Let’s say you are a clever white-collar criminal who defrauded the government of nearly $4 million with a series of fake COVID-19 loan applications. But judgment day is at hand.
In asking a federal judge for leniency, should you:
1. Be contrite, say you’ve learned your lesson, and promise you won’t do it again.
2. File a bunch of bogus character letters saying what a great guy you are.
Randy Frasinelli chose option 2, prosecutors say.
It’s not terribly surprising, all things considered.
Frasinelli, a 66-year-old businessman from Scott, filed six fake COVID loans at the start of the pandemic that brought him $3.8 million. Then, while he was out on bond, he applied for another fraudulent loan for $525,000.
He did all this by inventing companies, employees and payrolls to submit to the Paycheck Protection Program.
So why not also make up letters to give to the judge who will sentence him Wednesday?
Frasinelli submitted 14 letters as an exhibit in his sentencing memo. They are purportedly from people in politics, finance, business, technology and charities, all praising Frasinelli for his talents and good will.
“As the government will prove at sentencing,” said Assistant U.S. Attorney Jeff Bengel, “those letters are forgeries.”
A 14th letter, purportedly from someone in Mexico also touched by Frasinelli’s good deeds, might also be fake but federal agents are still checking.
Frasinelli had been facing 63 to 78 months behind bars. But this new revelation raises the stakes, Bengel said, and now prosecutors are asking for 97 months, or a little more than eight years.
Bengel said Frasinelli has been “unwaveringly deceptive” for nearly three years.
He tricked financial institutions into giving him loans, tried to fool federal agents investigating his fraud and lied to his own lawyers. Now, Bengel said, he’s trying to pull one over on U.S. District Judge W. Scott Hardy.
Federal judges don’t take too kindly to that. The chief judge in this district, Mark Hornak, sometimes warns defendants in his courtroom who have previously gotten away with crimes that “you’re in the major leagues now.” Frasinelli is likely to find that out Wednesday.
Bengel also asked that Hardy not grant any more delays and requested that the U.S. marshals immediately take him to prison after the sentencing.
He said Frasinelli can’t be trusted to self-report, an option for many white-collar thieves.
Frasinelli pleaded guilty last year to the loan scheme, admitting to bank fraud and money laundering following an investigation by the FBI and IRS.
The loans were supposed to be used to help businesses get through the pandemic. Government money was to be used to make payroll, pay rent and the like.
Frasinelli used it for cars, art, food, wine, precious metals, guns, vacations, college tuition and a Mexican villa.
He initially collected four loans from two banks in the spring and summer of 2020. He said he ran several small companies and needed financial help. He listed offices and employees. None existed, the FBI found.
In one instance, Frasinelli submitted an application to Lendio Inc. in the name of Grant-Williams Global on May 2020. He said the company had 28 employees and a $210,000 monthly payroll. He submitted a 2020 IRS profit-or-loss form, a monthly payroll report and a JPMorgan Chase Bank account statement.
All were bogus.
The FBI raided his house and seized a Ford Mustang, two Mercedes SUVs, a BMW, a Land Rover, a Porsche, gold bars, silver coins, watches, artwork, two investment accounts and four bank accounts.
After that seizure, Frasinelli got another loan for $1.3 million from Bank of America.
Then, while he was out on bond, he applied for yet another loan. This time he didn’t get any money.
Frasinelli’s lawyer, Rachael Santoriella, said in a sentencing memo last month that her client is highly intelligent, having earned degrees in molecular biology from Pitt and a doctorate in global affairs from CMU and embarking on various ventures in his life.
At one time he apparently was a corporate headhunter. One executive search firm where he worked said he was a founding principal of Grant-Williams Associates and had previously served as director of global operations at a defense contractor.
The Pittsburgh Business Times quoted Frasinelli in 2000 saying he formed Grant-Williams in 1992 and placed managers in tech jobs around the country.
How much is true and how much is fiction is hard to know with Frasinelli. But Santoriella said her client has suffered from undiagnosed bipolar disorder and is getting treated for it.
“He understands now why he made certain decisions that he did,” she said. “He will tell you that sometimes he will do things and not really be able to stop himself, although knowing it might not be the best road to travel.”
She asked for time served and 30 months of home monitoring along with a $3.8 million restitution order.
Santoriella said this week, however, that she doesn’t want to represent Frasinelli anymore after learning about the bogus letters he submitted. She moved to strike the letters and has also asked the judge to allow her to withdraw as Frasinelli’s lawyer.
A hearing on that request is set for a half hour before the sentencing on Wednesday.