Former Hallmark owner faces prison
SPRINGFIELD — George J. Rosa III, former owner and president of the Hallmark Institute of Photography in Turners Falls, faces federal prison time in relation to his use of that company as a personal ATM.
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, who has not been associated with the school since 2012, pleaded guilty to related charges of bank fraud and tax evasion on Tuesday in U.S. District Court in Springfield.
According to prosecutors, Rosa disguised his personal spending by reconfiguring these expenses on the company’s books as proper business expenses, and in doing so defrauded the People’s United Bank in connection with a series of corporate loans, two of which were guaranteed by the federal Small Business Administration. Rosa also used the company’s altered books as a basis to file false income tax returns for himself and the company, according to the DOJ. It was not immediately clear over what period the crimes occurred, although the school’s current owner’s comments imply it was when Rosa still owned the school.
Rosa could not be reached for comment Wednesday. The DOJ gives Rosa’s residence as Conway, where he lived as recently as 2013.
Rosa, whose father founded the business, sold Hallmark to Premier Education Group in 2009, at which time he was already facing foreclosure by People’s United.
The company kept Rosa on as president until 2012, when he and Premier parted ways under circumstances the company declined to comment on at the time.
“Unfortunately, George Rosa, who had served as president of Hallmark, separated from the company in August of 2012 in light of personal and business issues that had occurred prior to Premier Education Group ownership,” said current school President Ed Martin, reading from a prepared statement Wednesday.
Also in August of 2012, Rosa was silently implicated in another federal court case, against former Greenfield lawyer Gregory M. Olchowski.
Olchowski worked from 2003 to 2009 as senior vice president and chief operating officer of a Turners Falls company.
Judge Michael Ponsor sentenced Olchowski to six months in prison in 2013. Olchowski had pleaded guilty in 2012 to federal tax evasion after a summary of evidence including incriminating quotes secretly recorded by his unnamed former employer, also implicated in the crime.
The documents charging Olchowski with tax evasion alleged he had entered into an agreement with the unnamed president of an unnamed Turners Falls business to accept payment under the table, and accepted $197,293 in cash and checks from the president to third parties for the benefit of Olchowski or his family between 2005 and 2008. The company in question was revealed in the courtroom to be Hallmark. Rosa was president of Hallmark during the time period specified.
Reached for comment in 2012, Premier President William Anjos said all school finances have been handled by Premier’s Connecticut corporate office since the acquisition.
Allegations of fraud surfaced in 2010, when People’s United asked a federal court to rule that Rosa knowingly provided false information to the bank, and that it was owed damages in addition to the debt owed. Rosa had at the time filed for bankruptcy protection from $2,753,299 in personal debt.
The Premier statement this week praised Rosa for his legacy in building the school and for his contributions to the profession of photography. Martin said he was not authorized to comment beyond the statement.
Rosa’s sentencing is scheduled for May 29. Rosa faces a maximum of 30 years in prison on the charge of bank fraud and five years in prison on the charge of tax fraud, five years of supervised release, and a $1 million fine or twice the gross gain or loss of his crime, according to the DOJ.
You can reach Chris Curtis at: email@example.com or 413-772-0261, ext. 257