criminal Appeals 
Division of the Criminal Bureau, successfully defended cases challenging the constitutionality of 
a statute requiring DNA testing of certain convicted felons. In Landry v. Attorney General , the 
Supreme Judicial Court held that the involuntary collection of a blood sample under the provi- 
sions of the DNA database statute did not constitute an unreasonable search and seizure and 
therefore vacated a preliminary injunction enjoining the implementation of the statute. In 
Murphy v. Department of Correction, the Supreme Judicial Court upheld, under the equal protec- 
tion provisions of the state and federal constitutions, the application of the statute to a prisoner 
who was originally incarcerated for a covered offense and remained incarcerated, although for an 
I uncovered offense, on the effective date of the statute. 



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As in prior years, the Division handled many heaUh-care related cases. In RoUand v. 
Cellucci , nursing home patients with mental retardation seek declaratory and injunctive relief 
against various state officials, requiring the state to provide community-based services and 
placements to members of the plaintiff class. At the end of this fiscal year, the United States 
District Court denied our motion to dismiss, holding that plaintiffs had stated a claim for such 
relief under the Americans with Disabilities Act and under various provisions of the Medicaid 
Act. 

In other Medicaid cases, the Supreme Judicial Court upheld, in Briggs v. Commonwealth, the 
Commonwealth's methodology for calculating Medicaid reimbursement for services rendered to 
certain individuals who are also Medicare beneficiaries and, in Massachusetts Eve and Ear 
Infirmarv v. Commissioner of the Division of Medical Assistance , invalidated regulations of the 
Division of Medical Assistance governing reimbursement for inpatient, as opposed to outpatient, 
services. In Haverhill Municipal Hospital v. Commissioner of the Division of Medical Assis- 
tance , the Appeals Court held that the Division appropriately denied Medicaid reimbursement for 
sterilization services because the patient had not executed the required consent form but inappro- 
priately denied reimbursement for labor and delivery services performed at the same time. 

In another major health-related case, Philip Morris, Inc. v. Harshbarger , handled by the 
Division along with attorneys from the Public Protection Bureau, the Court of Appeals for the 
First Circuit affirmed a preliminary injimction entered by the District Court, enjoining the imple- 
mentation of the Massachusetts Tobacco Ingredient Disclosure Law on the ground that plaintiffs 
had a likelihood of success on their claim that the statute effects a "taking" of their property 
without just compensation in violation of the Fifth Amendment. In yet another health-related 
case, Veksler v. Board of Registration in Dentistry , the Supreme Judicial Court held that the 
Board was required to hold a hearing prior to imposing disciplinary sanctions on a dentist, where 
the dentist did not contest her culpability but did wish to present evidence relevant to the sanc- 
tion to be imposed by the Board. 

In fiscal year 1 999 the Division was also involved in several cases involving elections issues. 
In Hurst v. State Ballot Law Commission , plaintiffs challenged the inclusion of a referendum 
question on the statewide election ballot on various procedural grounds, all of which were ulti- 
mately rejected by the Supreme Judicial Court. First, the court upheld the Commission's conclu- 
sion that the positioning on the petition form of the required summary of the challenged law and 
the names and addresses of the first 10 signers of the referendum petition did not violate the 



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referendum provisions of the Massachusetts Constittition. Second, the court held that petition 
forms that bore extraneous pre-printed or hand-stamped information were not "exact copies" of 
the forms provided by the Secretary of State as required by the applicable statute and constim- 
tional provision; however, the court did not apply that holding to invalidate the petitions at issue 
in that case. Finally, after remanding the case to the Commission for ftirther evidentiary pro- 
ceedings, the court affirmed the Commission's decision that the plaintiffs had improperly pre- 
sented challenges to certain signatures. In another case challenging the same referendum peti- 
tion on substantive grounds, Miller v. Secretary of the Commonwealth , the Supreme Judicial 
Court held that the Attorney General correctly determined that the petition was not excluded 
from the referendum process by constitutional language barring referenda on appropriations for 
the Commonwealth or its departments, boards, commissions, or instimtions. Accordingly, the 
referendum in question, concerning the Electric Industry Restructuring Act, appeared on the 
ballot in the November 1 998 statewide election. 

The Division also reviewed two initiative petitions in fiscal year 1999, approving one and 
disapproving the other as required by amendment article 48 of the state constitution. 

The Division also continued to handle various environmental challenges to the Central 
Artery/Third Harbor Tunnel Project. In Airport Impact Relief. Inc. v. Wykle . the United States 
District Court held that the Federal Highway Administration's approval of changes to the project 
without requiring a Supplemental Environmental Impact Statement was not arbitrary and capri- 
cious and that the changes did not violate a federal statute limiting transportation projects affect- 
ing public parks. Other environment cases handled by Division attorneys during fiscal year 1 999 
included Massachusetts Division of Marine Fisheries v. Daley , in which the Court of Appeals for 
the First Circuit affirmed the District Court's decision setting aside, as unsupported by the 
administrative record, a federal state-by-state quota for scup fishing that disadvantaged Massa- 
chusetts fishermen; Silva v. Director of Division of Marine Fisheries , in which the Appeals Court 
held that the Division's suspension of plaintiff s lobster permit did not constitute double jeop- 
ardy or violate his procedural due process rights; and Baker v. Coxe (handled jointly with the 
Trial Division), in which the United States District Court entered summary judgment for the 
defendants on plaintiffs' claim that state officials denied their application for a permit to build a 
pier in retaliation for plaintiffs' opposition to environmental legislation and their litigation 
against a scientist who negatively reviewed their permit application. 

The Division continued to handle many cases involving children and families. In Adoption 
of Astrid, the Appeals Court held that the trial court's findings of parental unfitness were sup- 



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ported by clear and convincing evidence, including the father's conviction for child endanger- 
ment in connection with the death of the parents' first child, the mother's abandonment of other 
children, the parents' inability to nurture any of their children; and their failure to participate in 
any of the proceedings involving Astrid. On the other hand, in Care and Protection of Ian, the 
Appeals Court held that the trial court's findings were stale and did not support its conclusion of 
current unfitness and that the trial court erroneously placed the burden on the mother to demon- 
strate her fitness; the court also held that the trial court applied an incorrect legal standard in 
ordering that visitation with the mother occur only if "therapeutically appropriate." In L.G.G. v. 
Department of Social Services , the Supreme Judicial Court held that the Department of Social 
Services could not be required, via a writ of mandamus, to commence a care and protection 
proceeding. In Mannor v. Mannor , the Appeals Court held that a Ohio divorce judgment, includ- 
ing child and spousal support orders, was enforceable and could not be overridden by a tempo- 
rary order of the Massachusetts Probate Court. 

During fiscal year 1999, Division attorneys handled many bankruptcy matters on behalf of 
state agency creditors. Two such matters, involving state taxation, resulted in reported decisions. 
In Adams v. Coveney , the United States Court of Appeals for the First Circuit held that an 
individual who was the president and chief operating officer of a bankrupt corporation was not 
personally liable for the corporation's unpaid state taxes, where he authorized his partner, the 
corporate treasurer and an attorney, to take charge of paying the corporation's taxes. In Workers' 
Compensation Trust Fund v. Saunders , the United States District Court for the District of Massa- 
chusetts held that a claim asserted by the state Workers' Compensation Trust Fund to recover 
sums that the Fund had paid to the debtor's injured employee prior to the debtor's bankruptcy 
filing was not entitled to priority as a claim for an "excise tax." 

Division attorneys also handled a substantial number of appeals from Appellate Tax Board 
decisions in the state appellate courts, several of which raised constitutional issues. In Commis- 
sioner of Revenue v. MuUins , the Supreme Judicial Court held that the Commonwealth's Con- 
trolled Substances Tax constitutes "punishment" for purposes of the Fifth Amendment's Double 
Jeopardy Clause and, as a result, carmot be imposed in addition to a criminal sentence. In Aloha 
Freightwavs v. Commissioner of Revenue , the Supreme Judicial Court upheld a corporate excise 
tax on an out-of-state common carrier on the grounds that the carrier had sufficient contact with 
Massachusetts to support the minimum excise tax and that the minimum excise tax statute 
satisfied Commerce Clause requirements. In Prudential Insurance Co. of America v. Commis- 
sioner of Revenue , the Supreme Judicial Court upheld the validity, under the equal protection 
provisions of the state and federal constitutions, of the methodology used by the Commissioner 



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of Revenue to calculate taxes on insurance premiums of a foreign insurer. 

Other tax cases handled by Division attorneys this year included Commissioner of Revenue 
V. Cargill , in which the Supreme Judicial Court held that a corporation that does no agricultural 
business in the Commonwealth is nevertheless entitled to an agricultural tax investment credit, 
based on the value of the corporation's qualifying property in the Commonwealth; Associated 
Testing Laboratories v. Commissioner of Revenue , in which the Supreme Judicial Court held 
that certain testing equipment was exempt from the sales and use tax where the testing occurs 
before the item is sold; A.W. Chesterton Co. v. Commissioner of Revenue , in which the Appeals 
Court reversed, as unsupported by substantial evidence, an Appellate Tax Board ruling on the 
timeliness of the Commissioner's assessment of an excise tax; and Farrell Enterprises, Inc. v. 
Commissioner of Revenue , in which the Appeals Court held that a holding company that filed 
consolidated returns could not use the individualized net operating loss deduction belonging to 
one of its subsidiaries when that subsidiary could not use the deduction in a particular tax year. 

Several cases dealing with retirement benefits, handled by Division attorneys, resulted in 
reported decisions during the last year. In Dunn v. Contributory Retirement Appeal Board , 
involving competing claims to a decedent's pension benefits, the Appeals Court held that the 
Contributory Retirement Appeal Board ("CRAB") was not bound by the findings of the local 
retirement board and therefore remanded the matter to the CRAB for a de novo hearing. In 
Hollstein v. Contributory Retirement Appeal Board , the Appeals Court affirmed a CRAB deci- 
sion denying plaintiffs claim for interest on improperly withheld retirement deductions, as 
unauthorized by the applicable statute. In Evans v. Contributory Retirement Appeal Board , the 
Appeals Court upheld CRAB's ruling that a teacher's summer school wages were not "regular 
n compensation" within the meaning of the retirement statute. 

Three employment-related cases handled by Division attorneys in fiscal year 1999 resulted in 
I reported decisions. In Commissioner of the Department of Employment & Training v. Dugan , 
the Supreme Judicial Court held that the factual findings of a hearing officer in a prior disciplin- 
ary proceeding against a former court clerk, which resulted in her discharge, should have been 
given preclusive effect in a subsequent proceeding before the Department of Employment & 
^ Training on the former clerk's application for unemployment compensation. In P & JV of 
Kingston v. Massachusetts Commission Against Discrimination , the United States District Court 
dismissed an employer's claim that he was entitled to remove an employment discrimination 
proceeding from the MCAD to Superior Court immediately after an employee filed her com- 
plaint with the MCAD. 

Two cases in which the Division represented the State Racing Commission resulted in re- 



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ported decisions in fiscal year 1999. In Wonderland Greyhound Park. Inc. v. State Racing 
Commission , the Supreme Judicial Court held that televising of live races constitutes "simulcast- 
ing" within the meaning of the applicable statute and that unredeemed vdnnings from bets placed 
on such races should therefore be paid over to the State Treasury in accordance with that statute, 
rather than retained by the racetracks. In Hotchkiss v. State Racing Commission , the Appeals 
Court reversed a Superior Court decision vacating the Commission's ejection of the plaintiff, a 
mutuel clerk, from Suffolk Dovms based on his pending state and federal indictments for fenc- 
ing, receiving stolen goods, and other theft-related charges. In so doing, the Appeals Court 
faulted the Superior Court for failing to accord sufficient deference to the Commission's factual 
findings and interpretation of its regulatory authority. 

Cases in which Division attorneys represented the Alcoholic Beverages Control Commission 
included Chebacco Liquor Mart. Inc. v. Alcoholic Beverages Control Commission , in which the 
Supreme Judicial Court upheld the reasonableness, and hence the constitutionality, of a statutory 
exception to the Sunday closing laws for package stores located in municipalities within ten 
miles of the New Hampshire or Vermont border. In Fran's Lunch. Inc. v. Alcoholic Beverages 
Control Commission , the Appeals Court upheld the ABCC's conducting of "sting operations" as 
a means of enforcing the prohibition on serving liquor to minors. In Massachusetts Food Asso- 
ciation V. Sullivan , the United States District Court granted our motion to dismiss plaintiffs' 
claim that a state statute limiting an entity to three retail liquor licenses violates the federal 
antitrust laws and denied motions to intervene filed by trade associations of liquor wholesalers 
and retailers. 

Among the insurance-related cases handled by Division attorneys during the past year were 
DiBiase v. Commissioner of Insurance , in which the Supreme Judicial Court held that a policy 
holder's constitutional challenge to the legislative conversion of the savings bank life insurance 
system to a single stock company was barred by the applicable statute of limitations and that the 
policy holder had no right to any greater notice than that provided by the legislation itself; and 
Nercessian v. Board of Appeal on Motor Vehicle Liability Policies & Bonds , in which the 
Appeals Court held that the scope of judicial review over the Board's decisions to uphold motor 
vehicle insurance premium surcharges under the Safe Driver Insurance Plan is limited to correct- 
ing errors of law. 

In fiscal year 1999, as in prior years, most of the cases handled by Division attorneys in- 
volved appeals from agency decisions under the State Administrative Procedure Act. In addition 
to many of the cases described above that fall into that category, these cases also included 



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Cablevision Systems Corporation v. Department of Telecommunications & Energy , in which the 
Supreme Judicial Court dismissed, for lack of standing, Cablevision's appeal from the 
Department's order allowing Boston Edison to establish a holding company. 

The Division attorneys also handled other significant cases in the federal courts during fiscal 
year 1999. In National Foreign Trade Council v. Baker , the United States District Court held 
that a nonprofit organization advocating for open international trade had standing to challenge 
Massachusetts' "Burma Law," which generally prohibits the Commonwealth from purchasing 
goods or services from companies or individuals doing business with Burma, and further held 
that the Burma Law unconstitutionally impinges on the federal government's exclusive authority 
to regulate foreign affairs. That decision was affirmed by the United States Court of Appeals, 
which frirther found that the Burma Law violates the Foreign Commerce and the Supremacy 
Clauses of the United States Constitution. In Stem v. Supreme Judicial Court for the Common- 
wealth , in which the United States Attorney sought to enjoin individual district court judges from 
enforcing a Massachusetts Rule of Professional Conduct against federal prosecutors, the United 
States District Court upheld the application of the state ethical rule. In Trustees of Boston 
University v. ASM Communications , the United States District Court held that there is no private 
right of action to enforce a criminal statute prohibiting the sale of term papers. 



MUNICIPAL LAW UNIT 

The Attorney General's Office is required by statute to review most legislative actions taken 
by the more than 300 towns throughout the Commonwealth, consisting mostly of general, zon- 
ing, and historic district by-laws. Under G.L. c. 40, § 32, the Attorney General exercises a 
limited power to disapprove local legislative action if found to be inconsistent with the laws and 
the Constitution of the Commonwealth. The Attomey General has 90 days from the date on 
which the by-law amendments are received to complete his review. Under the Home Rule 
Procedures Act (G.L. c. 43B) the Attomey General is required to render an opinion on every 
proposed new charter or proposed charter amendment adopted by any city or town in the Com- 
monwealth. These reviews are performed by the attomeys in the Municipal Law Unit within the 
Administrative Law Division of the Government Bureau, with the assistance, as necessary, of 
attomeys from the other bureaus of the Attomey General's Office. 

During fiscal year 1 999, the Municipal Law Unit reviewed 660 general by-laws, of which 568 were 



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approved (86. 1 %), 25 were disapproved (3.8%), nine were approved with partial deletion (1 .4%), and 
58 were returned with a finding that no Attorney General action was required (8.8%); 1 ,065 zoning by- 
laws, of which 938 were approved (88 . 1 %), 93 were disapproved (8.7%), 26 were approved with 
partial deletion (2.4 %), and eight were returned with a finding that no Attorney General action was 
required (0.8%); 1 60 zoning map amendments, of which 1 53 were approved (95.6%), five were 
disapproved (3 . 1 %), and two were approved with partial deletion (1.3%); eight historic district by- 
laws, of which six were approved (75.0%), one was disapproved, and one was returned with a finding 
that no Attorney General action was required; and 1 7 municipal charter matters. 

General by-laws pertain to town governance and the exercise of municipal power under the 
Home Rule Amendment and other powers expressly conferred by the Legislature. The principal 
subjects of general by-law legislation during the past year included wetlands protection, earth 
removal, and First Amendment issues. 

Zoning by-laws strike the balance between a property owner's right to use and enjoy private 
property and a municipality's exercise of police power to regulate uses of land for the common 
good. During fiscal year 1999 the most common subjects of local zoning by-law amendments 
were adult businesses, telecommunications facilities, growth control, flexible zoning, and open 
space techniques. 

The attorneys in the Municipal Law Unit are often assigned initial assessment of lawsuits in 
which the legality or constitutionality of state and local laws are challenged and are asked to 
make a recommendation as to whether the Attorney General should appear and be heard in the 
matter. By court rule and statute, notice to the Attorney General is required wherever such a 
challenge is made. In most instances the Attorney General does not intervene, and in these 
instances the litigation is monitored by Unit attorneys to ascertain whether any municipal law 
issue of state-wide significance emerges in the case that might warrant later intervention and 
participation by the Attorney General. In addition to matters currently in litigation. 

This has been a busy year for the Municipal Law Unit, which consolidated most administra- 
tive and operational ftinctions of the Unit in the Attorney General's Western Massachusetts 
Office in Springfield. With assistance fi-om volunteer interns, the Municipal Law Unit has well 
under way its project of collecting and cataloguing by-law endorsement letters issued by the Unit 
since the time when those letters were first generated on word processors and stored electroni- 
cally. The objective is to assemble and catalog Unit work product to facilitate our fiiture by-law 
review ftinctions and to enhance our consistency with past determinations. The final product 



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will also be a useful tool in personnel training when staff changes occur within the Unit. The 
Unit has also begun a process for organizing all closed files for archival purposes in ways that 
later facilitate search and retrieval. 

In other areas, there has been a dramatic increase this year in the number of public records 
requests for by-law endorsement letters. During the fiscal year $2,340.27 was remitted to the 
state treasury for searching, copying, and mailing. Unit staff responded to an increased number 
of letters and telephone calls from local public officials and from the general public relating to 
municipal law issues. Unit personnel represented the Attorney General this year in over fourteen 
workshops and seminars conducted for local public officials and municipal attorneys. 

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. In limited circumstances, less formal legal advice 
and consultation is also available from the Opinions Coordinator, as is information about the 
informal consultation process. The questions considered in legal opinions must have an immedi- 
ate 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 en- 
acted 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 1 999, the Attorney General issued one formal Opinion, addressed to the Secre- 
tary of the Commonwealth (Opinion No. 98/99- 1 ). In the Opinion, the Attorney General reviewed 



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proposed ballot questions transmitted by the Secretary and concluded that, with two exceptions, each 
of the proposed ballot questions was a question of "public policy" within the meaning of G.L. c. 53, § 
1 9, that could appear on the November 1 998 ballot in the form provided in the Opinion. During the 
same time period, the Attomey General issued 3 1 letters providing informal advice or declining to give 
advice. (A copy of this formal opinion is included at the end of this report.) 



THE TRIAL DIVISION 



The Trial Division handles civil cases brought against the Commonwealth and its officers 
and employees in torts, real estate, employment, civil rights, contracts and other miscellaneous 
areas. In almost all of these cases the plaintiffs are seeking money damages, although in some 
they also seek injunctive or declaratory relief The Division's AAGs carry heavy caseloads, and 
the work of the Division is determined almost entirely by how many cases plaintiffs file; in fiscal 
year 1999 the Division received 537 new cases and closed 529 cases. Most of the Division's 
cases that are not dismissed by the courts are settled, as most civil cases are nationwide. The 
Division emphasizes early evaluation of cases for settlement, disposition by motion, or more 
protracted litigation. The Division encourages alternative dispute resolution whenever possible 
and appropriate. In all instances the Division's goals are to present strong and effective defenses 
to these lawsuits consistent with ensuring fair and just results for the complaining parties and the 
Commonwealth. 

TORT CASES 

The Division opened 370 new tort cases in fiscal year 1999 and closed 373. The following 
descriptions offer a sample of the kinds of tort cases which the Division resolved during the year. 

• Deandrade v. State Police (Bristol Superior) After a two day trial of this case in 
which a State Police vehicle hit the plaintiffs vehicle in the rear, the jury rendered a 
verdict for the defendants, finding that the defendant's negligence was not the proximate 
cause of the injury. 

• Gero V. T. L. T. Construction Co. and Commonwealth (Essex Superior) The 
plaintiff sued for personal injuries that allegedly occurred in 1992 at Taunton State 
Hospital. The plaintiff claimed that at the time of the alleged incident he was reporting to 
a job site for the defendant T. L. T. when he tripped and injured himself on a duct em- 
bankment in a maintenance tuimel. At the end of the second day of trial, the case settled 
through a payment made by the contractor. 



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Sarao v. MDC (Middlesex Superior) After a three day trial, a jury rendered a 
verdict for the Commonwealth in a case in which the plaintiff suffered a depressed skull 
fracture after tripping over a rope that crossed a walkway at the Waltham Skating Rink. 

Most tort cases do not go to trial, but are either disposed of in pre-trial proceedings or are 
settled. The following cases are examples of Division tort cases disposed of v^ithout trial in 
fiscal year 1999. 

• Dever v. Commonwealth et al (Suffolk Superior) Theplaintiffalleged that two 
troopers assaulted and falsely arrested her while she was on a photography assignment at 
the State House. The court granted the Commonwealth's motion for summary judgment, 
finding that there was insufficient evidence to show that the Commonwealth was negli- 
gent in training or supervising the troopers. 

• Knight V. Commonwealth (Appeals Court) The plaintiff settled a property damage 
claim stemming from a motor vehicle accident during the presentment stage. He then 
brought suit for personal injury. The Appeals Court held that the personal injury claim 
was barred by G.L. c. 258, § 5 which provides that a public employer cannot be subject to 
multiple claims stemming fi-om "the same subject matter." 

• Linda McNeil et al v. State Laboratory Institute (Suffolk Superior) The Com- 
monwealth settled a case brought by parents of a boy whose blood was tested at a Com- 
monwealth facility. The test failed to detect the baby's hypothyroidism. A retest of the 
blood sample four months later showed a positive test result, but the test was performed 
after the baby had developed serious symptoms. 

• Michelle Murray et al v. EOCD et al ., Essex Housing Court. The Commonwealth 
contributed to the settlement of this lead paint case which the plaintiff had brought on 
behalf of two daughters against the Commonwealth under a federal housing program. 
The plaintiff had retained several experts who were prepared to testify concerning the 
extent to which the children had been poisoned. 

• Nieves v. Commonwealth et al (U. S. D. C.) The Commonwealth settled this case 
in which a Worcester County inmate sued for damages after a correctional officer was 
convicted and sentenced to three years in a federal penitentiary for strapping plaintiff into 



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a chair and pouring scalding water on him. 

• Smith V. Commonwealth et al (Plymouth Superior) Prior to a hearing on the 
Commonwealth's summary judgment motion, the defendants settled this wrongful death 
action brought by the estate of a Plymouth County inmate who died after being snagged 
by a forage feeder that he was cleaning. The Commonwealth contributed $10,000 to- 
wards a settlement of $75,000. 

REAL ESTATE CASES 

The Trial Division handles many different kinds of real estate cases. The cases with the 
largest potential exposure to the Commonwealth and the most complexity often involve the 
taking of land by 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 land taking process. 
The Division opened 70 cases in fiscal year 1999 and closed 89. The following descriptions 
offer a sample of the kinds of real estate cases which the Division resolved in fiscal year 1999. 

• Anderson v. MHD (Plymouth Superior) Theplaintiffovmed a commercial building 
in Marshfield at the time the Highway Department widened Route 139. The Department 
acquired a strip of land which the plaintiff owned, paying the plaintiff $23,000. The 
plaintiff claimed that he was entitled to $250,000 because he had to move parking spaces, 
reconfigure his parking lot, and could not expand his building. After a three day trial, the 
jury reached a verdict which awarded the plaintiff $42,000. 

• Colbert v. Commonwealth (Middlesex Superior) The plaintiff sued the Common- 
wealth after the Metropolitan District Commission had paid the plaintiff $20,000 when it 
took a two-acre parcel of land which the plaintiff owned in Arlington. The Common- 
wealth had the property appraised again in preparation for trial and that appraisal valued 
the property at $4,300. The plaintiffs expert testified to damages in the amount of 
$205,000. The jury reached a verdict of $ 11 ,900. 

• Glavickas v. Commonwealth (Worcester Superior) This suit involved a taking on 
Route 20 in Worcester. On the day of trial the plaintiff reduced his demand of $68,000 to 
$17,500 and the case settled. 

• Jaffe V. Commonwealth (Middlesex Superior) The plaintiff brought this suit after 
the Highway Department took interests in land on which plaintiff operated an auto tire 



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business. The Department made this taking to facilitate the Route 85 improvement 
project in Marlborough. The plaintiff demanded an additional payment of $50,000, plus 
interest, due to the takings and the serious disruption of his business during construction. 
The Commonwealth had paid the plaintiff $6,000, and the case settled for an additional 
$16,500. 

• Marketplace Center v. Commonwealth (Suffolk Superior) After a two day trial, 
the jury awarded the plaintiff $3 1 2,200 in damages, excluding interest, in this case in- 
volving the taking of interests in land located in Boston for the purpose of constructing 
the Central Artery. The Highway Department's appraiser testified that the plaintiffs 
damages were no more than $92,000; the plaintiffs appraiser testified that damages were 
$394,000. 

• Rite Media, Inc. v. Massachusetts Highway Department et al (SJC) Plaintiff, a 
billboard owner, sued the Commonwealth for damages it allegedly incurred as a conse- 
quence of the taking of land on which the billboard stood. The plaintiff leased the land 
and argued that the billboard was real property that had been taken by eminent domain 
with the underlying land. The Commonwealth argued that the billboard was personal 
property and that the plaintiff was only entitled to its leasehold interest for which it 
suffered no damage. The court, in a 4-2 decision, affirmed a lower court ruling and held 
that a lessee's billboard, subject to removal by the lessee, is personal property- as a matter 
of law which was not taken in the eminent domain proceeding, and that the plaintiff had 
not been damaged by the taking of the leasehold. 

• Zora Enterprises, Inc. v. Commonwealth (Appeals Court) The Court affirmed the 
grant of summary judgment for the Commonwealth in this case where Zora claimed a 
regulatory taking due to the delay in providing an administrative hearing on a wetlands 
permit application. The court reasoned that such delays commonly occur and do not 
constitute a regulatory taking and that nothing in the record indicated that the delay was 
either unreasonable or extraordinary. 



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EMPLOYMENT CASES 

The Division opened 29 new employment cases in fiscal year 1 999. The following descriptions 
offer a sample of the kinds of employment cases which the Division resolved during the year. 

• Damery v. Commonwealth (Norfolk Superior) After a three-day trial, a jury handed 
down a verdict in favor of the plaintiff, a state trooper, who claimed that his removal from the 
State Police SWAT team was in retaliation for a whistleblower letter the plaintiff sent to his 
supervisor regarding safety concerns. 

• Hwang V. Roxbury Community College (Suffolk Superior) A jury returned a 
verdict in favor of the College in this employment discrimination case. The plaintiff, a 
Chinese-American woman whose contract as an administrator in the Math and Science 
Division had not been renewed, had sued the College, which has a predominantly Afri- 
can-American administration, for discriminating against her on the basis of her race and 
national origin as well as for retaliating for complaining about the allegedly discrimina- 
tory actions of an African- American faculty member who ultimately succeeded her as the 
administrator. 

• Monahan v. Commonwealth (Suffolk Superior) After a three-week trial, the jury 
returned a verdict in favor of the plaintiff on a claim under the whistleblower statute and 
awarded plaintiff $250,000 for emotional distress and $900,000 for economic loss. The 
court found for the individual State Police defendants on plaintiffs claims for violation of 
his First Amendment rights. 

• Peguero v. DMR et al (Suffolk Superior) The plaintiffs in this class action suit 
alleged race-based disparate impact and disparate treatment with respect to layoffs at the 
Femald State School due to privatization. After a three week trial, the jury returned a 
verdict for the Department as well as the individual defendants. 

• Sinai v. Department of Social Services (Suffolk Superior) The court granted the 
Department's motion for summary judgment dismissing the plaintiffs claims that he was 
discriminated against on the basis of his national origin and age because he was denied 
interviews with the Department for social worker positions. 

. Syilman v. Administrative Office of the Trial Court (U.S.D.C.) The court 
affirmed the trial court's motion to dismiss plaintiffs claims for failure to prosecute. The 



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plaintiff alleged that she was discriminated against on the basis of race and sex when she 
was fired from her position as a file clerk at the Newton District Court. 

