DeRosa attorneys seek light sentence

By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
 
Nicholas DeRosa’s attorneys and federal prosecutors can agree one thing occurred last October.

Before U.S. District Judge Gustave Diamond, the New Castle resident pleaded guilty to felony counts of bank fraud, mail fraud and conspiracy to commit money laundering as part of the government’s investigation of mortgage fraud in Lawrence County.

However, the seriousness of the offenses is being questioned.

The scam involving the sale of seven properties to Affordable Housing of Lawrence County resulted in losses nearing a half-million dollars. Affordable Housing officers secured a $250,000 mortgage from First Commonwealth Bank. The Lawrence County Housing Authority, which created the nonprofit agency in 2003, provided $200,000 in funding.

Four of the seven properties sold were either owned by DeRosa or in partnership with John Orlando.

“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 after DeRosa’s plea.
 
WINDFALL? 

Defense attorney Jeffrey M. Weimer disputed DeRosa’s financial windfall. Instead of being responsible for more than $200,000 to which he pleaded, DeRosa should be accountable for $12,500, Weimer said. That amount represents money he received from two friends to sell their properties to Affordable Housing.

DeRosa also engaged in “poor judgment to associate with criminals who embezzled money from public finances and diverted it to pay legal fees for their own, unrelated misdeeds.”

Diamond will decide which depiction of the retired educator is accurate when he sentences DeRosa at 10 a.m. March 22 in federal court, downtown Pittsburgh.

Defense attorneys began an assault on the government’s case when they stated their objections to a presentence investigation report prepared in January. The government document outlines the case, DeRosa’s involvement and the sentencing guidelines.
 
OBJECTIONS

Among the items to which they object:

•DeRosa advised Castle Realty Appraisal Services on how to prepare the appraisals.

•He established the sale prices for the properties sold to Affordable Housing.

•The conditions of the properties rested with the DeRosa.

•Affordable Housing consultant Robert Ratkovich and DeRosa shared money from the sales.

•Former county Treasurer Gary Felasco, Ratkovich and DeRosa plotted to pay Felasco’s attorney fees through the Affordable Housing sales.

The objections are part of DeRosa’s effort to receive probation or house arrest instead of the punishment suggested under the federal sentencing guidelines. He could face prison time, probation, restitution, forfeiture of assets and fines. The government agreed to a prison term of no more than four years.
 
FAIRNESS

Weimer also questioned the fairness in sentencing when compared to three of the four parties involved.

“The co-conspirators in this matter served much less time, although they engaged in much more serious criminal conduct,” he wrote in a motion.

Diamond veered from the guidelines when sentencing Felasco and Ratkovich.

Failing to file a 2005 federal tax return, Felasco received three years probation with the first six months under home detention. He faced four to 10 months in prison. The former treasurer was also ordered to repay back taxes with interest.

Ratkovich pleaded guilty on one count of bank and mail fraud conspiracy and one count of conspiracy to launder money. The former city councilman and housing authority maintenance director was sentenced to five years probation for each count, which is being served at the same time. He also was placed under house arrest for eight months and ordered to repay $338,800.

Diamond cited the assistance the pair provided in the government’s investigation as the reason for sentence reduction.

Castle Realty Appraisal Services Inc., a Neshannock firm that ended operations recently, was fined $75,000. The payment to First Commonwealth was a condition of the agreement in which the company pleaded guilty to one felony count of bank fraud.

A fifth person, Michael Trover of New Castle, was charged with three counts of lying to a grand jury. The contractor’s testimony centered on Ratkovich. Trover’s trial is scheduled for 9:30 a.m. March 14.

Weimer added that DeRosa has accepted responsibility for his actions and pointed to his service as an educator and community leader.

“He has suffered in the eyes of those he cares most about: his family, his friends, and members of his community,” the attorney wrote. “He has lost much of his own self-respect, and he experiences periods of great depression along with his feelings of remorse.

“Mr. DeRosa nevertheless remains a much-loved and much-respected member in his community.”