The two people at the center of what's believed to be the biggest fare-evasion scheme in Massachusetts Bay Transportation Authority history have pleaded not guilty to larceny and conspiracy charges in Salem District Court.
Judge Michael Lauranzano set bail Friday for Townes and Escobar at $250,000 and $100,000, respectively.
Townes — who was a supervisor at Cubic Transportation Systems Inc., the Beverly company contracted to produce and distribute monthly MBTA transit passes — allegedly printed upwards of 20,000 fraudulent passes worth an estimated $4 million and sold them directly to MBTA passengers, pocketing the proceeds, according to assistant Attorney General Gina Masotta.
Escobar, who is listed at the same Revere address as Townes but recently moved out, was not an employee at Cubic, but allegedly helped Townes sell the so-called "ghost passes" after he printed them, the prosecutor said.
Townes began printing the fraudulent transit passes in November 2007, and a warrant search of his Revere home "recovered multiple boxes filled with thousands of MBTA tickets," Masotta said.
There were also two large bags filled with shredded passes, which Masotta said was an attempt to "destroy evidence" once the couple caught wind that police were onto their alleged scheme.
By January 2010, police believe Townes was printing more than 500 of the fraudulent passes per month.
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The passes were real MBTA transit tickets, printed using the same machine at Cubic's Beverly office that's used to print legitimate monthly commuter rail and subway passes. There was, however, one important catch.
Normally, when a pass is printed, it's automatically logged into an MBTA database that keeps track of the number of passes produced and the revenue generated for the MBTA. Townes, however, allegedly figured out a way to manipulate the machine so that he could print fare passes and activate them without it being logged into the database, Masotta said.