CIVIL RIGHTS CASES 

Civil rights cases, defended in both the Trial Division and the Administrative Law Division, present 
jmyriad legal problems and can subject the Commonwealth to significant financial liability. Civil rights 
[damage awards are not limited by statute, and successfiil litigants may recover interest, costs and 
i attorneys fees. The Trial Division opened 1 9 new civil rights cases in fiscal year 1 999. The following 
descriptions offer a sample of the kinds of civil rights cases which the Division resolved during the year. 

• Davis V. Rennie et al. (U. S. District Court and First Circuit Court of Appeals) The 
plaintiff, a client of the Department of Mental Health, brought this suit against eight 
mental health workers, a nurse, two former commissioners of the Department and a 
former chief operating officer of Westborough State Hospital (the latter three being 
referred to as the Supervisors). The plaintiff alleged that his civil rights were violated 
when he was physically restrained by several mental health workers. The plaintiff also 
contended that one of the health workers struck the plaintiff in the head and the other 
workers and the nurse failed to prevent or stop it. The plaintiff alleged that the Supervi- 
sors had been deliberately indifferent to the plaintiffs rights by allowing the hiring of the 
mental health worker who allegedly assaulted the plaintiff and who was a convicted 
felon. Assistant Attorneys General represented all of the defendants except for the mental 
health worker who had allegedly assaulted the plaintiff and the nurse. After a four week 
trial, a federal jury reached a defendants' verdict in favor of the Supervisors and two of 
the mental health workers, but found that five of the mental health workers (including the 
mental health worker who had allegedly assaulted the plaintiff) and the nurse had vio- 
lated the plaintiffs civil rights, and the jury assessed compensatory and punitive damages 
against these defendants. The Commonwealth is appealing the judgment on behalf of the 
nurse and the four mental health workers who were not involved in the assault. 

• Hvnes v. Commonwealth et al (Suffolk Superior) The court awarded summary 
judgment to two defendant social workers on claims of federal civil rights violations 
stemming from the placement of the plainUff with her uncle in 1982. Plaintiff claimed 
that after the placement her uncle sexually abused her. The court held that the social 
workers were entitled to qualified immunity as they did not violate any "clearly estab- 
lished" right of the plaintiff of which the defendants should have had knowledge. 



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• Judge V. City of Lowell, et al (First Circuit) The court upheld the dismissal of an 
equal protection claim against policy officers and a state medical examiner stemming 
from allegations that had plaintiff not been black, the defendants would have investigated 
her brother's suspicious death with more care and she would have been treated differ- 
ently. The court wrote a major decision on the pleading standard necessary to support a 
civil rights claim. 

• Kellev V. Downey (U. S. D. C.) The plaintiff alleged that the State Police mistak- 
enly arrested him for operating under the influence when he had actually suffered a 
stroke. He was held at the station for several hours before being transported to the hospi- 
tal. The plaintiff asserted that the delay in treatment resulted in permanent left side 
paralysis. Plaintiff brought suit for civil rights and ADA violations against five troopers, 
the Town of Norwell, and the Commonwealth. After a ten day trial, the jury rendered a 
verdict for all of the defendants. 

• Meehan v. Trial Court and Chief Justice for Administration & Management 

(U. S. D. C.) Plaintiff challenged an order of the Administrative Office of the Trial Court 
which barred the plaintiff indefinitely from the Worcester County Courthouse and its 
buildings and grounds after he had engaged in a campaign of letters, newspaper advertise- 
ments, leafletting, and demonstrations against the probate judge who had denied him 
legal custody of his child and limited his visitation. The case was settled for reasonable 
attorney's fees after a substitute order was fashioned which merely barred plaintiff from 
entering the probate judge's courtroom. 

CONTRACTS CASES 

The Trial Division opened 45 new contracts cases and closed 43 during fiscal year 1999. 
The Division defended a number of cases involving state contracts during the year, including 
construction contracts, leases entered into by state agencies, and contracts for the purchase of 
goods and services. The following descriptions offer a sample of the cases resolved during the 
year. 

• Acme Construction Co v. TLT Construction Co. v. Commonwealth (Suffolk Superior) 
After mediation, the parties settled a series of claims arising out of the rehabilitation of the 
Suffolk County Courthouse. The Commonwealth paid Acme $ 1 00,000 in settlement of 



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plaintiff s claims which amounted to approximately $300,000. 

• Commonwealth v. Ruggles Center Joint Venture et al (Suffolk Superior) After an 
extensive mediation, the defendants settled this multi-party litigation arising out of the air 
quality problems at the Registry of Motor Vehicles office at Ruggles Center by paying 
the Commonwealth approximately $4.5 million. 

• Maxvmillian v. Commonwealth v. Conrail (Suffolk Superior) The court granted 
the Commonwealth's motion for summary judgment on a claim for $125,000 in addi- 
tional costs arising out of the removal of a ledge on a bridge repair project over Conrail 
tracks. 

• Mui V. Salem State College (Essex Superior) The plaintiff, a college student sus- 
pended for one semester, obtained an injunction against his suspension, pending a deter- 
mination of his claims for violation of due process, contract and defamation. The plain- 
tiff did not proceed with his case until the College informed him that he could not gradu- 
ate until his suspension was served. The plaintiff then moved for an injunction to compel 
the College to let him graduate. The court denied the injunction, finding that the plaintiff 
would be unlikely to succeed in his claim and had waited too long to litigate it. 

• New England Independent Truckers Association, Inc. v. International Brother- 
hood of Teamsters et al (U. S. D. C.) The court granted the Commonwealth's motion 
to dismiss this case involving various claims under the Labor Management Relations Act 
arising out of the provision of health and pension benefits to truckers on the Central 
Artery Project. 

• Pierce v. Massport v. DCPO et al (Suffolk Superior) The plaintiff was injured 
during a fall on the roof of the State Transportation Building. A jury entered verdicts for 
all defendants. Massport then sought contractual indemnification from DCPO for its 
attorney fees under a contractual provision in which DCPO agreed "to hold the Authority 
harmless from any such claims and to defend the Authority from any claims from third 
parties resulting from any such defects. . ." The court, after a bench trial, agreed with the 
Commonwealth's position that this open-ended pledge of the Commonwealth's credit 
violated Amended Article 62, section 1 of the Massachusetts Constitution and was there- 
fore unenforceable against DCPO. 



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• SCC/Kullman Industries, Inc. v. Commonwealth (Suffolk Superior) The plaintiff 
sought approximately $4.5 million in damages incurred when the Commonwealth sus- 
pended work for several months on the construction of modular buildings for the 
Middlesex Community College due to fiscal problems. After several days of mediation, 
the Commonwealth settled the case for approximately $1.8 million. 

• T Equipment v. Commonwealth (Suffolk Superior) After a five day trial, the jury 
returned a verdict for the Commonwealth on several claims arising during the rehabilita- 
tion of the McCormack Building garage. The claims primarily involved the installation 
of a cathodic protection system designed to prevent corrosion of the concrete. The 
plaintiff sought to recover more than $150,000 for extra costs incurred in the installation 
of the system. 

MISCELLANEOUS MATTERS 

The Division handles a number of cases that do not fit neatly into the categories listed above. 
The Division opened 52 and closed 24 of these cases in fiscal year 1999. The cases which were 
closed during the year included the following: 

• Azubuko V. Attorney General (SJC for Suffolk County) The court dismissed a 
chronic pro se litigant's petition for a writ of mandamus seeking review of an injunction 
"precluding him from filing any new acfion without prior written approval of the Civil 
Regional Administrative Justice of the Suffolk County Superior Court." In entering the 
injunction, the lower court found that the plaintiff repeatedly filed the same claims 
against the same or related parties. The court ruled that mandamus is not the proper 
vehicle to seek appellate review of an injunction issued by the Superior Court. 

• Clemente v. State Board of Retirement (Plymouth District Court) The court 
affirmed the Board's decision which revoked plaintiffs state pension benefits based upon 
plaintiffs participafion in a criminal scheme to defraud the Commonwealth by stealing 
police promotional examinations, giving or selling them to other police officers, and 
breaking into state offices to alter test scores so that police officers could obtain promo- 
tions and salary increases. 

• Cramar v. PET (Appeals Court) Plaintiff voluntarily dismissed its appeal of a DET 
ruling which found that individuals who worked for plaintiff, a home inspection company, were 
employees and not independent contractors for the purposes of tiie unemployment insurance 



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fund. 

ABANDONED HOUSING PROJECT. 

Several members of the Trial Division have been actively involved in the Attorney General's 
Abandoned Housing Project. This past year, Assistant Attorneys General have been successful 
in having the courts appoint receivers in Brockton and Boston, while the project's work contin- 
ues in these and other cities with respect to other properties. The project is designed to assist 
local community groups in choosing and appointing their own people to take over abandoned 
houses which, due to the absentee owner's indifference, has created a health, safety and crime 
hazard for the community. The Assistant Attorney General's role consists of assisting the com- 
munity groups by petitioning the respective court in the name of the Attorney General for an 
order permitting the community to appoint their receiver and take charge of the blighted prop- 
erty, for the benefit of the neighborhood. Once the receiver is appointed, the community itself 
(and its receiver) takes over the actual repair and rehabilitation. 



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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, hazardous and solid waste. EPD also plays a key role under the Clean State 
Initiative to ensure that the Commonwealth's own agencies abide by state and federal environmental 
agencies, and in doing so the Division may bring enforcement actions against those agencies in court 
where the Attorney General, in his enforcement discretion, deems action necessary. Based on the 
Attomey 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 defends lawsuits challenging the actions of state 
environmental agencies and the legality of state environmental laws. 

During fiscal year 1999, EPD handled enforcement proceedings leading to judgments requir- 
ing future payments to the Commonwealth of $3,269,416. These are figures for penalties and 
cost recovery awarded in fiscal 1 999, whether or not actually paid in fiscal 1 999. Actual pay- 
ments received by EPD, in fiscal year 1999, were $2,817,539 for civil penalties and $1,886,688 
for hazardous material cost recovery, for a total of $4,704,228. Other cases resulted in court 
judgments requiring private parties to undertake costly cleanups of environmental problems for 
which they were legally responsible — a savings of millions of dollars to the Commonwealth. In 
fiscal year 1 999, the Division opened 45 new cases or matters and closed 1 45 cases or matters. 

STATE ENFORCEMENT AND COST RECOVERY LITIGATION 

One of the most important functions of EPD is to bring litigation to enforce state and 
federal statutes. In the past fiscal year EPD handled numerous major enforcement cases includ- 
ing the following: 

AIR POLLUTION 



Significant air pollution matters during the fiscal year included Commonwealth v. Borden & 
Remington Corporation . The defendants, a Fall River Company and one of its owners, agreed to 
pay $375,000 in civil penalties for operating without air permits, under-reporting emissions of volatile 



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organic chemicals, failing to install a wastewater pretreatment system for naphthalene, discharging 
heated water from its industrial processes into Mount Hope Bay without a permit, and violating hazard- 
ous waste management regulations. The defendants agreed to pay an additional $ 1 00,000 to the 
Massachusetts Environmental Trust to be used for a water-related program to benefit development in 
Fall River. They also agreed to conduct comprehensive environmental auditing of their facilities. 

In Commonwealth v. Bay State Sterling. Inc. , a Westborough company agreed to pay a 
$850,000 civil penalty to settle the Commonwealth's allegations that it had violated state air 
pollution and hazardous waste laws. The consent judgment in the case required the company to 
come into full compliance and to implement an environmental mitigation package that includes 
conducting an envirormiental audit and reducing or eliminating the use of eleven toxic chemicals. 

The final judgment entered in Commonwealth v. Churchill Coatings Corporation required a 
Massachusetts company that pre-stains and pre-paints wood siding for use in the building indus- 
try to pay a $150,000 civil penalty and to reduce over time its overall emissions of volatile 
organic compounds. The company failed to obtain fi-om DEP all of the air pollution permits 
required for its two facilities in Worcester and Palmer. This was the third in a series of 
woodcoater cases designed to encourage members of the Massachusetts woodcoating industry to 
adopt new materials and processes to reduce their emissions of volatile organic compounds. 

In Commonwealth v. Boston Edison Company , the first enforcement matter based on a 
company's Continuous Emissions Monitoring System (CEMS), Boston Edison agreed to pay a 
civil penalty of $205,000 for violations of its air permit at its Mystic Power Station in Everett. 
The CEMS data revealed that the plant had substantially exceeded permit limits for nitrous 
oxides and carbon monoxide. 

We brought an action in Attorney General v. Massachusetts Department of Highways , 
against a state agency, state contractors, and other parties for environmental violations relating to 
demolition of 150 Causeway Street in Boston for the Central Artery Project. The suit alleges 
unlawful asbestos abatement practices in violation of the Massachusetts Clean Air Act and 
disposal of asbestos at an unapproved site in violation of the Solid Waste Disposal Act. 

I In Attorney General v. Executive Office of Transportation and Construction , we filed suit 
: against two state agencies alleging violations of Department of Environmental Protection regula- 
tions that require the completion of various transit improvement projects as mitigation for the air quality 
llimpacts of the Central Artery Project. 



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We obtained a judgment in Commonwealth v. Consolidated Smelting and Refining Corpora- 
tion, in order to prevent additional contamination. The judgment permanently enjoins the defendant 
from operating its smelting equipment without Department of Environmental Protection approval, 
emitting lead and cadmium pollution in violation of DEP regulations, or reactivating or dismantling its 
contaminated equipment except pursuant to OSHA regulations. 

HAZARDOUS MATERIALS 

EPD brings lawsuits against responsible parties to remediate conditions 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. In 
the last fiscal year, EPD handled the following major hazardous waste cases. 

Together with the Department of Justice, the federal Environmental Protection Agency, the 
state Department of Environmental Protection, the City of Pittsfield and other federal and state 
agencies, we reached an agreement-in-principle in September of 1 998 with the General Electric 
Company regarding the clean up of PCB contamination at the GE plant and elsewhere in 
Pittsfield, and in the Housatonic River. Under the agreement, GE will also pay $ 1 5 million for 
the restoration of damaged natural resources, undertake various other natural resource restoration 
or enhancement projects, and provide brownfields economic redevelopment benefits for the City 
of Pittsfield worth several million dollars. Since September of 1998, the office has been in- 
volved in extensive negotiations to effectuate the agreement-in-principle through the filing of a 
federal consent decree. 

In Commonwealth v. PQ Corporation , the U.S. District Court approved a consent decree 
concerning the matter involving the Nyanza Superfund Site in Ashland. Together with the 
federal government, we sought recovery of cleanup costs and natural resources damages fi-om a 
group of operators at the site. The decree requires the parties to pay $8 million of which approxi- 
mately $1 .4 million will be paid to the Commonwealth in reimbursement of cleanup costs. The 
Commonwealth trustee for natural resources will be paid $230,000 for injury to groundwater at 
the site. 

We filed a complaint against, and entered into a settlement with, the MBTA in Attomey General v. 
MBTA regarding asbestos and oil contamination at an abandoned power plant in South Boston. The 



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consent judgment requires that the contamination at the site be abated and the building demoHshed in 
accordance with a set schedule. 

In Commonwealth v. City of Waltham & Mantakara, we settled an action charging the defendants 
with failing to report a large spill of fuel oil at the Waltham High School. About 1 6,000 gallons reached 
wetlands behind the school, substantially damaging the vegetation and wildlife. The City will assess and 
clean up the site, remedy the environmental damage, audit the school department's environmental 
compliance, and implement an environmental management system for the school department. In addi- 
tion, the City and a school official will pay civil penalties. 

In Commonwealth v. Edward Lyons, Jr.. the Attorney General successfully enforced a 
Suffolk Superior Court final judgment and collected $25,000 owed for response costs incurred 
by DEP to clean up a site in Roxbury. 

In Commonwealth v. Sak Recycling , the defendants agreed to pay a $50,000 civil penalty in 
settlement of the Commonwealth's allegations regarding hazardous waste violations at a site in 
South Boston. 

WATER POLLUTION/WATER SUPPLY 



In Commonwealth v. Perini Corporation, we settled an action against a Central Artery con- 
tractor involving unlawful discharge of a grouting material into the Fort Point Channel. The 
contractor, Perini/Kiewit/Cashman, is constructing a portion of the Interstate-93 northbound 
tunnel that will run along Atlantic Avenue and underneath the South Station subway station. The 
complaint alleged that soon after grouting began, some of the waste grout was allowed to enter a 
i system of sedimentation tanks that ultimately discharge into the Fort Point Channel. Under the 
terms of the settlement, Perini will pay a $40,000 civil penalty. The contractor also agreed to 
have a qualified environmental or civil engineer inspect on a daily basis discharge points to the 
i Boston Harbor. 

j The Tovm of Marshfield entered into a consent judgment in Commonwealth v. Town of 
Marshfield that resolves certain allegations that it violated the state Clean Water Act by discharg- 
ing sewage into groundwater and the South River. The consent judgment requires the Town to install a 
wastewater treatment plant at its high school complex that will help protect groundwater that feeds into 
i nearby municipal water supply wells. Since the filing of the Commonwealth's lawsuit, the town has also 



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disconnected a pipe at another school site that discharged sewage directly into the South River and 
replaced the septic system at that site, and has brought enforcement actions against town businesses to 
bring their failed sewage disposal systems into compliance with the septic system regulations known as 
Title 5. 

We filed a settlement agreement and agreement for judgment in Attorney General v. Adjutant 
General. Massachusetts National Guard for the Guard's violations of the Public Drinking Water 
Act at Massachusetts Military Reservation (MMR) on Cape Cod. Despite violation notices from 
the Department of Environmental Protection and an administrative consent order, the Guard had 
failed to purchase a parcel of land around its primary drinking water well at MMR so as to 
protect the well from contamination. Pursuant to the judgment, the Guard has filed legislation to 
acquire die parcel or take it by eminent domain and has begun negotiations with the owner to 
purchase the land. 

We settled an action against three construction companies in Commonwealth v. Kajima 
Engineering and Construction Company, in connection with a fish kill in Quincy. While work- 
ing on an approved Army Corps of Engineers flood control project, the defendants diverted water 
fi-om the Town River during rainbow smelt spawning season, an action specifically prohibited by 
the Department of Environmental Protection. The defendants' actions allegedly caused the 
destruction of millions of rainbow smelt eggs in what is one of the most productive runs for this 
valuable sport and commercial fish. Under the settlement, the defendants agreed to pay $75,000 
to the state Natural Resources Damages Fund for compensation for injured, killed or damaged 
fish or fish spawn. The defendants also paid a $50,000 civil penalty for violations of the Massa- 
chusetts Wetlands Protection Act and Clean Water Act. 

After a trial in Commonwealth v. Three M Homes Corporation , the court found an owner of a 
mobile home park in contempt for failing to comply with a preliminary injunction that required 
the defendant, among other things, to pump out three times per week the failed septic system at 
the Heritage Village Mobile Home Park in Warren. The injunction was entered in an effort to 
avoid fiirther breakouts of raw or under-treated sewage, which the park's residents have suffered 
with for years. 

We notified the Department of Justice (pursuant to 22 U.S.C. sec. 1365), in Commonwealth 
V. Veterans Affairs Medical Center/West Roxbury . of our intent to file suit against the West 
Roxbury VA for federal Clean Water Act violations. Following our notice, we represented 
MWRA in the negotiations that resulted in the VA's achieving compliance with discharge limits 



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for inter alia, formaldehyde, silver and mercury. 
WETLANDS 



Judgment was entered against the defendants in Commonwealth v. Triton Construction 
Corporation for $35,000 in civil penalties for wetlands violations at their residential subdivision 
in Southborough. During construction, the defendants failed to use necessary siltation and 
erosion control measures at the site, causing wetlands damage. Before judgment was entered, the 
defendants were required to install appropriate siltation control measures. In addition to the civil 
penalty payment, the judgment required the defendants to restore the damaged wetlands. 

We settled an action against homeowners in Dover in Commonwealth v. McCormack , who 
allegedly cut wetlands vegetation, altered a stream bed, and filled approximately an acre of 
wetlands on their property with soil and woodchips, all without a permit. Under the terms of the 
settlement, the defendants will restore the altered wetlands and pay a civil penalty of $12,000. 

SOLID WASTE 



We filed a complaint in Commonwealth v. Hub Construcfion and Maintenance Co., Inc. , for 
dumping of solid waste on the defendant's property abutting Striats Pond in Hull, an area of 
crifical environmental concern, in violation of the Solid Waste Disposal Act. The court granted a 
temporary restraining order enjoining the defendant from accepting, processing, or disposing of 
solid waste on the property. An agreed-upon preliminary injunction was entered in late January. 

PESTICIDES 

In August 1998, we notified 64 Massachusetts pest control companies of our concems that 
their yellow pages advertising, which includes claims of safety or environmental harmlessness, 
violates tlie Massachusetts Consumer Protection Act, G.L. c. 93A. We then met with the pest 
control companies to discuss our concems. We are negotiating assurances of discontinuance 
with the alleged violaters in this joint Department of Food and Agriculture/Attorney General's 
Office project that we hope will result in nearly universal voluntary compliance with respect to 
advertising by pesticide applicators. 

CLEAN STATE INITLATIVE 



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The Attorney General continues to exercise his enforcement discretion to bring actions I 

against agencies and authorities. EPD began a number of enforcement actions against state 
agencies and authorities this year. They have involved ongoing harm to the environment, failure to 
comply with the terms of administrative consent orders, failure to meet Clean State-ordered deadlines 
and matters that failed to make the Clean State list at all. 

Pursuant to his authority under G.L. c. 12, §11D, the Attorney General sent to the Legislature 
an annual report on the Clean State Initiative. The report discussed the successes of the Clean 
State Initiative in the previous year, such as the concerted effort to address the Commonwealth's 
underground storage tanks. It also discussed the environmental problems that state agencies and 
authorities have failed to correct, the cleanup deadlines that have been missed and the numerous 
problems originally ranked as "priorities" that have been relegated to lesser status. The report 
pointed out that the list of problems requiring remediation had grown by over 50% in four years 
and is expected to increase dramatically as environmental audits of state facilities are completed. 
The report noted that the professional auditing that was being done of state agency compliance, 
which was started in response to recommendations made by the Attorney General in 1995, comes 
extremely late in the program and that agencies and authorities will therefore have little time to 
deal with these problems before the June 30, 2000 deadline for the resolution of all matters. 

The report also criticized the lack of long-range planning and the failure to adopt specific 
action plans for resolving the problems. It documented the failure expeditiously to develop and 
match cost estimates for each problem with existing funding, and pointed out that over 40% of 
the matters do not have funding identified. The report concluded that the year 2000 goal will be 
difficult to reach without a renewed commitment by the Administration and the agencies to 
Clean State. Lastly, it urged agencies and authorities to develop environmental management 
systems that will enable them to stay in compliance once they have achieved it. 

MASSACHUSETTS MILITARY RESERVATION 

While the Massachusetts Military Reservation ("MMR") on the Upper Cape is well known as 
one of the Commonwealth's worst environmental disasters, it is also a tremendously valuable 
state resource. Because of the Cape's growing population and demand for drinking water, and 
because much of the Upper Cape's aquifer has been damaged by past military activities, it has 
become clear that the groundwater under Camp Edwards - the relatively undeveloped northern 
portion of the base - is critical to the Upper Cape's future. Though the ongoing EPA-mandated 



GOVERNMENT BUREAU 



study of Camp Edwards groundwater has revealed some explosives contamination, this groundwater is 
the best remaining option for supplying additional water to the Upper Cape. With some 14,000 acres 
of open space (the largest undeveloped parcel of state land on the Cape), Camp Edwards also has 
unique value as wildlife habitat and a buffer to increasing development. 

The Office of the Attomey General has continued to provide Cape citizens and officials with 
(advice on legal issues relating to land use at Camp Edwards, as they plan for the best future use 
of the land. The Office provided substantial input into the Community Working Group's Master 
Plan for the future use of the base, and has also given technical assistance to legislators who have 
been drafting legislation to protect and develop drinking water supplies at Camp Edwards. 

i 

This past winter, the Attomey General entered into a Memorandum of Agreement v^th the 

Air Force and other federal and state agencies to form a Natural Resource Trustee Council for 

MMR. This Council will conduct an assessment of damages to natural resources caused by 

contamination from MMR, and will seek to restore or replace these resources. A central part of 

the Council's mission will be to replace water supplies lost or damaged by MMR contamination. 

The Office has, so far, succeeded in obtaining funding from the Air Force for the Council and 

v^ll continue to press the Air Force to fund a thorough natural resource damage assessment. 

DEFENSrV^ CASES 



One of the critical functions of the Attomey General's Office is the defense of lawsuits 
challenging the regulatory and enforcement actions of state environmental officials and agencies. 
These cases involve numerous challenges to state permitting decisions, as well as challenges to 
the legality of state environmental regulations. 

The court upheld DEP's decision in American Reclamation Corporation v. Department of Environ- 
mental Protection, to deny plaintiff ("Amrec") a determination of beneficial use for a product called 
LANLOC-7, a mixture of petroleum-contaminated soil, asphalt and clay, for use as final landfill cover. 
The court affirmed that Amrec was not entitled to an adjudicatory hearing on DEP's denial and upheld 
DEP's decision on the grounds that Amrec did not meet its burden of showing that LANLOC's use 
would cause no adverse impact. 

The case of Water Works Laboratories Inc. v. DEP involved a challenge to DEP's decision to 
decertify this laboratory company from performing analyses of public water supplies. 



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DEP decertified the lab for one year for submitting falsified data to support the lab's application. 
We successfully defeated the plaintiflTs motion for a preliminary injunction. The company subsequently 
dismissed its suit with prejudice. 

In Quirk v. Department of Environmental Protection, the owner of a large automobile dealership 
challenges DEP's issuance of a permit to the Town of Quincy and aprivate developer for ajoint devel- 
opment of a golf course and recreational complex on land in Quincy formerly used as a landfill. The 
permit allows the developers to test soil excavated fi-om the Central Artery before using it to cover the 
former landfill. The plaintififcomplains that the traffic and construction impact associated with this large 
project has damaged his business. 

The Supreme Judicial Court issued a decision in General Electric v. Department of Environ- 
mental Protection , regarding GE's efforts to obtain certain documents from the Department of 
Environmental Protection. While the Court upheld the lower court ruling that DEP had not 
waived its ability to withhold certain documents by sharing these documents with the federal 
government, it denied DEP's ability to withhold documents based solely on the attorney work 
product privilege, holding that that privilege had been abrogated by the enactment of the state 
public records law. 

In East Ashland Street Realtv Trust v. DEP , we achieved the dismissal of a party's appeal of 
the assessment of an administrative penalty based on the plaintiffs failure to comply with the 
procedural requirements of the Administrative Penalties Act. 

In Burkhard Corporation v. Rojo , the plaintiffs, proponents of a hotel development in Arling- 
ton, sued several residents for defamation based on comments made by the residents in connec- 
tion with an appeal of a wetlands permit for the project. We filed an amicus brief in support of 
defendants' special motion to dismiss pursuant to G.L. c. 231, § 59H. The Attorney General's 
brief supported the residents' argument that the defamation action should be dismissed as it was 
a SLAPP (strategic lawsuit against public participation) suit. Subsequent to our filing the brief, 
the parties to the litigation settled the action. 

Litigation concerning the right of a developer to construct a landfill in the Town of Douglas 
was declared moot by the Supreme Judicial Court in Douglas Enviroimiental Associates v. 
Department of Environmental Protection, et al. , after the site was taken pursuant to chapter 22 1 
of the Acts of 1998. Because the question remains relevant to the valuation of the site, the Court 



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nevertheless reviewed and endorsed the Superior Court's decision that the developer would have been 
entitled to a permit. 

NEW LEGISLATION - BROWNFIELDS 

The Attorney General's legislative efforts focused on securing passage of a brownfields bill 
to spur clean ups and redevelopment, especially in areas of economic need. The Attorney Gen- 
eral worked closely with members of the Joint Committee on Natural Resources and Agriculture, 
the House and Senate Committees on Ways and Means, and an appointed Conference Committee 
to secure passage of the Brownfields Act (St. 1998, c. 206), which was signed into law on Au- 
gust 5, 1998. Since that time, the Attorney General has worked to implement the new law, 
including promulgating regulations for a new brownfields covenant not to sue program that was 
mandated by the Legislature at the recommendation of the Attorney General. We also continued 
to push for brownfields development opportunities at locations across the Commonwealth. For 
example, pursuant to a consent judgment we negotiated, we oversaw the sale of property owned 
by a defunct rustproofmg company in Medford. DEP had removed cyanide-contaminated soil 
from the site in the 1980s and the property has been vacant since. This property then sold for 
$549,000, with the sale proceeds split among DEP, the City of Medford, and a mortgagee who 
took the lead the marketing the property. The property was purchased by an autobody repair 
business that plans also to rent space to other businesses. 

NATIONAL AIR POLLUTION ISSUES 

The Office of the Attorney General is deeply involved in many Clean Air Act issues of 
national importance. 

Ozone &: Fine Particulate NAAOS 

In American Trucking Association v. Environmental Protection Agency, the Court of Appeals for the 
B.C. Circuit issued a ruling overturning EPA national ambient air quality standards for ozone and fine 
particulates. Because we believe that EPA's tougher standards are needed to protect public health, 
Massachusetts is an intervenor in that case in support of EPA's actions. EPA, joined by Massachusetts, 
and New Jersey have filed Petitions for Rehearing, With Suggestion for Rehearing In Banc. 



