Oct. 30, 2010
Patrick E. Litowitz
New Castle News
NEW CASTLE — The government’s case against Nicholas DeRosa centered on mortgage fraud.
However, prosecutors were prepared to discuss quarters, nicknames and bingo.
And defense attorney Efrem Grail did not want a jury exposed to those topics.
DeRosa’s guilty plea Thursday in the Affordable Housing scandal made Grail’s effort to suppress parts of the government’s evidence no longer necessary. The 65-year-old New Castle resident pleaded to felony counts of bank fraud, mail fraud and conspiracy to commit money laundering.
The retired city school district administrator will be sentenced March 1.
Grail targeted six areas in his motion to exclude evidence. Court paperwork highlights some of the information investigators collected as they worked to bring charges against those responsible for defrauding First Commonwealth Bank of $250,000.
The issues were New Castle building code violations and tenant complaints; nicknames; and the alleged receipt of stolen quarters, embezzled contract fees and bingo funds.
Grail argued that the evidence was improper and served “to sully Mr. DeRosa’s character in the eyes of the jury, to show he has a propensity to do wrong, to paint him as a bad person.”
The Pittsburgh-based attorney said the crime took place over short span and the evidence’s prejudicial nature outweighed any value it might provide.
“Nevertheless, the government has produced wholly unrelated … material alleging prior bad acts by Mr. DeRosa dating as far back as the (1990s) … ,” Grail wrote.
Assistant U.S. Attorney Brendan T. Conway said he did not expect additional charges to be filed. However, he would not comment when asked if the evidence would be turned over to other law enforcement agencies.
CODE VIOLATIONS
Using a $250,000 loan from First Commonwealth and a portion of the $200,000 in federal funds provided by the Lawrence County Housing Authority, Affordable Housing of Lawrence County purchased seven properties in December 2005. The appraisals that Castle Realty Appraisal Services Inc. presented to First Commonwealth depicted one condition.
Prosecutors presented another using a government expert and the city’s code enforcement department. The government argued little change in property condition from the time Castle Realty issued its appraisal until state-certified appraiser R. Robert Barone Jr. provided his assessment 10 months later.
DeRosa owned or co-owned four of the properties.
“(D)uring that time period, 10 truckloads of trash were removed from five of the seven properties, and they were cleaned up. In one property, the one located at 857-859 Frank Avenue, the basement was filled with garbage … ,” the government wrote in rebuttal to Grail’s motion.
“Many of these properties had reached the ends of their economic lives, and significant investments had to be made into the properties to make them habitable.”
DeRosa was the sole owner of the Frank Avenue property.
In another example, code enforcement Officer Larry Joseph condemned a Wallace Avenue property co-owned by DeRosa five days after Castle Realty’s inspection. Officer Anthony Cioffi found another Affordable Housing structure, located on Croton Avenue, to be in deplorable condition.
COMMENTS
Investigators also spoke to DeRosa’s former tenants. Among their comments:
•“DeRosa was a slumlord.”
•“Every time something broke, (we) had to fix it (ourselves).
•“There were rats in the place.”
•“It smelled musty and had mold in the structure.”
Saying that no one in the real world likes their landlord, Grail said the tenants’ statements would make DeRosa appear unsympathetic to a jury. He added that it was not relevant or fair to allow them to make negative statements about DeRosa.
While objecting to DeRosa being called a “slumlord,” the defense also argued against introducing testimony referring to the city resident as “Boss Hog” and the “Godfather.” The government learned of the nicknames through an interview with Gary Felasco, former county treasurer.
Grail said the terms were “highly prejudicial as it paints Mr. DeRosa as corrupt, as a mob boss, and as criminal.” He added that “Godfather” is a term that continues the stereotype of “Italian Americans’ involvement in organized and sustained criminal enterprises.”
Felasco was convicted in 2006 of theft and embezzlement while in office. A portion of the funds from the Affordable Housing mortgage scam paid for his legal bills, the government said. He pleaded guilty to failing to file a tax return in connection with the unreported proceeds.
MONEY ISSUES
The government also obtained witness statements regarding DeRosa’s alleged role regarding stolen money. As Grail detailed in his motion, DeRosa was never charged in the reported incidents.
The first area involved the theft of quarters from laundry machines based in county housing authority properties. In creating Affordable Housing, the authority turned over management of its washing facilities to the nonprofit agency.
Donald “Ducky” Conti told investigators of the alleged scheme during a July 3, 2008, meeting. Conti served on the housing authority and Affordable Housing boards.
Conti collected the quarters and placed them in bags, which were left in his car’s trunk. He usually had $1,300 to $1,500 before DeRosa contacted him, court records stated. DeRosa reportedly phoned him within a day of the collection.
“From the first time he collected the coins, they were taken to DeRosa’s house,” according to prosecutors. “Conti pulled into DeRosa’s garage, the garage door was closed, and DeRosa and Felasco took the bucket of coins into the house.”
