Federal tax-fraud investigation appears to be closing in on North Hills businessman
A federal tax-fraud investigation appears to be closing in on a North Hills businessman who made headlines more than a decade ago with a mansion near Sewickley that prosecutors claim he outfitted with a swimming pool, murals and a cadre of helpers by siphoning millions from his companies.
The U.S. Attorney's Office filed charges Thursday against Ann E. Harris, the personal assistant, secretary and bookkeeper of Joseph W. Nocito Sr., 73, of Bell Acres. Prosecutors claim Harris, whose age and residence were not disclosed, aided her boss in an income-tax fraud conspiracy.
“Ann Harris is a good human being and a hard-working person,” said her attorney, James DePasquale. “She was taking direction, and she did as she was told to do. That doesn't relieve criminal responsibility, and she knows that. ... She got caught up in something and will have to bite the bullet.”
DePasquale said the charges were negotiated over months with the government.
No charges have been filed against Nocito, an accountant, entrepreneur and member of the Robert Morris University board of trustees. The university did not return calls seeking comment.
Prosecutors refer to the co-conspirator in Harris' case as the person who owns or controls several Western Pennsylvania-based businesses. They include Automated Health Systems in McCandless and Nocito Enterprises, as well as Golden Triangle Leasing, Northland Properties and Jonolley Properties, all of which list Nocito as president.
Nocito could not be reached for comment. His attorney Phil DiLucente said it is “a tax dispute, nothing more.”
Automated Health System's website identifies Nocito as its chief executive officer. His bio states that he was chief financial officer since the company's founding in 1979 and became CEO in 1997.
The health services management company operates in six states with more than 700 employees. It specializes in administering large-scale public health programs for state and local governments.
According to the charges, Harris, Nocito and others wrote checks from Nocito's stable of companies to pass off millions of dollars in personal expenses as business purchases from 2006 to mid-April 2013.
The expenses included the construction, furnishing and upkeep of a multimillion-dollar mansion; employment of a full-time personal cook, butler and landscaping crew at the mansion; the purchase and maintenance of a “multimillion-dollar, exotic automobile collection”; and the purchase and upkeep of homes, and payment of living expenses, for the co-conspirator's family members, investigators said.
Prosecutors detailed at least $365,000 in alleged fraudulent charges from Nocito's business accounts, though the information cites “millions of dollars of purely personal expenses,” including:
• Furnishing his “staff quarters” at the mansion, passed off as a $14,257.90 consulting bill for Jonolley Properties.
• $4,620.08 a month to Clearview Federal Credit Union, recorded as interest expenses for Jonolley Properties but used for payments on a 2008 Rolls Royce Phantom.
• A $237,000 check from Jonolley Properties billed as consulting but used for a down payment on a swimming pool.
• Two $10,000 checks from Jonolley and Nocito Enterprises that went to Sewickley Academy for tuition for the co-conspirator's grandchildren but recorded as “advertising” in the books for each company.
• $17,000 for murals at the mansion's gym, recorded as consulting for Palace Development Co.
Nocito's huge Bell Acres mansion made headlines for its size, which Allegheny County records put at 33,400 square feet, with 12 bedrooms and 21 bathrooms. Those records list the owner as Northland Properties and put the home's assessed value at $4.25 million; when it was built, some real estate sources estimated the market value of the home at about $20 million.
Since Harris struck a deal and prosecutors list a co-conspirator — noting that person benefited from the conspiracy — that would appear to be where the investigation is centered, said Paul Boas, a defense attorney and adjunct professor who teaches criminal procedure at the University of Pittsburgh Law School.
“These people have probably known for at least a year that there is an investigation,” said Boas, who has no connection to the case. “Clearly, he's the main man. They want the bigger guy.”
The U.S. Attorney's Office declined to comment. Assistant U.S. Attorney Mary Houghton brought the charges against Harris.
In February, Houghton accused Joseph W. Nocito Jr., 44, of Edgeworth of bank fraud conspiracy and filing a false tax return. The younger Nocito, president of Castle Mortgage Co., pleaded guilty in March to working with others to defraud a Florida bank on a $2.4 million real estate loan.
That case is not connected to the current investigation.