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Contractor Cheats Dozens, Gets Prison

Wednesday, February 4, 2015

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A Massachusetts contractor who failed to finish projects, used false identities, and forged documents will spend three and a half years in state prison, a judge ruled Friday (Jan. 30).

James F. McCarthy, 54, of Boxford, pleaded guilty in Salem Superior Court to 67 criminal counts of contractor fraud, larceny and related crimes, according to an announcement by the Essex District Attorney’s Office.

Over the past four years, prosecutors say McCarthy engaged in numerous fraudulent schemes, leaving a wake of victims, including his mother.

James McCarthy
Groveland Police Department

James F. McCarthy, 54, of Boxford, engaged in numerous frauds, leaving a wake of victimsincluding his mother.

In court, McCarthy expressed remorse for his behavior, The Daily News of Newburyport reported.

“I’m just sorry for my actions […] I just want to move on with my life,” he said, according to The Daily News.

Probation, No Restitution

In addition to prison, Salem Superior Court Judge Thomas Drechsler ordered McCarthy to serve six years of probation, during which he is prohibited from working as a self-employed contractor.

Prosecutors say McCarthy stole more than $100,000 from his victims, but restitution was not ordered, The Daily News related. Some of his victims have filed civil suits against the contractor.

Originally, prosecutors sought a four- to six-year term in state prison, followed by 10 years of probation.

McCarthy’s attorney, Patrick Regan, did not respond Tuesday (Feb. 3) to a request for comment.

However, he reportedly told the court that his client, a Northeastern University graduate with a difficult upbringing, did what he did to support a large family that was “essentially falling apart.”

‘Treacherous Pattern of Fraud’

Assistant District Attorney Philip Mallard argued that McCarthy’s intent to steal was demonstrated by the sheer number of victims and by his repeated pattern of conduct in forging documents, issuing false checks, and even forging his sister's signature to enrich himself. 

McCarthy was able to continue his crimes “because,” as Mallard argued, “so long as he showed up on the jobsite and started the project, the victims were told by authorities that it was a civil matter, leaving them with nowhere to turn.

“Only when this case was investigated in its full scope did the treacherous pattern of fraud emerge.” 

Police detectives from Groveland, Salem and Wenham worked with state police to piece together the case against McCarthy.

Broken Promises, Bounced Checks

The contractor was said to have entered into numerous contracting agreements with homeowners, general contractors, and commercial property owners.

While on those projects, prosecutors say, he would repeatedly:

  • Lie about his licensure and insurance status;
  • Make false promises concerning the work;
  • Fail to complete projects; and
  • Take money for supplies and materials that he would not use toward those purposes.
forged documents
© iStock.com / Gajus

According to prosecutors, McCarthy forged documents and bounced checks.

McCarthy was never licensed or insured in the building trades during the times at issue. 

In a 2012 case outlined by the news outlet, a homeowner gave McCarthy at least $10,000 to do work on his home and let the contractor use a personal credit card to buy supplies.

McCarthy used the credit card at multiple locations in various cities and “reimbursed” the homeowner by giving him a $5,000 check that bounced, the report indicated.

The Boston Globe reported that workers employed by one of McCarthy’s companies, MGM Framing, were given little or no pay; when they were paid, the checks often bounced.

McCarthy was originally charged in Haverhill District Court with a portion of the crimes for which he pleaded guilty, prosecutors said.

False Identities

While he was released on bail in the summer of 2013, McCarthy continued his fraudulent ways, the District Attorney’s office reported.

He began impersonating other contractors and created businesses in their names in New Hampshire to seek new jobs. His real name had been the subject of press coverage associated with the criminal charges.

“He became ‘Jeff Schwartz’ of Pegasus Construction for some jobs," reported The Daily News. "On others, including a subcontracting job for Plum Island contractor Bill Barrett, he became ‘Bill Mitchell,’ purportedly an employee of Pegasus. But ‘Mitchell’ also purportedly owned another company, ‘Blue Whale.’”

One of the real Bill Mitchells was actually dragged into court on larceny charges due to McCarthy’s actions, according to the news report.

Video Evidence

Part of the evidence gathered in the case included a video of McCarthy on a project in Plum Island. In it, McCarthy was operating an excavator and recklessly destroying the chimney of a neighboring property, the District Attorney reported.

TheEagleTribune / YouTube

This video reportedly "crystallized the fraud at issue in this case."

Mallard argued that the video “crystallized the fraud at issue in this case,” because, for that project, “[the] defendant was known as ‘Bill Mitchell,’ under a fake company he made in New Hampshire in that stolen identity; was not licensed to do that type of work; operate that type of machinery; had presented fraudulently obtained insurance binders; and caused the general contractor to incur the costs of repairing the destroyed chimney and roof.” 

Scheme Involving Mother, Sister

Some of McCarthy’s scams also involved relatives. For example, while he was out on bail in 2013, McCarthy’s mother, who was in bankruptcy, inherited a parcel of land in Middlesex County.

According to prosecutors, McCarthy, who held a Power of Attorney along with his sister, attempted to sell the land out from under his mother’s estate and the bankruptcy court.

To accomplish the sale, he forged the notarization and signature of his sister on sale documents and did not inform the bankruptcy court of the property, the District Attorney said.

Based on evidence gathered during the search of his house, it was believed that the closing on the property was scheduled to take place in January 2014—the same day that McCarthy was arrested and the search warrant was executed at his residence, according to prosecutors.

That transaction would have netted him $75,000, Mallard said.

   

Tagged categories: Business management; Business matters; Contractors; Criminal acts; Ethics; Fraud; Government; Laws and litigation

Comment from Gail Alario, (2/4/2015, 7:25 AM)

Good to know that bad people do get caught and have to pay for their crimes!


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