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GOVERNMENT BUREAU 



Interstate Air Pollution Transport 

In Petition to Reduce Emissions from Ohio River Valley Power Plants, EPA issued its technical 
findings on the petitions of 8 states, including Massachusetts, for reductions in omissions of nitrogen 
oxides by power plants and other large industrial sources in upwind States. On Massachusetts' petition, 
EPA found that power plants in West Virginia and Ohio were contributing significandy to violations of 
the new ozone standard in Massachusetts. Because EPA had already proposed to revoke the old 
standard in Massachusetts, it declined to make a finding regarding contributions to violations of the 
standard in Eastern Massachusetts, but it found that sources in West Virginia were contributing to 
violations of the old standard in Western Massachusetts. EPA also established a default remedy that 
will take effect by May, 2000, if the States in which the target sources are located do not propose 
acceptable action plans sooner. 

We intervened with other Northeastem states in State of Michigan v. Environmental Protection 
Agency, in defense of EPA's rule calling upon 23 States to revise their Clean Air Act section 1 26 
implementation plans to reduce emissions of nitrogen oxides, which react in the atmosphere in the 
summer to form smog. The D. C. Circuit Court of Appeals has stayed the rule pending review; the case 
will be argued to the Court in September, 1 999. 

Low Emission Vehicle Requirements 

In American Automobile Manufacturers Assn. v. Department of Environmental Protection, 
the Court of Appeals for the First Circuit issued a ruling in our appeal of a District Court judg- 
ment invalidating a rule requiring the automobile manufacturers to produce and deliver zero 
emissions vehicles (i.e., electric cars) in 1998-2000. The Court referred some key questions to 
the federal Environmental Protection Agency based on primary jurisdiction. We filed written 
corrmients with EPA concerning these questions. 

We filed a brief amicus curiae in Avers v. Environmental Protection Agency, in support of a 
petition contesting EPA regulations establishing a national low emission vehicle program. We 
argued that the NLEV program has diverted northeastem states from the effort to adopt the 
cleaner California program, and has thereby resulted in dirtier air in the Northeast even if it will 
lead to cleaner air somewhere else. After we filed our brief, we were informed that the petition- 
ers had tentatively settled the case for commitments by EPA to promote development of "alterna- 
tive technology vehicles." 



192 



GOVERNMENT BUREAU 



CENTRAL ARTERY/TUNNEL PROJECT CIVIL COST RECOVERY 

The Central Artery /Tunnel Project Civil Cost Recovery unit was established in the Govern- 
ment Bureau in December 1997, as a part of enhanced state oversight efforts on the multi-billion 
dollar Central Artery/Tunnel Project ("CA/T Project"). Earlier that year, the Legislature had 
provided dedicated funds for the Attorney General, the State Auditor, and the Inspector General 
to supplement their ongoing activities with respect to the CA/T Project, and to coordinate those activi- 
ties through the CAyT Project Oversight Coordination Commission ("the Commission"). The Attomey 
General has asked the Legislature to renew this dedicated fiinding, as the CA/T Project now proceeds 
in its peak construction period. 

The CA/T Project Civil Cost Recvoery unit in the Government Bureau is presently made up 
of an attomey director and support staff. Its work often is performed jointly with the Criminal 
Bureau and the Business and Labor Protection Bureau. 

The unit director investigates allegations of wrongdoing on the CA/T Project; pursues civil 
cost recovery actions; works with Criminal Bureau and Business and Labor Protection Bureau 
attomey s on criminal matters; coordinates CA/T Project activities within the Office; participates 
in the activities of the Commission; proposes cost-containment and anti-fraud measures to the 
CA/T Project; and takes part in drafting and promoting state False Claims Act legislation. 

THE CENTRAL ARTERY/TUNNEL PROJECT 

The CA/T Project, which is now being run by the Massachusetts Turnpike Authority, has 
been described as the largest, most complex, and technologically most challenging highway 
project in the history of the United States. Among other things, the Project will replace Boston's 
deteriorating and inadequate elevated Central Artery (part of Interstate 93) with an eight-lane 
vmderground expressway, will extend the Massachusetts Turnpike (Interstate 90) to Logan 
Airport via the Ted Williams Tunnel under Boston Harbor, and will create 27 acres of open 
space in the heart of the city. The Project is designed to improve traffic flow and traffic safety in 
one of the country's oldest and most congested cities, utilizing a number of state-of-the-art 
engineering and constmction techniques. 

The estimated total cost of the CA/T Project, the time anticipated for its completion, and the 
portion of the total costs to be paid by the Commonwealth have grown substantially over the past 
decade. In 1 989, CA/T Project management estimated that constmction would be completed in 

193 



GOVERNMENT BUREAU 



1 998 at a cost of $4.4 billion. Project management now targets completion in 2004, at a cost of $ 1 0.8 
billion, and this figure has been criticized as overly optimistic. The federal government previously had 
assumed responsibility for approximately 90 percent of the Project's costs, but a new federal fimding 
formula requires the Commonwealth to pay a larger share of the costs. All of these factors make 
effective oversight, criminal enforcement, and cost recovery activities even more critical for Massachu- 
setts taxpayers. 

FISCAL YEAR 1999 CA/T PROJECT OFFICE ACTIVITIES 

Over the past several years, the Attorney General has engaged in numerous investigations, 
civil actions, and criminal prosecutions to protect the public interest in the CA/T Project. The 
CA/T Project Civil Cost Recovery unit in the Government Bureau allows for enhanced coordina- 
tion of activities within the Attorney General's Office, and a more focused relationship with CA/ 
T Project management and with others involved with the Project outside the Office. 

As in the past, the range of matters in the Office relating to the CA/T Project during fiscal 
year 1999 has been diverse. Several matters reported by informants are imder investigation. The 
Office has prosecuted a procurement fraud matter (the defendant is now a fugitive), and has 
resolved allegations of improper billing. The Administrative Law Division has defended the 
decisions of agencies and agency officials in matters including the Blue Line MBTA station and 
the adjacent East Boston roadways and parks, and the use of excavation materials to cap and 
close landfills. The Environmental Protection Division ("EPD"), among other things, has 
brought actions against other state agencies and private businesses for alleged violations of 
environmental requirements. The Trial Division has defended the Commonwealth in a number 
of contract and tort actions arising out of the CA/T Project, including a challenge to a require- 
ment that contractors contribute to union benefit funds, and several contractor claims for addi- 
tional payments. In eminent domain cases, the Trial Division has saved the CA/T Project more 
than $37 million during the past year, and more than $109 million to date, in inflated compensa- 
tion claims brought in connection with property takings for the Project. 

In the Business and Labor Protection Bureau, the Fair Labor and Business Practices Division 
has criminally prosecuted a number of businesses and individuals for violating the prevailing wage laws, 
and has advised Project personnel and employers about the governing laws and recent amendments. 
The Insurance Fraud Division likewise has prosecuted several cases of worker's compensation fi^ud, 
an area in which the Office has taken a "zero tolerance" approach in order to deter such offenses fi^om 
occurring once the CA/T Project's construction activities begin to wind down. 



194 



GOVERNMENT BUREAU 



OVERSIGHT COORDINATION COMMISSION 

The Attorney General, the State Auditor, and the Inspector General make up the C A/T Project 
Oversight Coordination Commission, a body charged by the Legislature with responsibility for coordi- 
nating oversight efforts among the three ofiBces. Senior staff from each office, including the director of 
the Government Bureau's C A/T Project Civil Cost Recovery unit, meet monthly to discuss activities and 
plans, consistent with each oflBce's confidentiality requirements. The Commission invites legislators to 
attend special meetings that are held quarterly. 

The Commission is soliciting detailed information from other public construction "mega- 
projects" (costing more than $1 billion) throughout the country regarding anti-fraud and cost- 
containment measures that they are employing. This survey, prepared with input from each of 
the Commission member offices, is intended to generate information that can be put to use on the 
CA/T Project. 

OTHER ANTI-FRAUD AND COST CONTAINMENT MEASURES 

The Attorney General's Office has established a toll-free 24-hour telephone "hotline" to help 
identify fraud, waste, and abuse on the CA/T Project. The Attorney General's Big Dig Fraud 
Hotline - 1-888-TIP-BGDG (1-888-847-2434) - is answered by staff during business hours and 
by voicemail at all other times. 

Through June 1999, the Hotline has logged more than 150 calls. Calls that can be better 
addressed by the Project itself, or by another state officer such as the State Auditor or the Inspec- 
tor General, are referred accordingly. All calls to the hotline are confidential. 

The unit also works with Project management to encourage the implementation of measures 
that will tend to reduce the incidence of fraud and abuse, and to reduce the incidence and cost of 
defensive lifigation. 

FALSE CLAIMS ACT LEGISLATION 

An important objective of the CA/T Project Civil Cost Recovery unit is the enactment of 
state False Claims Act legislation. The False Claims Act would significantly enhance the ability 
of the Commonwealth to recover state funds that are obtained improperly through the submission 
of false claims or false statements to the Commonwealth, to its agencies or contractors, and to 



195 



GOVERNMENT BUREAU 



state authorities like the MBTA and the Turnpike Authority. The legislation would be of special signifi- , 
cance with regard to the extraordinarily costly CA/T Project, which involves billions of dollars and I 

thousands of personnel. 

The False Claims Act would authorize the Commonwealth to recover treble damages, civil 
penalties, costs, and attorney's fees from defendants found to be liable for submitting false j 

claims and false statements for funds. The statute also would authorize the Attorney General to 
compel the production of documents, testimony, and interrogatory responses before a case is 
litigated, in order to determine whether allegations warrant further action. A key provision of the 
legislation would meaningfully encourage individuals to come forward with information about 
fraud, by allowing them to share in the Commonwealth's recovery and by protecting them from 
retribution by their employers. 

During 1998, the Senate passed a similar bill, but the legislation died in the House at the end 
of the session. A new bill was introduced in the 1999 legislative session, incorporating several 
changes designed to facilitate the its enactment and implementation. Attorney General Tom 
Reilly testified in support of this bill before the Joint Committee on the Judiciary, on May 25, 
1999. 



196 



PUBLIC PROTECTION 
BUREAU 

Civil Investigations Division 

Civil Rights and Civil Liberties Division 

Consumer Protection and Antitrust Division 

Public Charities Division 

Chief Prosecutor 

Regulated Industries Division 



Public Protection Bureau 

The Public Protection Bureau manages and oversees civil and criminal affirmative litigation 
on behalf of the Commonwealth and its citizens, the development of policy, legislative and 
regulatory proposals, and persoimel for five divisions: Consumer Protection and Antitrust Divi- 
sion, Regulated Industries Division, Civil Rights and Civil Liberties Division, Public Charities 
Division and Civil Investigation Division. In addition, the Bureau has an office of the Chief 
Prosecutor, which brings criminal actions in appropriate cases. The divisions and the chief 
prosecutor's office also conduct investigations and publish reports in areas of interest arising out 
of their activities. 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 Bureau has an office of the Legislative Liaison, which coordinates testimony for hear- 
ings before the Legislature on issues of concern to the Bureau. This past year, the Bureau testi- 
fied on a variety of legislative items, including: (1) medical records confidentiality; (2) access for 
individuals with disabilities; (3) establishment of a registry of abusive home care providers; (4) 
health warnings on the advertising of alcoholic beverages; (5) health insurance benefits for 
domestic partners of public sector employees; (6) electronic shelf pricing; (7) community rein- 
vestment by insurance companies; (8) health club industry practices; (9) telemarketing fi-aud; 
(10) harming assault weapons; and (11) automatic teller machine surcharges. The Legislative 
Liaison also monitors legislation that impacts the work of Bureau. 

Bureau persoimel also coordinate and staff the Attorney General's Student Conflict Resolu- 
tion 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 smdent- 
centered mediation programs in the Commonwealth's schools to prevent disputes from escalating 
into violence. In addition, Bureau staff oversee a Conflict Intervention Team (CIT) of specially 
trained community mediators, who mobilize on a moment's notice to provide emergency media- 
tion service to schools in crisis or on the verge of crisis. 

Bureau personnel engaged in two historic battles this year over tobacco and handgun regula- 



197 



PUBLIC PROTECTION BUREAU 



tion. The Tobacco Unit of Consumer Protection and Antitrust Division settled a multi-billion 
dollar cost-recovery case against the tobacco industry. This settlement will result in benefits to 
Massachusetts citizens throughout the forseeable future. The Bureau also defended a legal 
challenge to regulations it had issued to prevent the sale of unsafe handguns. The Attorney 
General's authority to issue such regulations was recently upheld by the Supreme Judicial Court. 

The Public Protection Bureau continued its charge of coordinating efforts and taking the lead 
in the areas of elder issues and health care. The Bureau continued its work with the Attorney 
General's Home Care and Home Health Care Task Force, working to ensure that the laws, 
regulations and business practices of the home care and home health care industries in Massa- 
chusetts are 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, parents with disabled 
children and others who require home health and home care services. As a result of the task 
force's work, a comprehensive legislative package was passed to (1) amend the Criminal Of- 
fender Record Information (CORI) statute for home health care and home care employees and 
volunteers; (2) provide home health care and home care employers with immunity for sharing 
information regarding former employees; (3) establish a registry of abusive home health workers; 
and (4) establish procedures for reporting and investigating allegations of abuse, neglect, mis- 
treatment and misappropriation of home care consumers' property. In addition, the Bureau 
represented the Attorney General on the Nursing Homes Admission Contract Task Force, created 
to address findings that some nursing facility admission contracts failed to comply with regula- 
tions promulgated by the Attorney General and the federal government. The Bureau also as- 
sisted the Department of Public Health in amending its patient abuse regulations and will assist 
with training nursing facility staff in the upcoming year. 

The Bureau oversees the Attorney General's Community Benefits Guidelines for both hospi- 
tals and HMOs. This initiative was staffed by members of the Regulated Industries Division, the 
Consumer Protection and Antitrust Division and the Public Charities Division. Members of the 
Consumer Protection and Antitrust Division and the Public Charities Division oversee reporting 
under the hospital Guidelines. A member of the Regulated Industries Division oversees both 
reporting under the HMO Guidelines and the Attomey General's Community Benefits Advisory 
Task Force, convened in June 1998 for the purpose of advancing the goals of the Community 
Benefits Guidelines. 

The Bureau furthered its priority in the guardianship area by continuing to participate as a 



198 



PUBLIC PROTECTION BUREAU 



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 statutes. The Bureau also assisted the Committee on Guardianship Reform, 
which includes the Attorney General, probate judges, elder and disabled persons advocates and 
private bar attorneys, on drafting and filing in the Legislature Article 5 of the Uniform Probate 
Code to revise the state guardianship laws. 

Bureau staff continued to participate in the steering committee of the Inter- Agency Task 
Force on Long-Term Care Financing. This statewide Task Force is a bipartisan effort led by the 
Attorney General and the Governor to develop strategies to increase the private financing options 
for nursing home and other long-term care, and to provide financial security to elders while 
easing the burden on Medicaid. This past year, Bureau staff played a lead role in drafting major 
revisions to the Division of Insurance's long-term care insurance and life insurance regulations, 
which expand private options for covering the costs of long-term care. These revised regulations 
are set to be promulgated early in the next fiscal year. In the coming year, the Task Force will 
focus on designing consumer education and disclosure materials. 

The Attorney General's Elder Hotline (1-888-AG-ELDER), a state-wide toll-free hotline, 
handled over 5,000 calls from elders and their families. The hotline provides information, 
mediation services, and referrals for senior citizens and their families on a wide range of elder 
issues. The Bureau also has an internal task force of Elder Law Advocates comprised of Assis- 
tant Attorneys General and office Investigators in areas of elder law, including long term care 
issues, protective services, financial exploitation of elders, and home health care services. These 
advocates work in conjunction with the Elder Hotline to address specific elder protection con- 
cerns. 

The Bureau continued its multi-faceted approach to combating home contractor fraud. Fol- 
lowing its June 1998 law enforcement conference, Bureau personnel successfully prosecuted 
several fraudulent contractors, and provided assistance to police and assistant district attorneys 
on how best to approach this type of case. The Bureau also continued its efforts to educate 
consumer and elder groups about how to avoid home contracting fraud. 

The Bureau continues to be actively involved with consumer issues. In recognition of the 
emerging problem of identity fraud. Bureau personnel drafted legislation criminalizing identity 
fraud. This bill became law in March of 1999. The Bureau also continued its participation with 



199 



PUBLIC PROTECTION BUREAU 



the American Association of Retired Persons (AARP) in various initiatives, including serving on 
the Senior Health Care Coalition, a consortium of consumer groups that has worked with the 
Division of Medical Assistance and Executive Office of Elder Affairs on drafting the 
MassHealth Senior Care Options (SCO) proposal for dually eligible senior citizens to the Health 
Care Financing Administration. The Bureau also increased its efforts over the past year to 
prevent telemarketing fraud, through consumer education targeted at elders and increased investi- 
gative coordination with federal, state and Canadian law enforcement agencies. 

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 the Attorney General's 
Workforce Diversity Committee, which was created to promote dialogue and identify strategies 
for addressing workplace diversity issues. 



200 



PUBLIC PROTECTION BUREAU 



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; conduct- 
ing surveillance, background checks and asset checks; analyzing financial records and perform- 
ing other forensic accounting functions; and, testifying before the Grand Jury and at trial. 

Investigators worked closely with other state attorneys general's offices, district attorneys, 
local and state police departments, the U. S. Attorney's Office, the U.S. Postal Inspection Ser- 
vice, the Federal Bureau of Investigation and the Federal Trade Commission. 

In fiscal year 1999, the Division initiated 389 investigations in the following major areas: 

PUBLIC PROTECTION 

CONSUMER PROTECTION AND ANTITRUST 

Investigators continued to perform their traditional role by assisting the office in bringing 
G.L. c. 93 A enforcement actions against businesses and individuals in major consumer areas 
such as: automobile sales and repair, debt collection and credit repair services, billing schemes, 
travel services, health spas, retail sales, computer scams, advance fee loan scams, asset search 
firms, immigration services and employment schemes. Areas also included numerous issues 
affecting the elderly and vulnerable populations, such as the unauthorized practice of law, mort- 
gage lending, 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 fraudulent sweepstakes promotions, telemarketing 
scams and the sale of tobacco to underage consumers. 



201 



PUBLIC PROTECTION BUREAU 



CIVIL RIGHTS/LIBERTIES 

The Division investigated "hate crimes," allegations of police misconduct and other viola- 
tions 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. 

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 otherwise misrepre- 
sented themselves or the charity's purpose. Investigators worked with other law enforcement 
personnel 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 employees contributions for health insurance premi- 
ums, but failed to actually purchase the health insurance coverage. Other cases investigated 
included unlawful sales practices also known as "churning," and the sale of fraudulent or costly 
life and health insurance policies. 

BUREAU PROSECUTOR 

Investigators worked with the Bureau Prosecutor on numerous cases which resulted in indict- 
ments and convictions against individuals for violations of the Commonwealth's criminal laws. 
Cases included larceny against the elderiy and vulnerable by financial advisers, attorneys, home 
improvement contractors and auto dealers. Cases also involved investigations relative to the 
unlicensed practice of medical professions, health care fraud, telemarketing fraud, illegal chari- 



202 



PUBLIC PROTECTION BUREAU 



table fundraisers and embezzlement from non-profit organizations. 
GOVERNMENT BUREAU 

ENVIRONMENTAL PROTECTION 

[ The Division's role in EPD cases primarily involved locating and identifying assets of poten- 
ftially 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 investi- 
gating allegations of abuse, mistreatment and deaths of individuals in state care; alleged wrong- 
ful 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. 

CRIMINAL BUREAU 

SAFE NEIGHBORHOOD INITL\TIVE (SNI) 

The Division continued its assistance to the office's Abandoned Properties project by con- 
ducting research on target properties, primarily to determine the status of ownership and exist- 
ence of encumbrances of the buildings, and, also in some instances, assisted in inspecting proper- 
ties scheduled for renovation. 

BUSINESS & LABOR PROTECTION BUREAU 

INSURANCE FRAUD DIVISION 



In conjunction with the protocols established by the Attorney General's Task Force to Re- 
duce Waste, Fraud and Abuse in the Workers' Compensation System, the Division continued to 



203 



PUBLIC PROTECTION BUREAU 



investigate allegations that state employees or employees of self-insured companies were fraudu- 
lently 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. 



STATISTICS 

The Division opened 389 investigations in Fiscal Year 1999, with 344 investigations ongo- 
ing as of June 30, 1999. Case distribution by division and/or bureau is as follows: 



DIVISION/BUREAU 


OPENED 


ONGOING AS 




DURING FY '99 


OF 6/30/99 


Consumer Protection/ Antitrust 


48 


64 


Civil Rights 


16 


12 


Public Charities 


2 


6 


Regulated Industries 


3 


5 


PPB/Criminal 


24 


32 


Government 


7 


7 


Environmental Protection 


11 


19 


Trial 


278 


195 


Insurance Fraud 





4 


TOTAL 


389 


344 



204 



PUBLIC PROTECTION BUREAU 



CIVIL RIGHTS AND CIVIL LIBERTIES DIVISION 



THE MASSACHUSETTS CIVIL RIGHTS ACT 

The Civil Rights and Civil Liberties Division continues to enforce aggressively the Massa- 
chusetts Civil Rights Act (MCRA). The MCRA authorizes the Attorney General to seek injunc- 
tive 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. A violation of a civil rights injunctive 
order constitutes a criminal offense, punishable by a maximum often years in a state prison if the 
victim suffers bodily injury, or up to two and a half years in a correctional facility if no bodily 
injury results. 

In fiscal year 1999, the Division's mission to deter and prevent hate crimes resulted in the 
issuance of seven preliminary injunctions by the Superior Court against seventeen defendants, 
where it was alleged that the defendants had interfered with the rights of forty two residents of 
Massachusetts on the basis of their race, sexual orientation, gender, religion, and national origin. 
In addition, a number of in-depth civil rights investigations of possible MCRA violations were 
conducted by the Division. 

GENDER BIAS 



The Division has continued its efforts to protect women from hate motivated violence in 
dating relationships. The Division prevailed in its first landmark MCRA case involving allega- 
tions of civil rights violations on the basis of gender in 1994. In December 1998, in Common- 
wealth V McGrath , a preliminary MCRA injunction was obtained from the Worcester County 
Superior Court against a twenty seven year old Hopedale man for his alleged nine year history of 
violence and abuse against women. This is the third gender bias MCRA case in Massachusetts, 
all brought by the Division. The defendant is alleged to have repeatedly physically and sexually 
abused his female victims, and taunted them with vulgar and demeaning obscenities, reflecting 
animus against women as a class. One of the alleged victims was thirteen years old when she 
met the defendant. The preliminary injunction prohibits the defendant from engaging in gender 
based threats or violence against three women specifically named in the Division's court com- 
plaint as well as with any other woman with whom he may have a dating relationship with in the 
fiiture. 



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PUBLIC PROTECTION BUREAU 



RACIAL, NATIONAL ORIGIN, AND RELIGIOUS BL\S 

A striking example of the Division's strong response to racial violence is the MCRA case 
titled Commonvyealth v. McPherson . In this case, the Division obtained a preliminary civil 
rights injunction from the Suffolk County Superior Court against three defendants for several 
alleged race based brutal attacks on a fifteen year-old Somalian youth in the Charlestown section 
of Boston. In a series of incidents that occurred in a six month period, the defendants allegedly 
beat, intimidated, and threatened the Somalian youth while yelling racial slurs. The victim 
suffered substantial physical injuries from these attacks that occurred in the victim's own neigh- 
borhood with one incident happening on the stairwell leading to his apartment. The injunction 
contained strict language which prohibits the defendant, or anyone acting on their behalf, from 
knowingly engaging in further race or national origin based harassment, threats, or violence 
against the victim or any other person, and from knowingly approaching within fifty feet of the 
victim's apartment building. 

In Commonwealth v. Quinn , the Division entered into an agreement with a juvenile defen- 
dant, where he agreed to participate in an Anti-Defamation League Youth Diversion Program 
that included four weeks of workshops on civil rights, multiculturalism, and diversity and ten 
hours of service in a community setting. In this case the defendant, along with three unidentified 
white males, allegedly drove near one adult and three teenage religious Orthodox Jews wearing 
traditional religious garb, while they walked to synagogue during the holiday of Passover. The 
defendant allegedly yelled out profanities and made gestures from his car and then pulled up 
adjacent to the victims, shouting more profanities, while a passenger threw a lit cigarette directly 
at two of the victims before driving off. 

ANTI-GAY BL\S 



In fiscal year 1999, the Division continued to obtain injunctive relief against gay bashers, 
demonstrating its continued commitment to combating hate crimes directed at individuals based 
on their actual or perceived sexual orientation. In December 1998, in Commonwealth v. Archer, 
the Division obtained a preliminary injunction from the Bristol County Superior Court, prohibit- 
ing sixteen year old juvenile defendant from threatening, intimidating, or harassing the victim or 
anyone else due to their perceived or actual sexual orientation. In this case the juvenile defen- 
dant allegedly threw a large rock at the seventeen year old victim's head, which knocked the 
victim to the ground. The defendant is alleged to have then kicked the victim while yelling anti- 
gay epithets. The attack left the victim with a broken nose and a concussion. Prior to the attack. 



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PUBLIC PROTECTION BUREAU 



the defendant told two friends that he hated gay people and that they should be beaten up. In 
addition to the charges brought by the Division, the defendant was convicted on criminal civil 
rights charges. 

In addition, the Division has engaged in a number of in-depth investigations of other pos- 
sible hate crimes against individuals because of their actual or perceived sexual orientation. 

ANTI-ASIAN BIAS 

In fiscal year 1999, the Division obtained two preliminary injunctions against ten alleged 
perpetrators, and conducted three additional in-depth investigations into matters involving 
alleged hate crimes targeting members of the Asian-American community. In Commonwealth v 
Lauretano, the Division obtained a preliminary injunction from the Norfolk County Superior 
Court against four female teenagers who allegedly attacked a Chinese American woman in North 
Quincy. The victim, a thirty seven year-old woman who moved to the United States from Hong 
Kong ten years ago, suffered cuts, bruises and dizziness when one night while driving home 
through North Quincy, four teenaged females allegedly began banging on the trunk of her car. 
When the victim stepped out of her vehicle to see what was happening the teenagers allegedly 
laimched an improvoked physical and verbal attack on her, while disparaging her Asian ancestry. 
The preliminary prohibits the youths from having any contact with the alleged victim for two 
years. In addition, the injunction prohibits the defendants from assaulting, threatening, intimidat- 
ing or coercing any person in Massachusetts on the basis of race or national origin. 

Another case in which the Division enforced the MCRA to protect members of the Asian- 
American community occurred in Commonwealth v. Aguiar . In this case the Division obtained 
preliminary injunctions from the Bristol County Superior Court against three adults and three 
teenagers who allegedly attacked a group of about thirty Asian-American youths, between the 
ages of six and eighteen years old, a majority of whom were Cambodian Americans, who were 
playing in the yard of St. Luke's church, located in Fall River,. The defendants allegedly 
shouted anti-Asian epithets and threw large rocks, bricks, sticks and table legs at the children in 
the youth group. In this particularly egregious attack, several of the defendants allegedly waved 
baseball bats, while others in the group shouted, "Go back to your own country!" At least two 
people were stuck by bricks and rocks thrown during the attack. The injunction bars the defen- 
dants, and anyone acting on their behalf, from harassing, threatening, intimidating or attacking 
the victims or any person based on his or her race or color and prohibits them from entering the 
property of the church where the alleged attack occurred. 



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In addition, the Division engaged in extensive outreach and education efforts to various 
communities in Massachusetts with large numbers of Asian- American residents, with particular 
focus on Quincy, Maiden, Lowell, Revere, Fall River and Boston. These efforts were led by the 
Division's liaison to the Asian- American community in Massachusetts. The Division's liaison 
spoke at many different venues including at numerous community meetings. In addition, the 
Division's liaison participated in panel discussions and conducted a workshop regarding anti- 
Asian hate crimes and civil rights. One of the panel discussions aired on a South /Shore Cable 
television program involved a collaborative effort involving the Attorney General's Office, the 
Governor's Task Force on Hate Crimes, the Boston Police Department's Community Disorders 
Unit, the Plymouth County District Attorney's Office, the Anti-Defamation League, and the 
Fenway Community Health Center. Another workshop, conducted by the Division's liaison at 
the annual Coalition for Asian Pacific American Youth Symposium, focused on educating youth 
students from twenty five high schools across the state. 

CIVIL RIGHTS IN THE SCHOOLS 

The Division has continued to focus on ensuring the civil rights of students attending schools 
in the Commonwealth. In fiscal year 1999, the Division swiftly responded to more than eight 
allegations of hate or bias-motivated conduct by youngsters which occurred within the Massa- 
chusetts school system. With each of these complaints, the Division conducted investigations 
and worked with the schools to resolve the conflicts and prevent future recurrence. 

