August 30, 2008

Beaver County Borough Officials Charged With Theft

By Brad Bumsted; Brian C Rittmeyer

HARRISBURG -- The state Attorney General's office on Thursday charged the former borough manager of Rochester and a current council member with theft and related charges.

Former manager Edward Piroli, 57, of New Brighton is accused of mishandling state grant money and failing to deposit state checks into the police pension fund in the financially struggling Beaver County borough of about 4,000 people.

He is among four people charged based on a grand jury presentment, Attorney General Tom Corbett announced. The other defendants, all Rochester residents, include former borough secretary Lois Sutter, 54; councilman Joseph Glenn, 45; and Jeffrey Simmons, 43, treasurer of the former Rochester Community Network Authority.

Piroli adamantly denies wrongdoing, said his attorney Steven Townsend.

"He never mishandled any pension funds," Townsend said. "I think the allegations are without any sort of corroboration." Attorneys for the other defendants could not be reached for comment.

Some Rochester residents said they were withholding comment -- and judgment -- until they learned more. Others reacted with a mix of surprise and disgust.

"I'm upset about it because they keep raising our taxes for all the thievery they've been doing," Ron Gailey said as he worked on his 1969 Corvette in his garage. "Seems like all these guys want to get into the till, and the taxpayer usually ends up having to pay."

The grand jury said Piroli withdrew $47,000 from the police pension fund in 2005 and deposited it into the borough's general fund. The money in part went for longevity pay, unauthorized pay raises, vehicle stipends and fuel to both Piroli and Sutter, prosecutors say.

As of January, Piroli was listed as a board member of the Beaver Initiative for Growth, a nonprofit founded by former state House Democratic Whip Mike Veon and Sen. Gerald LaValle, of Rochester, according to state Department of Community and Economic Development documents. The charges announced yesterday are unrelated to BIG, which remains under scrutiny of state investigators.

"I can't comment on that," said Corbett's spokesman Kevin Harley.

Veon, who was indicted in a corruption scandal, announced Piroli's appointment to the BIG board in March 2006.

At Fritz's Hair Styling in Rochester, owner Alan Fritz said Piroli had worked to make the town and its business district better.

"I can't imagine," Fritz said. "He seemed OK to me."

Glenn and Simmons are accused of having private contracts with the borough for their own personal benefit and stealing computer equipment that the Rochester Community Network Authority bought with federal tax dollars.

Glenn served as president of the authority, which had been created by the borough in 2005 to oversee projects, and fire and police training. Simmons served as treasurer and was Glenn's business partner in Khitomer Computer Services. The authority bought most of its computer equipment from Khitomer. The borough also hired Khitomer to provide Web site services, according to the grand jury.

The grand jury said most borough council members weren't aware of Piroli's alleged mishandling of a $50,000 community revitalization grant from the DCED. Instead of spending the money on the police department as intended, Piroli allegedly used it to pay the mortgage on the borough building.

The grand jury said the borough is unable to get additional grant money from DCED and must repay the $50,000.

But Rochester received a $57,000 grant earlier this year from DCED through the Early Intervention Program, intended to help municipalities with financial problems from being subject to state financial oversight under Act 47, said Kevin Ortiz, a spokesman for the agency.

"We thought this was an instance where we would waive a municipal flag" on grants, Ortiz said.

DCED was in the process of closing out the $50,000 grant and recovering the money but had not received the necessary documentation from the borough, Ortiz said.

The grand jury said borough council did not authorize the withdrawal of money from the pension fund and only learned of Piroli's alleged action when police officers brought it to their attention. The investigation began at the request of Beaver County District Attorney Anthony Berosh, Corbett said.

"Rochester is a good community," Fritz said. "There's a lot of good people here just trying to survive. I hope the outcome is a lot better than it sounds."

Brad Bumsted can be reached at [email protected] or 717-787- 1405. Brian Rittmeyer can be reached at [email protected] or 724-779-7108.

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