DeRosa plea caps federal probe

Dec. 31, 2010


(As 2010 draws to a close, The News is counting down the Top 10 local stories of the year. Today: No. 2)

By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com

Who’s Nick DeRosa? What’s he like?

During its federal grand jury investigation into mortgage fraud, the U.S. Attorney’s Office questioned Deno DeLorenzo about the finances of Affordable Housing of Lawrence County. A few grand jury participants wanted to know about the retired New Castle school administrator.

“I was there for a good hour of questioning,” DeLorenzo said of his April 2008 testimony. “The only question (the jury) asked was about the character of Nick DeRosa.”

DeLorenzo served as board president in the final months of the nonprofit housing agency’s existence. While executive director of the Lawrence County housing authority, Robert Evanick helped found Affordable Housing in 2003.

He left the group in December 2005 after the board signed a $250,000 mortgage agreement with First Commonwealth Bank for the purchase of seven structures.

The agency defaulted on the loan in March 2006. DeRosa owned or co-owned four of the seven properties.

A certified public accountant, DeLorenzo provided the government with the documentation and insight that led to charges being filed against DeRosa and four other parties.

DeRosa pleaded guilty Oct. 28 to single felony counts of bank fraud, mail fraud and conspiracy to commit money laundering. His sentencing is scheduled for March 1.

IMAGE

The unfolding of the Affordable Housing scandal magnified the differences between DeRosa’s public image and private life.

He was elected to city council, served two terms on the Slippery Rock University Council of Trustees and sat on the Lawrence County Planning Commission board.

DeRosa’s community service included work with the American Heart Association, the American Cancer Society and Easter Seals. He also was former president of the National Association of Wolves, an Italian service organization.

However, DeRosa is best known for his association with the New Castle Area School District. A 1963 Ne-Ca-Hi graduate, he was hired as an elementary teacher. DeRosa was promoted to principal and became assistant superintendent in 1989.

Although never naming him, a 2003 state Auditor General’s report detailed problems involving the educator. The findings outlined gambling activities that permitted DeRosa to receive free hotel rooms for three school board members attending a conference in 2002; a failure to disclose financial interests; the purchase of boxed lunches from the district for a business DeRosa owned; and his conduct regarding travel while representing the school system.

The audit led the school board to hire attorney Richard A. Harper in March 2004 to conduct an independent review.

“The Harper Report focuses on one thing and one thing only — the assistant superintendent (Nicholas DeRosa),” district solicitor Charles Sapienza said in a June 24, 2006, interview.

TARGET

Likewise, federal investigators made him the target of its mortgage fraud probe.

DeRosa originally pleaded not guilty to the charges. Prior to the change, defense attorney Efrem Grail filed objections to portions of the government’s evidence.
One of the complaints dealt with DeRosa’s role as a landlord.

Government investigators talked to former tenants, one of which referred to him as a “slumlord.” New Castle code enforcement had condemned a Wallace Avenue property that DeRosa co-owned five days after Castle Realty inspected it for an appraisal. Rats were reportedly living in the properties, and truckloads of trash were removed.

Federal prosecutors also were prepared to tie DeRosa to the theft of quarters from housing authority laundry machines, kickbacks involving a housing authority grass-cutting contract and money he and former county treasurer Gary Felasco reportedly collected from a bingo hall operator.

In court paperwork, Grail called the evidence improper and said that it tainted “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.”

DeRosa faces three to four years in prison, probation, restitution, forfeiture of assets and fines. He remains free on $10,000 unsecured bond.