The Division provided educational trainings to students, teachers, and administrators on hate 
crimes and discrimination as well as sexual, racial, national origin and religious harassment in 
the schools. In April 1 999, the Division Chief led a workshop at a Title IX Conference for 
education teams from the Boston area and Middlesex County schools, sponsored by the Office 
for Civil Rights of the U.S. Department of Education and Project Alliance of the Middlesex 
County District Attorneys Office. The workshop focused on how schools can create comprehen- 
sive civil rights and anti-harassment policies and programs and develop partnerships with law 
enforcement to address hate crimes effectively. 

In 1998, the Civil Rights Division drafted a brochure titled "Erasing Hate - A Guide to your 
Civil Rights in School," for middle and high school students. In fiscal year 1999, the Division 
updated and revised the brochure and then mailed approximately 100,000 copies of the revised 
edition to school superintendents, principals, community service organizations and civil rights 
advocacy groups throughout the Commonwealth. The brochure defines and describes hate 



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crimes and what constitutes unlawful harassment in school, informs students about their civil 
rights, and provides them information about the resources available to help them if they believe 
their civil rights have been violated. 

NATIONAL CIVIL RIGHTS IN SCHOOLS GUIDE 

On January 18, 1999, the Office announced the publication of a practical, comprehensive 
national guide aimed at helping school officials in Massachusetts and across the country protect 
students from hate crimes and harassment. The guide, titled "Protecting Smdents from Harass- 
ment and Hate Crime- A Guide For Schools," is a joint publication of the National Association 
of Attorneys General ("NAAG") and the Office of Civil Rights, U.S. Department of Education 
("OCR"). It was developed and drafted as part of a national project initiated by the Civil Rights 
Division. The Chief of the Division served as national co-chair for this project. The guide was 
endorsed by the National School Boards Association. The goal of the guide is to help school 
districts throughout the country develop policies and practices to identify, investigate and elimi- 
nate instances in which hate crimes and harassment based on race, color, national origin, sex, 
sexual orientation, and disability, create or contribute to a hostile learning environment for 
students in violation of federal laws. The guide provides school administrators and other offi- 
cials with step-by-step assistance on how to develop comprehensive civil rights policies, prac- 
tices and programs to protect students' civil rights. The guide includes the Division's "Erasing 
Hate" brochure in its Appendix. 

MASSACHUSETTS HATE CRIMES TASK FORCE 

Working closely with the Division, Attorney General Tom Reilly, along with United States 
Attomey Donald Stem, jointly decided to expand the Massachusetts Hate Crimes Task Force to 
include a broad spectrum of community members with vast experience in hate crimes prevention, 
victim assistance, community relations, and human and civil rights advocacy, including numer- 
ous nationally recognized experts in these areas. The first session of this newly expanded Task 
Force will be held on July 14, 1999. It is anticipated that the expanded Task Force will develop a 
comprehensive plan to address and prevent hate crimes most effectively in the Commonwealth. 
First organized in 1994, the Hate Crimes Task Force has been limited to federal, state and local 
prosecutors and other law enforcement officers. Over the past five years, the Task Force, headed 
by the Division Chief, has helped law enforcement officials to more effectively coordinate 
enforcement activities, and share information and expertise in combating and prosecuting hate 
crimes in the Commonwealth. 



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I 

I 
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I 

NATIONAL WORKING GROUP ON HATE CRIMES TRAINING | 

FOR STATE AND LOCAL LAW ENFORCEMENT ! 

I 

In fiscal year 1 999, the National Working Group on State and Local Law Enforcement Hate ' 
Crimes Training, established by Attorney General Janet Reno in July of 1 997, finalized and i 

published four model hate crime training curricula for law enforcement throughout the country: i 
for patrol officers and responding officers; for investigating officers and detectives; for multi- \ 
level law enforcement professionals; and a fourth curricula for law enforcement managers. The j 
Division Chief is one of the four national co-chairs of the National Working Group. The Work- ' 
ing Group includes representatives from the U.S. Department of Justice the U.S. Department of 
the Treasury, the International Association of Directors of Law Enforcement Standards and : 

Training, the International Association of Directors of Law Enforcement Standards and Training, 
the International Association of Chiefs of Police and the National Association of Attorneys 
General. The Division Chief played a leading role in developing, designing and drafting the new | 
national hate crime training program for state and local law enforcement officials. The four hate 
crime training curriculum incorporate the best policies, procedures, practices and materials used 

to train law enforcement officers. j 

] 

i 
In the fall of 1998, the DOJ and NAAG sponsored, and the Working Group held three day ' 

regional hate crime train-the-trainer programs to instruct experienced law enforcement and civil i 

rights trainers throughout the United States on how to deliver these state-of-the-art hate crime 

training curricula. The Division Chief served as a national trainer at two of the three regional 

train-the trainer program sites. 

CIVIL RIGHTS AND POLICE 

In a collaborative effort to promote civil rights, assist the police, and provide departments 
with technical assistance, the Division continues to offer and provide civil rights training to law 
enforcement covering issues of hate crimes identification, response and prosecution, civil liabil- ' 
ity, sexual harassment, and racial and cultural awareness. 

The Division continues to investigate allegations of police misconduct. It is also regularly 
consulted by police departments to assist them in their internal civil rights investigations. The 
Division has closely worked with departments to ensure that appropriate remedial steps are taken i 
when credible evidence is found which substantiates civil rights complaints. For example, the 
Division worked closely with one Department to develop and implement new procedures to 



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address effectively the concerns raised regarding strip searches of persons who are arrested and 
placed into custody. 

In addition, on April 12,1999, the Attorney General, with the assistance of the Division, 
drafted and sent a letter to the Senate and House Chairs of the Joint Committee on Public Safety 
expressing strong support for the goals of Senate 1 1 80, An Act Providing For the Collection Of 
Data Relative to Traffic Stops. The bill requires the collection and analysis of data to determine 
whether racial profiling is used by law enforcement when making routine traffic stops in Massa- 
chusetts. The letter expressed the Attorney General's strong commitment to having his office 
play an integral role in addressing the concerns about the use of racial profiling by law enforce- 
ment in the Commonwealth. 

HOUSING DISCRIMINATION 

The Division 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, famil- 
ial status, marital status, source of income (receipt of housing subsidy), age, or disability. 

In fiscal year 1 999, the Division fought discrimination in housing by filing ten new civil 
actions in Superior Court. These cases involved allegations of discrimination based on race, 
familial status, gender, and disability as well as for retaliation. Eleven pending housing discrimi- 
ination cases were favorably resolved through court approved consent agreements during this 
period. Settlements included broad prohibitory and affirmative relief provisions, as well as 
significant compensatory damages to the complainants. Collectively, complainants in the eleven 
favorably resolved cases received over one hundred fifty five thousand ($155,000.00) dollars in 
jmonetary damages. In addition, two thousand five hundred ($2500.00) dollars to the local 
consumer aid fund to be used to educate consumers about discrimination. 

Through these and other housing discrimination cases, the Division hopes to modify landlord 
and 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. 

An important case reflecting the Division's commitment to curtail discriminatory housing 
practices is its successful suit in Commonwealth v Davenport Realtv Trust . The realty company, 
one of the largest on Cape Cod, allegedly discriminated and retaliated against a tenant by evict- 
ing her because she provided foster care services to a mentally disabled man as part of the state's 



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foster care program. The Division entered into a settlement approved by the Barnstable County 
Superior Court which includes comprehensive prohibitory and affirmative injunctive relief as 
well as a very substantial monetary award for the two complainants. The consent judgement 
prohibits the defendants from discriminating against or refusing to make reasonable accommoda- 
tions for persons with disabilities and from retaliating against individuals who file discrimination 
complaints. In addition, the affirmative injunctive relief requires the defendant to report certain 
information to the Division about its compliance with the consent judgement as well as ensures 
the intensive fair housing training of all of the defendant's employees, supervisors and managers 
who deal with rental housing. 



In Commonwealth v. Schachter , the Division entered into a comprehensive consent judge- 
ment, approved by the Middlesex County Superior Court, which awards thirteen thousand dollars i 
to the complainant and prohibits an Everett landlord from reftising to rent an apartment to a 
person because the person is pregnant or has a child less than six years of age. The judgment 
also requires the defendant to have all twenty- three units in his six rental properties inspected by ; 
a licensed inspector and to delead or abate the units found to contain dangerous levels of lead. 
The defendant allegedly agreed to rent an apartment to a prospective tenant and accepted a 
deposit from her. Upon learning from another that the prospective tenant was pregnant the 
landlord allegedly informed her that the apartment might contain lead pain and subsequently 
refused to rent the apartment to her. 

In Commonwealth v. Echo Hill Townhouse Condominium Trust , the Division obtained a 
Final Judgement by consent from the Hampshire County Superior Court in a suit against the 
Echo Hill Townhouse Condominium Trust and Congate Enterprises, its management company, 
for allegedly rejecting a prospective female buyer because she had young children. The Housing 
Discrimination Project intervened in the case on behalf of the complainant. The bylaws of the 
Condominium Association's Trust allegedly contained an unlawful provision that restricted 
occupants of the condominium development to people over the age of fifty. The provisions 
attempted to establish a housing community for the elderly in violation of the state's anti-dis- 
crimination law. The final judgement ordered the Condominium Trust to remove the provision 
from its bylaws and prohibits it from continuing to refrise to rent or sell units to families with 
children in the future. In December 1998 the Trust removed the provision. The defendants 
provided the complainant $40,000.00 in settlement of her claims. 

In Commonwealth v Neptune Towers , the Division closely monitored compliance with the 
comprehensive model agreement entered into with the ovmers and managers of a 330-unit 



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federally subsidized apartment complex located in Lynn, and approved by the Middlesex County 
Superior Court and the United States Department of Housing and Urban Development in August 
1997. The court complaint had alleged race and national origin discrimination by the defendant. 
In fiscal year 1999, the agreement's affirmative outreach, advertising and marketing provisions 
! significantly enhanced housing opportunities for African- American and Hispanic families at the 
complex. A number of blacks and Hispanic families applied for and have been placed into the 
apartment complex as a result of the judgement by consent. In addition, the Division conducted 
ifair housing training of the defendant's staff and contacted numerous community agencies to 
! notify them of housing opportunities at the complex. 

EMPLOYMENT DISCRIMINATION 

Since fiscal year 1996, the Employment Discrimination Project in the Civil Rights Division 
has focused its efforts on addressing allegations of systemic employment discrimination prac- 
tices in the Commonwealth. 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. 

MASSACHUSETTS BAY TRANSPORTATION AUTHORITY 



From the effective date of the Agreement in 1997 through fiscal year 1999, the Division 
continues to have a significant impact on employment practices at the Massachusetts Bay Trans- 
portation Authority (MBTA). In February of 1997, the Division entered into an historic, court 
enforceable agreement with the MBTA and twenty-six of twenty-seven of its labor unions to end 
years of alleged violations of state and federal fair employment laws and to protect employees 
from future discrimination, harassment and retaliatory conduct. The comprehensive agreement 
mandated significant changes in policies and practices at the MBTA, and required new systems 
to govern the identification, investigation, monitoring and response to allegations of discrimina- 
tion, harassment and retaliation at the MBTA. In 1999, the Division continued ongoing monitor- 
ing of the MBTA's compliance with the Agreement, responded to numerous complaints from 
MBTA employees, engaged in special reviews to determine if there was compliance with par- 
ticular provisions of the Agreement, and investigated possible breaches. Some of the Division's 
fiscal year 1 999 efforts include the following: 

(A) Review and analysis of MBTA's lengthy quarterly reports which are required to 
document its compliance with each provision of the Agreement; 



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(B) An extensive audit of the Authority's Department of Organizational Diversity, 
which is charged under the agreement to investigate and resolve complaints of discrimination, 
harassment and retaliation filed by employees, identifying compliance issues and problems; and 

(C) Extensive review of all the MBTA's job posting sites to determine whether the 
Authority had complied v^th its obligation to post job vacancies and employees' rights under 
the agreement at all these sites. A number of areas of non-compliance were identified and 
immediate corrective action by the MBTA was undertaken. 

SUPREME COURT AMICUS BRIEFS 

The Division filed a Brief of Amici-Curiae in the United States Supreme Court, on behalf of 
Massachusetts and eleven other states in Wright v. Universal Maritime Corp ., on the important 
question of whether an arbitration clause in a collective bargaining contract barred union em- 
ployees fi-om filing discrimination claims under federal and state law in court. The Division 
argued that union employees should not be denied the right to bring their discrimination claims 
in court rather than being required to arbitrate them, asserting that discrimination claims should 
be litigated in a public judicial forum and not in a private arbitral forum, beyond the reach of 
public scrutiny. The United States Supreme Court issued its decision in Wright on November 
1 6, 1 998 and held that for an arbitration clause in a collective bargaining agreement to waive 
employees right to a judicial forum for statutory discrimination claims, it must clearly and 
unmistakenly waive the right. The Court left for another day the question of whether an arbitra- 
tion clause is ever enforceable to preclude a court hearing on discrimination claims in the collec- 
tive bargaining context. 

The Division, on behalf of Massachusetts and seven other states, also filed an Amicus Brief 
in the United States Supreme Court in Vaughn Murphy v United Parcel Services, Inc . This case 
presented an extremely important issue regarding the appropriate standard for determining 
whether a person has a "disability" within the meaning of the Americans with Disability Act 
("ADA"). The Division argued that a disability should be evaluated based on the underlying 
medical condition of the employee (i.e., diabetes, heart condition, epilepsy, severe hypertension) 
without considering the ameliorative effects of medication, prosthetic devices or other forms of 
assistance. On June 22, 1 999, the Supreme Court held, however, that ameliorative measures 
must be taken in consideration when making the threshold determination of whether a person is 
disabled. The decision may deny the protection of the ADA to people suffering from serious 
medical conditions which are currently controlled. 



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Commonwealth v. Bull HN Information Systems, Inc. 

Age Discrimination Claim Under Federal law 

In a ground-breaking decision in Commonwealth v. Bull HN Information Systems, Inc ., 
the United States District Court denied the defendant's motion to dismiss and held that 
the Commonwealth has parens patriae power to enforce federal anti-discrimination laws 
in federal court. The district court also found that the Commonwealth could proceed with 
its federal age discrimination claims. In fiscal year 1997, the Diyision's Employment 
Discrimination Project, along with the EEOC, had filed this precedent setting age dis- 
crimination in employment case alleging that Bull HN, a large electronics company, 
yiolated the federal Older Workers' Benefits Protection Act ("OWBPA") and the federal 
Age Discrimination in Employment Act ("ADEA"), when laying off its workers aged 
forty and older. This is the first ever joint enforcement effort of federal employment 
discrimination law in the United States between a state attomey general and the EEOC. 

The suit alleged that Bull HN violated federal law by requiring laid-off employees 
over forty years of age to sign a waiver of rights in order to receive severance benefits. 
Further, it alleged that in violation of OWBPA, Bull HN failed to provide statutory 
mandated information to laid off employees which would enable them to assess whether 
or not they were victims of age discrimination when terminated. This waiver agreement 
also provided that in exchange for receiving severance benefits, an employee gave up the 
ability to sue for any current or prior claims arising out of the employee's employment. It 
further provided that if an employee who executed a waiver later brought or maintained 
any claim covered by the agreement, he or she would be required to return all severance 
paid and would have to indemnify the employer for all attomeys fees, costs and expenses 
associated with defending the complaint or claim. 

In its motion to dismiss, Bull HN raised a number of objections to the Attomey 
General's participation in the action, many of which presented issues of first impression 
in the First Circuit and even the federal courts. With issues of standing now resolved, the 
Division continues to actively litigate the age discrimination issues in this case, with the 
assistance of EEOC. 

Age Discrimination Case Under State Law 

In addition to challenging Bull HN's employment practices in federal court under federal 



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law, the Division pursued an action in the Massachusetts Commission Against Discrimi- 
nation under state law, alleging that Bull HN engaged in a pattern of age discrimination 
when terminating its employees pursuant to an ongoing reduction of its workforce. On 
January 13, 1999 the parties entered into a detailed settlement agreement, in which Bull 
HN agreed to establish or revise policies and procedures to ensure the protection of their 
employees from age discrimination. The Agreement will remain in effect for four years, 
and policies and procedures for five years. Some of the provisions of the agreement 
include the following: 

A requirement that Bull HN give notice of future job vacancies to its former employ- 
ees who were laid off pursuant to a reduction of workforce and the right to file a com- 
plaint if the former employee is not rehired, and believes that he or she has been discrimi- 
nated against; that seniority be the tie-breaking factor when Bull HN is faced with a close 
decision concerning rehiring or termination amongst employees who are substantially 
equally qualified; extensive training of persormel decision-makers on age discrimination 
law and the requirements of the Agreement; and additional review by senior level man- 
agement when a decision is made to terminate an employee forty years of age or older to 
ensure that age is not a factor in the decision. 

CIVIL RIGHTS INITIATIVES WITH THE 
NATIONAL ASSOCIATION OF ATTORNEYS GENERAL 

NAAG'S NATIONAL CIVIL RIGHTS WORKING GROUP 



The Division Chief continues to serve as national chair of the National Association of Attor- 
neys General's ("NAAG") Civil Rights Working Group consisting of representatives of state 
Attorneys General offices from throughout the country. The Working Group's goal is to en- 
hance the cooperative relationship between the states and the U.S. Department of Justice in civil 
rights enforcement. Pursuant to the NAAG-DOJ Memorandum of Understanding on Affirma- 
tive Civil Rights Enforcement, executed in 1995, five NAAG-DOJ civil rights task forces have 
been established under the umbrella of NAAG' s Civil Rights Working Group. Among other 
things, these task forces are intended to formulate and implement joint enforcement initiatives in. 
five substantial areas: bias-related crimes; housing discrimination; mortgage lending discrimina- 
tion; discrimination in public accommodations based on disabilities; and, most recently, employ- 
ment discrimination. Division staff play a key role in each of the national task forces to address 
national policy and enforcement issues in these areas. 



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For the past six years since 1994, including in fiscal year 1999, the Division has taken a 
leading role in initiating and organizing NAAG's annual Civil Rights Conferences attended by 
representatives of state attorneys general offices, the Civil Rights Division of the U.S. Depart- 
ment of Justice, United States Attorneys Offices and most recently, the EEOC, to share expertise 
and to enhance national, regional and state civil rights enforcement efforts. 

DISABILITY RIGHTS 

ENSURING EQUAL ACCESS TO PRIVATE BUSINESSES 

The Disability Rights Project of the Civil Rights Division continued its extensive efforts to 
protect the rights of individuals with disabilities throughout the Commonwealth. For example, 
the Project reached an agreement with Starwood Hotels and Resorts Worldwide, Inc., which will 
significantly improve access for people with disabilities at the company's eleven Massachusetts 
hotels, including the Boston Park Plaza. The settlement agreement resolved allegations of 
noncompliance with state and federal disability access requirements at the chain's hotels. Under 
the terms of the agreement, Starwood will, over the next several years, increase to five percent 
the number of accessible guest rooms at each of its Massachusetts hotels, raising to almost 200 
I the total number of its accessible rooms. Starwood will also survey each of the hotels, and will . 
develop a remedial plan and time frame for addressing all identified access problems to ensure 
that meeting rooms, restrooms, restaurants, health clubs and outdoor areas are more accessible to 

! people with disabilities. 
In a landmark action, the Massachusetts Attorneys General's Office, along with the U.S. 
Department of Justice and the attorneys general offices of Arizona, California, Florida, Illinois, 
I Kansas, Minnesota, Pennsylvania and West Virginia, combined their efforts in a first-time ever 
I joint federal/state ADA compliance investigation and enforcement action against Wendy's 
International Inc., a fast food chain. The matter arose out of Wendy's belief that it was upholding 
; the Americans with Disabilities Act ("ADA") by offering separate but equal access to customers 
in wheelchairs. However, the Disability Rights Project, along with the Department of Justice and 
other state attorneys general offices, concluded that "separate but equal" is just as illegal under 
the ADA as it is in racial segregation matters. As a result, Wendy's entered into a major settle- 
f ment agreement to widen or eliminate the queue or maze system in its ahnost 1 ,700 fast-food 
I restaurants nationwide. The queue barriers in which customers stand in a snaking line to order 
, food are too narrow to accommodate wheelchairs, forcing disabled customers to wait nearby 
until they are noticed by restaurant employees. In addition, Wendy's agreed to modify its archi- 



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tectural plans to eliminate the problem in future restaurants. The company also agreed to pay the 
joint federal/state Task Force $50,000 and will pay a total of $12,000 in damages to five indi- 
viduals or groups who filed complaints with the DOJ or state attorneys general regarding accessi- 
bility at the fast-food chain. 

PROTECTING FAIR HOUSING RIGHTS OF INDIVIDUALS WITH DISABILITIES 

The Project continues to safeguard the right of individuals with disabilities to live in the 
communities of their choice. For example, the Disability Rights Project of the Division assisted 
a nursing home (Pelham House) in Newton which was encountering neighborhood opposition to 
its renewal of a special permit. The facility claimed that the city's unwillingness to renew the 
permit was violative of the residents' fair housing rights, while the city questioned whether the 
facility had been operating properly. Project staff did a presentation on the Fair Housing Act and 
Title II of the ADA to Newton's Land Use Committee. A three-part working group, composed 
of representatives of the city, the neighbors and the Project was established. After a very long 
evening of discussions/negotiations between the groups, people reached an agreement which 
would provide Pelham House with the special permit it needed to continue flinctioning, and 
establish safeguards and a process for redressing fiiture concerns of the neighbors. The Land Use 
Committee (which had previously voted unanimously to reject the special permit application) 
and the Board of Alderman approved the settlement package and granted the special permit. 

The Project also obtained a settlement in a fair housing dispute in Lawrence. It grew out of 
Lawrence's refusal to remove a piece of property from its demolition list, despite there being a 
developer willing and able to develop the building into a residence for individuals with mental 
disabilities. The Project explained to the City the fair housing implications of its actions and 
commenced negotiations with the city to resolve the matter. According to the terms of the settle- 
ment, the City of Lawrence agreed to provide $67,000 in community development funds to help 
the developer purchase an alternative property, to be used for a community residence, and a 
special employment training project. 

COMMUNITY EDUCATION 



Consistent with the strong emphasis upon community education, the Project has emphasized 
programs to increase people's understanding of and compliance with disability rights laws. 



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PUBLIC PROTECTION BUREAU 



Advisory To Dentists and Dental Hygienists 

The Disability Rights Project issued an Advisory in August, 1998 to apprise all dentists and 
dental hygienists in the Commonwealth of their obligations under state and federal law not to 
discriminate against individuals infected with the human immunodeficiency virus (HIV). The 
Advisory stated that any practice or policy of denying treatment, providing disparate treatment, 
and/or assessing a surcharge to any patient who is HIV-positive, regardless of whether that 
person is symptomatic for HIV/ AIDS violates both state and federal law. 

The Advisory also explained the 1998 United States Supreme Court ruling of Bragdon v. 
Abbott which held that a person's HIV infection constitutes a "disability" within the meaning of 
the ADA. Therefore, the affected person would be entitled to complete protection under the 
ADA in areas of employment, public services and places of public accommodation (including a 
dental or medical office). The Bragdon decision specifically involved a provider of dental care; 
however, the same principle of non-discrimination also applies to other providers of medical care 
and related health care services. 



C ONSUMER PROTECTION AND ANTITRUST DIVISION 

THE WORK OF THE DIVISION 

CPAD carries out the Attomey General's authority under the state Consumer Protection Act 
and the state and federal antitrust laws. The division also acts pursuant to a broad grant of 
authority and responsibility found in General Laws chapter 12, section 10, which directs that the 
Attomey General "shall take cognizance of all violations of law... affecting the general welfare of 
the people... and shall institute... such criminal or civil proceedings before the appropriate state 
and federal courts.. .as he may deem to be for the public interest...." At any given time, the 
division is likely to be handling 250 separate matters, roughly a dozen of which relate to antitrust 
law. 

CPAD is also active in the legislative arena, working with all sectors of the public to draft 
bills that will protect consumers without placing undue burdens on businesses. The division 
engages in other forms of advocacy as well, filing formal comments in administrative proceed- 
ings, at both the state and federal levels. The division provides information to the public through 
written publications on a variety of consumer topics, and makes speakers available to both 



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consumer and business groups for educational purposes. 

Three specialized units also fall under the responsibility of the division's Chief These are , 
the Consumer Complaint and Information Section (CClS), the Local Consumer Programs 
(LCPs), and the Mediation Services Department (MSD). 

RELIEF OBTAINED THROUGH CPAD CASES 



Consumer Restitution: 

Civil Penalties, Attorney Fees, Costs: 

Local Consumer Aid Fund: 

Other: 



$ 1,668,725 
$2,565,500 
$127,500 

$8 billion over next 25 years 
plus $323 million every year 
thereafter paid by Tobacco 
industry to Commonwealth 



$250 million to establish 
anti-smoking foundation 

$1 .45 billion for anti-smok- 
ing public education 

$158,333 to DPH Health 
Protection Fund 

$30,000 grant to publish 
consumer brochures in 
several languages 

Return of unfairly collected 
debt monies from hundreds 
of Massachusetts residents 



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SIGNIFICANT CASES AND PROJECTS 

Brief descriptions of several significant matters handled by the Consumer Protection and 
Antitrust Division between July 1, 1998 and June 30, 1999 are set out below. 

ANTITRUST 



Microsoft: The Division contributed to the preparation of the government's case in a 
significant way, by conducting essential legal research and assisting in the preparation of 
expert witnesses. The suit involves claims by the federal government and several states 
that software manufacturer Microsoft engaged in illegal efforts to preclude competition in 
computer related products and services. 

Toys R Us: This case, filed jointly by several states to halt a major retailer's efforts to 
keep warehouse and club chains from competing in the sale of toys, has produced settle- 
ments with each of the defendants, retailer Toys R Us, and toy manufacturers Mattel, 
Little Tykes, and Hasbro. The proposed joint settlement, which has been submitted to a 
federal court for approval, would require the donation of tens of thousands of toys to the 
Toys for Tots program. 

Disposable Contact Lens Litigation: Massachusetts has been very active in litigating 
with other states this federal antitrust action, based on allegations that eye care providers 
have made concerted efforts to restrict competition in the retail sale of contact lenses. 

Joint health care venture by Harvard-Pilgrim Health Care, Baystate Health System, 
and Health New England: An examination of potential anticompetitive effects of a 
proposed health care joint venture in western Massachusetts led to an agreement on July 
13, 1998 requiring prior notice to the Attorney General of any ftiture acquisitions or 
exclusive contracting arrangements. 

CONSUMER CREDIT 

First Alliance Mortgage Company: Suit was brought on October 30, 1998 against this 
California mortgage lender for charging up to 23 points for loans made to Massachusetts 
citizens. 



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United Companies Lending Corporation: The Division obtained a Consent Judgment 
on October 21, 1998 in this case against a Lousiana mortgage lender, based upon its 
practice of charging Massachusetts borrowers excessive fees and points for mortgage 
loans. The judgment orders the company to pay over $500,000 in restitution to Massa- 
chusetts consumers and a $146,500 civil penalty to the Commonwealth. In a related 
matter, in which UCLC challenged the Attorney General mortgage lending regulations 
that prohibit the charging of unconscionable fees, a federal judge upheld the regulations 
as valid law. 

Commonwealth Capital Funding Corporation: The Division obtained a Judgment on 
August 1 7, 1998 against this company, which operated a phony first time home buyer 
program, and took thousands of dollars from would be homeowners in Massachusetts. 
The judgment orders the principals of the company to pay $828,000 in restitution to 
consumers, and a $1,435,000 civil penalty and $22,000 in attorney fees to the Common- 
wealth. 

National Affordable Housing Coalition, Inc: This consumer protection action against a 
Nevada company that charged consumers $500 to attend a sales presentation it called a 
"seminar" and falsely promised that consumers could obtain mortgage loans and purchase 
their dream homes within 7 to 10 days regardless of their credit history has nearly con- 
cluded, with a ruling July 9, 1998 that the company was acting as an unlicensed mortgage 
broker in Massachusetts. 

First North American Bank: The Division led a national effort to prosecute retailers 
who violated the rules of bankruptcy and tried to collect from consumers debts that were 
discharged by the federal bankruptcy court. This subsidiary of Circuit City, which issued 
the retailer's store credit card, settled the claims of Massachusetts and 29 other states by 
agreeing on November 19, 1998 to repay to consumers any debts unfairly collected (100 
in Massachusetts), and paying a $40,000 civil penalty to the Commonwealth. 

May Department Stores Company: another in the series of national investigations of 
retailers unfairly collecting debts that were discharged through personal bankruptcy 
proceedings, this case resulted on November 2, 1998 in reimbursement of 1200 Massa- 
chusetts consumers for moneys unlawfully collected, and payment of a $280,000 civil 
penalty to the Commonwealth. 



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General Electric Capital Corporation and Montgomery Ward: another in the series 
of national investigations of retailers unfairly collecting debts that were discharged 
through personal bankruptcy proceedings, this case resulted on August 7, 1998 in reim- 
bursement of about 430 Massachusetts consumers for moneys unlawfully collected, and 
payment of a $153,000 civil penalty to the Commonwealth. 