Conti estimated Felasco and DeRosa each collected $800 to $1,000 a year from the coins.
Felasco told investigators of a second alleged scheme involving the housing authority. This one dealt with contract fees for grass cutting.
Felasco said he and DeRosa told a housing authority maintenance provider to bid on lawn cutting services. As part of the deal, Felasco alleged, the company would include kickbacks to Felasco and DeRosa as part of the bid. The business also was told to cut the grass every nine days but to bill the housing authority every seven days.
“The government has no proper purpose in offering the evidence,” Grail said. “Its introduction can only be to show that Mr. DeRosa has a propensity to attempt to benefit improperly from others’ business dealings with Lawrence County municipalities.”
NEXT NUMBER
Lastly, the government alleged that DeRosa and Felasco took money from a county bingo hall. Felasco made the statement to investigators in August 2006. He originally denied the claim two years earlier.
The incident reportedly occurred when Felasco was running for county treasurer. A bingo hall operator told him that the small bingo games were hurting his business and he wanted to get rid of the competition.
“At the time Felasco became treasurer, bingo was big business in Lawrence County,” a government investigator wrote. “(The operator) was busing people in from Ohio to play bingo.
“DeRosa and (the operator) became friends and hatched a plan that Felasco would go out and get rid of the small bingos.”
Upon becoming treasurer, Felasco used the state tax regulations and closed some of halls. In return, court records stated, DeRosa and Felasco reportedly received payments of $1,000 each.
Felasco did not provide the total amount they reportedly received.
Had DeRosa not pleaded guilty, his trial was scheduled to begin Monday.
Saturday, October 30, 2010
Friday, October 29, 2010
DeRosa admits to role in mortgage fraud
Oct. 29, 2010
Patrick E. Litowitz
New Castle News
PITTSBURGH — Nicholas DeRosa’s plea agreement effectively ends the federal government’s fraud probe of a defunct Lawrence County housing agency.
DeRosa represents the fourth of five parties to admit guilt in a mortgage scam involving Affordable Housing of Lawrence County.
The 65-year-old New Castle resident appeared in federal court yesterday afternoon to change his original plea on four charges. He then pleaded guilty to single felony counts of bank fraud, mail fraud and conspiracy to commit money laundering. A second count of mail fraud will be dismissed at DeRosa’s sentencing, scheduled for March 1.
“Public corruption, mortgage fraud and financial fraud are important priorities of this office,” said U.S. Attorney David J. Hickton, representing the Western District of Pennsylvania.
“At issue here was the misuse of government funds intended to be used for the benefit of low-income citizens in need of housing. We are making serious progress in the fight for hard-working Americans who play by the rules by protecting vulnerable families and communities from financial predators.”
PLEA ACCEPTED
Senior U.S. District Judge Gustave Diamond accepted the retired city school administrator’s plea during the 50-minute session.
The former city councilman faces jail time, probation, restitution, forfeiture of assets and fines. The prosecution agreed to a prison term of no more than three to four years. However, Diamond will decide DeRosa’s punishment after a presentence investigation is concluded.
“The really unique aspect from my perspective was the intermingling of the financial crime with the sort of undertow of political corruption,” Assistant U.S. Attorney Brendan T. Conway said.
“It’s pretty amazing to me the sort of influence DeRosa was able to have despite the lack of a real, actual political position or even a position on the board of any of these entities. Yet, he was able to pull off this scam.”
DeRosa remains free on $10,000 unsecured bond.
DeRosa’s attorney, Efrem Grail, did not respond to a request for comment after the hearing.
The centerpiece of the Affordable Housing case was a $250,000 loan fraudulently obtained from First Commonwealth Bank. The government said Robert Ratkovich, who worked as Affordable Housing’s consultant, recommended seven properties, four of which were either owned or co-owned by DeRosa. Ratkovich, through DeRosa’s instructions, asked the bank to use Castle Realty Appraisal Services Inc.
The Neshannock Township firm then submitted inaccurate and inflated appraisals to First Commonwealth, which relied upon them to approve the loan. A company representative pleaded guilty Wednesday to one felony count of bank fraud. Castle Realty, which admitted to no wrongdoing, will pay $75,000 in restitution.
KICKBACKS
Prosecutors said Affordable Housing served as an instrument for DeRosa, Ratkovich, former county Treasurer Gary Felasco and a fourth unnamed co-conspirator to collect kickbacks and additional unearned income. Felasco helped create Affordable Housing in 2003 in his role of chairman of the Lawrence County Housing Authority.
The authority provided $200,000 in federal funds and laundry concessions to the nonprofit group.
Ratkovich, who collected nearly $61,000 as an Affordable Housing consultant, pleaded guilty to bank fraud, mail fraud and money laundering conspiracy. Felasco admitted guilt to one count of failing to file a 2005 federal tax return.
New Castle contractor Michael Trover faces three counts of lying to a grand jury.
