In 2013, former Fall River mayor Jasiel F. Correia II and two partners opened a bank account for their new startup, SnoOwl, and deposited a $50,000 check from a Fall River orthodontist, the first investor in the smartphone app company, court records show.
A month later, Correia bought a 2011 Mercedes-Benz after withdrawing $10,000 in cash from SnoOwl’s account at Citizens Bank and depositing it into his personal account, IRS Special Agent Sandra Lemanski told jurors Friday during the fifth day of testimony in Correia’s federal corruption trial in Boston.
At the time, Correia said he spent the money on “software development” of the company’s app. But a paper trail showed he put it toward a $12,000 down payment for the car, she said.
Correia’s attorney, Kevin Reddington, suggested Correia used the Mercedes to conduct SnoOwl business, but Lemanski said he purchased the car in his own name and didn’t list it as a business asset.
Correia, 29, a Democrat, is accused of stealing hundreds of thousands of dollars from people who invested in the smartphone app he helped create while he was attending Providence College. He’s also accused of extorting $600,000 from four marijuana vendors who were seeking to open dispensaries in the city while he was mayor from 2016 to 2019, and forcing his chief of staff to give him half of her city salary. He is charged with extortion conspiracy, extortion aiding and abetting, bribery, tax evasion, and lying to investigators.
Lemanski, who previously worked on criminal investigations involving James “Whitey” Bulger and other organized crime figures, presented a detailed array of pie charts and financial records from a stack of thick binders that she said documented Correia’s practice of using company money for personal use.
Between 2013 and 2015, seven investors contributed more than $358,000 to the company, she said. By her calculations, Correia spent 64 percent of it for personal purposes, including $37,282 to pay down student loans and credit cards; $31,780 for travel and transportation; $27,000 for hotels; $25,121 for dining; and $18,655 for clothing, grooming, jewelry, and health care products.
Correia also made “tens of thousands” in ATM withdrawals from SnoOwl’s account at various locations, including Foxwoods Resort Casino in Connecticut, she said.
Records show Correia arranged monthly deductions from SnoOwl’s account to pay $216 monthly dues for sessions with a fitness trainer, she testified. In August 2013, four days after a Rhode Island businessman invested $50,000 in SnoOwl, Correia made a $6,900 payment on a personal loan and a $2,400 payment to his personal credit card, she said.
In June 2014, Correia bought his girlfriend a $259 Kate Spade handbag on eBay and listed it as a “business expense,” Lemanski testifed.
The following month, Correia told Sallie Mae he was unable to make his student loan payments because he was making only about $17,000 a year as a Fall River city councilor and was living at home with his parents “helping them get by right now,” according to Sallie Mae records presented by prosecutors.
That same month, Correia paid $1,134 to the Chatham Bars Inn on Cape Cod to book a two-night stay for him and his girlfriend, Lemanski said.
When more checks from investors flowed into the company in late 2014 and early 2015, Correia purchased new tires for his Mercedes and a $300 bottle of Creed Original Santal men’s cologne, according to Lemanski. He also traveled to Washington, D.C., where he stayed at the Willard InterContinental Hotel with his girlfriend and took her on a $457 Valentine’s Day cruise on the Potomac River.
During cross-examination, Reddington suggested that Correia’s expenses were not personal and asked if it could be considered a business expense if someone “goes to a restaurant, has a meal, and cultivates a rapport” with people with the intent to promote a business.
Lemanski agreed it could be a business expense “if you had a meal with a potential customer and discussed them being a customer.” Reddington suggested that it could be a business expense if Odyssey Cruise invested in SnoOwl after Correia and his girlfriend’s Feb. 14, 2015, cruise.
“It was a Valentine’s dinner cruise,” said Lemanski, rejecting the suggestion.
Reddington asked if Correia’s personal trainer sessions would be “a legitimate business expense” if he was “going to the gym and talking up the app and the gym ended up becoming a customer.”
“No,” Lemanski said.
Prosecutors played a video of a Fall River mayoral debate in October 2015, showing incumbent Sam Sutter challenging Correia to disclose how much money people had invested in SnoOwl and how it had been spent. Correia said that the investors were partners in his business and that he had spent their money “wisely.”
But at that time, SnoOwl’s account had a balance of $69, Lemanski testified.
Testimony in the trial, which is expected to last about two more weeks, resumes Monday.