Secret Accounts, M Deficit Plagues DuBois After Suplizio Scandal • Spotlight PA
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Secret Accounts, $1M Deficit Plagues DuBois After Suplizio Scandal • Spotlight PA

STATE COLLEGE — A federal judge has repeatedly postponed trials for a former public official accused of corruption as the Pennsylvania town he once ran and allegedly defrauded grapples with the fallout and a nearly $1 million budget shortfall.

Last November, federal authorities charged Herm Suplizio, DuBois’ former city manager, and his former secretary, Roberta Shaffer, with conspiracy and federal program theft. Officials say Suplizio diverted money belonging to the small city into secret bank accounts that he and Shaffer controlled but over which the city had no oversight. Suplizio, they say, used some of that money to pay off his credit cards.

The case — brought by the Pennsylvania Attorney General’s Office — has remained silent since then.

At the same time, new city officials had to deal with the fallout from the scandal and unpleasant surprises, including a dozen secret bank accounts.

“We are faced with a complicated financial mess that leaves us shaking our heads,” Jennifer Jackson told Spotlight PA. She was elected to the city council last year as one of a number of candidates who promised to overhaul DuBois’ operations.

Both Suplizio and Shaffer have pleaded not guilty. Their attorneys have asked the judge overseeing the case for more time to consider and respond to the charges — five times each, according to court records.

In each case, federal prosecutors did not object, and the judge granted an extension. The couple’s next response date is Aug. 2.

Bruce Antkowiak, a former federal prosecutor who teaches law at Saint Vincent College in Latrobe, said the delays suggest, “One thing: This guy is cooperating with the feds.”

“Is there another explanation? Yes,” said Antkowiak, who is not involved in the case. But he added that in cases like Suplizia’s, which involve the diversion of public funds, the question is: “Were there other people, both above and below the person involved, who were substantially aware of this and allowed it to happen?”

Alyssa Angotti, one of Suplizia’s attorneys, wrote in an email that the former city manager “never benefited from this work, only the residents of DuBois.”

She added: “After proving his innocence in a court of law, Herm looks forward to returning to serve the residents of DuBois.”

Shaffer’s attorney did not return phone calls or emails. Federal prosecutors Nicole Vasquez Schmitt and Robert Cessar also did not respond to requests for comment.

Mike Rick, a spokesman for the U.S. Attorney’s Office for the Western District of Pennsylvania, which is handling Suplizia’s case, would not discuss the delays. Instead, he emailed links to federal workload management statistics that show that last year, the median time it took to resolve cases in the district after charges were filed was 24 months.

Suplizio’s employment was officially terminated in April, and a court issued an injunction barring the city from making any payments to him while the criminal case is ongoing. Although his official ties to DuBois have ended, city officials are still trying to address the financial oversight holes exposed by the alleged fraud.

State and federal investigators say Suplizio allegedly opened secret bank accounts using the city’s name behind the council’s back. After the new council was sworn in, the city asked its banks to turn over information about the accounts in order to get a full financial picture.

City Attorney Thomas Breth informed the public at a March meeting that “12, maybe 13” bank accounts had been discovered with DuBois’s tax identification number. The accounts were not audited by the city and have never been investigated.

“I don’t mean to suggest that anyone who uses any of those 13 accounts is in any way misappropriating funds,” Breth said, according to minutes of the meeting. “I’m just telling you… that’s a problem.”

The council is also grappling with an allegedly unrelated budget deficit that threatens to rebuild trust in the DuBois administration.

In May, the city discovered it had a nearly $1 million shortfall in its fiscal 2024 budget because of miscalculations. The errors in “what was budgeted and what was actually needed to” meet loan repayment obligations, as well as insurance and workers’ compensation, had to be corrected, Shawn Arbaugh — who serves as manager of DuBois and Sandy Township, which are in the process of consolidating — said at a public meeting.

The city balanced the budget by making cuts to multiple departments, selling lumber and refinancing some loans, Mayor Pat Reasinger told Spotlight PA. Reasinger said at a public meeting that he and the previous council, including two members who still serve, unknowingly approved the wrong numbers and apologized. Interim City Manager Chris Nasuti oversaw the budget and acknowledged his responsibility.

The city’s finance director, DeLean Shepherd, who Arbaugh said also had a responsibility to ensure an accurate budget, announced her retirement during that meeting. Shepherd had testified at a grand jury investigation into Suplizio’s alleged theft from the city.

Nasuti, appointed to Suplizio’s position following his arrest last March, ran the city for more than a year and retired earlier this month.

Jackson, the city council member, said the work has been difficult, but she feels she and her colleagues have made progress.

“There’s no doubt there will be difficult decisions ahead,” Jackson said, “but there are brighter days ahead.”

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