December 19, 2016- Ennio Manto, age 52, of Braintree, the former Director of the Finance Division of the Group Insurance Commission (“Insurance Commission”) pleaded guilty today in Suffolk Superior Court to two counts of Larceny over $250 and one count of Conflict of Interest under G.L. c. 268A, Conduct of public officials and employees. As described in the prior Agency Checklists’ article below, Mr. Manto used his position to steal $122,000 through two bogus transfers from the Insurance Commission’s accounts under his control.
After Mr. Manto pleaded guilty, Assistant Attorney General Kristen Stone of Attorney General Healey’s White Collar and Public Integrity Division recommended that the Superior Court judge hearing the plea commit Mr. Manto to serve a jail sentence, as determined by the judge, followed by probation. However, Judge Rosalind H. Miller elected to sentence Mr. Manto to three years’ probation with an order for him to pay restitution to the commonwealth in the amount of $122,349.83.
In speaking about Mr. Manto’s guilty plea and the order of restitution, Attorney General Healey was quoted as saying:
This defendant abused his position at a state agency to steal money that was meant for insurance benefits for those working for municipal and state government, We will continue to hold those who abuse their positions for their own financial gain accountable. We are pleased that the money will be returned to the state.”
Prior June 14, 2016 Agency Checklists Article on discovery of Mr. Manto’s theft and his indictment by the Attorney General
Until December of 2015, Ennio Manto worked as the head of the Finance Division of the Group Insurance Commission (“Insurance Commission”). He apparently thought that no one would miss $122,000.00 out of the $2.1 billion annual appropriation his former employer, the Insurance Commission, received from the Massachusetts Legislature to purchase insurance. He was wrong.
On May 27, 2016, Attorney General Maury Healey announced that Mr. Manto, 52, of Braintree had been indicted by a statewide grand jury. He was charged with two felony larceny counts and one count of conflict of interest under the state ethics statute arising out of his thefts from the Insurance Commission.
Sharp-eyed accountant picked up discrepancy in Mr. Manto’s fund transfer
In his position as finance director of the Insurance Commission, Mr. Manto made two transfers of the Insurance Commission’s funds between March and June 2015 to a company named Seaport Equity. An eagle-eyed accountant at the Commission discovered a wire payment in June 2015 for $72,342.83 that could not be reconciled with the Commission’s financial statements and internal documents. Upon being questioned, Mr. Manto acknowledged that he had made the transfer. However, he claimed that it was a payment to a health plan administrator company for the production of a “non-standard report.”
The diligent accountant made further inquiries into the matter. In the course of his examinations, he discovered that while the supposedly required $72,000 payment Mr. Manto claimed was a valid payment, in truth, the payment was actually for a different amount and not due for payment until 2016. As a result of the accountant’s discoveries, further inquiries into Mr. Manto’s actions at the Insurance Commission ensued.
Cut-and-paste evidence of fraud pulled from recycling bin
When Mr. Manto got wind of this further investigation into the basis for the $72,000 wire transfer, Mr. Manto sprung into action. According to the facts of the investigation, he allegedly took the original printout of the wire transfer that went to Seaport Equity and then proceeded “to cut and paste” in the information about an actual health plan administrator. Unfortunately for Mr. Manto, however, he was less than diligent in covering the tracks of his forgery merely throwing away the materials into a Commission recycling bin, which were subsequently recovered.
After receiving Mr. Manto’s cut-and-paste job, further suspicions were aroused and a thorough search of the office’s recycling bins found materials evidencing the preparation of the forged back up document. Additional false evidence Mr. Manto had given the accountant who was questioning the transfer’s backup documentation, was also found in the form of documents he had forged to make it appear as though a legitimate health plan administrator was being paid.
Further investigation finds another $50,000 payment
Once Mr. Manto’s scheme was discovered, the authorities began an even deeper investigation into his activities at the Commission. Upon further investigation, the authorities determined that Mr. Manto also had made an additional fraudulent transfer from the Commission’s funds to his personal company, Seaport Equity early, in March 2015 for $50,000.00.
