Date: February 18, 2020
BOSTON – The former CEO and co-founder of a Boston-based mobile phone music streaming service has pleaded guilty to charges of engaging in a scheme to embezzle hundreds of thousands of dollars from his employer and filing false tax returns.
David John, who recently changed his name from David Fondots pleaded guilty on Friday, Feb. 14, 2020, to one count of wire fraud and one count of filing false tax returns. U.S. District Court Judge Richard G. Stearns scheduled sentencing for June 15, 2020.
John misappropriated company funds which he used for his personal benefit. From 2014 to 2016, John caused his company to pay significant sums of money directly to himself, to a family member, and to companies controlled by a family member. John used the embezzled funds to pay personal expenses for himself and his family, including car payments, legal fees, and travel, among other things. John is also charged with failing to report the illegal income to the IRS over the period of his embezzlement scheme.
The charge of wire fraud carries a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, restitution, and forfeiture. The charge of filing false tax returns carries a sentence of up to three years in prison, one year of supervised release and a fine of $ 250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Kristina O'Connell, Special Agent in Charge of the Internal Revenue Service's Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorney Sara Miron Bloom of Lelling's Securities & Financial Fraud Unit is prosecuting the case.