Rosa gets probation
Cooperation, contrition earn lighter sentence for former Hallmark Institute of Photography owner
SPRINGFIELD — George J. Rosa III must repay the millions he owes the Internal Revenue Service and People’s United Bank, but will not see a day in prison for bank fraud and tax evasion.
The sentence of five years’ probation is significantly less than the reduced sentence requested by the prosecution in recognition of Rosa’s evidence against a former colleague and others.
U.S. District Court Judge Michael A. Ponsor sentenced the former president of the Hallmark Institute of Photography in Turners Falls on Thursday. On Thursday, Rosa chokingly read a prepared statement asking the judge not to sentence him to prison. Rosa said he has “become a strong family man, a valuable contributor to society and a person who should be delivered a sentence that does not include imprisonment.”
Rosa pleaded guilty in March to financial crimes committed while president of the for-profit school.
According to the Department of Justice, Rosa spent $2.6 million in company funds for his own purposes, including construction at his personal residence, gambling, and approximately $55,000 on clothing, shoes and accessories. Rosa disguised this personal spending as Hallmark business expenses, defrauding the People’s United Bank and federal Small Business Administration in connection with a series of corporate loans, and filing false income tax returns for himself and the company based on the altered books.
Ponsor said the sentence was in recognition of what he called an unusually powerful expression of contrition in informing on former colleague Gregory Olchowski and “people of a shadowy and more dangerous nature,” his unusually impressive post-apprehension rehabilitation — he has worked for the Red Cross and Autism Speaks — and his potential to benefit the community. Ponsor also said he didn’t see much to be gained by warehousing Rosa in prison at a cost of $30,000 a year to taxpayers when he could be working to repay his debts.
The sentence includes 400 hours of community service, to be performed during the five years’ probation, nine months of which will be served in a halfway house and nine months on house arrest. In both situations Rosa will be allowed to leave during the day to work.
Rosa owes the IRS $1.4 million and People’s United Bank $2.5 million in restitution. He was also sentenced to serve one day in jail, but was given credit for his one day detained in connection with the case.
“I consider this to be a very serious sentence,” Ponsor said. “Mr. Rosa is effectively ruined financially and will be working to stay just where he is for the rest of his life.”
The prosecutor, Assistant U.S. Attorney Steven H. Breslow, had requested a sentence including about two years in state prison, half the minimum sentence. Breslow said he believed this was the largest reduction his office has ever recommended, in recognition of Rosa’s help in building a case against Olchowski, a former Greenfield lawyer disbarred following the charges. Breslow said that without Rosa there would not have been a case.
Ponsor last year sentenced Olchowski to six months in state prison and a year of probation, after Olchowski confessed and made restitution for the $148,805 in back taxes and penalties he owed the IRS for accepting payment under the table from his then employer, Rosa.
Summarizing the prosecution’s filing in the Rosa case, Ponsor said Rosa had also been helpful in investigations of several individuals involved in illegal gambling and loan sharking.
Summarizing the defence’s filing for a lesser sentence, Ponsor said Rosa has cured himself of a deeply-imbedded gambling addiction and turned his life around in the five years since he learned of the investigation.
Breslow said the requested two-year sentence balanced the need to reward Rosa and encourage others to inform, and the need to give serious weight to serious white-collar crime.
“I think Mr. Pucci will agree with me it’s not like the IRS is going to get paid back any time soon,” Breslow said.
Defence attorney John Pucci said the government has given immunity to serial killers, pointing to the Bulger trial, and said they could do more for Rosa.
“I’ve seen far better deals made,” Pucci said. “I’m not talking about a radical reduction, but I think (you) could nudge it down reasonably.”
Pucci said that Rosa had had no chance to grow up as a normal, balanced person despite his two-parent middle-class upbringing, describing his father as a philandering “Frank Sinatra impersonator” who taught him to gamble at 11.
Prompted by Ponsor, who asked to hear more about what he did to save jobs when the business began to go under and his charitable efforts, Pucci said Rosa was able to miraculously bring in a group to take over the school after it was discovered he had been cooking the books, and that the new owners kept him on in full knowledge of the situation because he was important to the culture of the school.
Rosa, whose father founded the business, sold the photography school to Premier Education Group in 2009, at which time he was facing foreclosure by People’s United Bank.
Premier kept Rosa on as president and executive director until 2012, when he and the company officially parted ways.
The dates listed in the charges filed by the DOJ span the years 2005 through the end of 2008.
A group of 21 supporters sat behind Rosa in court. Five sat in the opposite row of benches. Ponsor considered hearing from two of these as victims, but ultimately said as former Hallmark students rather than bank or IRS representatives they were not victims in the case and their statements could be prejudicial to his decision.
You can reach Chris Curtis at: firstname.lastname@example.org or 413-772-0261, ext. 257