West Haven Records $1.04 Million Insurance Recovery After Pandemic Relief Theft

Years after more than $1.2 million in federal pandemic relief money was stolen from the City of West Haven, a newly available city audit provides an important answer about what happened to a large portion of the missing money.

West Haven's Annual Financial Report for the fiscal year ending June 30, 2025, records $1,037,363 in insurance recoveries as an extraordinary item in the city's General Fund. In its budget notes, the report says the revenue was reimbursement for an embezzlement loss and had not been budgeted.

That distinction matters. The money recorded by the city was an insurance recovery. It should not be confused with restitution paid personally by the people convicted in the theft.

The recovery reduced the direct financial loss to the city, but it did not erase the crime, the misuse of emergency funds or the obligation of the defendants to pay court-ordered restitution. When an insurer reimburses a loss, it may become entitled to receive restitution payments associated with the covered amount. The city audit does not state how much the defendants have paid to date, who received those payments or how much remains outstanding.

The scandal became public in October 2021, when federal authorities arrested Michael DiMassa, then a Connecticut state representative and an employee of the West Haven City Council.

According to the U.S. Attorney's Office for the District of Connecticut, DiMassa participated in three conspiracies that defrauded West Haven of more than $1.2 million in federal Coronavirus Aid, Relief, and Economic Security Act funds.

One of those schemes involved Compass Investment Group LLC, a company formed by DiMassa and fellow city employee John Bernardo. Federal prosecutors said Compass submitted fraudulent invoices to West Haven for services that were never performed. The city paid the company $636,783.70 between February and September 2021.

That $636,783.70 figure represents the Compass scheme — not the entire pandemic-fund theft. The larger total includes other conspiracies involving DiMassa and additional defendants.

DiMassa pleaded guilty on Nov. 1, 2022, to three counts of conspiracy to commit wire fraud. On May 31, 2023, a federal judge sentenced him to 27 months in prison and ordered him to pay $856,844.45 in restitution.

The federal investigation led to convictions of four people: DiMassa; Bernardo; Lauren DiMassa, DiMassa's wife; and John Trasacco. The cases exposed serious weaknesses in how West Haven reviewed invoices and approved payments from emergency relief funds.

The latest audit establishes that West Haven recorded more than $1 million in insurance proceeds connected to an embezzlement loss. It does not establish that the convicted defendants repaid that amount.

It also does not provide a defendant-by-defendant accounting of restitution collections. That leaves several legitimate questions for city and federal officials:

How much restitution has each defendant paid? How much of the court-ordered restitution remains unpaid? Were restitution payments made to West Haven, its insurer or both? Did the city absorb a deductible or any other portion of the loss not covered by insurance? What additional safeguards are now in place to prevent fraudulent vendors and invoices from passing through City Hall?

The financial recovery and the criminal accountability are separate parts of the same story. Insurance can reimburse a government for a covered loss. It cannot restore the public services that pandemic relief money was intended to support at the height of a national emergency, nor can it repair public trust by itself.

For West Haven residents, the audit is evidence that a substantial portion of the stolen money was returned to the city through insurance. But a full public accounting still requires transparent, current information about restitution, remaining losses and the controls adopted after the scandal.

The central question is no longer only how the money was stolen. It is also who ultimately paid for the loss — and whether those responsible are continuing to repay what the court ordered.