Conway said the government will pursue the return of funds taken from First Commonwealth and the housing authority. He estimated the overall restitution at $350,000.
Conway added he doesn’t expect more charges to be filed.
“We feel like this is an appropriate resolution to this case — to get the people responsible.”
Patrick E. Litowitz
New Castle News
PITTSBURGH — Nicholas DeRosa’s plea agreement effectively ends the federal government’s fraud probe of a defunct Lawrence County housing agency.
DeRosa represents the fourth of five parties to admit guilt in a mortgage scam involving Affordable Housing of Lawrence County.
The 65-year-old New Castle resident appeared in federal court yesterday afternoon to change his original plea on four charges. He then pleaded guilty to single felony counts of bank fraud, mail fraud and conspiracy to commit money laundering. A second count of mail fraud will be dismissed at DeRosa’s sentencing, scheduled for March 1.
“Public corruption, mortgage fraud and financial fraud are important priorities of this office,” said U.S. Attorney David J. Hickton, representing the Western District of Pennsylvania.
“At issue here was the misuse of government funds intended to be used for the benefit of low-income citizens in need of housing. We are making serious progress in the fight for hard-working Americans who play by the rules by protecting vulnerable families and communities from financial predators.”
PLEA ACCEPTED
Senior U.S. District Judge Gustave Diamond accepted the retired city school administrator’s plea during the 50-minute session.
The former city councilman faces jail time, probation, restitution, forfeiture of assets and fines. The prosecution agreed to a prison term of no more than three to four years. However, Diamond will decide DeRosa’s punishment after a presentence investigation is concluded.
“The really unique aspect from my perspective was the intermingling of the financial crime with the sort of undertow of political corruption,” Assistant U.S. Attorney Brendan T. Conway said.
“It’s pretty amazing to me the sort of influence DeRosa was able to have despite the lack of a real, actual political position or even a position on the board of any of these entities. Yet, he was able to pull off this scam.”
DeRosa remains free on $10,000 unsecured bond.
DeRosa’s attorney, Efrem Grail, did not respond to a request for comment after the hearing.
The centerpiece of the Affordable Housing case was a $250,000 loan fraudulently obtained from First Commonwealth Bank. The government said Robert Ratkovich, who worked as Affordable Housing’s consultant, recommended seven properties, four of which were either owned or co-owned by DeRosa. Ratkovich, through DeRosa’s instructions, asked the bank to use Castle Realty Appraisal Services Inc.
The Neshannock Township firm then submitted inaccurate and inflated appraisals to First Commonwealth, which relied upon them to approve the loan. A company representative pleaded guilty Wednesday to one felony count of bank fraud. Castle Realty, which admitted to no wrongdoing, will pay $75,000 in restitution.
KICKBACKS
Prosecutors said Affordable Housing served as an instrument for DeRosa, Ratkovich, former county Treasurer Gary Felasco and a fourth unnamed co-conspirator to collect kickbacks and additional unearned income. Felasco helped create Affordable Housing in 2003 in his role of chairman of the Lawrence County Housing Authority.
The authority provided $200,000 in federal funds and laundry concessions to the nonprofit group.
Ratkovich, who collected nearly $61,000 as an Affordable Housing consultant, pleaded guilty to bank fraud, mail fraud and money laundering conspiracy. Felasco admitted guilt to one count of failing to file a 2005 federal tax return.
New Castle contractor Michael Trover faces three counts of lying to a grand jury.
Conway said the government will pursue the return of funds taken from First Commonwealth and the housing authority. He estimated the overall restitution at $350,000.
Conway added he doesn’t expect more charges to be filed.
“We feel like this is an appropriate resolution to this case — to get the people responsible.”
Thursday, October 28, 2010
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.
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.
DeRosa to change fraud plea
Oct. 27, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Nicholas DeRosa, a key figure in the Affordable Housing mortgage scandal, will change his plea, according to paperwork filed yesterday.
Senior District Judge Gustave Diamond said a hearing will take place at 12:30 p.m. tomorrow in Pittsburgh federal court. The former New Castle city councilman and retired school administrator pleaded not guilty on Oct. 1, 2009, to two counts of mail fraud in addition to bank fraud and conspiracy to commit money laundering. The charges are felony offenses.
The government named DeRosa and real estate appraiser Anthony Staph Jr. as co-conspirators in the case. Their trial is scheduled to begin Monday. Staph is charged with one felony count of bank fraud.
The U.S. Attorney’s Office alleges DeRosa, Staph and Robert Ratkovich schemed to defraud First Commonwealth Bank using inflated appraisals of seven city properties to acquire a $250,000 loan.
Affordable Housing hired Ratkovich to serve as its consultant, earning approximately $61,000 in a two-year span. DeRosa had owned or co-owned four of the seven buildings.
DeRosa’s request to change his plea comes as defense attorneys and federal prosecutors submitted motions regarding the jury selection process, the credibility of a government expert and two witnesses, and the admissibility of evidence.
