Staph cleared of fraud charge

Oct. 28, 2010

By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com

The U.S. Attorney’s Office has ended its prosecution of a real estate appraiser connected to the Affordable Housing fraud investigation.

Prosecutors dropped a charge of bank fraud against Neshannock Township resident Anthony J. Staph Jr., whose trial was scheduled to start Monday.

Staph’s employer, Castle Realty Appraisal Services Inc., pleaded guilty yesterday morning to one felony count of bank fraud. As part of a plea arrangement, the firm agreed to pay $75,000 in restitution to First Commonwealth Bank.

Attorney Thomas J. Farrell said Castle Realty’s plea does not implicate Staph, co-workers, board members or shareholders of any wrongdoing. Farrell represents Staph and the Neshannock-based business.

“The allegation was that the appraisals were wrong, and that’s what the corporation admitted,” Farrell said.

In a press release issued yesterday, the U.S. Attorney’s Office said Castle Realty provided fraudulent appraisals to First Commonwealth as part of a $250,000 loan application.

“The appraisals were fraudulent because they misrepresented the values of the properties, the condition of the properties, and whether the properties were occupied,” the government said.

Located throughout New Castle, the seven properties were purchased by Affordable Housing of Lawrence in December 2005. Months later, the nonprofit agency declared itself insolvent with nearly a half-million dollars in debt.

During a meeting Monday, Castle Realty’s board of directors adopted a resolution agreeing to the plea. The resolution noted the action was not an admission of guilt.

“Both sides decided it was a fair resolution of the case,” Farrell said. “(Staph is) glad he can continue with his career … and taking care of his family.”

Staph, who serves as the board’s secretary and vice president, represented Castle Realty during yesterday’s 45-minute session in Pittsburgh federal court.

In addition to paying restitution, Castle Realty may be fined, ordered to pay additional compensation or placed on probation, Farrell said. Senior U.S. District Judge Gustave Diamond scheduled sentencing for 10 a.m. March 1.

“As with an individual, judges limit fines to a corporation’s ability to pay, and I don’t think the corporation has much in the way of assets, especially after restitution is paid.”

Nicholas DeRosa, a co-defendant in the case, was expected to appear in court today to change his plea. The former city councilman and retired school administrator originally pleaded not guilty to two counts of mail fraud in addition to bank fraud and conspiracy to commit money laundering.