Ex-Middletown mayor pleads guilty to embezzling

NEW HAVEN — A former Middletown mayor waived his right to be indicted Tuesday and pleaded guilty to fraud stemming from a scheme in which he allegedly embezzled about $490,000 from his former employer, then stole an estimated $457,000 from a family member to repay the employer, federal officials said in a release.

Stephen T. Gionfriddo, 68, of Middletown, pleaded guilty before U.S. District Judge Jeffrey A. Meyer in New Haven, according to the release from the U.S. Attorney’s Office.

According to court documents and statements made in court, Gionfriddo was hired by a Rocky Hill law firm as a paralegal in August 2013. Beginning around December 2013, Gionfriddo caused the firm’s bookkeeper to prepare checks payable to various of Gionfriddo’s creditors by misrepresenting that the funds were needed to pay client expenses, according to the release. Gionfriddo also intercepted numerous checks payable to the law firm or to the firm’s clients, endorsed the checks over to himself, and then deposited the checks into his personal bank account for his own use, officials said.

In July 2017, Gionfriddo forged the signature of one of the firm’s partners on a Notice of Certificate Maturity to cancel a certificate of deposit in the name of one of the firm’s clients, and then mailed the form, the U.S. Attorney’s Office said. When the $112,748.21 distribution check representing the proceeds of the client’s CD was mailed to the firm, Gionfriddo intercepted it, forged the signature of the payee, and converted it to his own use, according to the release.

Through this scheme, Gionfriddo stole $543,372.21 from the law firm and its clients.

In late September 2017, the principals at the law firm confronted Gionfriddo about the theft of funds, and Gionfriddo promised to repay the firm. On Oct. 3, 2017, Gionfriddo called the Thrift Savings Plan, a defined contribution plan for federal employees, and impersonated his brother, who had worked for the federal government and maintains a TSP account.

During the call, Gionfriddo obtained information about how to effect a hardship withdrawal of money from the account and have it sent to a bank account he controlled, according to the release. Gionfriddo also was advised on that call that TSP would issue a Form 1099 in January as a result of the hardship withdrawal.

On Oct. 4, 2017, Gionfriddo faxed a form requesting a withdrawal of $195,000 from his brother’s TSP account for “medical expenses.” Gionfriddo directed the TSP to deposit the funds into a bank account that he controlled, according to the release.

In an effort to conceal this scheme from his brother, Gionfriddo contacted the U.S. Postal Service and had his brother’s mail held for the entire month of January, officials said.

Gionfriddo also stole from his brother’s bank and investment accounts in the total amount of $201,518, according to the release.

Gionfriddo was arrested on a criminal complaint on June 12.

Gionfriddo pleaded guilty to one count of mail fraud and one count of wire fraud. Judge Meyer scheduled sentencing for Feb. 12, at which time Gionfriddo faces a maximum term of imprisonment of 20 years on each count.

Gionfriddo was previously convicted of federal wire fraud and mail fraud offenses in 2006 for embezzling more than $633,000 from clients while acting as their attorney.

The 68-year-old served on Middletown’s Common Council from 1979 through October 2005, and was mayor for six months after Sebastian Garafalo stepped down to assume duties as tax collector in 1993.

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Susan L. Wines.