Ethics Commission will investigate complaint against councilman, rep candidate Cunha

East Providence City Councilman, and state rep. candidate Helder Cunha.

PROVIDENCE, R.I. (WPRI) — The Rhode Island Ethics Commission voted to launch a full investigation into a financial disclosure complaint filed against East Providence City Councilman and State Representative candidate Helder Cunha.

Mayor Thomas Rose, who is the city councilman designated as Mayor by the body’s other members, filed the complaint last week, claiming “Cunha failed to disclose his management / executive position with Cambridge Capital Group” in two separate Rhode Island Ethics Commission filings.

The complaint references the federal investigation that sent Cambridge Capital’s former employee David Prescott to prison in what investigators said was a scheme that bilked investors out of about $500,000. Cunha was never charged with any type of crime.

Cunha, who is the East Providence Assistant Mayor, is currently running as a Democrat for House District 64. Helio Melo had held the seat for 12 years, but announced his retirement in June.

The two financial statements he filed with the commission list Cunha Construction as the councilman’s only “family income source.” There is no reference to Cambridge Capital in either statement.

Cunha said Cambridge was not a big part of his life at the time of the filings and he said he “forgot to disclose” his connection to his now defunct company. A Facebook post from June of 2012 that announced he was running for city council stated he “is the President of Cambridge Capital Group, LLC.”

“This [complaint] is politically motivated,” Cunha said last week after the complaint was filed. “This is because I plan on voting against his proposal to fire the city manager.”

City Manager Richard Kirby was suspended by the council last Thursday for the way he handled a case involving a sexual harassment complaint filed by city employee Kathleen Waterbury. Cunha was one of two council members who voted against suspending Kirby.

Rose denied the complaint he filed against Cunha was political. Rose is also currently under investigation by the Ethics Commission for allegedly using his post as Mayor to lease a vehicle. Rose has said he is confident he will be exonerated.

Prescott pleaded guilty last November to four counts of wire fraud and is currently serving a 19 month sentence in a California federal prison. He was ordered to pay $505,619 in restitution, including just over $265,000 to one Cambridge Capital investor.

When Target 12 broke the news about Cambridge Capital last month, Cunha said he did his “due diligence” in looking into Prescott’s background, but added that he did not know Prescott had also used the name David Weeks.

“I was victimized by an individual who used a fraudulent name,” Cunha said at the time. “At no time were any of my clients’ funds misappropriated or misallocated.”

Cunha insisted that he looked into Prescott’s background, but an administrative complaint from the organization that regulates futures-trading companies stated that neither Cunha nor Cambridge tried to register Prescott with the agency.

According to the complaint filed by the National Futures Association, if Cambridge had tried to get proper certification for Prescott, “it is unlikely it would have been able to register him due to his prior felony conviction for securities fraud.”

The NFA claimed Prescott went to work for Cunha starting in June 2012, solicited customers for investments and allegedly misappropriated $500,000 from four people. The complaint stated Prescott spent “some of those funds for air travel, hotel accommodations, and gambling.”

In the complaint, Cunha was accused of providing false information to the NFA and using a PowerPoint presentation with customers that was “misleading in that it contained references to potential profits without discussing risk of loss.”

In the document that outlines the NFA’s decision, Cunha stated the “violations were unintentional.”

According to that document, “Cambridge and Cunha, without admitting or denying the allegations of the complaint,” agreed not to reapply for membership with the NFA for a period of five years.

Send tips to Target 12 Investigator Walt Buteau at wbuteau@wpri.com and follow him on Twitter @wbuteau

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