Woburn Woman Sentenced in Connection with Defrauding Investors of $1.3 Million

WOBURN, MA — A woman who was convicted in connection with the defrauding of $1.3 million from investors was sentenced to seven years in prison Wednesday, U.S. Attorney Carmen M. Ortiz announced.

Rosalind Herman, 61, was sentenced to seven years in prison, three years of supervised release and was ordered to pay restitution of $1,891,391 to victims. According to a release from the U.S. District Court, Herman and her business partner Gregg Caplitz defrauded investors of more than $1.3 million dollars from 2008 to 2013

Herman was convicted of the charges on April 6.

Caplitz was sentenced to 42 months in prison after pleading guilty to fraud and tax charges.

According to the release, Herman owned and controlled companies in Massachusetts and Nevada that provided investment advice and sold insurance products to individual investors. From 2008 to March 2013, Herman and Caplitz pitched a new hedge fund company investment to existing clients. The purported investment was billed by Caplitz and Herman as a hedge fund company owned by Herman. No hedge fund ever existed, however, and the investment funds obtained from clients were used to fund personal expenses for Herman, her family and Caplitz.

Additionally from 2003 to 2012, Herman failed to file accurate tax returns for herself and her companies, including the $1.3 million in investor funds she took from investors, and also by fabricating business expenses, according to the release. In many instances during this time period, Herman failed to file any tax returns for herself or her companies.