Filene's: The Division obtained a Consent Judgment on January 25, 1999 against Filenes 
for unfair debt collection practices, including phoning at unreasonable times and using 
profane language. The judgment that requires the retailer to pay a $245,000 civil penalty. 

National Credit Systems: Suit was filed July 24, 1998 against this New York debt 
collection agency for attempting to collect debts from Massachusetts residents without a 
Massachusetts license. 

University Student Services: The Division joined a multistate effort to halt the decep- 
tive marketing by a New Jersey company of a charge card to college bound students, 
wliich the company falsely represented was a means of payment required or endorsed by 
numerous schools. In a July 8, 1 998 agreement, the Commonwealth obtained $5225 in 
refunds for over 200 Massachusetts consumers. 

Credit Repair Firms: In a sweep of local companies taking in advance fees and making 
false claims to consumers of their ability to wipe clean their credit histories, the Division 
sued Second Federal Credit, Credit Repair Network, New England Financial, and Allied 
Credit Services, along with their principals on July 27, 1998, and obtained immediate 
court orders halting their practices. 

HANDGUN REGULATION 



American Shooting Sports Council v. Attorney General: In a June 30, 1999 decision, 
the Supreme Judicial Court upheld the legal authority of the Attorney General to issue a 
set of consumer protection regulations, which declare the sale of unsafe handguns to be 
an unfair or deceptive trade practice. The regulations require that handguns sold in 
Massachusetts meet certain manufacuring standards, and have adequate childproof 
features to protect children from accidental harm. 



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HEALTHCARE 

Horizon Healthcare: Litigation was filed October 6, 1998 against the operators of the 
Greenery Rehabilitation Center in Brighton, alleging that the nursing home provided 
substandard care to brain injured patients, which has led to serious harm or death in more 
than one resident of the home. 

SmithKline Beecham Consumer Healthcare: The Division participated in a multistate 
investigation of this drug manufacturer, for the misleading advertisement of its smoking 
cessation products Nicoderm and Nicorette. Under the resulting December 10, 1998 
agreement, the company vdll no longer suggest that using its products will guarantee 
success in quitting the smoking habit. The manufacturer also paid the Commonwealth 
$50,000 for the cost of its investigation, and contributed $158,333 to the Health Protec- 
tion Fund of the Department of Public Health. 

OTHER CONSUMER PROTECTION MATTERS 

United Parcel Service; Airborne Freight Corp.: An investigation of delivery services 
that took inadequate precautions against delivering alcohol without a Massachusetts 
license, and delivering it to minors in Massachusetts, has produced agreements dated 
June 23, 1999 under which two such companies will alter their practices and contribute 
$2500 to the Local Consumer Aid Fund. 

Travel Opportunities: This multistate investigation of a Florida travel company's 
deceptive marketing practices resulted on December 7, 1998 in a settlement whereby the 
company is to follow strict rules about its advertising, pay back injured consumers, and 
pay a $25,000 civil penalty to Massachusetts. 

JCK Group d/b/a Tower Cleaning Systems: A suit was filed on September 3, 1998 
against this company for claiming to sell lucrative franchises for commercial cleaning 
services, taking in thousands of dollars fi-om small entrepreneurs, and then failing to 
provide the income producing cleaning accounts promised. A Consent Judgment entered 
the same day by the court ordered the company out of Massachusetts for 2 years, and 
ordered it to pay $100,000 in restitution to affected Massachusetts purchasers, as well as 
a $5000 civil penalty to the Commonwealth. 



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Medical Weight Loss Center: The Division obtained a Consent Judgment on November 
6, 1998 in this case against the operator of a weight loss clinic. Among other things, the 
suit alleged that the clinic was prescribing a dangerous medication without adequate 
medical supervision. Under the judgment, the operator must pay $15,000 in restitution to 
affected consumers. 

Walter Long: Suit was filed by the Division on December 7, 1 998 against a man posing 
as a licensed real estate and mortgage broker, taking deposits and fees for unavailable 
apartments and mortgages, and failing to make refimds to consumers of any moneys paid. 

Home Shopping Channel: A Consent Judgment entered March 19, 1999 in this case 
prohibits the Home Shopping Channel from selling mace illegally in Massachusetts, and 
orders payment of a $10,000 civil penalty to the Commonwealth. 

Super Bowl: Massachusetts consumers who purchased travel packages from one of 
several ticket brokers or travel companies that were to include tickets to the 1 997 
SuperBowl were disappointed to find that no tickets were in fact provided. This suit 
resulted in a March 23, 1999 judgment that returned $70,500 to consumers who had made 
such purchases from National Travel Vacations, Sports World Tours, Harvey Zuckerberg, 
Carlyle Industries, Ticket to Travel, National Travel, Inc., and Saugus Center Travel. 
The court also ordered payment of a $2000 civil penalty. 

Bottle Bill Litigation: This case was filed December 9, 1998 against six container 
redemption centers that were refionding 4 cents per container rather than 5 cents, as 
prescribed by statute. 

United Buyers Service of Massachusetts, Inc.: This suit against a buying club, based 
upon allegations of high pressure sales practices and misrepresentations to consumers, 
concluded on December 15, 1998 with a court order voiding all contracts with Massachu- 
setts consumers; cancelling any debts owed by those consumers to the buying club; and 
ordering payment of $150,000 in restitufion to consumers and a $100,000 civil penalty. 

Nestle: The Division participated in a multistate investigation of "Nestle Magic," which 
consisted of a chocolate shell encasing a small plastic Disney toy. In response, Nestle 
recalled the product, and contributed $125,000 to the Local Consumer Aid Fund, pursu- 
ant to a March 11,1 999 agreement. 



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Union Travel and Tours: On March 3, 1999, the Division sued the owner of a travel 
agency who claimed falsely that she could arrange for consumers to obtain divorces from 
the Dominican Republic. The suit seeks return of the consumers' money, having been 
charged $500 apiece for this phony service. 

Guillermo Recinos; Rebecca Jereidini: This suit, brought under the Massachusetts 
Consumer Protection Act and the federal Americans with Disabilities Act, alleged that a 
dentist refused to treat HIV positive patients. An April 20, 1999 Consent Judgment 
prohibited the dentist from discriminating against HIV positive patients and required 
payment of a $20,000 civil penalty by the dentist and the co-owner of his practice. 

J.J. O'Brien Movers: A judgment obtained April 13, 1999 against this moving and 
storage company bars it from operating a warehouse without a license, and orders it to 
make frill restitution to consumers whose belongings have been lost or stolen while in the 
company's care. The mover must also pay a $4000 civil penalty to the Commonwealth. 

Cynthia and Christopher DesBrisay: This couple was sued on May 4, 1999 for taking 
deposits for works for art from numerous consumers, and failing either to deliver the 
purchased items or refimd the money paid for them. 

Matthew Gaeta: On March 18, 1999 this operator of several gas stations settled the 
Commonwealth's allegations that he claimed to sell Citgo brand gas, when in fact he was 
selling unbranded gasoline to consumers, with payment of a $50,000 civil penalty. 

Consumer Publications Translation Project: This office received a $30,000 grant on 
October 7, 1998 to fund the translation, printing, and publication of five consumer protec- 
tion brochures written by the attorneys of this division into eight different languages 
spoken in various Massachusetts communities. 

RECOVERING PUBLIC FUNDS 



U.S. V. Baker & Taylor: On July 14, 1998, the Commonwealth intervened in federal 
litigation filed by the U.S. Department of Justice to recover overcharges of public schools 
and libraries by this national book wholesaler. While discounts of 40% off list price were 
promised, actual discounts of only 10% to 25% were reflected in the bills paid by various 
public entities. 



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TOBACCO CONTROL 

Suit Against Tobacco Manufacturers: The massive, complex litigation against the 
tobacco industry, in which the Attorney General sought to recover the costs incurred by 
the Commonwealth in caring for residents suffering from smoking related illnesses, came 
to a close on December 3, 1998 with a ground-breaking settlement. Massachusetts will 
receive over $8 billion dollars from the tobacco companies over the next 25 years, and an 
additional $323 million every year thereafter as a result of this litigation. The Consent 
Judgment entered by the court also prohibits cigarette advertising aimed at children, 
outdoor advertising, and tobacco company sponsorship of events where a significant 
number of children are likely to be in attendance. The judgment restricts the distribution 
of free cigarette samples to adult-only venues. It also provides for the creation of a 
national charitable foundation, the purpose of which is to reduce teen smoking; the 
tobacco industry will fund this foundation with $250 million over the next 10 years. The 
tobacco industry will also pay $1.45 billion over the next 5 years to ftmd a national public 
education fund aimed at educating consumers about the harmful effects of tobacco use. 

Philip Morris v. AG: the Attorney General continues to defend against this federal suit 
brought by the tobacco companies challenging the Massachusetts statute requiring disclo- 
sure of the ingredients in tobacco products. 

Regulations to prohibit the advertising of tobacco products near schools, parks, and 
playgrounds, to require certain health warnings on packaging, and to prohibit certain 
practices that promote smoking in children, were issued by the Attorney General's Office 
after holding public hearings and accepting written comments. 



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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 re- 
quests 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 educat- 
ing 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 pros- 
ecution by the Consumer Protection and Antitrust Division. 

For the period July 1, 1998, through June 30, 1998, CCIS received and responded to 18,005 
written complaints and other correspondence; responded to 122,717 telephone calls to the Attor- 
ney General's consumer hotline; provided mediation services immediately upon receiving tele- 
phone calls to 72 consumers experiencing highly time sensitive or particularly egregious con- 
sumer disputes; mailed consumer educational brochures or pamphlets to 5,728 consumers; 
recorded 5,138 consumer complaints in our computerized complaint tracking system; mediated 
2,040 consumer complaints, recovering $733,685 in refunds or other savings for individual 
consumers, representing an increase of $155,418 from Fiscal Year 1998; responded to 672 public 
records requests; and identified 1 companies for further investigation or prosecution by the 
Consumer Protection and Antitrust Division. 

Some of the highlights of CCIS's mediation efforts during Fiscal Year 1999 include com- 
plaints involving a computer training school which closed leaving its students with thousands of 
dollars in student loans and no education. Working with the federal government and student loan 
guaranty agencies, CCIS was successful in obtaining complete loan discharges for the 55 stu- 
dents who filed complaints. CCIS also mediated complaints involving a travel agency where one 
of the employees allegedly received thousands of dollars from consumers for trips and then never 
booked the trips. Through mediation, CCIS was successful in obtaining full refunds for all of the 
consumers who could provide proof of purchase. Lastly, CCIS mediated complaints involving a 
furniture store which changed ownership. Allegedly, the previous owner accepted thousands of 
dollars in deposits for furniture before selling his business and disappearing. As a result of 
CCIS's mediation efforts, the new owner agreed to offer merchandise credits to all 47 consumers 
who filed complaints. 



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In addition to resolving complaints through its mediation service, CCIS continued a strong 
focus on preventative consumer education initiatives. CCIS staff organized activities and com- 
munity outreach for the National Consumer Protection Weeks in October 1 998 and February 
1999. As part of these outreaches, the Section developed a brochure with a compendium of 
consumer credit information called the Attorney General's Guide to Credit and an interactive 
computerized quiz on consumer credit. CCIS staff also participated in consumer outreach events 
at the "Big E" Eastern States Exposition and at the annual Massachusetts Council on Aging 
conference. 

In addition to these outreach events, CCIS partnered with the Quincy police department on an 
educational initiative aimed at decreasing victims of telemarketing fraud. As part of the initia- 
tive, the CCIS Director spoke to various groups of seniors on the topic, giving tips on how to 
avoid victimization. CCIS staff also partnered with the Massachusetts Consumers Coalition in 
their effort to examine and address the growing problem of seniors and credit debt. CCIS helped 
develop and test a survey that will allow the Coalition to further study this issue. Lastly, CCIS 
staff provided trainings on consumer topics to the freshman legislators elected in the fall of 1998, 
as well as to area high schools, colleges, and senior citizen groups. 

LOCAL CONSUMER PROGRAMS 

Nineteen Local Consumer Programs, located in communities around the state, are associated 
with CPAD. These programs receive grant monies and direction from this office, pursuant to 
G.L. c. 12, section 11 G. In addition to fielding consumer complaints received directly from the 
public and from CCIS, offering mediation services, and distributing Attorney General publica- 
tions to citizens, these programs feed complaint data to this office, for use in evaluating potential 
division cases. The office liaison to the LCPs is on call to provide advice as needed, and con- 
ducts monthly fraining sessions for program directors. Settlements of CPAD cases often include 
designation of a specified dollar amount of the recovery for the Local Consumer Aid Fund. 

MEDL\TION SERVICES DEPARTMENT 

MSD oversees three programs: the Student Conflict Resolution Experts (SCORE) Program, 
'the Conflict Intervention Team (CIT), and the Face-to-Face Mediation Program (FTFMP). 



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FACE-TO FACE MEDIATION PROGRAM (FTFMP) 

The Face-to-Face Mediation Program began in 1983 in an effort to broaden the continuum of 
services provided by the OAG for the resolution of consumer disputes. The FTFMPs offer 
consumers and tenants a quick, convenient, non-adversarial, and effective option to resolve their 
disputes. FTFMP users can schedule a mediation session at their convenience and, with the help 
of trained volunteer mediators, air their differences and negotiate a mutually acceptable resolu- 
tion. Cases are referred to FTFMPs by the courts, police, community agencies and local con- 
sumer programs. Today there are nine FTFMPs in Worcester, Somerville, Haverhill, Lowell, 
Hyannis, Fitchburg, Brockton, Springfield and Greenfield. 

In FY 99, the Face-to-Face programs responded to 4,856 referrals to mediation, resolved 136 
complaints by phone and conducted 2,190 mediation sessions with 82% resulting in a voluntary 
mediated agreement. A total of $1 ,03 1 ,25 in dollars and $ 1 96,827 in services was returned to 
consumers, businesses, landlords and tenants served by the FTFMPs. 

In FY 99, programs in Hyannis, Lowell and Brockton received ongoing consultation and 
technical assistance to enhance mediation and case-flow procedures. Annual site-visit evalua- 
tions were conducted with programs in Fitchburg, Brockton, Worcester, Springfield, Haverhill, 
Lowell, Greenfield and Hyannis. Site-visits enable MSD to evaluate individual program perfor- 
mance, assess field operations and identify areas for improvement. During the site visit, volun- 
teer mediators are observed while mediating, and questionnaires are administered to program and 
referral sources. 

STUDENT CONFLICT RESOLUTION EXPERTS (SCORE) 

SCORE is a comprehensive school-based student mediation program that prevents youth 
violence by teaching young people more constructive responses to conflicts. Since its inception 
in 1989, SCORE has: trained 3,960 student mediators; mediated 13,803 student conflicts; 
resolved 13,425 conflicts; and achieved a 97% success rate. 

The SCORE program model is unique because it links schools, government and community 
mediation centers. In the SCORE program model, a full-time adult SCORE coordinator is hired 
and supervised by a local community mediation program with SCORE grant funds. The school 
provides mediation program space and refers student disputes to be mediated. 



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In FY 99, 26 SCORE programs operated in 16 Massachusetts communities: Worcester 
(Bumcoat Sr HS), Somerville (Somerville HS), Boston (Cleveland MS, Curley MS, English HS, 
Boston HS, Brighton HS, East Boston HS), Lynn (Lynn Classical HS, Lynn English HS, Lynn 
Technical HS), Springfield (Chestnut MS), Dartmouth (Dartmouth HS), Taunton (Taunton HS), 
Fall River (Durfee HS), Maiden (Maiden HS), Medford (Medford HS), Wakefield (NE Metro 
Tech HS), Lowell (Lowell HS), Pittsfield (Reid MS, Herberg MS), Holyoke (Holyoke HS, Dean 
Tech HS), Quincy (Quincy HS), and Greenfield (Greenfield MS, Greenfield HS). 

In FY 99, SCORE programs conducted 2,693 peer mediations and successfially resolved 98% 
of the student disputes referred to mediation. 

Annual site-visit evaluations were held at 23 of the 26 SCORE programs during the last 
quarter of the school year (April- June) to assess program operations, identify areas needing 
improvement, troubleshoot problems, and interact with local school officials. During these 
annual visits, questionnaires are administered to SCORE coordinators, school principals, student 
mediators, and SCORE grant recipients. Informal site visits are also conducted during the year. 

I TRAINING GRANTS 

In FY 99, $212,000 of the funds allocated to SCORE from settlement monies were used to 
help schools to start-up or enhance existing peer mediation programs and to promote quality peer 
mediation training. Twenty -nine SCORE Training Grants were awarded for the 1998-99 school 
year to schools in: Arlington (Arlington HS), Boston (Boston Latin Academy, Boston Latin 
School, Timilty MS, Snowden HS), Lexington (Lexington HS), Medfield (Medfield HS), 
Mattapoisett (Old Rochester JHS), Swansea (Case JHS), Foxborough (Foxborough HS), 
Gloucester (Gloucester HS), Lowell (Robinson MS, Rogers MS, Sullivan MS), Peabody, 
(Higgins MS), Winthrop (Winthrop HS), Newton (Newton South HS), West Springfield (West 
Springfield JHS), Stoughton (Stoughton HS), Braintree (East MS), Framingham (combined grant 
to Framingham HS, Fuller MS and Walsh MS) South Deerfield (Frontier Regional HS), Hadley 
(Hopkins Academy), Rochester (Old Colony Regional Technical HS), North Reading (North 
Reading HS), Beveriy (Beverly HS), Fitchburg (Montachusett Technical HS), Westford 
(Nashoba Valley Technical HS), and Provincetown (Provincetown HS). 

CONFLICT INTERVENTION TEAM (CIT) 

The Conflict Intervention Team was initiated in academic year 1992-1993 in response to 
large-scale outbreaks of violence at several schools in Greater Boston. The OAG sponsors CIT 



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in collaboration with the Massachusetts Department of Education and the Massachusetts Asso- 
ciation of Mediation Programs/Practitioners. The CIT is comprised of a team of specially trained 
community mediators that can mobilize quickly to provide emergency mediation services to 
schools in crisis or on the verge of a crisis. CIT is able to respond to schools anywhere in the 
state with a team that reflects the diversity of the students involved in the conflict. In most 
instances, MSD staff oversees CIT mediators during an intervention. 

CIT conducted two interventions during the 98-99 school year, one in Quincy and one in 
Chelsea. In each instance, GAG staff and a team of community mediators conducted interviews 
with students to identify the sources of the conflict. Mediations were set up among the students 
involved in the conflict. All but one mediation resuhed in an agreement. 

FY 99 was the first year of a three-year $150,000 grant from the Hewlett Foundation to 
support CIT enhancement and replication. The Hewlett funds are administered by the CIT's 
partner, the Massachusetts Association of Mediation Programs/Practitioners. A part-time CIT 
program administrator, Xavier Velasco Suarez, was hired with Hewlett funds and works at the 
GAG under the supervision of the Mediation Services Department. 

TRAININGS 

MSD staff led nine SCORE trainings and trained 133 of the 445 student mediators trained in 
FY 99. MSD staff also helped conduct two CIT mediator trainings, in Hyannis, MA and Las 
Vegas, NV. Other trainings conducted by MSD included: a three-day "Introduction to Media- 
tion Skills" training for 20 OAG staff; a two-day Train-the-Trainers Institute for new peer media- 
tion trainers; a three-day Advanced Mediation Skills training for discrimination complaint 
mediators in the Federal Aviation Administration; and a 3'/2 day Basic Mediation Skills training 
for discrimination complaint mediators in the Federal Law Enforcement Training Center. 

PUBLIC EVENTS, CONFERENCES, WORKSHOPS 



During the year, MSD staff participated in public events in Springfield at the city wide peer 
mediators' swearing-in ceremony, in Worcester to celebrate SCORE'S tenth anniversary, and in 
Quincy at a SCORE grant award ceremony. 

MSD Staff delivered eleven SCORE and CIT workshops at OAG, state and national confer- 
ences in: Boston, Cambridge, Lowell, Hyannis, Springfield, Brockton, Dighton, Amherst, and 



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Holyoke, MA; and Phoenix, Arizona. There were six SCORE and CIT presentations delivered in 
Boston, Marlboro, and Wakefield, MA; and Loudonville and Rochester, New York. 

COMMUNITY OUTREACH 

Outreach projects in FY 99 included the Permanency Mediation Coalition, the Supreme 
Judicial Court Standing Committee on Dispute Resolution, the 1 999 MAMPP Conference 
Committee, the Massachusetts Violence Prevention Task Force, the Mediation Week 1999 
Committee, the Host Committee for the CREnet (Conflict Resolution Education Network) 1999 
conference, and as a Board member of the Massachusetts Association of Mediation Programs/ 
Practitioners. 

Additional outreach activities in FY99 included: a comprehensive statewide mailing of the 
Ten-year SCORE Report to school superintendents, principals, coordinators, grant recipients, 
mayors, school committees, state senators and representatives and local newspapers; a statewide 
and nationwide mailing on CIT; and publication of two articles on SCORE in News in School 
Health (September 1998), published by the MA Dept. of Public Health, and The Fourth R (July 
1998), published by the Conflict Research Education Network. Newspaper articles on SCORE 
programs and press releases announcing SCORE Training Grant awards appeared in the Salem 
Evening News, Berkshire Eagle, Dartmouth Chronicle, Greenfield Recorder, Springfield Union- 
News, Worcester Telegram and Gazette, Patriot Ledger, Lynn Daily Item and Nation's Cities 
Weekly. 



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DIVISION OF PUBLIC CHARITIES 



The Attorney General represents the pubHc interest in the proper soHcitation and use of 
charitable funds and is authorized to "enforce the due application of fiinds given or appropriated 
to public charities within the commonwealth and prevent breaches of trust in the administration 
thereof." G.L. c.l2, sec. 8. The Division of Public Charities was established to carry out the 
Attorney General's responsibilities in this area. 

More than 38,579 charities are registered with the Division, as well as 285 fiindraisers pres- 
ently soliciting donations on behalf of charities in Massachusetts. A public charity is an entity 
which is non-profit, whose purpose 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 to wind up the affairs of a public charity or to change the terms of a chari- 
table trust. 

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 I 
trust actions to ensure that charitable trust fimds are appropriately administered and applied; and 
corporate governance and oversight initiatives to ensure that charitable governing boards are 
carrying out their fiduciary duties of due care and loyalty. 

Recognizing that charities provide vital services in our communities, 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 chari- 
table fundraising, published during the Fall giving season, the Kellogg Healthcare Conversion 
Information Project, 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 
fundraisers for unfair or deceptive solicitation practices and to enforce their fiduciary duties with 



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PUBLIC PROTECTION BUREAU 



respect to funds raised. In addition to injunctive relief, the Attorney General may seek restitution 
of funds 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. Baystate Assistance Programs; Veterans for the Homeless; Com- 
monwealth Alliance d/b/a Veterans Aid Program; Steven M. Materas; Paul A. 
Kouri; Joseph J. Petillo. In December, 1 998 the Attorney General filed a fundraising 
fi-aud action against these defendants, which include professional fundraisers, charities 
and their officers, for allegedly misleading donors to believe that their contributions 
would benefit homeless shelters and veteran outreach centers when such was not the case. 
The Division also obtained initial orders under which the Division attached defendants' 
real property and $340,000 of their liquid assets while the case is pending. 

Commonwealth v. William Twohig d/b/a United States Charitable Publications, 
American Veteran^s Relief Fund, Inc., Disabled Peace Officers Association. Inc. 

I This deceptive solicitation action, which the Division had filed in 1997, was part of a 
federal and multi state sweep of telemarketing fraud. The defendants in the Massachu- 
setts case included a Las Vegas fundraising company and two client charities, one in 
California and the other based in Texas. That same year the Commonwealth had ob- 
tained a consent judgment against one charity, the California-based Disabled Peace 
Officers Association, Inc. and a $500,000 default judgment against the fimdraiser, 
William Twohig. 

In August, 1998 a final judgment was obtained against the remaining defendant, Texas- 
based American Veterans Relief Fimd, banning it from further fundraising in the Com- 
monwealth until a $48,000 penalty is paid. 

Commonwealth v. Allan C. Hill Productions, Inc. et al. The Division had brought this 
case in 1997 against fourteen telemarketing companies for failure to account for chari- 
table funds raised in Massachusetts as required under c. 68, Section 24(c). Consent 
judgments had been entered against four of the defendants. 

In August, 1998, the Division successfully opposed one defendant's motion to dismiss. 



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Defaults have entered against four other defendants. Litigation is proceeding against the 
remaining six defendants. 

Commonwealth v. Ranick Enterprises, Inc; Bellcamp Enterprises; Everready 
Enterprises; US Charitable Publications; NE Charitable Services; Eastern Mass. 
Veterans Programs; George Campbell; Help Hospitalized Children's fund; Regular 
American Veterans; Foundation for Disable Firefighters; American Veterans Wish 
Foundation. In 1 997 the Division had brought suit against a muUi state fundraising 
operation for allegedly defrauding Massachusetts donors of millions of dollars in chari- 
table contributions. In August, 1998, the Division obtained a final judgment against one 
of the charities, Texas-based Help Hospitalized Children's Fund, enjoining it from solicit- 
ing Massachusetts residents until it has paid $30,000 in restitution to Children's Hospital 
in Boston. In September and October, 1998, the Division obtained default judgments 
against five of the fundraising defendants and recovered $40,000 from the insurance bond 
company that had issued them solicitor bonds. 

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; George Campbell. This enforce- 
ment action was originally filed in 1996 against several professional fundraisers and their 
charity clients for deceptive solicitation of charitable funds in the Commonwealth. In 
December, 1998, the Division obtained a consent judgment banning professional solicitor 
Robert James Drake, Inc. from charitable fiindraising in the Commonwealth. In June, 
1999, the Division obtained a default judgment granting $500,000 in penalties and 
permanently banning solicitor George Campbell, the remaining defendant, from further 
charitable fundraising in the Commonwealth. 

Commonwealth v. M&M Advertising Associates, Inc., John E, MacNeil, Hugh M. 
Mayher, et. al. In January 1998, the Division had filed a contempt action against one of 
the fundraiser defendants, which resulted in payments to the Attorney General's Local 
Consumer Aid Fund in the amount of $4,500. The penalties were part of a judgment 
previously, obtained by the Division in a suit alleging that the defendants conducted 
deceptive charity campaigns for high school sports associations and a publication for 
senior citizens. After notice of the Attorney General's intent to file a second contempt 
complaint against the defendant for non-payment of a money judgment, the fundraiser 
paid another $8,000 in February, 1999. 



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Commonwealth v. Robert Aaron In June, 1998 the Attorney General had filed a 
contempt complaint against a Hyde Park telemarketer for allegedly continuing to raise 
charitable funds in Massachusetts in violation of a 1994 consent judgment entered in a 
deceptive solicitation suit. The defendant was found in contempt and ordered to pay a 
fine. 

Commonwealth v. Twentieth Century Promotions, Inc., Lloyd Morse, Mission of the 
Heart In March, 1999, the Division brought an enforcement action against a fundraiser 
and his charity client for falsely claiming to be fundraising on behalf of Ronald 
McDonald House and several local libraries. The Division obtained consent judgments 
ordering the fundraiser and charity to pay restitution to Ronald McDonald House in 
Boston and ordering the charity to dissolve. 

Commonwealth v. Cancer Fund of America and Medical Assistance. The Division 
brought this deceptive solicitation case against Cancer Fund of America, a Tennessee 
charity, and Medical Assistance, its Massachusetts fundraiser, in March, 1 999. The case 
alleges that Massachusetts donors were misled to believe that 100% of their contributions 
would benefit cancer patients in central Massachusetts who were in need of special foods, 
medicines, and hospice care, that the charity provided little or no care to cancer patients 
in central Massachusetts, and that it provided no funding to hospices. The complaint also 
alleges that the charity failed to monitor statements made by the professional fundraiser 
in accordance with commitments the charity had made in documents filed with the 
Attorney General. 

Commonwealth v. East West Concert Productions; Southeastern Productions, Inc.; 
Statewide Promotions; Joseph Moses; Police Alliance of Boston. This multi-defen- 
dant deceptive fundraising litigation concluded in October, 1 998 with court approval of 
consent judgments in which professional fundraiser Statewide Promotions and its client, 
the Police Alliance of Boston, agreed to a ban on all future charitable fundraising activity 
and also paid $7,500 in restitution to the Attorney General's Consumer Aid Fund. 

Commonwealth v. Production Marketing Services, Inc. The Division filed suit 
against Production Marketing Services, a telemarketer whose fundraising campaign 
misled donors to believe that their contributions would benefit athletic and drug preven- 
tion programs for Pembroke youth, when the funds were in fact going to a baseball 
league on Cape Cod, another part of the state. The Division obtained a consent judgment 



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ordering Production Marketing to pay $14,000 and obtained an Assurance of Discontinu- 
ance in which the Cape Cod baseball league agreed to pay $5,000 in restitution. 

ESTATES AND TRUSTS 

In furtherance of his authority to "enforce the due application" of charitable trust funds 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, §25. For example: 

Board of Trustees of the Maiden Public Library v. Attorney General The Trustees 
of the Maiden Public Library filed a complaint for the application of the doctrine of 
deviation to permit the library, which is a public charity, to sell a valuable painting given 
to it in trust in 1 885, the proceeds to be used to re-pay bonds taken out by the library to 
make the facility handicapped accessible, to expand its facilities, and to provide proper 
housing for its vast art collection. After investigation, the Division assented to the relief 
requested in the complaint. The Middlesex Probate Court approved the library's request 
on April 8, 1999. 

