NORTH ANDOVER — Police said the owner of a mortgage company told a local couple they would own a 15 percent stake in the company and profits on their investment once their $25,000 was deposited into the company.
That was in April of last year.
Instead, David Fili, 50, of 747 Great Pond Road, owner of 1-800-MY MORTGAGE LLC, used the money for his personal use, police said.
Friday, police contacted Fili and asked him to come to the station to tell his side of the story, but police said Fili told them he was too busy to come in and it would be a waste of his time.
"I can't believe that they did this," police said Fili told them. "I can drag this out for months or years if they want."
Fili hired a lawyer and refused to speak to police before he was arrested yesterday morning and charged with larceny over $250.
Police said Fili asked his lawyer to call the victims and ask them to drop the charges, but was told by police that would be intimidation of a witness.
The couple said when they asked for financial records earlier this year so they could see what profits had accrued from their investments, Fili delayed providing the records, and when he did provide them, the couple saw their $25,000 investment had never been deposited into the company.
The couple said Fili finally admitted via e-mail that he had had personal problems during the time of their investment and could not make his payments on personal finances, and decided to deposit their $25,000 into his personal account so the banks would not see it.
The victims told police Fili apologized for the bad decision and admitted using their money for his personal needs, police said.
He told them he planned to replace the money once he was able to get more people to invest in his business, police said.
According to court records, the couple told Fili they did not appreciate his unethical behavior and wished to receive the full payment of their $25,000 investment so they could cut ties with him. Fili told them he would be unable to repay the investment but that he would like to work out a repayment plan, as he had several investors willing to make a move and invest money in the company.
The victims told Fili he had until Nov. 20 to repay $25,000 by certified check or they would seek alternative action. Fili then responded with a written contract stating as of Jan. 20, 2010, and ending Oct. 16, 2010, $5,000 would be paid upfront and $2,000 would be paid on the 16th of each month until the $20,000 balance was paid.
The victims refused and contacted police.
In court yesterday afternoon, prosecutor Jennifer Kunsch briefly described the case to Judge Thomas Brennan.
"He admits he used the $25,000 for his personal gain," Kunsch said.
Fili told the court he would get his own lawyer, but protested that "it is a viable business. I have engaged with other investors to keep it going."
Fili was released without bail with a warning not to get into further trouble or he risked being held without bail for up to 60 days.
He was ordered to return to court on Jan. 8.
"It's totally false," Fili told a reporter outside the courtroom after his arraignment. "I am not guilty."
This is the third financial crimes case in North Andover this year.
In March, Craig Bogosian, owner of Sports Look LLC, a sports memorabilia firm, was charged with bilking a friend and investor out of $1.3 million, which was to have expanded the firm's operations.
Last week, Joseph Lydick, 43 of Derry, N.H., purchasing manager for the town, was charged with converting to his personal use $20,800, the proceeds from eBay auctions of surplus town equipment he was authorized to dispose of.