The Lawrence County Housing Authority created Affordable Housing of Lawrence County in 2003. The housing authority provided the nonprofit group with $200,000 and handed over its laundry concessions.
Affordable Housing purchased the properties in December 2005. In the three months that followed, five board members resigned and the agency declared itself insolvent with approximately $500,000 in debt.
Ratkovich, a Norwood Avenue resident, pleaded guilty in July 2009 to bank and mail fraud conspiracy in addition to money laundering conspiracy. The city councilman is scheduled to be sentenced at 10 a.m. Dec. 14.
The investigation also has produced charges against two men in cases related to Affordable Housing.
Gary Felasco, former county treasurer, pleaded guilty to one count of failing to file a 2005 federal tax return. He was sentenced in September 2009 to three years probation.
Felasco, whose last known address was in Warren County, gained $35,000 from the Affordable Housing purchases but did not report the income. A government report said the money reportedly was used for defense costs in Felasco’s May 2006 criminal trial. The state Attorney General’s Office charged him with theft and embezzlement while in office.
A New Castle contractor faces three counts of lying to a grand jury. Federal prosecutors charge that Michael Trover, an East Long Avenue resident, lied in his testimony regarding work involving Affordable Housing, the housing authority and Shenango Township’s housing rehab program.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Nicholas DeRosa, a key figure in the Affordable Housing mortgage scandal, will change his plea, according to paperwork filed yesterday.
Senior District Judge Gustave Diamond said a hearing will take place at 12:30 p.m. tomorrow in Pittsburgh federal court. The former New Castle city councilman and retired school administrator pleaded not guilty on Oct. 1, 2009, to two counts of mail fraud in addition to bank fraud and conspiracy to commit money laundering. The charges are felony offenses.
The government named DeRosa and real estate appraiser Anthony Staph Jr. as co-conspirators in the case. Their trial is scheduled to begin Monday. Staph is charged with one felony count of bank fraud.
The U.S. Attorney’s Office alleges DeRosa, Staph and Robert Ratkovich schemed to defraud First Commonwealth Bank using inflated appraisals of seven city properties to acquire a $250,000 loan.
Affordable Housing hired Ratkovich to serve as its consultant, earning approximately $61,000 in a two-year span. DeRosa had owned or co-owned four of the seven buildings.
DeRosa’s request to change his plea comes as defense attorneys and federal prosecutors submitted motions regarding the jury selection process, the credibility of a government expert and two witnesses, and the admissibility of evidence.
The Lawrence County Housing Authority created Affordable Housing of Lawrence County in 2003. The housing authority provided the nonprofit group with $200,000 and handed over its laundry concessions.
Affordable Housing purchased the properties in December 2005. In the three months that followed, five board members resigned and the agency declared itself insolvent with approximately $500,000 in debt.
Ratkovich, a Norwood Avenue resident, pleaded guilty in July 2009 to bank and mail fraud conspiracy in addition to money laundering conspiracy. The city councilman is scheduled to be sentenced at 10 a.m. Dec. 14.
The investigation also has produced charges against two men in cases related to Affordable Housing.
Gary Felasco, former county treasurer, pleaded guilty to one count of failing to file a 2005 federal tax return. He was sentenced in September 2009 to three years probation.
Felasco, whose last known address was in Warren County, gained $35,000 from the Affordable Housing purchases but did not report the income. A government report said the money reportedly was used for defense costs in Felasco’s May 2006 criminal trial. The state Attorney General’s Office charged him with theft and embezzlement while in office.
A New Castle contractor faces three counts of lying to a grand jury. Federal prosecutors charge that Michael Trover, an East Long Avenue resident, lied in his testimony regarding work involving Affordable Housing, the housing authority and Shenango Township’s housing rehab program.
Ratkovich’s sentencing postponed
Oct. 22, 20100
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A conspirator in the Affordable Housing mortgage scandal had his sentencing date moved to December.
Acting yesterday on a motion from the U.S. Attorney’s Office, Senior District Judge Gustave Diamond rescheduled Robert Ratkovich’s court appearance from Wednesday to 10 a.m. Dec. 14 in Pittsburgh federal court.
The former New Castle city councilman pleaded guilty in July 2009 to felony counts of conspiracy involving mail and bank fraud in addition to money laundering. Prosecutors said Ratkovich helped defraud First Commonwealth Bank of $250,000 in his role as consultant to Affordable Housing of Lawrence County.
The nonprofit agency was created in 2003 by the Lawrence County Housing Authority, where he was employed as maintenance supervisor. He resigned that position two months prior to entering his plea.
Assistant U.S. Attorney Brendan T. Conway sought the delay as the government prepares to try Anthony Staph Jr. and Nicholas DeRosa.
Staph, a real estate appraiser, faces a felony count of bank fraud. He is accused of inflating the values of seven properties Affordable Housing purchased in December 2005. DeRosa and Ratkovich reportedly oversaw the sale.
