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Federal prosecutors charge two more in West Haven conspiracy probe

Lauren Knox, the wife of former Democratic lawmaker Michael DiMassa, leaves the federal courthouse in New Haven with her mother and attorney. Knox was arrested on Feb. 18, 2022 and charged with federal wire fraud as part of an alleged conspiracy to steal hundreds of thousands of dollars from the city of West Haven.
Lauren Knox, the wife of former Democratic lawmaker Michael DiMassa, leaves the federal courthouse in New Haven with her mother and attorney. Knox was arrested on Feb. 18, 2022 and charged with federal wire fraud as part of an alleged conspiracy to steal hundreds of thousands of dollars from the city of West Haven.

Federal officials arrested two people on Friday as part of a widening investigation into corruption in the city of West Haven.

The U.S. Attorney’s Office charged Lauren Knox, the wife of former state Democratic lawmaker Michael DiMassa, with fraud for allegedly stealing more than $147,000 from the city — money that was meant to pay for youth violence prevention programs.

The federal prosecutors also unsealed similar charges against John Trasacco, who controls two businesses — L&H Company and JIL Sanitation — that were allegedly funneled more than $431,000, but never provided any services to the city.

The new indictments shed additional light onto the growing financial scandal in West Haven, and the documents allege a broader conspiracy to defraud the city out of local and federal taxpayer money.

Knox and Trasacco were both charged with wire fraud and related federal conspiracy charges, which can carry a prison sentence of up to 20 years. Both defendants pleaded not guilty in the federal courthouse in New Haven on Friday afternoon.

Knox, who is pregnant, was released on a $50,000 bond. Trasacco, who has a criminal history that includes robbery and assault, was released on a $100,000 bond.

The Connecticut Mirror published an investigation earlier this month that revealed the $147,000 that the city paid to Knox.

But West Haven’s leaders have not revealed or addressed publicly the $431,000 that was paid to Trasacco’s companies.

All told, the federal indictments now indicate that West Haven’s finance department issued a combined $1.2 million in allegedly fraudulent payments between July 2020 and October 2021.

West Haven Mayor Nancy Rossi did not return a phone call for this story, but her administration has been under increasing pressure since last fall when federal authorities arrested DiMassa, who also worked as an assistant to the city council.

In that case, DiMassa and another city employee, John Bernardo, were accused of funneling more than $636,000 in federal pandemic relief funds to an alleged shell company called Compass Investment Group.

DiMassa and Bernardo also had additional charges leveled against them as part of the alleged conspiracy that federal prosecutors unveiled on Friday. They, too, pleaded not guilty in separate hearings that were held over a video conference.

DiMassa, who resigned from his job with the city last year following his arrest, is at the center of all of the indictments, which is why he is facing numerous conspiracy charges.

Financial records obtained by CT Mirror show that DiMassa signed off on the invoices that were submitted by Knox and Compass Investment Group, the company that he and Bernardo formed in early 2021.

It’s unclear from the indictments whether DiMassa did the same for the five checks that were cut to Trasacco’s two companies, which allegedly claimed to be cleaning a school building that had been vacant and abandoned for years.

But the 31-year-old former lawmaker apparently had significant power over the city’s finances, even though he was not the head of a city department.

The West Haven City Council voted to appoint DiMassa in December 2020 to oversee roughly $1.1 million in federal CARES Act funding that it received. But that doesn’t explain all of the payments.

DiMassa signed off on the invoices submitted by Knox, whom he married in October 2021, and that money reportedly involved state grant funding for youth violence prevention initiatives. He also approved those payments months before the city council gave him any authority over the federal pandemic relief funding.

Frank Cieplinski, West Haven’s finance director, also signed off on the same invoices, according to the signatures included on the payment vouchers.

Earlier this month, Cieplinski was asked by the state Municipal Accountability Review Board why so many payments that were approved by DiMassa went unchecked by the finance department.

“There was a breakdown because an individual of trust was signing off on things, and finance accepted that his signature meant that these were being reviewed and that they were accurate,” Cieplinski told the MARB, which has overseen parts of West Haven’s finances since 2018.

Steven Johnstone, a new Republican member of the city council, said those circumstances raise a lot of questions about the city’s financial controls, and he believes the city council should play a part in answering some of those questions for taxpayers.

“I think, as a council, we’re going to have to start doing investigations ourselves,” said Johnstone, who was elected last fall. “I know people have been asking me lately if we are going to take that action. So I think it’s something that is going to have to be brought to the table.”

“I think it’s necessary at this point,” he added. “Knowing that we lost more money and we are well over the million dollar mark now, we can’t wait anymore.”

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