Fraud can be stickier than honey or tar or the gluiest of glues. As a business ethics keynote speaker, business ethics consultant and author, I have seen countless individuals who were “brushed by fraud,” get dragged into courtrooms because they refused to report what they had known or seen. Such appears to be the case with the so-called DiMassa fraud scandal.
West Haven, CT
The quaint city of West Haven has been rocked by scandal; of inappropriate business dealings between politicians, contractors and bureaucrats in an atmosphere of fraud.
It began with a politician who saw an opportunity, Representative Michael DiMassa. He submitted and signed vouchers for payment on behalf of John Trasacco, who owns two contracting companies. Trasacco received nearly $432,000 from that scam, and his then girlfriend (now wife) engaged in a similar scam with Trasacco. Together they stole more than $1 million in PPP funds. And, together, they face three counts of committing wire fraud.
DiMassa has claimed his innocence.
What makes this scam interesting is Frank Cieplinski, who was the former West Haven finance director. The question is if Cieplinski was duped or if he was part of the scam. It sets up an interesting ethical discussion. For he was the one who affixed his signatures to the payment vouchers.
To make matters interesting, his payments of PPP funds on behalf of the city was not made out to the state representative or to the contractor, but to a shell company by the name of Compass Investment Group. A little research revealed that the principals of the shell company were, in fact, Trasacco and DiMassa.
On November 22, 2022, Cieplinski was brought before a judge and jury for nearly eight hours to defend his authorizing payment for services never rendered.
“Someone needed to take the fall for this,” said Cieplinski. “There were fraudulent vouchers put through that were paid, and that was the situation I was blamed for.”
Hold on a minute
Allegedly, Cieplinski was the person responsible for authorizing payment. According to business writer Brian Zahn for the New Haven Register:
“It was noted by Assistant U.S. Attorney Ray Miller that the voucher documents signed by Cieplinski say, ‘This is to certify that funds are available for this payment’ above the line for the finance director’s signature. Cieplinski said his role was to verify and confirm that the city had funds available to pay for its vouchers, and that he would take a department head’s signature to mean that they attested to the accuracy of the document.’”
Allegedly, Cieplinski “had intended to make changes to how the city does business but was ‘met with pushback.’”
Cieplinski claimed his department was admittedly understaffed, so the understaffed situation allowed a convenient alibi for why, apparently, no due-diligence was done in regard to the shell company or to the invoices themselves.
However, as a business ethics keynote speaker, business ethics consultant and author, I am left with many more questions than answers. It might also explain why he was on the witness stand for as long as he was.
Representative Michael DiMassa, who is only 32, resigned after stealing $600,000 in this PPP fraud case and his co-defendant John Trasacco claims he is innocent. However, no work was done by his contracting companies. Money is missing. Someone is lying.
The invoices were fakes and Cieplinski signed them. Even if Cieplinski took not one cent of government money, he is surely caught up in this mess. If he is taking the fall for this, he must have suspected something before falling.
He is able to offer a rationalization by saying he was understaffed and over-worked. It is a difficult rationalization. The total budget of West Haven is about $170 million. It is modestly hefty, but not so hefty as invoices of $1 million to a shell company should have gone unnoticed.
This case is an excellent primer on fraud. Fraud is sticky, and everyone associated with it, somehow gets entrapped. We don’t know what went on behind the scenes; who pressured whom, and why Cieplinski may have protested and was pushed-back, but he stayed long after a resignation might have been in order.
Whether he will see legal penalties remains to be seen however, he had choices in the moment and turned his back on making the good choices.
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