Home Boston Press Releases 2009 Former Chief Operating Officer Guilty in $20 Million Fraud Prosecution
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Former Chief Operating Officer Guilty in $20 Million Fraud Prosecution

U.S. Attorney’s Office November 30, 2009
  • District of Massachusetts (617) 748-3100

BOSTON, MA—A Peabody man pled guilty today on his first day of trial in U.S. District Court to a fraud scheme that netted him $20 million and which he used to purchase private jets and support an extravagant lifestyle for his family and mistresses.

United States Attorney Carmen M. Ortiz; Robert Bethel, Inspector in Charge of the U.S. Postal Inspection Service; Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation - Boston Field Office; and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office, announced today that JOHN F. DOORLY, age 60, of Peabody, pled guilty to mail fraud and money laundering in connection with his scheme to defraud a North Shore company of more than $20 million dollars while he was employed as its Chief Operating Officer.

At today’s hearing, the prosecutor told the Court that if the case proceeded to trial, the government would prove that during the period of 1999 through March 2006, DOORLY removed millions of dollars from the bank accounts of Tenens Corporation, and used the money for his own purposes including: the acquisition, use and maintenance of three airplanes (total cost of more than $12.0 million); the purchase of mortgage free houses and condominiums for family members, friends, and mistresses; the purchase of golf memberships at exclusive clubs across the United States for himself and his son; transfers of hundreds of thousands of dollars to his wife and his mistresses; and the payment of hundreds of thousands of dollars of personal credit card bills. DOORLY also overcharged for accounting fees, thereby generating a slush fund for himself totaling millions of dollars. In addition, DOORLY also withdrew large sums of cash and manipulated the company’s internal accounting system, which he controlled, in order to conceal his activity.

DOORLY entered his plea immediately prior to jury impanelment, scheduled for this morning. There is no written plea agreement with the government.

Sentencing is scheduled for March 23, 2010. DOORLY faces up to 20 years' imprisonment, to be followed by three years of supervised release on each count. DOORLY is also subject restitution, forfeiture, and fines.

The case was investigated by the U.S. Postal Inspection Service, the Internal Revenue Service, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Lori J. Holik, with assistance from Auditor Andrea Roller of Ortiz’s Economic Crimes Unit.

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