NORTH ANDOVER — Craig Bogosian asked a friend to finance an expansion of his company and now police said that pal is out $1.3 million. What Bogosian did with all that money, police Detective Lt. Paul Gallagher said, remains a mystery.
Bogosian, 56, of 47 Penni Lane, was arraigned yesterday in Lawrence District Court on a charge of larceny by a single scheme and was released without bail. Outside the courtroom, alleged victim Barry Sheldon said he was shaking with anger.
"I was in denial," Sheldon said of the alleged theft. "Now I am angry. I couldn't believe he would do this to me. I thought it was a pretty good business."
According to court records, Bogosian owns Sports Look LLC, a marketing firm that sells promotional items to companies that are printed with the company's name or logo, such as shirts, hats and pens.
Sheldon said he and Bogosian were friends for about eight years, meeting through youth sports programs in town. They moved in the same circles and their wives were friends too, court records state.
According to those court records, Bogosian approached Sheldon and his wife, Gail, in the fall of 2007, with a business proposal: He wanted to sell to bigger customers in larger companies, and needed financing.
Sheldon told police he would wire Bogosian money through his own business every time his friend said he landed a new client. Under the agreement, Sheldon was supposed to get his investment back plus half the profits.
According to court records, Sheldon made wire transfers from his company to Bogosian in the amount of $3 million without question — or request for documentation — because of their friendship. Bogosian reportedly told the Sheldons that sales increased dramatically each month in 2008 and as a result, the advances for new purchases were always larger than the payments received from customers.
But the Sheldons and investigators said they believe not one cent of that $3 million was ever spent on Bogosian's business. Bogosian refused to comment after yesterday's hearing.
"Essentially, we realized there were no receivables behind those invoices," said Gail Sheldon.
The Sheldons' accountant found in November 2008, that Bogosian owed their business $1,288,893 for the wire transfers they made. They went after the money from Bogosian, who sent a check Jan. 16, for $494,370.82.
"He bounced a check to me for a half-million dollars," Barry Sheldon said.
According to court records, Bogosian stopped payment on the check on Jan. 21. The Sheldons also reportedly received a call from Bogosian's lawyer, Richard Bardi, telling them the check would bounce and that Bogosian was broke. Bardi represented Bogosian in court yesterday "for bail purposes only." He could not be reached for comment after the proceeding.
When the Sheldons' lawyer spoke to Bardi on Jan. 22, Bardi confirmed that Bogosian had no money and that there were no outstanding receivables. He said $1,288,893 was gone and that Bogosian has no present ability to repay even a portion of the money back, court records state.
The Sheldons turned to police for help and the department launched its own investigation. Barry Sheldon said he has no idea what Bogosian used his money for.
"That's what we are trying to find out," Sheldon said during a telephone interview yesterday afternoon.
If convicted, Bogosian faces up to five years in prison or two years in jail and up to a $25,000 fine.
He was ordered to return to court April 10, and to have no contact with the Sheldons.
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