Direct document trail from company paid Insurance Commission funds and Mr. Manto
Besides his shoddy cut-and-paste attempt to hide his link to the supposed health plan administrator, Mr. Manto also left a clear connection to the company where he transferred the stolen funds, Seaport Equity.
The corporate records of the Massachusetts Secretary of State shows that on May 24, 2010, Mr. Manto, along with another person, formed Automotive Finance Solutions, LLC. Automotive Finance Solutions was created for the purpose of “…Auto financing and refinancing…In addition, to carry on any other business or activity which may lawfully carried on by a corporation [sic] organized …[in] Massachusetts…”
On November 11, 2011, Automotive Finance Solutions filed amendments with the Secretary of State to change its name to “Seaport Equity Group, LLC.” The amendment listed Mr. Manto as Seaport Equity’s resident agent and as the person authorized to file its documents with the Secretary of State.
Seaport Equity was, of course, the beneficiary of the illegal fund transfers from the Insurance Commission that Mr. Manto made to himself.
Commission’s employees commended for discovery of Mr. Manto’s alleged fraud
Ray A. Campbell, Interim Executive Director of the Insurance Commission was quoted on the indictments stating: “I want to commend the Insurance Commission’s employees who discovered the conduct in question and brought it to the attention of the Insurance Commission’s leadership, who then immediately alerted the Attorney General’s office,” said. “The Insurance Commission will continue to cooperate fully with the investigation.”
In announcing the indictments, Attorney General, Martha Healy, stated that: “This defendant allegedly stole money that was meant to provide health insurance and other benefits to state employees,” said Attorney General Healey. “Our office will not tolerate those who abuse their positions for their own personal gain.”
Mr. Manto is scheduled to be arraigned on his indictment later this month.
Felony larceny charges carry up to ten years in state prison
The two counts of larceny involving an amount over indictments against Mr. Manto alleging larceny over $250 pursuant to G. L. c. 266, § 30 carries a sentence of” not more than ten years in state prison or not more than two and one-half years in the house of correction, or by a fine of not more than fifty thousand dollars or by both such fine and imprisonment.”
The count of conflict of interest for a state employee “present[ing] a false or fraudulent claim to his employer for any payment or benefit of substantial value” may be punished by a fine of “not more than $10,000, or by imprisonment in the state prison for not more than 5 years, or in a jail or house of correction for not more than 21/2 years, or both,” where the fraudulent payments, as in this case, totaled more than $1,000 in any 12-month period.
About the Massachusetts Group Insurance Commission
The Group Insurance Commission is a quasi-independent state agency governed by a 17 member Commission appointed by the Governor. Commission members encompass a range of interests and expertise including labor and retirees, the public interest, the administration, and health economics. It was established by the Legislature in 1955 to provide and administer health insurance and other benefits to the Commonwealth’s employees and retirees, and their dependents and survivors. The Insurance Commission also covers housing and redevelopment authorities’ personnel, participating municipalities, and retired municipal employees and teachers in certain governmental units.
There are currently almost 240,000 individuals enrolled and over 435,000 people covered by the Insurance Commission. As of Fiscal Year 2016, the Insurance Commission’s appropriations totaled $2.1 billion.
Health coverage options provided by the Insurance Commission include an Indemnity plan, Point of Service plans, Preferred Provider-type Organizations, an Exclusive Provider Organization, and several Health Maintenance Organization plans. As part of its UniCare State Indemnity Plan and active employee Tufts Health plans, it manages mental health/substance abuse benefits and also manages pharmacy benefits for the indemnity plans.
For active state employees only, the Insurance Commission offers a long term disability program, two pre-tax employee programs —Health Care Spending Account and Dependent Care Assistance Program—and for managers, legislators, legislative staff and certain Executive Office staff, a dental/vision plan. The Insurance Commission also offers a discount vision plan for Commonwealth retirees and a dental plan for state and certain municipal retirees.