Trustees under the will of Caroline Weld Fuller v. The Attorney General In 1998 

the Fuller Trustees submitted a complaint for cy pres for the probate court's approval. 
The complaint is the last chapter of a lengthy case involving the removal for misconduct 
of the prior trustees of a charity which provided housing for elderly in Milton, the man- 
agement of the trust by a receiver, the return to the trust of $1 million by the former 
trustees, and an appeal to the SJC on issues raised by the probate court judge, and finally 
the appointment of new trustees in November 1996. 

With the intervention and guidance of the Division, the relief ultimately sought by the 
trustees in the cy pres complaint requested modification of the trust so that the Fuller 
trustees can sell the trust property to a non-profit developer and then use income from the 
proceeds to subsidize the housing units in the development to make the housing afford- 



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able for moderate and low income tenants. The court approved the relief requested in 
October 1998. The Attorney General continues to monitor the progress of the develop- 
ment and the implementation of the court's order at the request of the court. 

Museum of Fine Arts v. The White Fund Trustees, et. al. The White Fund Trustees, 
v^ho hold a collection of paintings in trust for the purpose of creating and gratifying a 
public taste for fine arts, particularly among the people of Lawrence, are seeking court 
approval to sell the paintings, which include a valuable Monet, and to use the income 
from the proceeds to fiind art projects in Lawrence. In 1912, the Reverend William 
Wolcott left the paintings in trust to the White Fund Trustees and stated in his will that 
until a suitable gallery existed in Laurence to hang the paintings, the trustees should offer 
the paintings to the Museum of Fine Arts for exhibition. The paintings have been at the 
Museum since that time. The trustees challenge the museum's contention that the status 
quo furthers the intent of the testator. The case is scheduled for surmnary judgment 
arguments in August, 1999, and for trial in September, 1999. 

Town of Amesburv The Division has been involved in this longstanding dispute be- 
tween Amesbury and the now defunct Anna Jacques Hospital over control of trust flinds 
held by the hospital. Following the Attorney General's assent in 1997 to court transfer of 
the trust funds to the Town of Amesbury, Anna Jacques Hospital filed a motion to inter- 
vene. Subsequently, and at the Division's urging, the Town of Amesbury established a 
health care commission to administer the funds in order to provide grants to individuals 
who incur necessary health services but who are uninsured or underinsured, and who lack 
the means to pay for such services. In addifion, Amesbury agreed to reserve one seat on 
the five person health commission for a member of Anna Jacques Hospital management. 
After this arrangement was finalized, Anna Jacques withdrew its motion to intervene, and 
the court approved transfer of the trusts' assets to the health care commission. 

In Re: Petition for the Allowance of the First and Final Account of James K. 
Glidden as Executor of the Estate of Walter Barrett The Division filed objections to 
the court allowance of the first and final account of James Glidden as executor and 
attorney for the estate of Walter Barrett, on the grounds that his fees were excessive, both 
as to the amount of time spent on various tasks, and the rate at which many executor 
services were billed. The Division further contends that estate taxes were overpaid; 
Glidden allegedly failed to file for a rebate when informed of his mistake; and he improp- 
erly billed the estate for unnecessary services, including meetings with representatives of 



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the charitable beneficiaries regarding the inadequacy of his accounting. The matter is 
scheduled for trial in fiscal year 2000. 

Trustees of the Arthur G.B. Metcalf Foundation v. Air University, Falcon Founda- 
tion, United States Strategic Institute, Boston University, and Thomas Reilly 

The Arthur G.B. Metcalf Foundation is a private foundation created by the former presi- 
dent of the Board of Trustees of Boston University to principally benefit Boston Univer- 
sity. The trustees of the Foundation notified the Division that they wished to modify the 
terms of the trust to accelerate the funding of two professorships at the University which 
otherwise would be fimded over time. After review of the Complaint for Modification of 
the trust, the Division assented to the proposed relief 

Glendale Park, Everett The Division continued to review the decisions by cities and 
towns in the Commonwealth to use parkland for other municipal purposes, most com- 
monly for the siting of new schools. The crux of the Division's review is whether or not 
a park is held by the city or town in charitable trust. If so, the mimicipality must prove in 
a court proceeding that the park is no longer useful as a park. 

In 1998, the Division reviewed the City of Everett's decision to site a new high school on 
the Glendale Park. The Division concluded that the park was not held in trust and, 
therefore, there were no impediments raised by charities law to the park's being used for 
a school once the city complied with regulations imposed on such changes by the federal 
government, the state Office of Environmental Affairs, the Department of Education, and 
the state legislature. 

WILLS, TRUSTS, AND OTHER PROBATE STATISTICS 

During the past fiscal year, the Division received and reviewed 1,083 new wills, and received 
and reviewed 624 interim accounts for executors and trustees, as well as 682 final accounts. In 
addition, the Division received 673 miscellaneous probate matters or pieces of correspondence in 
new or existing probate cases, in addition to 92 petitions for license to sell real estate and peti- 
tions under G.L. c.203, sec. 25 to terminate trusts 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. 



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PUBLIC PROTECTION BUREAU 



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 funds. 
rhe Division has brought a number of enforcement actions and obtained several governance 
agreements, after investigation, in which charity boards have agreed to reform the manner in 
which they operate. This year such matters included: 

Commonwealth v. Valley Oasis in Childhood Education. In September, 1 998, the 
Division obtained a consent judgment banning the directors of a Bellingham day care 
center, Valley Oasis in Childhood Education (V.O.I. C.E.) fi-om operating any charitable 
organizations in Massachusetts in the fiiture. The ban was the resolution of a lawsuit 
previously filed by the Division against the directors, who were husband and wife, for 
allegedly mismanaging the center's finances. As part of the settlement, the couple re- 
signed their positions fi^om V.O.I.C.E., and turned its operations over to the Guild of St. 
Agnes of Worcester, an experienced day care provider in Worcester county. The transi- 
tion was accomplished without any interruption in services. 

Attorney General v. Hillcrest Remedial Reading School, Inc. The Division had 
obtained an order appointing a receiver for a charity for students with dyslexia and other 
reading disabilities following the death of the charity's president, because the charity had 
no remaining members of its board of directors or corporate officers. After liquidating 
the charity's assets and paying creditors' claims, the receiver initiated dissolution pro- 
ceedings. The Supreme Judicial Court entered an interlocutory order distributing ap- 
proximately $295,000 to support programs at each of two other charities for students with 
learning disabilities: the Carroll School and the Landmark School. 

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 chari- 
table 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 careftilly and in a manner 
uninfluenced by conflict of interest. 



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During the year, the Division handled the following matters relating to conversions or pro- 
posed conversions of nonprofit health care providers. 

Boston Regional Medical Center Boston Regional Medical Center ("BRMC") is an 
acute care hospital in Stoneham. Beginning in fiscal year 1 997, the Division had investi- 
gated the proposed sale of BRMC to a for-profit hospital chain. Doctors Community 
Health Care, Inc. In February, 1999 the hospital declared bankruptcy without complet- 
ing the proposed for-profit conversion. The Division continues to be involved in the 
bankruptcy proceeding in order to ensure the hospital's restricted funds are appropriately 
administered. 

Health Foundation of Central Massachusetts In 1995, after investigation by the Divi- 
sion, Central Massachusetts Health Care (CMHC), a non-profit HMO in Worcester, had 
obtained court approval and sold substantially all of its assets to a for-profit HMO. The 
sale generated $45 to 50 million in proceeds to be used by a foundation to make health- 
related grants for the benefit of the vulnerable population in Central Massachusetts. 

In October, 1998, after an intensive, community-based planning process, the board of 
CMHC and the Division jointly presented a foundation plan to the Worcester Probate 
Court for approval. The plan provided for a community based board to oversee health- 
related grant making within the greater Worcester community and was approved by the 
Court on October 29, 1998. The court also approved a process for the search for an 
executive director. After a nationwide search, the Health Foundation hired its first 
executive director in July, 1999. 

MetroWest Community Health Care Foundation, Inc. In February, 1999 the Supreme 
Judicial Court approved a plan filed by the Attorney General and MetroWest Health, Inc. 
for creation of the MetroWest Conmiunity Healthcare Foundation, Inc. The plan pro- 
vides for creation of a community based foundation intended to maintain and improve the 
health status of people living or working in the 25 towns served by the MetroWest Medi- 
cal Center prior to its conversion to for profit status in 1996. The Foundation will be 
funded with approximately $40 million in hospital related assets generated by the 1996 
sale of the Medical Center to Columbia/HCA, a for-profit hospital chain. 

Nellie Mae Corporation In the second and final phase of this for-profit conversion, the 
Division investigated and approved sale of the Nellie Mae Corporation, a wholly owned 



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PUBLIC PROTECTION BUREAU 



for-profit subsidiary of the Nellie Mae Foundation, to Sallie Mae. The net proceeds of 
the sale, approximately $210 million, will be used by the Nellie Mae Foundation for 
education-related grant making in New England, bringing the total funding for the Foun- 
dation to approximately $280 million. In September, 1997, the Supreme Judicial Court 
of Massachusetts had approved the initial transfer of Nellie Mae's student loan portfolio 
and secondary market operations to Nellie Mae Corporation, a wholly owned for-profit 
subsidiary, in return for 100% of the subsidiary's senior stock. 

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 wall result in a mate- 
rial change in the nature of the activities conducted by the corporation. G.L. c.180, 
§8A(c). 



In addition to for-profit dispositions such as those discussed above, the Division reviewed a 
number of significant transactions involving proposed disposition of substantial charitable assets, 
including the following: 

Sale of Interest in MetroWest Medical Center The Division reviewed the due dili- 
gence by the charity limited parmer of the MetroWest Medical Center Limited Partner- 
ship in evaluating its options in connection with the transfer fi-om Columbia/HCA of the 
majority for-profit paitnership interest in the MetroWest Medical Center to Tenet, another 
for-profit hospital chain. After investigation, the Division concluded that charities law 
requirements had been met and the sale occurred in March, 1999. 

In Re Worcester Surgical Center The Worcester Surgical Center was a non-profit 
wholly-owned subsidiary of Central Massachusetts Health Care Inc., the nonprofit HMO 
which sold its assets to a for-profit HMO in 1995. The court order permitting the sale of 
the HMO business ordered that the interim Board of Trustees of the former HMO take all 
necessary steps to sell the Worcester Surgical Center. Net proceeds of the sale were then 
to be added to the fiinding of the health care foundation formed after the sale of the 
HMO. 

In 1999, sale of the Surgical Center to a for-profit partnership which included the 
Center's doctors in a limited partnership was approved by the Probate Court after the 



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PUBLIC PROTECTION BUREAU 



Division completed an investigation and concluded that (1) the valuation of the Center 
was properly conducted and the asking price reflected fair market value; (2) the monetary 
interests of the physician investors did not adversely affect the price of the transaction; 
(3) the Center was widely marketed; and (4) the selection process of the buyer was fair. 

CHARITABLE CORPORATION DISSOLUTION STATISTICS 

In order to cease corporate existence, charitable corporations must dissolve through a pro- 
ceeding 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.180, §1 lA. 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 68 final judgments dissolving charitable 
corporations pursuant to section §1 1 A. 

SIGNIFICANT DIVISION INITIATIVES 

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. 

The Division continued to distribute its wide variety of public education materials, including 
"The Attorney General's Guide For Board Members of Charitable Organizations". "How To 
Give But Give Wisely", "Tips On Charitable Giving", and "Questions Commonly Asked To The 
Division Of Public Charities". 

In November, the Division conducted the seventh annual "Giving Season" public education 
campaign. Carried out in conjunction with the Better Business Bureau and the American Asso- 
ciation of Retired Persons Of Massachusetts, this education campaign is part of 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. Materials distributed, in addition to those men- 



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tioned above, included the "Attorney General's Guide For Charities Who Fundraise From The 
Public" and "Question And Answer Guide For Professional Fundraisers". 

The "Giving Season" public education campaign featured the annual "Attorney General's 
Report On Telemarketing For Charity". The report provides general information about profes- 
sional fundraisers and their statutory reporting obligations and specific information about the 
campaigns conducted in calendar year 1997. Annual financial reports from 449 charitable 
telemarketing campaigns conducted by 85 separate telemarketing companies were analyzed. 
Total revenue from all campaigns amounted to $84,351,651 out of which slightly more than 
$30,884,409 million dollars went to charity. The average percentage received by the charity was 
37 percent, after all ftmdraising expenses were deducted. This represents 2 percent more than the 
amount received by charities the previous year. On a per campaign basis, the average percentage 
received by the charitable organizations was 28.5 %. 

NATIONAL TRAINING FOR REGULATORS ON FOR-PROFIT ACQUISITIONS 

In 1997, the Attorney General had received a $295,000 grant from the W.K. Kellogg Founda- 
tion to develop and conduct a national training program for regulators dealing with for-profit 
acquisitions and conversions of nonprofit hospitals and other health care entities. In July 1 998, 
the Division conducted a conference for 100 regulators from 46 states. The Division also 
developed a Guide to assist board members, regulators and advocates facing for-profit healthcare 
acquisitions and conversions in their communities. The Guide, which will be published in 1999, 
will be supplemented by a collection of conversion-related materials. A website is being created 
to maximize access to these materials. 

THE ATTORNEY GENERAL'S COMMUNITY BENEFITS INITL\Tr/E 

The Division was involved in the initial public meetings and final drafting of the Attorney 
General's Community Benefits guidelines for Nonprofit Acute Care Hospitals. Since the issu- 
ance of the Guidelines in June, 1994, the Division has been closely involved in monitoring and 
furthering hospital compliance. In 1998, the Division prepared a new financial template and 
summary guidance sheet and conducted informal training for hospital community benefit coordi- 
nators. 

In January, 1999, 65 separate hospital Community Benefit Reports were reviewed and evalu- 



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PUBLIC PROTECTION BUREAU 



ated and the aggregate findings made public in a status report. In addition, the Division prepared 
an inventory and classification of all the reported community benefit and community service 
programs and made that listing available to participating hospitals. 

The Division participates actively in the Attorney General's Community Benefits Advisory 
Task Force and chairs the working group on Needs Assessment and Outcomes Evaluation. One 
of the goals of this working group is to create a community benefits website to further interstate 
and intrastate exchange. 

PROBATE PROCEDURES OF THE DIVISION OF PUBLIC CHARITIES 

In October, 1998, the Division developed a new guide, "Probate Procedures of the Division 
of Public Charities". The guide presents a practical description of the information needed by the 
Division in order to facilitate its review of probate or trust matters and of the steps followed by 
the Division in such reviews. 

CONFERENCE AND PROFESSIONAL EDUCATION 
PRESENTATIONS AND PUBLICATIONS 

As part of the Division's ongoing public education effort throughout the year, the Director of I 
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. 

DIVISION ADMINISTRATION AND STATISTICS 

Enforcement of laws requiring accountability by public charities is central to Division re- 
sponsibilities 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 2,654 requests to view files in the past fiscal year and, in response, approximately 5,974 
files were pulled. 



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PUBLIC PROTECTION BUREAU 



CHARITABLE ORGANIZATIONS: REGISTRATION AND ENFORCEMENT 

I From July 1, 1998 through June 30, 1999, the Division processed approximately 13, 460 
annual financial reports and annual filing fees totaling $1 ,242,610.00. These funds are revenues 
received by the General Fund. During this period, 1,088 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. 

As part of an ongoing compliance program. Division staff contacted 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 from 
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 v^th statutory requirements. Unless there is a deficiency in the application, all 
certificates are issued within a 10-day statutory period. 

REGISTRATION OF PROFESSIONAL SOLICITORS AND FUND RAISING COUNSEL 

Under §§22 and 24 of G.L. c.68, all persons acting as professional solicitors, professional 
i fundraising counsel, or commercial co-venturers in conjunction with soliciting charitable organi- 
zations 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 fundraising contract which they sign with any charitable organization, 
and solicitors must later file a financial return regarding each fundraising campaign. 

|j During the fiscal year ending June 30, 1999, a total of 285 registrations were received and 
'approved, resulting in $58,950 in fees to the Commonwealth. Registrations were received from 
93 solicitors, 143 fund-raising coimsel, and 49 commercial co-venturers. 

CHARITIES DIVISION COMPUTERIZATION 



With Information Technology funding from the Legislature, the Attorney General's Office 



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PUBLIC PROTECTION BUREAU 



began implementation of a test database and imaging system for the Division's charity and 
fundraiser registrations and financial filings during this fiscal year. The system is designed to 
enhance compliance with the registration 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 

Charitable and Fundraiser Registration Fees $ 1 ,401 ,660.00 

Other fees, requests for copies, requests for $ 2,041 .32 

computer information 

TOTAL $1,403,701.32 



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PUBLIC PROTECTION BUREAU 



CHIEF PROSECUTOR 

The Chief Prosecutor of the Public Protection Bureau is responsible for the investigation and 
criminal prosecution of crimes related to the priority areas of the Bureau and Attorney General. 
The Chief Prosecutor, with the assistance of one full time Assistant Attorney General in addition 
to access to the Bureau attorneys, insures that the Bureau is able to protect the public interest 
through both civil and criminal means. 

The Chief Prosecutor focuses on solving complaints by considering creative approaches to a 
myriad of crimes that traditionally have gone unprosecuted. Criminal cases are begun when 
linvestigations are completed and a determination that criminal, as opposed to civil, remedies are 
|appropriate. On some occasions, investigations lead to a determination that civil or administra- 
tive remedies are more appropriate and will result in a better outcome for the Commonwealth. 
When patterns demonstrate the need for improved legislation, the Chief Prosecutor, in conjunc- 
Ition with the Bureau Chief, drafts the legislation and builds consensus with legislators and 
administrative agencies. Statewide training for prosecutors and police is performed when novel 
areas of enforcement, such as home improvement contractor fraud, demonstrate a need for 
improved methods of investigation and prosecution. 

Primary areas for criminal investigation include consumer related crimes, including identity 
fraud, home improvement contractor fi-aud, elder fraud and abuse, health care fraud within the 
area of private insurers, the unauthorized or unlicensed practice by certain professionals such as 
dentists, doctors or public accountants, crimes relating to charities and telemarketing fraud. An 
emphasis has been placed upon the application of criminal remedies to areas of criminal activity 
that have been especially challenging to traditional law enforcement. PPB Prosecutors also 
devote substantial effort to prevention of crimes such as Identity Fraud and Home Improvement 
Fraud and helping victims, even if criminal prosecution is not feasible. 

HIGHLIGHTS OF CASES PROSECUTED TO COMPLETION 

Am-TechAVilbur Brown (Telemarketing/Business Opportunity Fraud) 

The Chief Prosecutor was appointed to be a Special Assistant United States Attomey 
in order to work with an assistant United States attomey in prosecuting an egregious 
scheme selling private pay telephones. Based upon complaints received by the Attomey 
General's Consumer Hotline, sixty indictments were obtained and prosecuted in Federal 
Court. In October of 1998, Wilbur Brown was sentenced to serve five years in federal 

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PUBLIC PROTECTION BUREAU 



prison. The defendant was ordered to pay $821,000 in restitution. 

The initial investigation by investigators assigned to the Public Protection Bureau and 
State Police also led to a civil injunction which froze Amtech's bank accounts and a civil 
judgment pursuant to G.L. c.93 A. 

Sean Wagner (Home Contractor Fraud/Larceny from Elders) 

After defaulting on his probation and pending criminal charges for two years, Wagner 
was prosecuted in three District Courts for driveway paving scams involving the elderly. 
At the time that the complaints were initiated, Wagner was in violation of conditions of 
probation for prior convictions of larceny from an elder. The probation violations were 
used as a means to promptly dispose of the new complaints which included eighteen 
months incarceration in the House of Correction and a two year suspended sentence 
which ran concurrently with the period of incarceration with intensive drug treatment. 
This case served as the basis for state wide training of prosecutors and probation officers 
on the effective use of probation surrenders in matters of home contractor fraud. The 
case also formed the basis for proposed legislation regarding pavers in the Home Im- 
provement Contract Fraud statute. 

Robert Hernandez (Unauthorized Practice of Nursing Prosecutions/Forgery and Uttering) 

District Court complaints were issued in response to the discovery that Robert 
Hernandez was working in a nursing home as a nurse without a license after faking his 
own death and submitting a phony death certificate. 

Hernandez pleaded guilty to unlicensed nursing, forgery and uttering in the Lawrence 
and Framingham District Courts, and was sentenced to two years in the House of Correc- 
tion suspended for two years. He was placed on probation for four years, banned from 
the health care field and ordered to perform 400 hours of community service. The pros- 
ecution garnered widespread media attention and has led to increased vigilance in the 
nursing home industry to the verification of nursing credentials. Recent legislation was 
also passed to require criminal checks on nursing home employees. 

Paul Palaza (Larceny/Home Improvement Fraud) 

Palaza was an unregistered roofer who took the roof off a disabled single mother's 
house and then abandoned work. Palaza was on default on his probation and was thought 
to have left the state. He was arrested and was arraigned on larceny and home improve- 



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PUBLIC PROTECTION BUREAU 



ment fraud charges. Palaza pleaded guilty and received two years in the House of Correc- 
tion with six months to serve. The balance of the sentence was suspended for three years. 
Restitution of $7,500 was ordered and the defendant was banned from the home contract- 
ing field, except that the defendant may work for a licensed contractor, but must not 
accept money directly from homeowners. 

Jeffrey Gordon (Unlicensed CPA/Larceny) 

Gordon was charged with falsely holding himself out as a Certified Public Accoun- 
tant and with larceny after claiming to be a CPA and doing a shoddy job doing tax prepa- 
ration for two victims. Gordon pleaded guilty and was placed on one year probation, 
ordered to perform 1 00 hours of community service and pay restitution. 

Dirk Kiefer (Home Improvement Fraud) 

Kiefer was charged with larceny and home improvement contractor fraud after taking 
money from numerous consumers and doing little or no work. After several cases were 
joined into one District Court, Kiefer pleaded guilty in Salem District Court and was 
sentenced to two years in the House of Correction suspended for two years with restitu- 
tion to be paid to the seven victims. After a restitution hearing Kiefer was ordered to pay 
$43,538, the ftill amount of restitution. 

Lori Lebeouf (Larceny By a Personal Care Assistant) 

Lebeouf, a Personal Care Assistant, was charged with having bilked an elderly victim 
with Cerebral Palsy, through the unauthorized use of the victim's credit cards. Lebeouf 
who had moved to Florida, returned to Massachusetts and pleaded guilty to three counts 
of felony larceny. The Judge continued her matter without a finding. She was placed on 
probation for two years and ordered to pay $4962 in restitution and was banned from 
being a personal care assistant or a fiduciary. 

REFERRALS EVALUATED 

The Chief Prosecutor evaluated hundreds of complaints during this year. The complaints 
came from a variety of sources including other divisions within the Office of the Attorney Gen- 
eral, police departments, outside agencies, attorneys and private citizens. A large volume of 
complaints were generated by the Attorney General's Elder Hotline, Consumer Hotline and 
Insurance Hotline. Complaints to these hotlines that involved criminal behavior, and are not 
being handled by local District Attorney's offices, are assessed and investigated by the Chief 



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Prosecutor or investigators assigned to the Public Protection Bureau. 
INITIATIVES AND PUBLICATIONS 



Identity Fraud Legislation 

The criminal arm of the Public Protection Bureau drafted and promoted legislation 
criminalizing identity fraud. The legislation, Massachusetts General Laws, c. 266 §37E was 
sponsored by the former and present Attorneys General and State Senator Jacques. The bill was 
enacted and became law in March of 1999. In the course of researching and drafting the bill we 
have now become involved in several of these investigations. A model for investigation and 
prosecution is being developed. The Chief Prosecutor also helped to develop and distribute the 
Credit Identity Fraud consumer handbook that can be found in Attorney General Reilly's Guide 
to Credit . The Chief Prosecutor also sits on the Check Clearinghouse Task Force and works with 
the Financial Organized Crime Task Force. 

Home Improvement Contractor Fraud Initiative 

The Chief Prosecutor continues to get cases for referral and consultation from all over the 
state on this difficult topic, leading to several new prosecutions. The Chief Prosecutor was 
named to the Advisory Board of the American Prosecutor's Research Institute (APRI) Home 
Improvement Project and is a co-author of APRI's newest publication, Home Improvement 
Fraud Against Seniors . When that publication is completed, the manual will be distributed to all 
members of the National District Attorneys Association. 

Last Jime, the Chief Prosecutor and assistant attorneys general and investigators working 
under his direction embarked upon a project to increase and improve statewide prosecution of 
home improvement contractor fraud. The Chief Prosecutor and bureau personnel developed a 
prototype prosecution manual for use by local police and prosecutors. All legal and investigative 
documents were placed on computer disks and distributed at a state-wide conference attended by 
over 1 20 local police, prosecutors, probation officers and representatives of the Board of Build- 
ing Regulations and Standards and the Department of Consumer Affairs. As an offshoot of the 
training, the Attorney General's office handles home improvement fraud complaints from around 
the state and acts in an advisory capacity to local assistant district attorney's handling theses 
cases. Suggestions for improvements in the Home Improvement Statute are being collected and 



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are expected to be the basis for amending the Statute in a future legislative session. 

MCLE Training-Superior Court Practice 

On November 1 8, 1 998 The Chief Prosecutor was one of three prosecutors on the faculty 
of the MCLE Superior Court Practice training. The MCLE Superior Court Criminal Practice 
Manual , including a chapter co-authored by the Chief Prosecutor, was published in June of 
1999. 

Telemarketing Fraud 

The Chief Prosecutor has continued to work with Federal Authorities as a Special Assistant 
United States Attorney on a large telemarketing fraud case involving fraudulent charities. An 
initiative on coordinating with other state Attorneys General and Federal authorities on interstate 
telemarketing initiatives is underway. As part of this initiative, an assistant attorney general has 
coordinated with the National Association of Attorney's General in order to implement multi- 
state enforcement in this area. 

District Court Rotation 

The Public Protection Bureau continued to send assistant attorneys general to the District 
Court criminal prosecution rotation program which enabled them to gain valuable courtroom 
experience which they brought back to the criminal cases in the bureau. 



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REGULATED INDUSTRIES DIVISION 



INSURANCE 

The Regulated Industries 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 protec- 
tion/insurance laws enforcement function. Through the Division's insurance hotline for consum- 
ers, 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 

Automobile 

1999 Private Passenger Automobile Insurance: 

On July 7, 1998, the Auto Insurers' Bureau (AIB) filed with the Division of Insurance its 
recommendation concerning the profit component of 1 999 private passenger automobile insur- 
ance rates. On August 14, 1998, AIB filed with the Division of Insurance its recommendation 
concerning the main rate for 1999 private passenger automobile insurance rates. AIB requested 
an increase of 15.5 % increase over the 1998 rates. If approved, these requests would have been 
equivalent to an average increase in auto insurance premiums for Massachusetts drivers of $129 
per car or 462 million dollars overall. On behalf of Massachusetts consumers, the Division 
challenged the increase requested by the industry. In addition, the Division asked the Commis- 
sioner to recuse herself fi-om playing any role in the decision for the 1 999 rate year because of 
allegations that the Commissioner had engaged in private discussions concerning the rate with a 
member of the AIB. The Commissioner refused to recuse herself. On December 29, 1998, the 
Commissioner issued a memorandum and order fixing and establishing an average rate of $841 
which is approximately 0.7% higher than the equivalent 1998 rate or 14.8% lower than the 
industry's requested increase. This reduction included 20% of the 176 million dollars collected 
in error during the years 1991 through 1996. The savings to Massachusetts consumers was 443 
million dollars or an average of $1 14 per car. 



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2000 Automobile Insurance: 

Proceedings concerning the 2000 automobile insurance rate began on April 13, 1999 with 
notice of the annual hearing called by the Commissioner to determine whether it was necessary 
jthat the rates for 2000 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 
third 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, 1997 
and 1998. No decision had been issued by the Commissioner by the end of the fiscal year. 

Homeowners 
FAIR Plan Rate Increase: 

In September, 1998, the Massachusetts Property Insurance Underwriting Association 
("FAIR") submitted filings to the Division of Insurance for increases in their Homeowners 
product and their Dwelling and Fire product. The Division participated in the hearings and the 
case was settled by stipulation. The stipulations resulted in savings to Massachusetts consumers 
of $11 5,983. 

Medicare Supplement 
United Health Care: 

In April 1998, United Health Care filed for increases in its Medicare supplement policy rates 
to be effective in 1999. These policies are provided to members of the AARP. Following 
lengthy hearings before the Commissioner in which the Division actively participated and argued 
against the increase, the case was settled by stipulation of the parties. The Commissioner ap- 
proved the sfipulation in April 1999. The stipulation resulted in an aggregate rate that was 
$578,998 less than United Health Care requested. 