A retired city school administrator and former city councilman, DeRosa is charged with one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy.
Their trial is scheduled for Nov. 1. The date may be moved in response to motions filed by Staph’s attorney on Oct. 12.
The government said in its motion that as part of Ratkovich’s plea arrangement he agreed to cooperate in the investigation against Staph and DeRosa. Moving the sentencing date will allow Ratkovich to complete his obligation, prosecutors said.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A conspirator in the Affordable Housing mortgage scandal had his sentencing date moved to December.
Acting yesterday on a motion from the U.S. Attorney’s Office, Senior District Judge Gustave Diamond rescheduled Robert Ratkovich’s court appearance from Wednesday to 10 a.m. Dec. 14 in Pittsburgh federal court.
The former New Castle city councilman pleaded guilty in July 2009 to felony counts of conspiracy involving mail and bank fraud in addition to money laundering. Prosecutors said Ratkovich helped defraud First Commonwealth Bank of $250,000 in his role as consultant to Affordable Housing of Lawrence County.
The nonprofit agency was created in 2003 by the Lawrence County Housing Authority, where he was employed as maintenance supervisor. He resigned that position two months prior to entering his plea.
Assistant U.S. Attorney Brendan T. Conway sought the delay as the government prepares to try Anthony Staph Jr. and Nicholas DeRosa.
Staph, a real estate appraiser, faces a felony count of bank fraud. He is accused of inflating the values of seven properties Affordable Housing purchased in December 2005. DeRosa and Ratkovich reportedly oversaw the sale.
A retired city school administrator and former city councilman, DeRosa is charged with one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy.
Their trial is scheduled for Nov. 1. The date may be moved in response to motions filed by Staph’s attorney on Oct. 12.
The government said in its motion that as part of Ratkovich’s plea arrangement he agreed to cooperate in the investigation against Staph and DeRosa. Moving the sentencing date will allow Ratkovich to complete his obligation, prosecutors said.
Wednesday, October 20, 2010
Attorney seeks to suppress testimony in Staph trial
Oct. 20, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A co-defendant in an upcoming mortgage fraud trial wants to exclude the testimony of a government expert and two witnesses.
Attorney Thomas J. Farrell, representing Neshannock Township resident Anthony Staph Jr., filed the motions Oct. 12 in Pittsburgh federal court.
Staph, a real estate appraiser, was indicted on one felony count of bank fraud in the Affordable Housing of Lawrence County scandal. Prosecutors charged that in November 2005 Staph inflated the prices of seven New Castle properties to $350,000.
Federal investigators allege Staph’s appraisals were instrumental in First Commonwealth Bank approving a $250,000 loan to Affordable Housing. The Lawrence County Housing Authority created the nonprofit agency in 2003 using $200,000 in federal funds.
Co-defendant Nicholas DeRosa, of North Cascade Street, faces one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy. He is a retired city school administrator and former city councilman.
Farrell asked Senior District Judge Gustave Diamond to exclude the testimony of R. Robert Barone Jr., a state certified appraiser. Barone produced a report in September 2006 for the U.S. Department of Housing and Urban Development. In it, he listed the value of the properties at $198,500.
“This Court should preclude Mr. Barone from testifying because his opinion is based on unreliable data and information,” Farrell wrote. “In particular, in reaching his conclusions, Mr. Barone relies upon West Penn Multi-List real estate property listings ...”
He claimed the service does not verify the listings’ accuracy.
Farrell also said that Barone did not account for the time the structures were vacant.
“The properties appraised by Mr. Staph deteriorated significantly after he finished the appraisals,” Farrell wrote. “In the (10) months after the Staph appraisals were completed, the properties were vacated and vandalized and were left unattended in the cold winter months and stripped of carpeting, tiling and various fixtures ...
“The properties as appraised by Mr. Barone were simply not the same properties appraised by Mr. Staph.”
Staph’s attorney then filed a motion to bar Robert Ratkovich and Gary Felasco, former county treasurer, from testifying. Farrell also reiterated his request to separate his client’s case from DeRosa’s. The trial is scheduled to begin Nov. 1.
Ratkovich, of 512 Norwood Ave., pleaded guilty in July 2009 to bank and mail fraud conspiracy in addition to money laundering conspiracy. The former housing authority supervisor and city councilman is set to be sentenced at 10 a.m. Oct. 27 in Pittsburgh.
Diamond sentenced Felasco in September 2009 to three years probation for failing to file a 2005 federal tax return. The case was separate but related to the Affordable Housing scheme. Court records stated Felasco illegally collected $35,000 from the Affordable Housing purchases. In doing so, he underpaid the IRS $10,000.
In his motion, Farrell provided seven statements from government documents that he said amounted to hearsay. The remarks involved another person associated with city-based Castle Realty, where Staph is employed.
A federal investigator noted in a July 2008 interview with Felasco that “DeRosa told Felasco that the appraisals were nothing more than a formality, and they would get the appraisals they wanted.”
