OIG: Office of Inspector General
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MIDDLE District of Pennslyvania


Fred R. Rosetti Charged with Defrauding Northeastern Intermediate Unit #19

February 21, 2012

The United States Attorney's Office for the Middle District of Pennsylvania announced today that a Grand Jury in Scranton has returned an indictment today charging the former Executive Director of the Northeastern Intermediate Unit #19 with multiple counts of fraud, theft, and money laundering.

According to United States Attorney Peter J. Smith, the indictment alleges that between July 1, 1998 through June 30, 2010, Fred R. Rosetti, age 63, Archbald, engaged in a scheme to defraud the Northeastern Intermediate Unit #19 (NEIU). The indictment alleges that during his tenure as Executive Director, Rosetti fraudulently, improperly, and unlawfully converted funds and property of the NEIU for his personal benefit and for the personal benefit of his family.

It is alleged that Rosetti directed and ordered NEIU employees to perform home maintenance services at his personal residence, personal secretarial services, personal shopping for Rosetti and his family, and to assist in the planning and preparation of Rosetti family events.

The indictment alleges that Rosetti created false travel vouchers and directed and ordered NEIU employees to create false travel vouchers for the benefit of Rosetti. Rosetti is also charged with intentionally failing to document his time-off in the form of used vacation, sick and personal days which enabled him to include all of the undocumented time-off in an accumulation of days for which he received a cash payout at the time of his retirement. The financial loss to the NEIU is alleged to be material and substantial. The indictment alleges that the government seeks forfeiture of $240,000 plus the contents of two bank accounts and a property in Archbald, PA.

Under the applicable U.S. Sentencing Guidelines, if convicted of the most serious charges Rosetti faces 10 years in prison and fines in the amount of $250,000.

Rosetti served as the Executive Director of the NEIU #19 from July 1, 1998 through June 30, 2010. The NEIU #19 is part of the public school system of the Commonwealth of Pennsylvania and provides statutorily-mandated educational services, such as the delivery of early intervention programs and services, special education programs, learning support, and life skills, to school districts in Lackawanna, Wayne, Wyoming, Pike, and Susquehanna Counties that cannot provide these specialized services themselves. NEIU #19 receives federal as well as state funds. The administrative offices of the NEIU #19 are located in Archbald, Pennsylvania.

The prosecution is the result of a joint investigation by the Federal Bureau of Investigation (FBI), the United States Department of Education - Office of Inspector General, and the Pennsylvania Department of the Auditor General - Office of Special Investigations. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

U.S. Attorney Smith said that the investigators and his office are continuing to look into allegations of fraud and corruption in school districts and areas of the education-related activities in the Middle District of Pennsylvania that receive federal funds. Anyone with information should contact the FBI at 570-344-2404.


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Last Modified: 02/23/2012