United States Attorney Announces Over $880,000 Recovery for Victims of Real Estate Fraud Scheme | USAO-MA
BOSTON — The United States Attorney’s Office announced today that $884,755 recovered from the forfeited estate of Scott J. Wolas will be distributed to his victims. The United States Attorney’s Office specifically requested permission to use the forfeited assets directly for victim restitution granted by the Department of Justice.
Wolas, who was on the run for more than 20 years before his April 2017 arrest, was convicted in 2018 of seven counts of wire fraud, one count of aggravated identity theft, one count of misusing a Social Security number and one count of tax evasion related to a fraud scheme for $1.9 million real estate investment in Quincy.
“My office will diligently work towards the financial recovery of our crime victims – even years after someone has been convicted and convicted, we will continue our prosecution,” said United States Attorney Rachael S. Rollins. “These ill-gotten gains have finally been reclaimed and our efforts are sending an important message that crime doesn’t pay.”
In January 2019, Wolas was sentenced by Chief Justice of the United States District Court F. Dennis Saylor IV to 81 months in prison, three years supervised release, and to pay $1,949,813 in compensation to victims of his fraud scheme. Chief Justice Saylor also ordered Wolas to pay $69,768 to Social Security and Medicare and $318,266 to the IRS, and entered a forfeiture order of $1,949,813.
From at least 2009 to 2016, Wolas operated a real estate company called Increasing Fortune Inc. under the name Eugene Grathwohl and worked as a licensed real estate agent for Century 21 in Quincy. From 2014 to 2016 he solicited investment for the development of the Beachcomber Bar property on Quincy Shore Drive and the construction of a single family home on the adjacent property. He raised more than $1.9 million from at least 24 investors, promising each of them a substantial return on his investments. He also pledged to pay out at least 125% of profits from single-family home construction. However, Wolas mainly used the money for personal expenses unrelated to the development of the real estate projects.
Law enforcement then discovered that Grathwohl was actually Wolas, a former attorney who had been on the run since 1997 after being charged with fraud and grand larceny in New York. The real Eugene Grathwohl lived in Florida and was known to Wolas.
On November 17, 2016, law enforcement officials interviewed Wolas’ ex-wife, Cecily Sturge, of Delray Beach, Florida, who stated that she had not been in contact with her ex-husband for approximately 15 years since their divorce in 2001. Further investigation found that this was false and that Wolas had been staying in a condo rented in Sturges’ name for five days prior to her interview with law enforcement. Sturge later pleaded guilty to making materially false testimony to a federal agent and was sentenced to one year’s probation in May 2018.
Prior to her conviction, Sturge filed a motion in a Florida court in February 2017 to amend the 2001 divorce decree to preserve the contents of Wolas’ retirement account. When Sturge filed the petition, Wolas’ retirement account had a balance of about $647,000 from the law firm where he worked before he was indicted by New York authorities in 1997. Sturge had previously attempted to obtain the retirement account by claiming Wolas was dead, but in 2016 Wolas proposed changing the divorce decree to gain access to the account. Law enforcement determined that Wolas had drafted the motion to amend the divorce decree in order to transfer the contents of Wolas’ retirement account to Sturge. The petition, written by Wolas and signed by Sturge, falsely stated that Sturge did not know Wolas’ whereabouts. After Wolas’ arrest, he and Sturge continued to discuss the retirement account transfer over prison calls and using barely veiled code words.
After the Florida court granted Sturges’ request but before the account was transferred to her, US Attorneys withheld the retirement account and requested that it be forfeited. Sturge resisted the forfeiture and claimed ownership of the retirement account. In February 2021, Chief Justice Saylor issued a 39-page memorandum and order finding that the transfer of the retirement account to Sturge was a fraudulent transfer and granted the government’s motion to deny her ownership claim. As a result, the retirement account was liquidated and $884,755 was transferred to the United States. The United States Attorney’s Office subsequently sought permission to apply the forfeited assets to the victim’s restitution, which was granted by the Department of Justice’s Money Laundering and Asset Recovery Division in January 2022.
US Attorney Rollins; Joseph R. Bonavolonta, Special Agent in Charge, Federal Bureau of Investigation, Boston Division; Joleen D. Simpson, special agent in charge of the Boston Internal Revenue Service criminal investigation; John Cremonini, Acting Special Representative of the Social Security Administration, Office of the Inspector General, Bureau of Investigation, Boston Field Division; and Quincy Police Chief Paul Keenan made the announcement today. Assistant US Attorney Carol E. Head, head of Rollins’ asset recovery unit, handled the forfeiture dispute.