Bankers Life & Casualty: 

In November 1 997, Bankers Life and Casualty filed for an increase in its Medicare supple- 
ment rates to be effective in 1998. All of the policy forms for which Bankers Life seeks a rate 
increase are closed to new enrollment. For forms A043 (the Core Plan) and A044 (the MediSup 



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2 Plan), Bankers requested 100% and 1 17% respectively. For forms 73X, 98X, and A042, (guar- 
anteed renewable age-rated plans with prescription drug coverage), Bankers Life requested 
respective rale increases of 83%, 77%, and 64%. For form A040 (age-rated, guaranteed renew- 
able Core plan). Bankers requested a 46% increase. The Division intervened in the case and 
participated in the hearings. On June 1 1 , the Commissioner disapproved the rate request and 
asked Bankers to submit additional evidence to demonstrate the reasonableness of its administra- 
tive expenses and other expense components. Following the Commissioner's disapproval, the 
parties entered into settlement discussions and settled the case by stipulation. The Commissioner 
approved the stipulation in July, 1998 with an effective date of August, 1998. The stipulation 
resulted in an aggregate rate that was $24,645,060 less than Bankers requested. 

Bankers Life & Casualty: 

In November 1998, Bankers Life and Casualty filed for an increase in its Medicare supple- 
ment rates to be effective in 1999. All of the policy forms for which Bankers Life seeks a rate 
increase are closed to new enrollment. For forms A043 (the Core Plan) and A044 (the MediSup 
2 Plan), Bankers requested 157% and 188% respectively. For forms 73X, 98X, and A042, (guar- 
anteed renewable age-rated plans with prescription drug coverage). Bankers Life requested 
respective rate increases of 51%), 74%, and 52%. For form A040 (age-rated, guaranteed renew- 
able Core plan). Bankers requested a 11% increase. The Division intervened in the case and 
participated in the hearings. The parties entered into settlement discussions and settled the case 
by stipulation. The Commissioner approved the stipulation in March, 1999 with an effective 
date of August, 1999 . The stipulation resulted in an aggregate rate that was $16,960,393 less 
than Bankers requested 

World Insurance Company: 

In March 1998, World Insurance Company filed for a rate increase in its Medicare supple- 
ment policies. All of the policy forms for which World seeks a rate increase are closed to new 
enrollment. For forms D-A041(old Medisup2 policy) and D-A044 (new Medisup 1 policy), 
World requested an increase of 52%). For D-A042 (old Medisup3 policy) and D-A045 (new 
Medisup2 policy), World requested a 103% increase. The Division intervened in the case and 
participated in the hearings. In August, 1998, the Commissioner approved a rate that was 
$4,142,244 less than World requested. 



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World Insurance Company: 

In April, 1 999, World Insurance Company filed for a rate increase in its Medicare supple- 
ment policies. All of the policy forms for which World seeks a rate increase are closed to new 
enrollment. For forms D-A041(old Medisup2 policy) and D-A044 (new Medisup 1 policy). 
World requested increases of 74.5% and 78.1% respectively. For D-A042 (old Medisup3 policy) 
and D-A045 (new Medisup2 policy). World requested increases of 48.1% and 50.4% respec- 
tively. The Division intervened in the case and participated in the hearings. The case was 
ongoing at the end of the fiscal year. 

Community Health Plan/ Kaiser Foundation Health Plan of MA: 

In April, 1998, Community Health Plan/ Kaiser Foundation Health Plan of MA filed for a 
rate increase for its Medicare cost contract. Kaiser asked for a rate of $97.65 per member per 
month for the base medical product and $69. 1 per member per month for the drug rider. Com- 
bining the 2 rates, this represents approximately a 60% increase from last year's rates. The 
Division intervened in the case and participated in the hearings. By decision entered September 
1998, the Commissioner approved a rate that was $1,489,896 less than Kaiser requested. 



CONSUMER PROTECTION/ENFORCEMENT 



The Division also engaged in non-rate case related insurance work during fiscal year 1999 
that involved consumer protection issues and/or enforcement of the Commonwealth's insurance 
I laws. Representative matters include: 

EMPLOYERS FAILURE TO REMIT HEALTH INSURANCE PREMIUMS 

During the 1 999 fiscal year, the Division continued to investigate complaints against employ- 
ers who allow their group health plans to lapse because of their failure to remit health insurance 
premiums or their failure to provide sufficient funds to cover their employees' health costs. 

Investigations 

The Division investigated 53 employers in response to these types of complaints during this 



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fiscal year. The Division has seen a marked decrease in the volume of "failure to remit" com- 
plaints since 1996, when the Division was instrumental in promulgating an Attorney General 
regulation, 940 CMR 9.00, that requires insurers to pay claims until they have notified employ- 
ees directly of any termination of coverage. With the exception of disputes between a single 
employee and the employer, most complaints now relate to self-insured plans. 

Bankruptcy Intervention 
Summit Plastics 

During the fiscal year, the Division's motion to intervene in the bankruptcy filing of Summit 
Plastics was allowed by the bankruptcy court. Summit filed for chapter 1 1 protection leaving its 
former employees with medical bills in excess of $22,000 outstanding. The matter was still 
pending at the end of the fiscal year. 

Boston Regional Medical Center (BRMC) 

BRMC filed for reorganization under chapter 1 1 of the bankruptcy code on February 2, 1999. 
Prior to the bankruptcy, BRMC had deducted a portion of the health insurance premiums from 
the employees' pay checks for approximately two months. BRMC failed, however, to remit 
those payments to the appropriate carriers. This resulted in unpaid medical bills for Fallon 
Health Care participants (approximately 240 employees) in the amount of $200,000. The Divi- 
sion filed a Motion to Intervene on February 24, 1999 on behalf of the employees which was 
allowed by the court. The Division is working on a settlement and stipulation that would allow 
BRMC to remit payment to Fallon which would, in turn, pay the outstanding medical bills. 

NewCare Health Corporation (NewCare) 

NewCare employees began contacting the Division' Insurance Hotline in June with com- 
plaints about employee benefits not being funded. Through an investigation, prompted by the 
complaints received, the Division learned that NewCare had failed to remit premiums deducted 
from employee paychecks, as far back as January 1999, to the appropriate carriers, including 
Blue Cross Blue Shield and Health New England. On June 22, 1999, NewCare filed for protec- 
tion under chapter 1 1 of the bankruptcy code. After the close of the fiscal year, the Division filed 
a Motion to Intervene on behalf of the employee consumers for payment of their medical claims. 



258 



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Agreements 

East Coast Medical (Massachusetts Rehab) 

Jeff Greenfield, M.D. failed to remit employee paycheck deductions to New England Health 
Care (NEHC) between February 28, 1997 and April 21, 1997. After negotiations with 
Greenfield's attorney, we received payment to satisfy the outstanding medical bills for the five 
employees affected. 

Everett Plating 

An employee of Everett Plating complained that it was delinquent in its payments to the 
insurance company even though the premiums were deducted from the employees' paychecks. 
Through our intervention, the company remitted the premiums due and the benefits were rein- 
stated. 

Oasis Health Care 

Employees of Oasis informed this Office that the self-funded health insurance plan was 
tenninated retroactively and that there were outstanding medical bills in excess of $100,000. 
Because it involved the self fimded plan of a large national corporation, the Division referred the 
case to the US Department of Labor. 

FMK Manufacturing 

An employee of FMK Manufacturing was promised health insurance as a benefit of employ- 
ment. Nonetheless, FMK failed to honor that promise. As a result, the employee and his family 
incurred medical bills in the amoimt of $2564. Through our intervention, FMK reimbursed the 
employee for the outstanding medical bills. 

Valley Gage 

The Division entered into an agreement with self-insured employer Valley Gage, Inc. In 
which Valley Gage promised to pay off numerous outstanding claims against its health plan. 
Valley gage paid off approximately $25,000 of the $37,000 of outstanding claims before going 
out of business this year. 



259 



PUBLIC PROTECTION BUREAU 



Violations of 940 CMR 9.00 

Following an investigation of some companies' failure to pay their health insurance premi- 
ums, the Division discovered that three local HMOs were in violation of 940 CMR 9.00. (940 
CMR 9.00 is the Attorney General regulation that requires insurance carriers, including HMOs, 
to pay medical claims imless they have notified employees that the coverage has been canceled 
for non payment of premium by their employer). The HMOs had refused to pay health insurance 
claims of employees of a number of companies without first notifying the employees that their 
coverage had been canceled because of nonpayment. That investigation was ongoing at the end 
of the fiscal year. 

HEALTH COVERAGE 

During the 1999 fiscal year, the Division undertook a variety of initiatives in the areas of 
health insurance coverage and managed care. 



Hospital and HMO Community Benefits 

A member of the Division oversees the implementation of the Attorney General's HMO 
Commimity Benefits Guidelines. During the 1998-99 fiscal year, the Division member provided 
guidance to the HMOs in their completion of their annual community benefits reports and ana- 
lyzed those reports. 

Communirv Benefits Task Force 

i 
A member of the Division also oversees the Attorney General's Advisory Task Force on 1 

Hospital and HMO Community Benefits, which was convened in June 1 998 for the purpose of , 
advancing the goals of the Community Benefits Guidelines. This Task Force includes represen- ! 
tatives of hospitals, HMOs, insurance carriers, health maintenance organizations, community j 
health advocacy groups and relevant state agencies, and is organized into several working groups;! 
that focus on the key elements of community benefits including needs assessment, program 
evaluation and community participation. There were initially five working groups: (1) Confer- j 
ence Planning (now concluded); (2) Statewide Public Health Initiative; (3) Community Participa- 
tion; (4) Needs Assessment and Outcomes Evaluation; and (5) Guideline Implementation Issues. 



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Community Benefits Conference: Good, Better. Best: 
Making the Most of Community Benefits 

A member of the Division, working with the Task Force, played a lead role in planning a 
major conference focusing on community benefits best practices that took place in October 1998 
The Conference was attended by a diverse group of more than 300 hospital, HMO and commu- 
nity organizations from across the state. Panelists included representatives from Harvard School 
of Public Health, the Heller School at Brandeis University, Stonehill College, Yale University 
School of Medicine, the MHA, MAHMO, Health Care for All, the Massachusetts Department of 
Public Health and representatives from hospitals, HMOs, Blue Cross Blue Shield of Massachu- 
setts and community organizations. 

Non-Group Health Insurance Advisory Board 

Following the appointment by the Attorney General of the two consumer members to the 
Nongroup Health Instu-ance Advisory Board, the Division continued to review the work of the 
Board. 

Balanced Budget Act, Medicare Plus Choice and Prescription Drug Coverage 

Following the issuance of regulations by HCFA that implied that the Balanced Budget Act ( 
the "BBA") preempted all state mandated benefits insurance laws, the Division worked with 
health advocacy organizations. Members of the Division met regularly with the advocates and 
with members of the Administrative Law Division in challenging the preemption by the BBA of 
the Massachusetts statute and regulations. The Office litigated the issue in the U.S. District and, 
following an adverse decision, appealed that decision to the First Circuit. 

The Division worked with the Attorney General in the preparation of his testimony presented 
to the Joint Committee on Health Care of the Massachusetts legislature. The Attorney General 
supported the expansion of the Senior Pharmacy Program from its current $750 per year benefit 
to $1,500 per year. In addition, the Attorney General supported the expansion of the eligibility 
requirements so that more seniors would be eligible to participate in the Senior Pharmacy Pro- 
gram. 

In addition, a member of the Division works with a coalition of health care advocates seeking 
to find aUemate mechanisms to provide prescription drug coverage for seniors. The Coalition 

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has drafted and filed proposed legislation which would expand the current Senior Pharmacy Plan 
to include more elders and to increase the drug benefit. 

Infertility Treatment Coverage 

Members of the Division investigated the use of age limits by HMOs on the coverage of 
infertility treatments in violation of the Infertility Benefits Mandate, G. L. M. c. 175, § 47H, i.e., 
the HMOs would not cover treatments such as artificial insemination for women over 42-45 
years of age. Members of the Division met separately with representatives from three HMOs. 
The HMOs agreed to cease using age limits. 



Continuation Coverage after Divorce 

A member of the Division participated in a working group made up of various health care 
advocates to provide education to pro se divorce litigants on their rights to continuing coverage 
in the event of divorce. The group prepared a brochure to be distributed to all divorce litigants 
through the probate court. In addition, the group drafted amendments to the current statute to 
clarify the rights of divorcees to continuing coverage. 



LEGAL ACTIONS 

Commonwealth v. Fraternal: Following complaints from consumers who had pur- 
chased health insurance from the Fraternal Insurance Group, the Division determined that 
Fraternal was operating an unlicensed insurance company and had over one million 
dollars in outstanding medical claims with no assets to pay those claims. The Division 
filed a complaint against Fraternal Insurance Group, its owner, Paul J. Pereira, and 
obtained a preliminary injunction against them, prohibiting them from engaging in the 
business of insurance, accepting premiums of fees from consumers in connection with 
insurance and freezing their bank accoimts. The Commonwealth's Motion for Summary 
Judgment was allowed and judgment has entered for the Commonwealth. 

Commonwealth v. Fraternal: Subsequent to the entry of a preliminary injunction 
prohibiting them from accepting insurance premiums, the defendants. Fraternal Insur- 
ance Group, its owner, Paul J. Pereira. accepted insurance premiums from several con- 



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PUBLIC PROTECTION BUREAU 



sumers. The Division filed a contempt of court action and obtained judgment against 
Mr. Pereira. 

Paul J. Pereira (Fraternal) Following suit by the Commonwealth, Mr. Pereira filed for 
protection under c. 13 of the Federal Bankruptcy code. The Division intervened in the 
bankruptcy on February 11, 1999. On May 5, 1999, the Division filed a Motion to 
Dismiss Mr. Pereira's bankruptcy. The bankruptcy was dismissed on June 10, 1999. As 
a result, Mr. Pereira's assets are no longer under the protection of the Federal Bank- 
ruptcy court. This will aid in the recovery of a civil judgment in the amount of approxi- 
mately $1.9 million the Division has obtained against Mr. Pereira. 



LONG TERM CARE INSURANCE 

During the 1998-1999 fiscal year, the Division continued its work in the examination of 
problems faced by elders in financing nursing home and other long-term care. 

Consumer Complaints and Education 

The Division responded to numerous consumer inquiries regarding long-term care insurance. 
A member of the Division made presentations to elder and other organizations conceming long- 
term care insurance. 

Long-term Care Task Force 

Members of the Division, together with Bureau attorneys, continued to participate 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 from the costs of long-term care services. Participants include representa- 
tives of the relevant state agencies (Office of the Attorney General, Division of Medical Assis- 
tance, Division of Insurance, Executive Office of Elder Affairs, and the Group Insurance Com- 
mission), consumer and elder advocacy groups, the insurance industry and long-term care pro- 
vider 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 



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PUBLIC PROTECTION BUREAU 



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 have worked 
on and participated in several working groups that studied and made recommendations on a 
number of issues. These included the redrafting of Division of Insurance regulations on long- 
term care insurance and the acceleration of death benefits in life insurance policies, public educa- 
tion concerning long-term care financing, and development of alternative insurance products to 
cover some of the costs of long-term care, such as the offering of long term care insurance to 
state employees through the Group Insurance Commission. Members of the Division have taken 
lead roles in drafting major revisions to the Division of Insurance's long-term care insurance and 
life insurance regulations for the purpose of expanding the private options available for covering 
the costs of long-term care, while enhancing consumer protection. The revised regulations are 
set to be promulgated early in the next fiscal year. The work of the Task Force will continue into 
the next fiscal year with a focus on designing consumer education and disclosure materials. 



LIFE INSURANCE LITIGATION 

Consumer Complaints 

During the year, the Division continued to devote a considerable amount of time and re- 
sources 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. 

Companies with whom members of the Division mediated individual complaints included: 
Midland Life, Mutual of New York (MONY), Zurich Kemper, Beneficial Standard Life, 
Conseco, Mass Mutual, Boston Mutual, Delaware American life. Presidential and Equitable Life. 
The Division estimates that benefits to policyholders as a result of its intervention were in excess 
of $500,000. 



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PUBLIC PROTECTION BUREAU 



Prudential Life Insurance Company of America Claims Settlement: The Division 
continued to monitor the Alternative Dispute Resolution ("ADR") process detailed in our 
consent judgement against The Prudential and in the global class action settlement. In 
addition, the Division provided advice to policyholders who were dissatisfied with their 
settlement proposal and wished to appeal the decision. The Division continued to partici- 
pate in the Regulatory Oversight Group that is conducted by the various states to ensure 
the fairness of the remediation process. Members of the Division also spend time with 
policyholders who do not understand the offers made to them. The processing of claims 
and appeals, and accordingly the Division's work, will continue into the next fiscal year. 

Hancock Mutual Insurance Company: On March 25, 1998, the Division filed a con- 
sent judgement in which John Hancock agreed to provide global relief for the alleged 
deceptive sales practices of its agents from 1979 through 1996. The judgment provided 
relief to approximately 250,000 Massachusetts policyholders. In the litigation, the 
Division, as in the case against The Prudential, alleged that John Hancock engaged in 
three primary deceptive sales practices in the sale of whole life, universal life and vari- 
able life insurance policies, as well as certain mutual fiinds and aimuities sold during that 
time frame. The Division alleged that John Hancock engaged in: "churning" or replace- 
ment and financing; "vanishing premiums" or "abbreviated premium payment" plans; 
and selling life insurance as an investment, retirement plan, savings plan or college 
savings plan, the practice of selling life insurance by either disguising the product as life 
insurance or minimizing the life insurance of the product. 

On May 1, 1998, the Division set up a consumer hotline to assist policyholders in making 
appropriate elections of either ADR or General Policy Relief ("GPR") and to assist them 
in filing their claim forms in a manner designed to afford them the best possible relief 
Between fiscal year 1998 and fiscal year 1999, the Division received and responded to 
over 22,000 calls. The hotline was still in operation at the end of the fiscal year. 

Between fiscal year 1998 and fiscal year 1999, the Division also conducted twenty-one 
(21) claim form assistance seminars, fraveling across the state to reach as many policy- 
holders as possible. The Division also met in small group sessions twice per week with 
John Hancock policyholders in order to assist those individuals who need special atten- 
tion due to disability or age and for those who cannot attend a large group seminar. The 
Division has met with and assisted almost 3,000 policyholders through personal assis- 
tance and seminars. 



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PUBLIC PROTECTION BUREAU 



In addition to consumer outreach, the Division has continued to allocate substantial 
resources and manpower to monitoring and participating in the training of claims ana- 
lysts. The Division conducted four audits of the ADR claims and brought its concems to 
the company's attention which resulted in the retraining of analysts. The Division 
continues to meet with defendants and plaintiffs' counsel in order to ensure compliance 
with the letter and spirit of the settlement. 

In addition, members of the Division mediated individual complaints for out-of -class 

policies which has resulted in refunds of $520,000 to over 50 John Hancock policyhold- 

I 
ers. I 

MetLife. Members of the Division began initial discussions with MetLife on the possi- 
bility of settling the national class action suit pending against MetLife.. Members of the 
Division mediated individual complaints against MetLife resulting in refunds of over 
$100,000 in cash and $287,000 in additional death benefits to twenty five MetLife policy- 
holders. 

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 for help. 

Consumer Mediation 

Members of the Division mediated several matters on behalf of consumers throughout the 
year. 



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PUBLIC PROTECTION BUREAU 



Consumer Hot-Line and Paralegal Resolution of Inquiries and Complaints 

During the fiscal year, the Division received and responded to over 9,250 telephone inquiries, 
an increase of almost three percent from the prior fiscal year. In addition, the Division opened 
and mediated on behalf of consumers 1371 written complaints. The Division closed 1435 com- 
plaints. Over $1,847,500.00 were received by consumers through the intervention of the parale- 
gal and volunteer interns, an increase of 4.5% over the prior fiscal year. 

AGELDER: 

The Attorney General's Elder Hotline is a fairly recent initiative that began operation on June 
16, 1997. The hotline was established in response to the high volume of calls from, or relating to, 
the elderly that come into the Attorney General's office. In the past fiscal year, the number of 
calls and the number of elders helped has continued to increase. The hotline has fielded approxi- 
mately 5,241 phone calls in the past fiscal year. The hotline staff provides information, referrals, 
and mediation services to resolve the concerns of callers. The hotline is staffed by 10 elder 
volunteers and 3 part-time staff members who receive monthly trainings on elder issues. The 
majority of callers are elders, with an increasing number of calls coming from the children of 
elders as well as with professionals who deal with elders in the course of their duties. Since its 
inception, AGELDER has increased its mediation activities and these activities benefitted elders 
in the amount of $93,046.23 during the past fiscal year. 

The calls are remarkable for their variety, although some trends are discemable. Consumer 
issues and complaints have been the number one concern. Within this group complaints and 
queries about businesses and private contractors and reports of telemarketing and other scams 
directed at the elderly have been primary. Health insurance, especially Medicare, Medigap and 
Medicare HMOs and long-term care insurance constitute another broad area of concern. The 
hotline also receives calls about tenant/landlord issues, financial exploitation, home care, benefit 
programs, health concems and questions, fransportation problems, charities and non-profits and 



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PUBLIC PROTECTION BUREAU 



OTHER ACTIVITIES 

Legislative Activities 

A member of the Division testified, on behalf of the Attorney General, before the Massachu- 
setts Joint Committee of Insurance in support of two bills, S. 733 and S.734, both bills sponsored 
by Senator Dianne Wilkerson. Both bills would prohibit discrimination by insurance companies 
on the basis of gender. 

Guest Speakers 

Members of the Division made presentations to several organizations regarding insurance 
and financial exploitation of seniors. 



ESTIMATED SAVINGS TO CONSUMERS 

Auto Rate Case 443,000,000 

Medigap Insurance Rate Cases 43,674,347 

FAIR Rate Case 115,983 

Life Insurance Individual Case Mediation 1 ,297,000 

Consumer Hotline 1 ,847,500 

AGELDER Mediation 93,046 

Total 490,027,876 



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PUBLIC PROTECTION BUREAU 



UTILITIES 

The bulk of the utiHty workload of the Regulated Industries Division in fiscal year 1999 
Involved advocacy of consumer interests in connection with the implementation of the dramatic 
changes underway in the telephone, electric and gas utility industries. There was only one 
traditional rate case, but a number of proceedings related to mergers between utility companies 
— two mergers between gas utilities were approved and another was proposed as were two 
involving electric utilities. Implementation of the 1997 Electric Restructuring Act (St. 1997, c. 
164) continued with the final proceedings on individual electric utility company restructuring 
plans as well as proceedings concerning sales of electric generating facilities, annual transition 
cost reconciliation filings, and the design of the "default" power service that must be made 
available to all customers. Work continued among interested parties to make competitive gas 
supplies available to more customers and the further progress was made at expanding the range 
of activities in which competition could occur in the telecommunications industry. The Division 
was an active participant in all of these developments. It advocated new structures and rules to 
maximize the consumer benefits from the change in regulatory approach as well as to protect the 
interests of small residential and business customers during the transition to new regulatory 
frameworks. Most of this work occurred in adjudications of specific cases. Examples of the 
Division's public utility work relative to each industry in fiscal year 1999 include the following: 

UTILITY MERGERS 



Eastern Enterprises - Essex Gas Company, D.T.E. 98-27 

On February 27, 1998, Eastern Enterprises (the corporate parent of Boston Gas Com- 
pany) and Essex County Gas Company filed a joint petition in connection with a pro- 
posed merger in which they sought DTE approval of a "rate plan" under G.L. c. 164, § 
94. Among other things, the rate plan called for the current rates of Essex to be"frozen" 
at current levels for 10 years and for Essex to be allowed to amortize the acquisition 
premia and other costs of the merger during that 10 year period. The Division opposed 
DTE approval of this rate plan on the grounds that a rate freeze would harm, not benefit 
Essex's customers and, thus, that the Companies had not made the required demonstra- 
tion that allowing the recovery of acquisition premia costs would not harm consumers, 
that in addifion, the Division urged the DTE to require the Company to implement a plan 
to ensure the quality of the service provided to Essex's customers did not deteriorate as a 
result of the merger. In a decision issued on September 17, 1998, the DTE concluded that 
a rate freeze would benefit customers and approved the rate plan, but it did require the 



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Companies to put into place a service quality plan. 

Northern Indiana Public Service Company - Bay State Gas Company, D.T.E. 98-31 

On March 209, 1998, Northern Indiana Public Service Company ("NIPSCo") and Bay 
State Gas Company filed a joint petition in connection with the proposed acquisition of 
Bay State by NIPSCo in which they sought DTE approval of the transaction under G.L. c. 
164, § 96 and of a "rate plan" under G.L. c. 164, § 94. The rate plan called for the rates 
of Bay State that would be in place November 1 999 (the end of an earlier rate plan) to be 
frozen for five years, but with rate reductions required/rate increases allowed to the extent 
the Company's earnings exceeded/fell below certain levels. The rate plan also provided 
for Bay State being permitted to recover the costs of the transaction in the future to the 
extent that it demonstrated that those costs had been offset by savings resulting from the 
merger. The Division opposed DTE approval of this rate plan on the grounds that a rate 
freeze would result in Bay State's customers paying higher rates than they otherwise 
would and argued that the Companies had not demonstrated that allowing the recovery of 
acquisition premia costs would not harm consumers. In addition, the Division urged the 
DTE to require the Company to implement a plan to ensure the quality of the service 
provided to Essex's customers did not deteriorate as a result of the merger. In a decision 
issued on November 5, 1998, the DTE concluded that a rate freeze would benefit custom- 
ers and approved the rate plan, but it did require the Companies to put into place a service 
quality plan. 

Eastern Enterprises - Colonial Gas Company, D.T.E. 98-128 On December 24, 1998, 
1999, Eastern Enterprises (the corporate parent of Boston Gas Company and Essex 
County Gas Company) and Colonial Gas Company filed a joint petition in connection 
with a proposed merger in which they sought DTE approval of a "rate plan" under G.L. c. 
164, § 94. Among other things, the rate plan called for the current rates of Colonial to 
be"frozen" at current levels for 10 years, as well as for Colonial being permitted to 
include in its rates over the subsequent 10 years an annual charge of approximately $12.3 
million to offset "costs" from the merger to the extent its rates in 2009 are less than the 
level that they would have attained had its 1998 rates been increased by $8.5 million (10 
percent) and then been further increased each year between 1 999 and 2000 by the overall 
rate of inflation less 1.5 percent. The Division opposed DTE approval of this rate plan on 
the grounds that its approval would result in "harm" to consumers. The Division spon- 
sored two expert witnesses and argued during the course of eight days of evidentiary 
hearings and in briefs filed in May 1999. that Colonial's current rates were excessive and 



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that approval of the Companies' proposal would resuh in Colonial's customers paying 
higher rates than they would in the absence of the rate plan. A decision in this case had 
not been issued at the close of the fiscal year. 

BEC Energy - Commonwealth Energy System, D.T.E. 99-19 

On February 1, 1999, BEC Energy (the corporate parent of Boston Edison Company) 
and Commonwealth Energy System (the public utility holding company parent of Cam- 
bridge Electric Light Company, Commonwealth Electric Company, Canal Electric 
Company and Commonwealth Gas Company) filed a joint petition in connection with a 
proposed merger in which they sought DTE approval of a "rate plan" under G.L. c. 164, § 
94. The rate plan called for the current rates for all four utility subsidiaries to be "frozen" 
at current levels for four years as well as DTE approval of the utilities recovering through 
rates over the next 40 years approximately $1 billion in "costs" resulting from the merger. 
The Division was an active participant in the DTE proceeding, opposing the rate plan on 
the grounds that its approval would result in "harm" to consumers because the Compa- 
nies had not shown that their current rates were reasonable or the rates that would result 
under the plan (with the inclusion of the merger costs) would be reasonable. Following 
several days of evidentiary hearings, including testimony by two expert witnesses spon- 
sored by the Division, briefs were filed in May and June 1999. A decision in this case 
had not been issued at the close of the fiscal year. 

New England Electric System - Eastern Utilities Associates, D.T.E. 99-47 

On April 30, 1999, Massachusetts Electric Company and its wholesale affiliate. New 
England Power Company, togther with Eastern Edison Company and its wholesale 
affiliate, Montaup Electric Company, filed a joint petition with the DTE seeking approval 
of the merger of Eastern Utilities Associate's electric company operating subsidiaries into 
the New England Electric System's ("NEES") electric company operating subsidiaries as 
well as of rate plan for MassElectric after the merger with Eastern Edison. The proposed 
rate plan included provisions concerning the recovery of the acquisition premium and 
transaction costs associated with the acquisition of EUA by NEES as well as the acquisi- 
tion of NEES by National Grid Company. The DTE held public hearings on the proposal 
during June 1999, but evidentiary hearings had not yet begun at the close of the fiscal 
year. 



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ELECTRIC MATTERS 

Electric Restructuring Plans 

Western Massachusetts Electric Company, D.T.E. 97-120. 

