A 68-year-old Winthrop man has been sentenced to more than eight years in prison for conducting a decade-long insurance scheme that federal prosecutors say defrauded 40 people of $7 million.
Joseph Gennaco, who also lived in Jupiter, Fla., had pleaded guilty in February to 27 counts of mail and wire fraud. On Tuesday, US District Judge Nathaniel Gorton sentenced Gennaco to 100 months in prison, the maximum under a plea arrangement, plus three years of supervised release. The Boston judge also ordered Gennaco to repay the $7 million to his victims — but his lawyer says he is penniless.
Bernard Grossberg, the attorney representing Gennaco, said his client expressed remorse at his sentencing hearing Tuesday. “He said the victims were good people. Most of them had been his friends,’’ Grossberg said.
Gennaco ran a successful insurance business for some 40 years, his lawyer said. But from 2001 to 2011, federal prosecutors said, Gennaco told clients he was investing their money in “life settlements” — a practice of cashing in life insurance policies for a fraction of their face value.
He promised “guaranteed” profits from the sales of the policies, but instead took investor funds for his own use.
Gennaco also allowed clients’ insurance policies to lapse, by failing to pay premiums, according to US Attorney Carmen Ortiz’s office, and he did not return investors’ money.
Yet for years, he reassured them their money was safe, “offering a variety of phony excuses for the delay” in repaying them, prosecutors said.
Gennaco has been in custody since November 2011, when his bail was revoked in part because he continued to defraud people even after he had been charged, prosecutors said.
His lawyer said that despite the heart-rending testimony in court from victims who lost their life savings, there is “absolutely no possibility whatsoever” they will recoup funds from Gennaco because he is indigent. According to Grossberg, his client is “a ruined man in every sense of the word — financially, physically.”
Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust, and Crescent Management Group.