DeRosa downplays role in scam

By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
 
Nicholas DeRosa denied being the major figure behind a Lawrence County mortgage scandal.

In an effort to gain leniency prior to sentencing, the retired New Castle school administrator admitted he took money from friends and helped collect funds to pay for a disgraced official’s legal fees.

“I pled guilty because it was the right thing to do,” DeRosa explained last week in a letter to U.S. District Judge Gustave Diamond. “I am guilty and I want to take responsibility for the things I’ve done to break the law.”

As to the collapse of a nonprofit housing agency, DeRosa said others were responsible.
“I didn’t personally take any taxpayer money from Affordable Housing (of Lawrence County) or from anyone else,” he wrote to Diamond. “I didn’t do anything to falsify the values of the appraisals for the houses AHLC brought.”

DeRosa’s attorneys hope their client’s admission and letters of support will result in probation.

A federal investigation resulted in DeRosa’s guilty plea in October to charges of bank fraud, mail fraud and conspiracy to commit money laundering. Diamond was scheduled to sentence DeRosa tomorrow morning in federal court, downtown Pittsburgh. However, he moved the hearing to 10 a.m. March 22 at the request of government prosecutors.

“(DeRosa) claims responsibility for an extremely narrow set of facts,” the U.S. Attorney’s Office responded. “In the government’s view, the defendant’s conduct in this case is much more egregious than set forth in the defendant’s pleadings.”

Approximately a half-million dollars was lost in the fraud. First Commonwealth Bank had approved a $250,000 loan for the purchase of seven properties. The Lawrence County Housing Authority, which created Affordable Housing, provided the group with $200,000 in start-up funds.

DeRosa said he took money from two friends who sold their properties to Affordable Housing.

“Those payments weren’t disclosed to the bank,” he said. “And I was present and helped get money to Gary Felasco’s lawyer.”

Felasco is a former county treasurer who was convicted on theft and embezzlement charges in 2006.

“I’m sorry for what I did,” he said. “It ruined me and brought shame and disgrace to me and my family.

“It doesn’t take away from all of the good work I’ve done raising money for college scholarships and public service, but it still doesn’t add anything, either, and this is probably what I’ll be remembered for, not the good works I’ve done.”

Prior to the scandal, DeRosa had served on governmental and community boards. A longtime educator, he also was elected to city council and named to Slippery Rock University’s Council of Trustees.

But controversy followed as well. Most of it dealt with his role as the school district’s assistant superintendent. The school board hired attorney Richard A. Harper in 2004 to review a state audit critical of the district and DeRosa.

The audit outlined DeRosa’s gambling activities, which allowed him to obtain free hotel rooms for board members attending a 2002 conference; issues regarding travel while representing the district; his failure to disclose financial interests; and food purchases he made from the district without prior approval.

Harper’s report became a critique of DeRosa’s shortcomings as an administrator.
His retirement in July 2006 created a stir when it was disclosed he would receive approximately $69,000 for unused sick and vacation days. That amount was in addition to the $40,000 he was paid as part of the district’s retirement package for administrators.

DeRosa’s pension is estimated to be $100,000 annually.

In addition to his North Cascade Street home, DeRosa is a part-owner of a condominium in Collier County, Fla. The property is valued at approximately $98,000.

“I have very little money and little reputation to speak of left,” DeRosa said. “I am older than I want to be.”