Man pleads guilty in fraud scheme

Staff report

pittsburgh

A New Castle man pleaded guilty Thursday in federal court over his role in a scheme to defraud a nonprofit housing agency, the U.S. attorney’s office said.

Nicholas DeRosa, 65, of 221 N. Cascade St., pleaded guilty to one count each of bank fraud, mail fraud and money-laundering conspiracy.

He was charged in connection with properties he sold to Affordable Housing of Lawrence County after he and others involved in the scheme colluded to inflate the value of the properties, the U.S. attorney’s office said.

Those fraudulent appraisals were submitted to the First Commonwealth Bank, which lent Affordable Housing the money to buy seven properties, the U.S. attorney said. DeRosa owned four of those properties either individually or in a partnership.

Also involved in the scheme, says the U.S. attorney, was Gary Felasco, former county treasurer and head of the Lawrence County Housing Authority; Robert Ratkovich, a former New Castle city council president and housing authority maintenance employee; and Anthony J. Staph, a vice-president of Castle Realty Appraisal Services on Wilmington Road. Castle Realty Appraisal pleaded guilty Wednesday to a charge of bank fraud.

“At trial, the government would have presented evidence that Affordable Housing was used as a mechanism to get money to Felasco, Ratkovich, DeRosa and a fourth co-conspirator,” the U.S. attorney’s office said Thursday.

According to information provided by the U.S. attorney, the scheme dates back to 2004.

Affordable Housing, which was seeking houses to repair and rent or sell to elderly and disabled people, hired Ratkovich as a consultant to search for suitable homes.

Ratkovich worked at $45 an hour, eventually being paid $60,000. After he was paid, he recommended the seven homes, owned by DeRosa and his friends and relatives, despite the availability of houses in better condition for less money.

Affordable Housing applied for a loan to buy the houses through First Commonwealth Bank.

The U.S. attorney’s office said it would have presented evidence that DeRosa, through Ratkovich, requested that the bank hire Castle Realty Appraisal.

Appraisals prepared by Staph misrepresented the conditions of the properties, improvements there, their neighborhoods and even in one case said a house was occupied when it hadn’t been for years.

An appraisal for one of DeRosa’s properties failed to note a number of severe problems. Ten days after the appraisal was prepared, the city condemned the East Wallace Avenue house, the U.S. attorney’s office said.

Affordable Housing board members resigned and defaulted on the First Commonwealth loan after DeRosa got his money in December 2005, the U.S. attorney said.

Ratkovich has pleaded guilty and is awaiting sentencing. The attorney general also alleges he did not work nearly enough hours to justify his $60,000.

Felasco, who was at the time facing corruption charges for theft of taxpayer money while in office, got money from the scheme after DeRosa funneled it to Felasco’s lawyer through a series of transactions at businesses that took cash payments. Felasco pleaded guilty last year to a tax charge based on his failure to report that money as income on his tax returns.

DeRosa will be sentenced March 1. He could get as much as 70 years in prison and a $1.75 million fine.