As required under the terms of the Electric Utility Restructuring Act, on December 31, 
1997, Western Massachusetts Electric Company filed a proposed restructuring plan with 
the DTE, which it supplemented in January 1998. Following a review of the Company's 
proposal and two evening public hearings, the Division filed comments with the DTE, 
arguing that the proposal did not satisfy the standards of the Act. In a February 1998 
decision, the DTE granted interim approval to the Company's plan, but ordered minor 
modifications as well as further review and investigation. The Company modified its 
plan in May and later filed testimony in support of its proposal for the treatment costs 
related to its Millstone nuclear facilities. During 27 days of evidentiary hearings held 
between September 1998 and January 1999, the Division opposed the Company's plan 
through cross-examination of the Company's witnesses as well as through the presenta- 
tion of the testimony of four expert witnesses who, among other things, proposed another 
approach to the Company's nuclear costs which reduced its recovery of nuclear costs to 
reflect the impact that years of mismanagement had on the market value of those facili- 
ties. The Division also opposed the Company's proposal to shift onto Massachusetts 
customers responsibility for costs that had previously been borne by the customers of its 
Connecticut affiliate as well as a number of erroneous approaches to accounting issues 
proposed by the Company. Briefs were filed in March and April 1999 and a decision by 
the DTE was pending at the close of the fiscal year. 

Fitchburg Gas & Electric Light Company (DTE 97-115) 

As required under the terms of the Electric Utility Restructuring Act, on December 31, 
1997, Fitchburg Gas & Electric Light Company filed a proposed restructuring plan with 
the DTE, to which the DTE granted interim approval in February 1998. Following four 
days of evidentiary hearings, the Division filed briefs in May 1998 in which it urged the 
DTE to modify the Company's proposal to, among other things, include lower distribu- 
tion rates, require that the accounting for the Company's earlier Seabrook loss be brought 
in compliance with a 1985 settlement, and reduce the amount of the balance claimed by 
the Company for deferred income tax liabilities related to its electric generating invest- 
ments. In a decision issued on January 15, 1999, the DTE rejected the proposal for lower 
distribution rates but generally agreed with the Division's position on the interpretation of 



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the 1985 agreement on the Company's Seabrook, loss as well as on the treatment to be 
given to revenue shortfalls resulting from discount power contracts and the design of the 
low income rates required under the Electric Restructuring Act. The DTE deferred final 
resolution of the Seabrook and deferred income tax issues until the results of an indepen- 
dent audit. 

Generation Asset Divestiture 

Boston Edison Company /Commonwealth Electric Company, D.T.E. 98-118/119/126 

In December 1998, Boston Edison filed a petition with the DTE seeking approval of an 
agreement to sell its Pilgrim nuclear power plant to a wholly owned subsidiary of Entergy 
Corporation and, pursuant to G.L. c. 164, § IH, to "securitize" (refmance with bonds 
supported by a pledge of transition charge revenues) approximately $730 million of its 
remaining stranded costs. Commonwealth Electric Company, a contract purchaser of 1 1 
percent of the output from Pilgrim, had entered into an agreement to terminate its life-of- 
unit agreement with Boston Edison and a substitute agreement with the Entergy subsid- 
iary. ComElectric also filed a petition with the DTE seeking approval of its agreements. 
The DTE consolidated its consideration of the ComElectric petition with the two related 
Boston Edison proceedings. The Division participated in six days of evidentiary hear- 
ings and filed Initial and Reply Briefs in March 1 999 arguing that the limited financial 
resources of the single purpose Entergy subsidiary impaired substantially the claimed 
value to Edison's customers of the transfer to that subsidiary of the Pilgrim decommis- 
sioning liability. In addition, the Division argued that the Company's earlier settlement 
agreement precluded Edison's proposal to shift onto its retail customers Pilgrim related 
stranded costs recovered previously under wholesale service contracts with municipal 
customers. On March 22, 1 999, the Department approved the sale of Pilgrim and the 
related ComElectric proposals without modification. On April 2, 1999, the DTE ap- 
proved the Company's securitization proposal. 

Eastern Edison Company/Montaup Electric Company, D.T.E. 99-9 

On January 7, 1999, Eastern Edison and its wholesale affiliate, Montaup Electric Com- 
pany, filed a petition with the Department requesting approval of the sale by Montaup of 
its minority interest (2.89989 percent) in Seabrook to Little Bay Power Corporation, a yet 
to be formed affiliated of Great Bay Power Corporation ("Great Bay"), a single purpose 
corporation formed in the 1980s to take title to another minority interest in the Seabrook 
plant divested as a part of the bankruptcy plan of EUA Power Corp., a former affiliate of 



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Eastern and Montaup. Following evidentiary hearings, the Division filed briefs in April 
and June urging the DTE to reject the sale. The Division argued that Montaup had not 
maximized the benefits to consumers because the requirement that Little Bay assume 
Montaup's liability for decommissioning Seabrook reduced the sales price while the 
purported transfer of liability had little value in light of the fact that Little Bay lacked the 
financial strength to withstand any adverse developments at the plant. The Division 
argued that a premature shutdown of the plant would be likely to lead to a decommission- 
ing default by Little Bay and such a development would result in harm to Massachusetts 
consumers, potentially even the customers of Eastern, who could possibly be required to 
make up any resulting shortfall. A decision was pending at the end of the fiscal year. 

Eastern Edison Company/Montaup Electric Company, D.T.E. 99-105 

On November 21, 1997, Eastern Edison Company ("Eastern") and its wholesale affiliate, 
Montaup Electric Company ("Montaup"), (collectively the "Companies"), filed a petition 
seeking DTE approval of the sale of the Montaup's Somerset station and Montaup's 1.96 
percent minority interest in Wyman Station. Following two days of evidentiary hearings, 
the Division entered into a stipulation with Montaup reserving all rate issues for a 
Montaup proceeding before the Federal Energy Regulatory Commission and, subject to 
the terms of that agreement, the DTE approved the sales in a decision issued on April 27, 
1999. 

Commonwealth Electric Company, Cambridge Electric Light Company, Canal 
Electric Company/Eastern Edison Company, Montaup Electric Company, DTE 98- 

78/83 

On July 31, 1998, the electric subsidiaries of the Commonwealth Energy System — 
Commonwealth Electric Company ("ComElectric"), Cambridge Electric Light 
("CELCo"), and Canal Electric Company ("Canal") — filed a joint petition with the DTE 
seeking approval of the sale of substantially all of their non-nuclear generating facilities 
to Southern Energy New England, the allocation of the proceeds between the two retail 
subsidiaries — CELCo and ComElectric — and the terms under which those proceeds 
would be returned to those companies' retail customers. On August 7, Eastern Edison 
Company and its wholesale affiliate, Montaup Electric Company, filed a petition with the 
DTE seeking approval of the sale to Southern Energy of Montaup's minority interest in 
one of the ComEnergy generating units. The two proceedings were consolidated. Fol- 
lowing three days of evidentiary hearings, the Division filed Initial and Reply Briefs in 
which it urged the Department to approve the sale as well as the proposed allocation of 



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proceeds between ComElectric and CELCo, but to reject the Companies' proposal to pay 
carrying costs on the balance of proceeds to be returned to customers at a significantly 
lower rate than the carrying costs paid by customers on the unamortized balance of the 
Companies' transition costs. Harvard University and Massachusetts Institute of Tech- 
nology filed briefs arguing that the Companies should be required to allocate a greater 
portion of the proceeds to CELCo. In an order issued on October 30, 1998, the DTE 
approved the sale but deferred ruling on the allocation and carrying cost issues pending 
the development of further information at supplemental hearings. Following a day of 
supplemental evidentiary hearings, the Division filed a supplemental brief and on Decem- 
ber 23, the DTE issued an order in which it adopted an allocation of the proceeds consis- 
tent with the position taken by the Division but allowing the Companies' carrying cost 
proposal, subject to a later review of the Companies' efforts to maximize the benefits to 
their customers from the proceeds. 

Eastern Edison Company, D.T.E. 99-21 

On February 16, 1999, Eastern Edison filed a petition with the Department seeking 
approval, pursuant to G.L. 164 § 17 A, to guaranty payment of the obligations of its 
wholesale affiliate, Montaup Electric Company, under an agreement whereby Montaup 
transferred to Constellation Power Source, Inc. ("Constellation") its rights to power under 
various power purchase agreements and its entitlement to power from Hydro Quebec in 
exchange for Constellation's agreement to supply power to serve Eastern's standard offer. 
Following an evidentiary hearing, the Division notified the Department that it would not 
oppose approval of the petition. A DTE decision had not been issued at the end of the 
fiscal year. 

Fitchburg Gas & Electric Light Company, D.T.E. 98-121 

On November 20, 1998, Fitchburg Gas & Electric Light Company filed a petition seeking 
DTE approval of a proposed sale of its minority interest in United lUuminafing 
Company's New Haven Harbor generating station. Following discovery, the Division 
nofified the DTE that it would not challenge the proposed sale but would participate in 
the later proceeding in which the Department would consider the appropriate rate treat- 
ment to be given the proceeds from the sale. 

Western Massachusetts Electric Company, D.T.E. 99-29 

On May 4, 1999, Western Massachusetts Electric Company filed a petition seeking DTE 
approval of an agreement to sell its fossil generating facilities to Consolidated Edison 



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Energy, Inc. and of a proposal to allow the Company to retain a portion of the proceeds. 
Following a favorable ruling by the hearing officer limiting the scope of the proceeding 
to the question of whether the terms of the sale satisfied the requirements of the Electric 
Restructuring Act, the Division notified the DTE that it did not oppose the sale. A DTE 
decision had not been issued by the close of the fiscal year. 

Miscellaneous Electric Restructuring Proceeding s 

Boston Edison Company, D.T.E. 98-111. 

On November 4, 1998, Boston Edison filed with the DTE proposed new rates and 
charges designed to provide the first annual reconciliation of it transition charge and to 
increase the price of its standard offer. In comments filed in December, the Division 
argued that the filing represented a "general increase in rates" and that the Department 
should hold a hearing on the propriety of the Company's proposal. In a decision issued 
on December 31, 1998, the DTE allowed the Company's proposal to go into effect but 
agreed that hearings were appropriate. Hearings were held in early March and in briefs 
filed in April, the Division urged the Department to reject the Company's proposal 
regarding the pension expenses related to its former generation employees, the treatment 
of revenues from sales of power from its former fossil plants, and the computations 
required under provisions of an earlier settlement agreement creating performance incen- 
tives governing the Company's recovery of Pilgrim related costs. A DTE decision had 
not been issued by the close of the fiscal year. 

Boston Edison Company, D.T. E. 97-95 

In October 1997, the DTE opened an investigation to determine whether Boston Edison 
had complied with the terms of a 1993 DTE order which approved up to $45 million of 
investments into an unregulated subsidiary for the express purpose of pursuing invest- 
ments in three specified areas: demand side management, electric motor vehicles, and 
power generation. The focus of the investigation was the Company's involvement in a 
telecommunications/cable TV joint venture with RCN Corporation which involved cash 
investments, transfers of assets, and guarantees of indebtedness. During 27 days of 
hearings, ending in March 1999, Boston Edison and Cablevision of Boston presented 13 
witnesses. Although it acknowledged the pro-competition impact on the market for cable 
TV and telecommunications services that resulted from the Company's investment, in 
briefs filed in May and June, the Division argued that Company had failed to comply 
with the 1 993 order. In particular, the Division argued that the Company had made 



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investments beyond the $45 million authorization and that the joint venture was outside 
the scope of the activities in which the DTE approved investments in its 1993 decision. 
The Division urged the DTE to require the Company to divest its interest in the joint 
venture and to credit its electric customers with any gain. A DTE decision had not been 
issued at the close of the fiscal year. 

Fitchburg Gas & Electric Light Company, D.T.E. 98-120 

On October 30, 1998, Fitchburg Gas & Electric Light Company filed a petition with the 
DTE seeking approval of a contract with Constellation Power Sources, Inc. ("Constella- 
tion") to supply the Company's entire standard offer service load between January 1, 
1999 and February 28, 2005 and a motion seeking a protective order against disclosure of 
the terms and pricing of the contract. The Division opposed the Company's motion for a 
protective order. In its January 15, 1999, decision on the Company's restructuring plan, 
the DTE approved the contract and denied that portion of the Company's motion that 
sought protection against disclosure of the pricing terms of the contract but allowed that 
portion concerning non-pricing terms. 

Fuel Clause Balances, D.T.E. 98-13 

On January 22, 1 998, the DTE issued a notice of inquiry soliciting comments regarding 
the treatment of any outstanding fuel and purchased power costs balances owed by or to 
utilities at the March 1 , 1 998 openings of the retail power market to competition and the 
termination of fuel clause recovery of such costs. In comments, the Division urged the 
DTE to consider limiting the scope of the inquiry to the identification of appropriate 
mechanisms to address any balances found owed or owing in individual company spe- 
cific filings and the of the number of outstanding performance issues for each company. 
As of the close of the fiscal year, the DTE had not yet issued a decision delineating the 
scope of the proceeding. 

GAS MATTERS 

Base Rate Cases 

Fitchburg Gas & Electric Light Company (DTE 98-51) In May 1998, Fitchburg Gas 
& Electric Light Company filed a request to increase its gas rates by $1.55 million (9%). 
Following 13 days of evidentiary hearings, the Division filed briefs in October 1998, in 
which it urged the DTE to reject the Company's proposals to: increase substantially the 



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rate at which it depreciates its assets and implement rate redesigns that would result in 
substantial increases for some customers. In addition, the Division argued that the DTE 
should find that the Company's had violated the provisions of the DTE's cost of gas 
adjustment (CGA) regulations concerning the collection of gas inventory financing costs 
and require the Company to return the monies wrongfully collected to its customers. In a 
decision issued on November 30, 1998, the DTE allowed the Company to increase its 
deprecation rates, with the result that it approved a $91 1,883 increase in the Company's 
rates. The DTE did accept the Division's position on the requirements of the DTE's 
CGA regulations, but deferred ruling on any remedy pending ftirther review in a subse- 
quent proceeding to be initiated. In a subsequent decision on a motion by the Company 
for recalculation, the DTE increased the amount of the approved rate increase by $86,278. 
On March 15, the Company filed a petition seeking an exception fi-om the provisions of 
the Department's CGA regulations. Hearings in this matter, D.T.E. 99-32, were sched- 
uled to begin after the end of the fiscal year. 

Gas Unbundling/Restructuring 

Unbundling of Natural Gas Distribution Services, D.T.E. 98-32-B. During the 
fiscal year, important developments occurred in connection with ongoing effort to re- 
structure the existing natural gas industry to allow all customers to choose among com- 
peting suppliers of gas to be delivered by the local distribution company. This undertak- 
ing began in 1997 when the Department of Public Utilities, the predecessor of the DTE, 
directed the 10 local gas distribution companies to initiate an informal process to build a 
consensus among various interested parties on principles upon which to restructure the 
existing industry. The Division has participated in this process, representing the interests 
of residential and small business customers in numerous meetings and technical confer- 
ences, urging, among other things, the principle that any restructuring or unbundling 
should not result in an unfair shift of costs from large to small customers. Most of this 
effort has been taken as a member of the so-called "Customer Group" (an informal 
coalition including the Division of Energy Resources as well as representatives of busi- 
ness customers). As a result of the inability of the interested parties to reach an agree- 
ment on the allocation of responsibility for the cost of the gas companies' existing gas 
supply capacity commitments, in April 1 998, the DTE opened a notice of inquiry to 
examine the question of how to dispose of that capacity' as well as the question of alloca- 
tion of responsibility for those costs. In May and June 1998, the Customer Group had 
filed two rounds of comments and given testimony in support of a requirement that 



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existing customers of gas companies be assigned their pro-rata share of supply capacity if 
they elect to purchase gas from a third party. On February 1, 1999, the DTE issued its 
decision in which it adopted the "mandatory assignment" position advocated by the 
Customer Group and set October 1, 1999 as the date upon which all of the gas companies 
would be required to provided to all of their customers the option to purchase gas from 
competitive suppliers. 

To assure continuation of a market for gas supplies for those customers that already had 
competitive alternatives, the Division entered into a settlement agreement with interested 
parties that: (1) exempted customers who had migrated to transportation service before 
February 1 , 1 999 from the mandatory assignment of capacity and (2) provided that those 
customers who entered into supply contracts between February 1 and November 1 , 1 999 
(including a significant niunber of residential customers) would pay $0.01/ therm or CCF 
in lieu of a mandatory assignment of capacity through November 1, 2000, after which 
they will be assigned their respective slices system capacity, with the funds collected 
being applied to reduce the gas supply costs of residential customers. On April 2, 1999, 
the DTE approved the settlement. At the close of the fiscal year, the gas utilities had not 
completed all of the tasks necessary to implement restructuring. 



TELEPHONE MATTERS 

Area Codes 

Area Code Conservation in Eastern Massachusetts DTE 98-38. 

Shortly before the May 1, 1998, completion of the implementation of the two new area 
codes created as a result of a January 23, 1997 DTE order (781 and 978), the national 
administrator of North American Number Plan armoimced an imminent shortage of 
number resources in the 508 and 617 area codes (March 4, 1998) and as well as in the 
new 781 and 978 area codes (May 12, 1998). On April 24, 1998, the DTE opened an 
investigation to evaluate means to delay the need for new area codes. The Division 
intervened in this proceeding and on June 1, 1998, filed a motion seeking an emergency 
order from the DTE requiring all telephone companies to conserve numbers through the 
implementation of "virtual nimiber pooling," an approach to number resource conserva- 
tion that increases the efficiency with which nimiber resources are used. Shortly after the 
beginning of the fiscal year, the industry adopted a voluntary number pooling plan that 



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provided much of the number resource conservation sought in the Division's earlier 
motion. On March 19, 1999, the Division filed with the Department a report addressing 
rate center consolidation, another number conservation mechanism that would reduce the 
new number resources needed by new entrants in the market. Hearings on the rate center 
consolidation proposal were scheduled to occur after the close of the fiscal year. 

Area Code Relief in Eastern Massachusetts, DTE 98-1 1. 

On January 11, 1999, the DTE opened an investigation to consider alternative means to 
add new area codes in eastern Massachusetts: further division of the geographic areas 
covered by the existing area codes, or the implementation of multiple area codes within 
geographic areas covered presently by a single existing area code. Following public 
hearings, the Division made a request, which was rejected by the DTE, for evidentiary 
hearings on issues raised during the course of evening public hearings held throughout 
the state. A DTE decision had not been issued at the close of the fiscal year. 

DTE Petition For FCC Waivers, NSD File No. L-99-17, 19. 

In April 1 999, the Division filed written comments with the Federal Communications 
Commission supporting February 1 999 requests by the DTE for authority to implement a 
technology-specific overlay (i.e., a separate area code for mobile phones) and/or other 
various area code conservation measures in the 508, 617, 781, and 978 area codes. An 
FCC decision had not been issued at the close of the fiscal year. 

MISCELLANEOUS 

Telesave, Inc. DTE 98-59. 

On June 15, 1998, Telesave, Inc. filed a complaint with the DTE alleging that Bell Atlantic 
engaged in unjust and unreasonable practices by refusing to accept e-mail from its customers 
as a valid means to communicate their intention to change long distance service providers. 
The Division intervened in this proceeding on behalf of Bell Atlantic's customers. Following 
hearings in November 1 998, the Division filed briefs arguing that subject to appropriate 
safeguards to ensure secure communications between the Company and its customers. Bell 
Atlantic should be required to accept e-mail as a valid means for customers to communicate 
their long distance carrier selection decisions. In a decision issued on May 21, the DTE 
required Bell Atlantic to accept electronic communications from its customers, but through a 
secure web site rather than e-mail. On June 1 1 , Bell Adantic filed a motion seeking reconsid- 
eration of the DTE and that motion was pending at the close of the fiscal year. 



280 



OPINIONS 



No. 98/99-1 



OPINIONS 




SCOTT HARSHBARGER 
ATTORNEY GENERAL 



1& Commonweatth oj ^Massachusetts 

office of the Slttomey Qemrai 

One ^fiSurton (Pface 

(Boston, M^ 02108-1698 

No. 98/99-1 
September 4, 1998 



Honorable William F. Galvin 
Secretary of the Commonwealth 
One Ashburton Place 
Boston, MA 02108 

Dear Secretary Galvin: 

You recently transmitted to me a series of proposed ballot questions and requested my 
opinion whether those questions are ones of "public policy" within the meaning of G.L. c. 53, 
§ 19, and, if so, what simple, unequivocal and adequate form is best suited for presentation of 
I these questions on the November, 1998, ballot. I have reviewed the proposed questions and have 
concluded that, wdth two exceptions, each is a public policy question that 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 exten- 
sively reviewed here. See, e^, 1990-91 Op. Att> 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 desir- 
able 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 two exceptions, each of the questions proposed here meets these standards. 



281 



OPINIONS 



The first question I must disapprove asks: 

Do you approve of the construction of a new high school at Legion Field, East 
Weymouth? 

Viewed generally, this question appears to concern the construction of public educational 
facilities, a subject that may be viewed as of state-wide concern. The question is not necessarily 
deficient, therefore, because it concerns only a single town. On its face, however, the question 
does not contain an instruction to a State Senator or Representative on a matter that is appropri- 
ate for legislative action; rather, it contemplates only action at the local level—a decision by the 
town of Weymouth regarding the siting of a new high school. See 1968-69 Op. Att'y Gen. No. 
5, Rep. A.G. , Pub. Doc. No 12 at 38 (1968) (Attorney General may draw reasonable inferences 
from the form of the statement of the question in the petition). This view is confirmed by infor- 
mation, including news accounts, indicating that the decision regarding the siting of the new 
school will be determined at a special town meeting in Weymouth. See id. (in reviewing public 
policy questions, Attorney General may rely on such facts of common knowledge, actual or 
presumed, in the voting district concerned as may be reasonable). The question, therefore, 
clearly violates the requirement that public policy questions pursuant to G.L. c. 53, § 19, instruct 
state legislators on matters fit for legislative action. See 1990-91 Op. Att'y Gen. No.l at 81 
(rejecting proposed question asking whether town should institute a traffic safety operation on 
ground that it sought action from town officials rather than the state legislature). 

The second proposed ballot question I must disapprove states: 

We call for the removal of the chain link fence fi-om the A. Piatt Andrew Bridge. We 
believe this project should not have gone forward without public input and approval. 
Though the motivation for the fence was well intentioned, the fence is ineffective and is 
aesthetically unacceptable. 

On its face, this proposal (which, I am informed, concerns a bridge in Gloucester) does 
not take the form of an instruction to a State Senator or Representative. Voters considering this 
question, therefore, would not be informed that they are instructing their legislator, as G.L. c. 53, 
§ 19, contemplates.' Moreover, the proposal fails to include a sufficient description of a law for 



' An informational booklet prepared by the Secretary of the Commonwealth on State Ballot 
Question Petitions recommends that public policy questions take the following form: "Shall the (senator 
or representative) from this district be instructed to vote in favor of legislation (describe the legislation 
you wish to be enacted)?" 



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which a legislator should vote; rather, it comments on the perceived inadequacies of the fence 
and on the circumstances regarding its origination.^ Public policy questions properly "involve 
determinations of what governmental action is desirable or necessary for the public interest, as 
. contrasted to statements of fact," 1988-89, Op. Att'y Gen. No. 1 at 103. 

In addition, one other ballot question merits discussion. That question asks: 

Shall the state representative from this district be instructed to vote in favor of legislation 

requiring that the nuclear reactor presently operating in Cambridge on Albany Street near Mass. 

Ave. and MIT, be removed forthwith out of Cambridge to a safer and less densely populated 

area? 

The question arises whether this legislation, if enacted, would be preempted by the 
federal Atomic Energy Act of 1954. See, e^, English v. General Elec. Co. . 496 U.S. 72, 80-82 
(1990) (issues regarding radiological safety of nuclear plants are preempted by federal govern- 
ment), and, consequently, whether the subject matter of the question would be fit for state legis- 
lative action. 

Prior opinions of Attorneys General have established not only that traditionally a broad 
view has been taken of what constitutes an appropriate question of public policy under G.L. 
c. 53, §§ 19-21, see 1988-89 Op. Att'y Gen. No. 1 at 102, but also that "in ascertaining whether a 
question is one of 'public policy,'" the Attorney General's review "does not and cannot extend to 
a consideration of the constitutionality of any legislation that might eventually be enacted as a 
result of the voters' instruction." 1986-87 Op. Att'y Gen. No. 2, Rep. A.G. . Pub. Doc. No. 12 at 
55 (1986). For the same reasons, my review does not and cannot extend to a consideration of the 
possibility that legislation enacted as a result of a public policy instruction might be preempted 
by federal law: the exact form of the action that might be taken by the Legislature based on the 
result of the voters' instruction cannot now be foreseen; and, like questions of constitutionality. 



^ Thus, it is unclear, for example, whether the law should provide for the removal of the fence, for 
the removal of the fence until the public has had its opportunity for review, for the removal of the fence 
and its replacement by a fence that is more effective or aesthetically acceptable, or some other variation. 
For the Attorney General and the Secretary of State to alter materially the substance of a question when 
drafting it would be contrary to G.L. c. 53, § 19, and could interfere with proponents' right to put an 
instruction before the Legislature. Moreover, revisions that materially change a proposed question would 
raise serious doubt whether the signature requirements of § 19 have been satisfied, because the question 
is no longer substantially the same as what was originally presented by petition to the voters. The 
authority of the Attorney General and Secretary of State to draft an approved question in "such simple, 
unequivocal and adequate form as shall be deemed best suited for presentation upon the ballot," G.L. c. 
53, § 19, does not encompass the kind of substantive revisions that this proposed question would require. 
See 1988-89 Op. Att'y Gen. No. 1 at 105, n.7. 



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questions of federal preemption that might result from one form of action might not be presented 
if that action took another form. See 1994-95 Op. Att'y Gen.No. 2, Rep. A.G. , Pub. Doc. No. 12 
at 199-200 (1994).^ 

In conclusion, each of the proposed questions may appear on the ballot, in the district(s) 
indicated, in the following form, which had been developed in consultation with your staff: 

First Berkshire, Second Berkshire, 
Third Berkshire and Fourth Berkshire Representative Districts 

Shall the state representative from this district be instructed to vote in favor of legislation 
that would change the Berkshire County Commission, enabling it to become a stronger, more 
effective, and more locally controlled agency with a mission to develop and implement regional 
policies regarding economic development, transportation, environmental protection, land use, 
water, sewage, education and other county services? 

Third Berkshire Representative District 

Shall the state representative from this district be instructed to vote in favor of legislation 
prohibiting state action in support of the Environmental Protection Agency's designation of the 
General Electric plant, the Housatonic River, and off-site PCB landfill areas 
as a Superfund site? 

Berkshire, Franklin, Hampden & Hampshire Senatorial District 

Shall the state senator from this district be instructed to vote against the elimination of 
county government, which elimination would allow the state to take over the county courthouses, 
the Berkshire County House of Correction, and the county's Registries of Deeds? 



' A prior Opinion of the Attorney General did disapprove one public policy question, and sug- 
gested the possibility of disapproval of another, on constitutional grounds. See 1984-85 Op. Att'y Gen. 
No. 2, Rep. AG., Pub. Doc. No. 12 at 76 (1984). However, I believe that more recent opinions declining 
to engage in such analysis are more persuasive for the reasons set forth in this opinion. Moreover, public 
policy questions regarding the subject of nuclear power have been approved in prior Opinions of the 
Attorney General. See, e,g^ 1980-81 Op. Att'y Gen. No. 6, Rep. A.G., Pub. Doc. No. 12 at 1 10-1 1 
(1980). 



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OPINIONS 



Ninth Essex and Twenty-third Middlesex Representative Districts 

Shall the state representative from this district be instructed to vote in favor of legislation 
illowing capital punishment for persons convicted of first degree murder? 

Second Norfolk and Tenth Suffolk Representative Districts 

Shall the state representative from this district be instructed to vote in favor of legislation 
lo create a health care system for all the residents of Massachusetts that provides universal 
coverage for comprehensive health care services that includes the freedom to choose doctors and 
other health care professionals, facilities and services; eliminates the role of insurance companies 
in health care and creates an insurance trust fund that is publicly administered and fairly funded; 
and, in order to safeguard the availability of quality health care, stops the buying, selling, manag- 
ing and closing down of health care facilities by for-profit corporations? 

Twenty Eighth Middlesex Representative District 

1 . Shall the state representative from this district be instructed to vote in favor of legisla- 
tion requiring that the nuclear reactor presently operating in Cambridge on Albany Street near 
Massachusetts. Ave. and the Massachusetts Institute of Technology be removed immediately out 
of Cambridge to a safer and less densely populated area? 

2. Shall the state representative from this district be instructed to vote in favor of legisla- 
tion stimulating increased production and availability of affordable housing for middle 

class and low income residents of Massachusetts, including rental and home ownership? 

3. Shall the state representative from this district be instructed to vote in favor of legisla- 
tion providing for universal, affordable, comprehensive health insurance for all residents of 
Massachusetts, and providing for a health care bill of rights for all residents of Massachusetts? 



285 



OPINIONS 



In accordance with the practice of prior Attorneys General, I have not made any indepen- 
dent inquiry whether the above questions meet the additional requirements for public policy 
questions set forth in G.L. c. 53, §§ 19-21 (1996 ed.). These requirements involve factual deter- 
minations which are more appropriately made by you as Secretary of the Commonwealth. I 
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 



286 




Office of Attorney General 
Tom Reilly 



One Ashburton Place 



Boston, MA 02108