Ratkovich pleads guilty to fraud

July 29, 2009

By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com

PITTSBURGH – A former New Castle councilman and housing consultant admitted that he conspired to defraud a Pennsylvania-based bank.

“Guilty, your honor,” Robert Ratkovich said yesterday in federal court.

Ratkovich, 40, of 512 Norwood Ave. waived his indictment, arraignment and plea hearing before U.S. District Judge Gustave Diamond. He pleaded guilty to one count of bank and mail fraud conspiracy and one count of money laundering conspiracy.

“The long and short of it is, you provided (inflated) information,” Diamond said during the hourlong hearing.

The U.S. Attorney’s Office alleged Ratkovich and Nicholas DeRosa, 64, of 221 N. Cascade St. schemed to defraud First Commonwealth Bank of $250,000 in connection with Affordable Housing of Lawrence County’s purchase of seven properties in December 2005.

Neshannock Township resident Anthony J. Staph Jr., 43, faces one count of bank fraud in connection with the investigation. He appeared in federal court on July 21 and pleaded not guilty.

Ratkovich entered into a plea agreement with the U.S. Attorney’s Office on Dec. 22, 2008. The arrangement was outlined during yesterday’s hearing.

Assistant U.S. Attorney Brendan T. Conway said he “anticipated (substantial) assistance from Ratkovich.”

Under the deal, Ratkovich will aid law enforcement in its investigation of DeRosa, Staph and unnamed parties. The government said it is looking into possible violations from January 2000 to present.

Ratkovich must provide investigators with documents and evidence in his possession. He also is required to testify when requested.

Conway said the government will seek a sentence reduction based on Ratkovich’s cooperation.

“I don’t believe it would be appropriate to comment at this time,” said John T. Haller Jr., Ratkovich’s attorney.

After the hearing, Ratkovich was taken to the U.S. Marshal’s Office for processing. He was then released on $10,000 unsecured bond. Ratkovich is not permitted to leave western Pennsylvania without the court’s permission.

A sentencing date has been scheduled for 10 a.m. Oct. 28. Conway said the government will likely seek a continuance.

DeRosa will be arraigned at 9:30 a.m. tomorrow before U.S. Magistrate Amy Reynolds Hay. A federal grand jury indicted the retired New Castle school administrator on one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy.

Pretrial motions involving Staph have been moved to Oct. 30.

Affordable Housing hired Ratkovich as a consultant to recommend and oversee property purchases. The board paid Ratkovich $45 an hour. During his tenure with Affordable Housing, he received approximately $60,000.

The county’s housing authority formed the spin-off, nonprofit corporation in 2003.
The government charged that Ratkovich and DeRosa knew the Norwood Avenue resident’s purchase recommendation to Affordable Housing was not the product of proper and accurate analysis. The rental properties were reportedly ones that DeRosa, his family members and his friends wanted to sell.

Ratkovich also submitted false financial projections regarding the properties to First Commonwealth, the U.S. Attorney’s Office said.

Government investigators said Affordable Housing overpaid Ratkovich for his consulting services. The U.S. Attorney’s Office charged that Ratkovich, DeRosa and a person identified in court records as “G.F.” agreed to share the funds.

Affordable Housing declared itself insolvent in March 2006.

In May, Ratkovich resigned as the housing authority’s maintenance superintendent, a position he held since April 2005. Before that, he was the authority’s modernization coordinator.

The U.S. Attorney’s Office said Ratkovich faces a maximum of 50 years in prison, a fine of $1.5 million, or both. He also may be required to make restitution.