pension fund assets of the International Brotherhood of Electrical Workers, Local 99;

The grand jury also charged LaScola with embezzling assets from the employee profit sharing plan of Anchor Business Forms, Inc.

The indictment results from a two-year investigation by several federal and state agencies. Contributing to the investigation were two investigative divisions of the U.S. Department of Labor, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Securities and Exchange Commission, the Rhode Island Department of Business Regulation, and the Rhode Island State Police. The case is being prosecuted by Assistant U.S. Attorney Edwin J. Gale.

The indictment focuses on two firms owned or controlled by LaScola: CPI Financial Services, later known as CPI Investment Management, Inc., and CPA Advisors Network. Through both firms, LaScola advised clients about investments and invested their assets, either directly or through a clearing house.

In one of the alleged patterns of fraud, the indictment charges LaScola with embezzling funds from CPI clients. Between 1994 and 1998, he is alleged to have taken approximately $393,000 from four clients' accounts and used it for his own purposes. Too conceal his thefts, LaScola allegedly deceived clients with fraudulent account statements.

The indictment charges LaScola with six counts of mail fraud in the alleged embezzlement scheme, each count representing an account statement that was mailed to a client.

As described in the indictment, LaScola, through CPI, managed the pension fund of the International Brotherhood of Electrical Workers, Local 99. The agreement between CPI and Local 99 prohibited investments in so-called "private placements," meaning securities not traded in a public market.

According to the indictment, in a series of transactions in 1997 and 1998, LaScola used Local 99 pension fund assets to purchase approximately $6.3 million worth of promissory notes from a firm called RBG Investments, Inc., a business that raised financing for real estate developers. The promissory notes, which were not publicly traded, supported three real estate projects known as Monarch Lake, Windjammer, and Cutter Sound.

In exchange for buying, the RBG promissory notes with the pension fund assets, LaScola allegedly received from RBG and Robert Goldfine, a principal of the firm, approximately $242,000 in illegal commissions. The Employee Retirement Income Security Act (ERISA), prohibits a union pension fund investor from receiving commissions intended to influence investment decisions.

The indictment charges LaScola with four counts of receiving illegal commissions: payments of $90,000 in November 1997, $42,000 and $10,200 in June 1998, and $100,000 in July 1998.

In October 1998, as recounted in the indictment, the RBG Cutter Sound promissory notes went into default. In November, Local 99 pension fund officials discovered that LaScola had bought the RBG promissory notes and directed him to recover the $6.3 million for the pension fund.

The indictment alleges that LaScola dipped into the accounts of CPA clients to replace the pension fund�s money. It charges him with 42 counts of wire fraud, each count representing an allegedly illegal transfer of a client�s assets into Local 99's pension fund. Two additional counts of wire fraud allege that he faxed fraudulent letters to CPA clients in December 1998.

The indictment also charges that, in November 1998, LaScola embezzled funds from the Profit Sharing Plan of Anchor Business Forms, Inc., a CPA client. The Profit Sharing Plan falls under the protections of ERISA, the federal law protecting employee benefit funds.

The maximum penalty for mail fraud, wire fraud, and embezzling from an employee benefit fund is five years in federal prison. Taking unauthorized payments in the investment of union pension funds carries a maximum penalty of three years imprisonment. Exact sentencing, upon conviction, would be determined on the basis of guidelines that take into account such factors as the specific nature and impact of an offense and a defendant�s criminal background, if any.