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Embattled Fayette City mayor wants family money back

| Thursday, June 20, 2013, 12:01 a.m.

The rightful owner of more than $60,000, seized by state police during a 2010 investigation of a Fayette County mayor accused of running an illegal numbers game was the subject of a court hearing Wednesday.

Herbert Vargo Jr., 46, of Fayette City, told Common Pleas Judge Steve Leskinen that the money, primarily taken from a lockbox in his home, belonged to his in-laws and to himself.

After a two-year investigation, state police in 2011 charged Vargo with misdemeanor counts of setting up a numbers game, possessing gambling devices and manufacturing unlawful numbers games. Police accused Vargo, who has been mayor of the borough for more than a decade and owner of Vargo's Newsstand, of taking illegal bets on state lottery numbers.

Last year, he was admitted into the probationary Accelerated Rehabilitative Disposition program, or ARD, for a period of 12 months.

Acceptance into the program is not an admission of guilt and typically allows a defendant's criminal record to be expunged.

Vargo's mother-in-law, Rosemarie Perry, testified on Wednesday that, over a period of years, she had given Vargo and her daughter about $35,000 to keep for her.

She said Vargo kept a handwritten account of what she gave him, but she had no record of her own.

Vargo said another $25,000 in the lockbox was a combination of income from his business, rental properties and money stolen from him and then returned through court restitution in 1999.

Raymond Stewart, retired from the state police organized crime unit, testified that a confidential informant recorded numerous meetings with Vargo at his business.

Those conversations led to a search warrant being granted for Vargo's business and home, Stewart said.

“He never gambled $1 with Vargo? You don't have any witness you observed that ... saw Vargo gambling and your investigation lasted one and one half years?” defense attorney Sam Davis said.

The confidential informant placed no bets during the investigation, Stewart said.

The lockbox, found under a bed in Vargo's residence, contained envelopes holding more than $59,000 in cash, Stewart said.

He said Vargo told him the key was lost, and that it contained paperwork.

When it was forced open, Vargo said the money represented his life savings, Stewart said.

Vargo testified that he did tell Stewart there was some cash in the lockbox.

There were no names on the envelopes or paperwork establishing ownership of the cash, Stewart said.

He said a child's red pencil box contained index cards, each marked with names and amounts, some dating as far back as 1985, with amounts ranging as low as $3.

Finding tip boards and tickets at the newsstand, Stewart said he determined that Vargo did not have a small games of chance license.

Davis asked Stewart if the index cards could have been used to show amounts owned to Vargo for store purchases.

“I could believe it if they were not all round numbers,” Stewart said.

Vargo testified that some of the cards in the pencil box were from his father's days running the newsstand.

“It was mom and pop, like an old company store. You give out credit,” he said.

Deputy Attorney General Margaret Ross said it is the state's opinion that the money should be forfeited.

Leskinen will issue his ruling at a later date.

Mary Pickels is a writer for Trib Total Media.

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