FRAUD CASE Defendant's finances to be probed
The magistrate allowed both defendants to go free on unsecured bonds.
By PATRICIA MEADE
VINDICATOR CRIME REPORTER
CLEVELAND -- Because John E. Prokop and his daughter Lisa Rosati will share in the proceeds of a property sale, her attempt to get a public defender in a fraud case is in question.
Prokop, 77, of Barbie Drive, and Rosati, 44, of Samuel Court, both in Boardman, are charged with conspiracy, mail fraud, wire fraud, securities fraud, money laundering, conspiracy to commit money laundering and false declarations before the court.
They were arraigned Wednesday in federal court by Magistrate Judge Nancy A. Vecchiarelli. Both defendants, indicted earlier this month, were released on unsecured bonds.
Before arraignment, Rosati filled out a financial disclosure form in an effort to get a public defender. The judge reviewed it and determined that Rosati qualified.
Christian Stickan, an assistant U.S. attorney, objected, telling the judge that Rosati does have assets. He said she will receive 60 percent of the proceeds from the sale of property she and her father own.
Prokop's Cleveland lawyer, Patrick M. McLaughlin, then stepped in and explained that the property is being sold for $156,000 and $46,000 is owed on it. McLaughlin said his client intends to use his proceeds to defend himself.
The judge noted that all she saw in Rosati's financial disclosure form was a $380,000 house on which $300,000 is owed and a lot of credit card debt.
Stickan then told the judge that Rosati had "a lavish wedding at the Bellagio" a few months ago. The Bellagio Hotel and Casino is in Las Vegas.
The federal prosecutor asked that Rosati be submitted to a thorough investigation of her financial situation.
The judge withdrew her finding that Rosati qualified for a public defender and set a hearing on the matter for Sept. 8.
The case involves what officials said was a scheme to defraud investors in pay phones, viatical (insurance) contracts and automated teller machines.
The indictment states that from 1997 through December 2002, Prokop and his daughter conspired to commit mail fraud, wire fraud and securities fraud.
From 1997 through September 2000, operating as Pro Insurance and later under Pro Insurance Associates Inc. in Boardman, they expended significant sums of money to promote and sell nontraditional investments, the government said. They falsely claimed in radio programs and in the print media, including fliers, the Yellow Pages, newspaper and billboards advertisements that the investments they sold were safe, had no risk and were guaranteed a high rate of return, the indictment alleges.
Prokop and his daughter are accused of moving or attempting to move investors from one investment to another in order to keep investors' funds tied up with them, thereby earning commissions based on a percentage of the sales price. All the companies failed.
The indictment charges that they sold more than $9.8 million in pay phones; $6.2 million in viatical settlements; and $855,000 in ATMs. They collected commissions of nearly $2 million, the government said.