Former Mayor Arrested in Alleged Hungarian Resort Swindle

Peter DiRosa, who served as mayor of Manchester from 1987 to 1989, was arrested on charges of conspiracy to commit wire fraud in Maine earlier this month after a Kennebunk resident complained that DiRosa and another Connecticut resident convinced him to invest $600,000 into a resort in Hungary and never returned the money or the promised return on investment.

To many in Manchester, the news came as a shock Tuesday. Residents said they remembered DiRosa for his involvement in town politics in the 1980s, as a former teacher at Manchester High School, and as the owner of a local dry cleaning business on West Middle Turnpike, but most also said they had lost touch with him over the years, and some were not even sure if he still resided in Manchester.

DiRosa, 64, who served on the Board of Directors from 1981 to 1989, resides at 451 Vernon St. in town with his wife Eileen. When reached for comment about the arrest Tuesday, DiRosa declined to speak about it except to say that “this thing’s gotten a little out of hand,” and referred further questions to his attorney, William Maselli, a Portland-based criminal defense attorney. Maselli did not return several calls for comment Tuesday.

The Portland Press Herald first reported the arrests.

According to the affidavit of FBI Special Agent Christopher Peavey, DiRosa and a Glastonbury man, Thomas Renison, convinced Kennebunk resident Frank Jablonski in May of 2008 to invest $600,000 from his retirement fund into a planned Hungarian five-star casino and golf resort called the Castle at Polgardi.

According to Peavey’s affidavit, Jablonski said that Renison and DiRosa promised him that his money would be returned within six months along with a $400,000 profit. Jablonski said that Renison, who had managed some of his retirement funds in the past, also told him that the money would be placed in an interest bearing account that would yield an additional 10 percent interest on the $600,000 investment. Renison also promised to pay any penalties, surrender charges and taxes incurred by the withdrawal, as well as an additional $6,500 per month to replace the lost income from the annuities.

Jablonski then claims that six months later he spoke to Renison about the return of his funds, only to be told that the money was not available due to the global economic slowdown. Renison then allegedly told Jablonski that the account had generated $30,000 in accrued interest and asked him what he wanted to do with the money. According to the affidavit, Jablonski, believing his money was safe, told Renison to keep the money in the account so it could continue to draw interest.

In April of 2009, Jablonski’s accountant informed him that his tax documents showed income of more than $700,000 for the previous year, which would cost Jablonski about $300,000 in state and federal taxes. According to the affidavit, Jablonski then realized that the release of the $600,000 from his retirement annuities had caused his tax burden, and again approached Renison about the return of his money. The affidavit states that Renison declined to return it, but told Jablonski that Hungary was receiving “stimulus money” from the United States that would help with the completion of the Castle at Polgardi.

Renison allegedly also promised Jablonski another $100,000 during that conversation “for his troubles.” Jablonski called Renison several days later to again ask for the return of his money, and claims that Renison “harshly” told him that he would not return the money to him at that time, but might do so in June or July.

Jablonski then retained an attorney in an effort to recoup his investment.

According to the affidavit, Jablonski told the FBI that Renison did most of the talking during the initial May 2008 meeting, but repeatedly deferred to DiRosa afterwards whenever questioned about the money were raised, leading Jablonski to believe that DiRosa was actually in control of the investment.

The affidavit also documents three wires transfers from the Hungarian account where Jablonski’s money was kept totaling $230,932 to a New Alliance bank account in the name of Eileen DiRosa, Peter DiRosa’s wife.

When the FBI interviewed DiRosa about the money on Sept. 25, 2009, he told them that Jablonski’s money was in a bank in Vienna, Austria, and that he had tried on numerous occasions to return the money to Jablonski through wire transfers but was unable to do so because of poor wiring instructions. DiRosa told the FBI that he had made arrangements with his attorney that morning to return the money to Jablonski in two separate wire installments of $300,000 on October 2 and October 9.

DiRosa was also deposed in a Maine Superior Court about the whereabouts of the money on July 16, 2010, and replied that he had no idea where the money was and did not believe it had been spent. DiRosa also stated that he and his wife were living on her disability income and loans from various people, including Renison. He said that he probably owed Renison “somewhere in the neighborhood of $10,000.”

DiRosa and Renison were arrested on the charges in Connecticut on June 2; their cases were then transferred to federal court in Maine. They were released on $50,000 bail apiece.

According to the affidavit, wire fraud is defined as “knowingly and with intend to defraud, devise, and intend to devise a scheme to defraud and obtain money by means of materially false and fraudulent pretenses, representations, and promises, knowing that they were false and fraudulent when made, and knowingly causing to be transmitted by means of wire communication.”

If convicted, DiRosa and Renison could face a maximum penalty of 20 years in prison and a $250,000 fine. There are no court dates pending in the case because DiRosa and Renison have yet to be indicted on the charges, according to staff in the United States Attorney’s District of Maine's office.