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Local official’s corruption case repeatedly delayed as city he left behind struggles with $1 million deficit and secret bank accounts

The DuBois sign, which stands 4 feet tall and hangs over DuBois Avenue, was built with the help of $2.3 million in federal, state and city funding overseen by Herm Suplizio. Photo by Nate Smallwood for Spotlight PA.

STATE COLLEGE, Pa. — A federal judge has granted repeated delays in the case of a former government official accused of corruption as the Pennsylvania city he once led and reportedly controlled grapples with the fallout and a nearly $1 billion budget deficit.

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

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

Since then, little has happened in the case, which was brought by the Pennsylvania Attorney General’s Office.

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

“We are challenged by a complicated financial mess that is making us shake our heads,” Jennifer Jackson told Spotlight PA. She was elected to the city council last year as part of a slate of candidates promising to reform DuBois’s operations.

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

In any case, federal prosecutors did not object and the judge granted the extensions. The next deadline for the couple to respond is August 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 federal government.”

“Is it possible that 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 government funds, the question is: “Were there other people, both above and below the status of the person involved, who had material knowledge of it and let it go?”

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

She added: “Having proven his innocence in court, Herm looks forward to returning to serve the people of DuBois.”

Shaffer’s attorney did not respond to 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 Suplizio’s case, declined to comment on the delays. Instead, he emailed links to federal statistics on caseload management that showed it took an average of 24 months last year 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 issued prohibiting any payments from the city to him, as the criminal case is ongoing. Although his official connection to DuBois is over, city officials are still working to patch up holes in financial control exposed by the alleged fraud.

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

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

“I’m not suggesting that anyone using any of those 13 accounts is embezzling money in any way,” Breth said, according to the meeting minutes. “I’m just telling you … that’s a problem.”

The council is also struggling with a seemingly unrelated budget deficit that threatens the restoration of confidence in the DuBois government.

In May, the city discovered it had a nearly $1 million shortfall in its 2024 budget due to accounting errors. Errors related to “what was budgeted and what was actually needed” to meet obligations for loan payments, 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 consolidation — said in a public meeting.

The city balanced its budget by cutting spending in several 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 are still in office, had unknowingly approved the erroneous figures and apologized. Interim City Manager Chris Nasuti, who oversaw the budget preparation, acknowledged responsibility.

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

Nasuti, who took over Suplizio’s position after he was arrested last March, led the city for more than a year and retired earlier this month.

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

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

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This story was produced by the Spotlight PA Regional Office of State Collegean independent, nonpartisan newsroom dedicated to investigative and public service journalism in Pennsylvania. Sign up for our north-central Pa. newsletter, Talk of the Town, at spotlightpa.org/newsletters/talkofthetown.

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