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Secret bank accounts, $1M deficit plague city as official's corruption case is repeatedly delayed

by Min Xian of Spotlight PA State College and Angela Couloumbis of Spotlight PA |

The DuBois sign was constructed thanks to $2.3 million in federal, state, and city funding that Herm Suplizio oversaw.
Nate Smallwood for Spotlight PA

STATE COLLEGE — A federal judge has repeatedly granted delays in the case of a former public official accused of corruption as the Pennsylvania city he once ran and allegedly fleeced grapples with the fallout and a nearly $1 million budget deficit.

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

Since then, the case — which was launched by the Pennsylvania Office of Attorney General — has largely gone silent.

At the same time, a new slate of city officials had to tackle the scandal’s fallout and unwelcome surprises, including a dozen secret bank accounts.

“We are challenged by a convoluted financial mess that leaves us shaking our heads,” Jennifer Jackson told Spotlight PA. She was elected last year to the city council as part of a slate of candidates who promised to reform DuBois’ operations.


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

In each instance, federal prosecutors have not objected, and the judge has granted the extensions. The next deadline for the pair to respond is Aug. 2.

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

“Is it possible there is another explanation? Yes,” said Antkowiak, who is not involved in the case. But, he added, in cases like Suplizio’s, which involve the diversion of public funds, the question is: “Are there other people both above and below the status of the individual involved who were materially aware of it, and let it go?”

Alyssa Angotti, one of Suplizio’s lawyers, said in an email that the former city manager has “never benefitted himself through this work, only the people of DuBois.”

She added: “After demonstrating his innocence in Court, Herm looks forward to returning to serve the people of DuBois.”

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

Mike Rick, a spokesperson for the U.S. Attorney’s Office for the Western District of Pennsylvania, which is handling Suplizio’s case, would not discuss the delays. Instead, he emailed links to federal caseload management statistics showing that last year it took a median of 24 months for cases in the district to be resolved after charges were filed.

Suplizio’s employment was officially terminated in April, and a court order has been in place to prohibit any city payment to him as the criminal case is pending. Even though his official connection with DuBois is over, city leaders are still rooting out gaps in control over its finances that were exposed by the alleged fraud.

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

City Solicitor Thomas Breth told the public in a March meeting that “12, maybe 13” bank accounts using DuBois’ tax identification number were discovered. Those accounts were not controlled by the city and never audited.

“I don’t want to imply that anybody that’s utilizing any of those 13 accounts is misappropriating funds in any way,” Breth said, according to meeting minutes. “I’m just telling you … that’s an issue.”

The council is also grappling with a supposedly unrelated budget deficit that threatens the rebuilding of trust in DuBois’ government.

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

The city has rebalanced the budget by making cuts across multiple departments, selling timber, and refinancing some loans, Mayor Pat Reasinger told Spotlight PA. Reasinger said in a public meeting that he and the previous council, including two members who continue to serve, had approved the erroneous numbers unknowingly and apologized. Interim City Manager Chris Nasuti oversaw the making of the budget and acknowledged his responsibility.

The city’s finance director, DeLean Shepherd, who Arbaugh said also shared the duty of ensuring an accurate budget, announced her retirement during that meeting. Shepherd had testified in the grand jury investigation into Suplizio’s alleged theft from the city.

Nasuti, appointed to Suplizio’s position following his arrest last March, managed 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 thinks she and her colleagues have made progress.

“There’s no doubt about it, tough decisions are ahead,” Jackson said, “but so are better days.”

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