LAWRENCE COUNTY Treasurer posts $25,000 bond in theft

The treasurer has no plans to resign, his attorney said.
By LAURE CIOFFI
VINDICATOR STAFF WRITER
ELLWOOD CITY, Pa. -- The Lawrence County treasurer is free on $25,000 bond on charges that he stole nearly $45,000 from county taxpayers to pay for a van, hotel rooms and his own taxes.
A very subdued Gary Felasco, 38, appeared Wednesday before District Magistrate Sam Battaglia. He was accompanied by his mother, Helen, and attorney, Jim Ross of Ambridge, Pa.
Battaglia scheduled Felasco's preliminary hearing for Sept. 14 in Lawrence County Central Court, but Ross indicated he would ask for a postponement.
Felasco was freed on bond after the 10-minute arraignment.
Not resigning
Ross said after the hearing that Felasco does not intend to resign as county treasurer.
However, it's unclear how Felasco would perform his duties because Battaglia warned him to stay away from witnesses, and court papers name both of Felasco's deputy treasurers, Gloria Conti and Cathy Baker, as witnesses.
Charges filed Wednesday are the culmination of an 18-month investigation into allegations that Felasco had not paid his taxes and there was money missing from the treasurer's office. The Vindicator was the first to report in February 2004 that county records showed Felasco had not paid property taxes on his Cunningham Avenue home since 2000.
At that time Felasco was also the county tax claim bureau director, in charge of delinquent tax collections. He was removed from that post by county commissioners about a week after the first story appeared in The Vindicator. At that time, Felasco paid his $5,700 tax bill.
Police now contend the county treasurer used stolen tax dollars to pay his own taxes, according to the affidavit filed to support the charges.
He is charged with theft by failure to make required disposition of funds received, misapplication of entrusted property of government or financial institutions, embezzlement and two counts of conflict of interest.
Court papers state that Felasco took $44,251.74 from the county tax office from October 2003 to December 2003.
What police think
Pennsylvania State Police think Felasco operated a scheme in which he did not record cash payments made to the county treasurer's office, but deposited the money into his private accounts. Those taxpayers would later turn up as delinquent in the tax claim bureau and Felasco would delete their files from the computer system, court papers said.
The scheme came to light when Felasco was removed as tax claim bureau director and residents who had proof they paid their taxes started showing up as delinquent in county records, according to court papers.
Deputy Treasurer Gloria Conti also told police that large amounts of cash were removed from the treasurer's office cash drawer by Felasco. The money came primarily from taxes paid to the county.
Conti told police that Felasco used some of the money to buy a van at Matt's Auto Sales in New Castle for $2,690; paid $2,516.68 in cash to the Radisson Hotel in West Middlesex, Pa., from February 2002 to September 2003; and paid $4,000 in rent for rooms in West Middlesex owned by a Farrell, Pa., couple. It was revealed last year that Felasco and his now-estranged wife, Jeannine, operated a swinger's club out of the West Middlesex property and hotels in the region.
Police discovered the discrepancies by comparing daily receipts from the treasurer's office and cash intake recorded by a scanner used on every tax bill processed by the office.
As an example, court papers state, on Dec. 31, 2003, the treasurer's office deposited $24.16 into the county's general fund. The county scanner system indicates that $5,272.62 was collected that day.
County District Attorney Matthew Mangino said he doesn't believe the criminal charges will have any effect on a civil lawsuit he has filed to have Felasco removed from office. Mangino's complaint contends that Felasco has abandoned his office and now lives in Ashtabula, Ohio, with his estranged wife and children.
cioffi@vindy.com.