“The government may argue that these statements are admissible as co-conspirator statements,” Farrell wrote. “There is no independent evidence that (Staph) was part of a conspiracy.”
The U.S. Attorney’s Office has until Tuesday to respond.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A co-defendant in an upcoming mortgage fraud trial wants to exclude the testimony of a government expert and two witnesses.
Attorney Thomas J. Farrell, representing Neshannock Township resident Anthony Staph Jr., filed the motions Oct. 12 in Pittsburgh federal court.
Staph, a real estate appraiser, was indicted on one felony count of bank fraud in the Affordable Housing of Lawrence County scandal. Prosecutors charged that in November 2005 Staph inflated the prices of seven New Castle properties to $350,000.
Federal investigators allege Staph’s appraisals were instrumental in First Commonwealth Bank approving a $250,000 loan to Affordable Housing. The Lawrence County Housing Authority created the nonprofit agency in 2003 using $200,000 in federal funds.
Co-defendant Nicholas DeRosa, of North Cascade Street, faces one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy. He is a retired city school administrator and former city councilman.
Farrell asked Senior District Judge Gustave Diamond to exclude the testimony of R. Robert Barone Jr., a state certified appraiser. Barone produced a report in September 2006 for the U.S. Department of Housing and Urban Development. In it, he listed the value of the properties at $198,500.
“This Court should preclude Mr. Barone from testifying because his opinion is based on unreliable data and information,” Farrell wrote. “In particular, in reaching his conclusions, Mr. Barone relies upon West Penn Multi-List real estate property listings ...”
He claimed the service does not verify the listings’ accuracy.
Farrell also said that Barone did not account for the time the structures were vacant.
“The properties appraised by Mr. Staph deteriorated significantly after he finished the appraisals,” Farrell wrote. “In the (10) months after the Staph appraisals were completed, the properties were vacated and vandalized and were left unattended in the cold winter months and stripped of carpeting, tiling and various fixtures ...
“The properties as appraised by Mr. Barone were simply not the same properties appraised by Mr. Staph.”
Staph’s attorney then filed a motion to bar Robert Ratkovich and Gary Felasco, former county treasurer, from testifying. Farrell also reiterated his request to separate his client’s case from DeRosa’s. The trial is scheduled to begin Nov. 1.
Ratkovich, of 512 Norwood Ave., pleaded guilty in July 2009 to bank and mail fraud conspiracy in addition to money laundering conspiracy. The former housing authority supervisor and city councilman is set to be sentenced at 10 a.m. Oct. 27 in Pittsburgh.
Diamond sentenced Felasco in September 2009 to three years probation for failing to file a 2005 federal tax return. The case was separate but related to the Affordable Housing scheme. Court records stated Felasco illegally collected $35,000 from the Affordable Housing purchases. In doing so, he underpaid the IRS $10,000.
In his motion, Farrell provided seven statements from government documents that he said amounted to hearsay. The remarks involved another person associated with city-based Castle Realty, where Staph is employed.
A federal investigator noted in a July 2008 interview with Felasco that “DeRosa told Felasco that the appraisals were nothing more than a formality, and they would get the appraisals they wanted.”
“The government may argue that these statements are admissible as co-conspirator statements,” Farrell wrote. “There is no independent evidence that (Staph) was part of a conspiracy.”
The U.S. Attorney’s Office has until Tuesday to respond.
Saturday, October 16, 2010
New Castle to join state-backed study
Oct. 14, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
New Castle will participate in the Pennsylvania Department of Education’s merger study.
The board agreed to the department’s no cost, no obligation offer in a 7-0 vote last night. Members Fred Mozzocio and Karen Humphrey were absent.
“This doesn’t mean New Castle will look to merge with another district,” Superintendent George Gabriel said at Tuesday’s work session. “I think it would be incumbent on us to at least participate.
“We are not committing anything other than some of the administration’s time to work with the department of (education).”
Earlier in the year, the Union Area School District’s superintendent approached Gabriel about a potential merger.
I had one meeting with Dr. (Alfonso) Angelucci, and I can tell you there was not a whole lot of substance,” he said. “I think the substance comes through this feasibility study.”
The board also approved two measures involving the Harry W. Lockley Early Learning Center.
Eckles Architecture & Engineering was approved as the architect overseeing the renovation, which is estimated to cost between $16.4 million to $19.3 million. The board also permitted the district to hire a geotechnical engineer. The contract is not allowed to exceed $20,000.
Both requests passed in 6-1 votes. Barbara Razzano said she voted ‘no’ because she did not support the project.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
New Castle will participate in the Pennsylvania Department of Education’s merger study.
The board agreed to the department’s no cost, no obligation offer in a 7-0 vote last night. Members Fred Mozzocio and Karen Humphrey were absent.
“This doesn’t mean New Castle will look to merge with another district,” Superintendent George Gabriel said at Tuesday’s work session. “I think it would be incumbent on us to at least participate.
