Boston 'Boiler Room' Operator Gets Prison Time for Fraud and Conspiracy

Boston, MA - A former Boston resident was sentenced to six years in prison on Monday in connection with his participation in a fraudulent “boiler room” operation that misled investors and caused over $4 million in losses.

Jonathan Fraiman, 36, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to six years in prison, three years of supervised release, and ordered to pay restitution of $3,800,466. Following an 11-day trial in December 2015, Fraiman was convicted of mail fraud and conspiracy to commit mail and wire fraud

In December 2007, Fraiman joined Envit Capital LLC (Envit), a company which, with its various related entities, purported to invest in and manage a hedge fund and private equity funds. Envit originally operated in Boston, and later opened an office in Boca Raton, Fla., according to a release from the U.S. Attorney's office.

Upon joining Envit, and through August 2009, Fraiman conspired with Envit’s CEO and Chairman, co-defendant Edward Laborio, to solicit investments, by, among other things, making fraudulent misrepresentations about the historical rate of return of certain Envit entities and falsely promising certain investors quarterly fixed dividends on their investments. As part of the scheme, Fraiman purported to act as some investors’ investment adviser, a position he exploited to convince his clients to invest monies, including retirement assets and trust monies, in Envit through bogus promises of guaranteed dividends and false assurances regarding the financial health of the company. As part of the conspiracy, Fraiman and Laborio periodically rolled out new Envit “offerings,” which invariably were based on deceptive representations about the company, to both existing and new investors in order to raise more funds for Envit, from which they both personally profited. Investors lost over $4 million through their investment in Envit and its related entities.

Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain in summer 2015.

In imposing sentence, Judge Saylor noted the “coldhearted” nature of the crimes of which Fraiman was convicted, particularly given that some of the victims were elderly individuals who had lost retirement savings in the schem