PAIR PLEAD GUILTY
TO PARTICIPATING IN $20 MILLION STRAW LOAN SCHEME

Boston, MA... A Melrose man and a Pennsylvania man pleaded guilty Friday, June 23, 2006, in federal court in connection with their roles in a scheme involving more than $20 million in fraudulent commercial loans for the purchase of construction equipment. The men were among seven defendants originally indicted; the other five men have also pleaded guilty.

United States Attorney Michael J. Sullivan and Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced that WILLIAM HOWE, age 65, of 53 Garfield Road, Melrose, Massachusetts, and MICHAEL R. O’NEILL, age 50, of 807 Cobblestone Court, West Chester, Pennsylvania, pleaded guilty before Chief U.S. District Judge Mark L. Wolf. Specifically, HOWE pleaded guilty to conspiracy, 4 counts of wire fraud and 3 counts of mail fraud; and O’NEILL pleaded guilty to conspiracy, 2 counts of wire fraud and 1 count of mail fraud.

At the plea hearing, the prosecutor told the Court that, if the case proceeded to trial, the government’s evidence would have proven that HOWE and O’NEILL participated in a scheme to obtain approximately $20 million in fraudulent commercial loans. According to statements made in this and earlier hearings, co-defendant Peter Maggio operated companies in Medford, Massachusetts under the names Earth Site & Utility Corporation and Earth Management & Equipment Co., Inc. from January 1998 to May 2000, Maggio and others fraudulently obtained commercial loans to purchase heavy duty equipment for Maggio’s companies. The evidence would have shown that co-defendant Jeffrey A. Deveau, who operated a construction equipment dealership in Syracuse, New York, assisted Maggio in obtaining the fraudulent loans and shared the proceeds with Maggio.

To carry out the scheme, Maggio solicited and paid co-defendants Matt Havey, Louis Paradiso and Sean Sacco to act as "straw" borrowers and sign fraudulent loan documents in their names. Further evidence would have shown that Maggio paid HOWE, an accountant, to produce fictitious financial statements and tax returns for submission to the lenders. Additional evidence would show that O’NEILL, the District Supervisor for a commercial lender named The CIT Group, took kickbacks to help Maggio, Deveau and the “straw” borrowers get their fraudulent loans approved and funded by CIT. Maggio also obtained fraudulent duplicate titles to illegally sell the vehicles which were obtained with the fraudulent the loans.

Chief Judge Wolf scheduled sentencing of HOWE, O’NEILL, Maggio, Havey, Paradiso and Sacco for September 20, 2006. On each count, HOWE and O’NEILL face up to 5 years in prison, to be followed by 3 years of supervised release, and a fine of $250,000.

Co-defendant Jeffrey A. Deveau, age 43, of 8072 Indian Hill Road, Manlius, New York, previously pleaded guilty and was sentenced in Syracuse, New York, to 1 year and a day in prison, to be followed by 3 years supervised release. He was also ordered to pay restitution in the amount of $15,655,000.

The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Victor A. Wild in Sullivan’s Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139

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