“We are not committing anything other than some of the administration’s time to work with the department of (education).”
Earlier in the year, the Union Area School District’s superintendent approached Gabriel about a potential merger.
I had one meeting with Dr. (Alfonso) Angelucci, and I can tell you there was not a whole lot of substance,” he said. “I think the substance comes through this feasibility study.”
The board also approved two measures involving the Harry W. Lockley Early Learning Center.
Eckles Architecture & Engineering was approved as the architect overseeing the renovation, which is estimated to cost between $16.4 million to $19.3 million. The board also permitted the district to hire a geotechnical engineer. The contract is not allowed to exceed $20,000.
Both requests passed in 6-1 votes. Barbara Razzano said she voted ‘no’ because she did not support the project.
Monday, October 11, 2010
Razzano continues records chase
Oct. 8, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Barbara Razzano will go to court to enforce an open records ruling against the New Castle Area School District.
“We’ve decided to move ahead with that,” said Pittsburgh attorney Ronald D. Barber, who represents the school board member.
He would not disclose when the filing would take place.
District solicitor Charles Sapienza said Razzano already has information on the city’s youth football program.
Razzano asked for documents dating back to March 2008 when the school board voted to have Red Hurricane head coach Frank Bongivengo Jr. oversee the program. She maintains the district has not fulfilled her request.
“The position of the administration and myself is that we have complied with the directive of the (Pennsylvania) Office of Open Records,” Sapienza said during the school board’s September work session.
“We gave them all records. We never possessed, controlled or created those records.”
In April, the district filed a petition for review of the state agency’s decision. The action occurred when the district learned board member Mark Kirkwood also had financial records relating to the program.
Sapienza said he was satisfied Bongivengo and Kirkwood made good-faith efforts to provide the materials Razzano wanted.
Days prior to the Aug. 31 pretrial hearing in Lawrence County common pleas court, Sapienza asked Judge J. Craig Cox to discontinue the case. However, Cox wanted to meet with the parties.
Sapienza reportedly told Cox that the district would provide whatever records Razzano believed she still did not possess.
“I’m telling you all (Bongivengo and Kirkwood) have told us, ‘That is all there is,’” Sapienza said to the board.
He added Razzano’s attorney made no request for records during the session with the judge, who had agreed to dismiss the district’s petition.
“If they believe there is something specific that has not been turned over, then let us know,” Sapienza said.
Terry Mutchler, the Office of Open Records’ executive director, said it is up to Razzano to move her case forward. She said the agency is awaiting a state Commonwealth Court ruling regarding its enforcement powers.
Razzano’s second notice, submitted in December, sought the following items: an original bank statement with balance totals and check descriptions; deposit slips, bank information from March 12, 2008, through June 17, 2009; a list of all signers for banking; and the minutes and names/titles of the executive committee.
A Pennsylvania State Police investigation is continuing into Bongivengo and the city youth football program’s finances. No announcement on the case is expected to take place until the season concludes.
The district does not fund the program and Bongivengo did not receive compensation. Concession sales at Taggart Stadium during the district’s football games provide the money necessary for operations.
A group of volunteers now handles the funds associated with the youth teams, while the ’Canes coach oversees the football operations.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Barbara Razzano will go to court to enforce an open records ruling against the New Castle Area School District.
“We’ve decided to move ahead with that,” said Pittsburgh attorney Ronald D. Barber, who represents the school board member.
He would not disclose when the filing would take place.
District solicitor Charles Sapienza said Razzano already has information on the city’s youth football program.
Razzano asked for documents dating back to March 2008 when the school board voted to have Red Hurricane head coach Frank Bongivengo Jr. oversee the program. She maintains the district has not fulfilled her request.
“The position of the administration and myself is that we have complied with the directive of the (Pennsylvania) Office of Open Records,” Sapienza said during the school board’s September work session.
“We gave them all records. We never possessed, controlled or created those records.”
In April, the district filed a petition for review of the state agency’s decision. The action occurred when the district learned board member Mark Kirkwood also had financial records relating to the program.
Sapienza said he was satisfied Bongivengo and Kirkwood made good-faith efforts to provide the materials Razzano wanted.
Days prior to the Aug. 31 pretrial hearing in Lawrence County common pleas court, Sapienza asked Judge J. Craig Cox to discontinue the case. However, Cox wanted to meet with the parties.
Sapienza reportedly told Cox that the district would provide whatever records Razzano believed she still did not possess.
“I’m telling you all (Bongivengo and Kirkwood) have told us, ‘That is all there is,’” Sapienza said to the board.
He added Razzano’s attorney made no request for records during the session with the judge, who had agreed to dismiss the district’s petition.
“If they believe there is something specific that has not been turned over, then let us know,” Sapienza said.
Terry Mutchler, the Office of Open Records’ executive director, said it is up to Razzano to move her case forward. She said the agency is awaiting a state Commonwealth Court ruling regarding its enforcement powers.
