Felasco receives 3 years probation

Sept. 9, 2009

Felasco receives 3 years probation


By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com

PITTSBURGH — Judge Gustave Diamond refused to excuse Gary F. Felasco’s criminal conduct during yesterday’s sentencing hearing.

However, the U.S. senior district justice could not ignore what the former Lawrence County treasurer has told federal authorities since August 2006.

Facing four to 10 months in prison, Felasco received three years probation for failing to file a 2005 federal tax return. The first six months will be spent under home detention.

“(Felasco) has brought to light some mind-boggling (allegations of) corruption in Lawrence County,” Assistant U.S. Attorney Brendan T. Conway said.

“We have been able to corroborate everything Mr. Felasco has said. We believe he will continue to cooperate.”

Felasco’s attorney, James J. Ross, and Conway each said Felasco has acted “exemplary.” Investigations have been initiated as a result.

“The cooperation has been truthful and complete,” Ross said.

One such effort involves a mortgage fraud probe centered on Affordable Housing of Lawrence County and First Commonwealth Bank.

Robert Ratkovich of 512 Norwood Ave. pleaded guilty to one count of bank and mail fraud conspiracy and one count of money laundering conspiracy. He is scheduled to be sentenced Oct. 28.

Neshannock Township resident Anthony J. Staph Jr. entered a “not guilty” plea on July 21 in response to one count of bank fraud. Pretrial motions in his case will take place Oct. 30.

Nicholas DeRosa of 221 N. Cascade St. is scheduled to be arraigned at 9:30 a.m. Oct. 1 on one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy.

To keep details of his assistance confidential, Diamond approved the government’s motion to have its sentencing report sealed.

“The public revelation of the extent of (Felasco’s) cooperation would unfairly reveal information related in individuals that have not been charged with criminal offense and may detrimentally effect ongoing investigations,” the government wrote.

Diamond agreed that Felasco’s cooperation has been substantial. He said he expects future indictments as a result.

Despite the nature of Felasco’s crime, the judge said his cooperation should be rewarded.
“I’m just sorry for the harm I caused so many people,” Felasco said to the judge.

As a condition of the probation, Diamond ordered the Warren, Pa., resident to make arrangements with the Internal Revenue Service for the payment of back taxes, penalties and interest.

Felasco’s presentence report, issued in late July, noted the IRS did not collect $10,000 for the 2005 tax year. Felasco earned $44,568 as county treasurer in 2005. He collected an additional $35,000, which the government said he received as the result of alleged illegal activity relating to Affordable Housing.

Diamond did not levy a fine against Felasco, who does not work as the result of a undisclosed disability.

Another federal agency, the U.S. Department of Housing and Urban Development, has maintained an interest in the cases involving Felasco and Affordable Housing. HUD funds were used in the creation of the nonprofit housing agency.

“At this time, HUD will await the outcome of the ongoing legal proceedings and then determine the appropriate steps to protect the taxpayer’s interest,” said Maria Bynum, HUD’s regional public affairs director in Philadelphia.