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Welcome (back) to my live coverage of day four of witness testimony in the trial for former Fall River Major Jasiel Correia; the then-23 year old Mayoral prodigy who quickly fell from grace following his arrest on extortion charges -- related to the issuing of cannabis licenses in the city -- by Federal authorities in September of 2019.
The trial is taking place in Boston at the Federal Courthouse under the supervision of U.S. District Court Judge Douglas P. Woodlock and is expected to last 3 weeks from this point in time (with jury selection having taken place last week over 4 days).
Correia faces a total of 24 counts during the trial, including tax fraud related to his company called SnoOwl, along with extortion and bribery charges related to local cannabis companies.
According to a press release from Federal officials at the time, Correia was "arrested and charged for allegedly extorting marijuana vendors for hundreds of thousands of dollars in bribes; extorting a building owner for cash and a Rolex watch in exchange for activating the water supply to a commercial building; and demanding that his chief of staff give him half of her salary in return for appointing her and allowing her to keep her city job".
Find rolling updates below;
12:50PM: "Enjoy the weekend, its supposed to be a nice one", and with that Judge Woodlock excuses the Jurors and Attorneys. That wraps things up for today, and I look forward to seeing you all again on Monday for what should be the first of a string of very interesting days of testimony related to cannabis permitting in Fall River.
12:45PM: Judge Woodlock now telling Jurors we will break for the weekend and that it is likely the case will now be completed in 3 weeks, instead of the originally scheduled 4 weeks. Next week, Judge Woodlock says, we will move on to the "conduct of the Fall River Government".
That is a reference to the multiple charges in the indictment related to Corriea attempting to extort cannabis companies in Fall River seeking to obtain a "letter of non-opposition". Those letters are needed before a cannabis company can seek a "Host Community Agreement".
The allegations are that Correia, and his staff, extorted cash payments (and, in one case, payment in cannabis) from local cannabis companies before he would sign off on those letters of non-opposition. That local permitting process, on a related noted, is terribly broken.
As I mentioned just yesterday, former Cannabis Control Commissioner Shaleen Title has said that the Agency's 2017 decision not to review local Host Community Agreements has facilitated not only situations like that which allegedly occurred in Fall River, but also other examples.
Municipal rent seeking, Title has explained on multiple occasions, creates a fundamental barrier to entry for smaller companies (in particular participants in the state's social equity and economic empowerment program) who do not have the funds to pay bribes or large fees.
In that context, while roughly 200-300 per people have been watching the hearing this week, I expect that number to easily increase to 1000 or more when that cannabis testimony begins next week.
12:23PM: Reddington, on cross-examination, asking Lemasnki what would have Correia needed to do in order to classify the Mercedes-Benz as a business expense. Lemanski explains there is a car log that is required by the IRS, indicating how the vehicle is used.
While I get Reddington's point here, I do not think the jury is going to think about what the Mercedes was used for. I think, instead, the jury is going to think about how investor funds were used to purchase a personal luxury car for more than $10,000.
11:53AM: Lemanski testifies that, just days after telling the student loan officer that he was unable to pay on his loans, Correia went on to put down over $1,400 as a deposit for a future hotel stay at Chatham Bars Inn (a highly expensive hotel located on Cape Cod).
11:50AM: Lemanski now testifying that, despite using money from SnoOwl for personal purposes throughout the year 2014, Correia told his student loan repayment officer that he had no income other than his salary from working as a City Councilor.
11:19AM: "Did you calculate the total amount of funds raised from investors for SnoOwl that were used by Correia for personal purposes?" asks the US Attorney.
"64% of investor funds raised for SnoOwl were used for personal purposes", replies Lemanski.
With that, a short 15 minute break.
11:12AM: Lemanski testifying that $10,000 from the SnoOwl bank account was transferred to Correia's personal account and then withdrawn for the purchase of a Mercedes-Benz.
Correia, on his tax return, attempted to classify that expense as a "software development cost" corporate expense.
11:02AM: "What was the total amount of investor funds that Mr. Correia collected related to SnoOwl?"
"358,190 dollars" says Lemanski.
"What was the total amount that the defendant (Mr. Correia) spent paying down his student loans from the SnoOwl Citizen's Bank account?"
"$7,940.27", says Lemanski.
"What was the total amount spent on personal hotel stays from the SnoOwl account?"
"What was the total amount spent on personal meals from the SnoOwl account?"
"What was the total amount spent on personal credit cards/debts (including the student loans mentioned above) from the SnoOwl account?"
10:58AM: Lemanski now testifying that a long list of personal expenses (designer hand bags, campaign signs for Correia's original City Council run, student loan payments, the purchase of a Mercedes-Benz, etc) were paid for by Corriea from a SnoOwl corporate account at Citizens Bank.
Lemanski then testifies how she went through Correia's personal income tax returns and identified those expenses which she was unable to verify as legitimate business expenses.
10:47AM: Lemanski now testifying that a Kate Spade bag, purchased as a personal gift using SnoOwl's corporate funds, was allegedly declared as a business expense tax write off on Correia's income tax return.
10:36AM: Rubin is now asking Lemasnki about another company run by Correia, SnoKino, that was brought up in earlier testimony by a local jeweler (Arias) who paid $4,500 to SnoKino for the purposes of building a website.
The website for the jeweler was never built, but the money was received by SnoKino. Correia, testifies Special Agent Lemanski, did not disclose that income on his personal tax return that year.
"Is the failure to include income in a given year on a tax return something the IRS deems material?"
10:26AM: US Attorney Rubin asking Lemanski about who at SnoOwl testified to the Grand Jury as the Custodian of Records.
Lemanski says only Correia (not Staff Sheehan or David Bernier) was the Custodian of Records for SnoOwl.
10:19AM: Up next on the stand is IRS Special Agent Sandy Lemanski, who has been with the agency for over 30 years.
10:18AM: After detailing a few more years of Correia's tax records, Vieira is asked to step down.
9:51AM: The first witness to testify for the Government today is Stacia Vieira. Vieira is a tax preparer who was employed at Liberty Tax Preparers in Fall River.
Vieira is currently testifying about the tax returns she filed for Correia at one point in time.