Razzano’s second notice, submitted in December, sought the following items: an original bank statement with balance totals and check descriptions; deposit slips, bank information from March 12, 2008, through June 17, 2009; a list of all signers for banking; and the minutes and names/titles of the executive committee.
A Pennsylvania State Police investigation is continuing into Bongivengo and the city youth football program’s finances. No announcement on the case is expected to take place until the season concludes.
The district does not fund the program and Bongivengo did not receive compensation. Concession sales at Taggart Stadium during the district’s football games provide the money necessary for operations.
A group of volunteers now handles the funds associated with the youth teams, while the ’Canes coach oversees the football operations.
Wednesday, October 6, 2010
No handouts
Oct. 6, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
First came the words of support and some followed with donations.
The one-, five-, 10- and 20-dollar bills presented to the Lin family were politely rejected and quickly returned. One spurned China Banquet customer threw $20 at the register and exited.
Gaofeng Lin said his family appreciates the community’s response after the theft of $11,000 earmarked for his grandmother’s cancer treatment.
His father, Jiesheng, was leaving the next day for the Chinese province of Fujian.
“(The customers) feel bad,” said Lin, a 2005 New Castle High graduate. “We do appreciate their sympathy. We’re very thankful.”
And that’s where it ends. No fundraisers, charity, benefits or gifts for the Lins, who have operated the business for the past 10 years.
“We want to use our hands to earn our money back,” he said. “We want to do something, like cooking your food.”
The theft occurred around 2:30 p.m. Friday at the North Jefferson Street buffet. Lin said seven Spanish-speaking men and women entered the building and ordered takeout meals. He said they had not been in the restaurant before.
Within the 15 to 20 minutes they were there, one member of the group asked where the bathroom was located. The money was gone when they left.
Lin said the money was in a bag and out of sight. Approximately $200 was also taken from a waitress’ laptop case.
“It seems like they knew it was in there.”
The city police department has not released a report on the incident.
Lin’s 75-year-old grandmother, Sai-Ying Chen, is in a hospital for lung cancer. However, she is unaware of the seriousness of the illness. Lin said her physicians have placed the responsibility of disclosing the information to Chen’s relatives.
“She doesn’t know she has cancer,” he said.
Lin said the doctors demand payment before starting treatment. They have provided enough money to have her placed into a treatment center.
“If you don’t have money, you’re waiting to die. They only accept cash.”
The Lins have borrowed money from family to help with costs. The cash was withdrawn Friday, he said, because their bank was closed on the weekend.
Lin said his father expects to head to China in one to two months with the funds needed to start the grandmother’s treatment.
Some have suggested to Lin that the theft was an inside job. He rejected the idea.
“People here are pretty nice.”
In the meantime, Lin said that people wanting to help should come to the restaurant — and eat.
“We want to earn it.”
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
First came the words of support and some followed with donations.
The one-, five-, 10- and 20-dollar bills presented to the Lin family were politely rejected and quickly returned. One spurned China Banquet customer threw $20 at the register and exited.
Gaofeng Lin said his family appreciates the community’s response after the theft of $11,000 earmarked for his grandmother’s cancer treatment.
His father, Jiesheng, was leaving the next day for the Chinese province of Fujian.
“(The customers) feel bad,” said Lin, a 2005 New Castle High graduate. “We do appreciate their sympathy. We’re very thankful.”
And that’s where it ends. No fundraisers, charity, benefits or gifts for the Lins, who have operated the business for the past 10 years.
“We want to use our hands to earn our money back,” he said. “We want to do something, like cooking your food.”
The theft occurred around 2:30 p.m. Friday at the North Jefferson Street buffet. Lin said seven Spanish-speaking men and women entered the building and ordered takeout meals. He said they had not been in the restaurant before.
Within the 15 to 20 minutes they were there, one member of the group asked where the bathroom was located. The money was gone when they left.
Lin said the money was in a bag and out of sight. Approximately $200 was also taken from a waitress’ laptop case.
“It seems like they knew it was in there.”
The city police department has not released a report on the incident.
Lin’s 75-year-old grandmother, Sai-Ying Chen, is in a hospital for lung cancer. However, she is unaware of the seriousness of the illness. Lin said her physicians have placed the responsibility of disclosing the information to Chen’s relatives.
“She doesn’t know she has cancer,” he said.
Lin said the doctors demand payment before starting treatment. They have provided enough money to have her placed into a treatment center.
“If you don’t have money, you’re waiting to die. They only accept cash.”
The Lins have borrowed money from family to help with costs. The cash was withdrawn Friday, he said, because their bank was closed on the weekend.
Lin said his father expects to head to China in one to two months with the funds needed to start the grandmother’s treatment.
Some have suggested to Lin that the theft was an inside job. He rejected the idea.
“People here are pretty nice.”
In the meantime, Lin said that people wanting to help should come to the restaurant — and eat.
“We want to earn it.”
Subscribe to:
Posts (Atom)