Crime & Safety

Former Mayor Wanted $16 Million from Shelton Man After FBI Arrest

Former Manchester Mayor, Peter DiRosa, is accused of involving a Shelton real estate developer and financial advisor in an illegal proposal.

Less than two weeks after he was , a Shelton man says that former Manchester Mayor Peter DiRosa approached him about investing $16 million in a power plant, golf resort and luxury hotel and casino in Hungary.

Joe Fitzpatrick, a Shelton real estate developer and financial advisor, told Patch Monday that on June 15 he met with DiRosa and several other men who claimed to be the board of directors of Castle Lodge LLC, a development group founded to create “the premier vacation property in Eastern Europe,” including “the largest casino in Hungary.”

Fitzpatrick said the meeting was arranged through a business contact of his who told him he had already invested $900,000 into the project, so he had every reason to believe it was a legitimate investment opportunity. He said DiRosa introduced himself as “a former mayor of Manchester,” and his bio included in a package of information the group provided about the investment describes DiRosa as thus:

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“Mr. DiRosa brings to our team over 30 years of financial, political and development experience both on the national and international level. As the former mayor of Manchester, CT, he was instrumental in the development of over 1,000 units of housing and is credited with the development of the Buckland Mall, the largest retail outlet in New England. He coordinated several political campaigns, including the successful re-election campaigns of Joe Lieberman and Congressman John Larson. Since 1990, Peter has worked extensively in Eastern Europe indentifying projects and infrastructure development projects in the former Soviet nations. He has worked closely with several international development groups to insure project success.”

But as the meeting went on Fitzgerald said he began to notice irregularities in the group’s presentation and started to grow more and more uncomfortable with the plan when DiRosa and the others would only offer vague explanations to his questions.

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“I said to myself something’s not right here,” Fitzpatrick told Patch. “It’s either an outright fraud or these guys have got their numbers wrong.”

According to the information the group provided to Fitzpatrick about the investment opportunity, Castle Lodge LLC was seeking to secure a $16 million investment, $8 million of which would go to pay off the debt remaining on a Hungarian power plant that they claimed became operational in April of 2011, and the remaining $8 million would be used to purchase land, permits and the rights to build the golf resort and casino.

The $16 million investment would be secured by the power plant, valued at approximately $100 million, and would also trigger a development loan from the Development Bank of Hungary that would pay for the construction of the resort, according to the information provided by Castle Lodge LLC. In addition, Castle Lodge claimed that the power plant, “a state of the art Green power producing plant that converts tires into electricity with no net emissions,” would produce enough electricity to cover the interest payments on the development loan while also yielding $9 million in profit annually for investors. The resort was estimated to earn $53.1 million in its first year, before interest, taxes, depreciation and amortization.

“As a smart investor I said, ‘OK, then I’ll just invest in the power plant without the risk of the resort,” Fitzpatrick said. “But they wanted me to invest in both as a package deal.”

The power plant, known as the Power Plant at Polgar, is described as capable of generating 51,000-megawatt hours of power a year, although no address for the plant is listed anywhere on the group’s investment materials.

The resort, known as “The Castle Spa, Casino, and Golf Resort at Hortogaby, Panon,” is described as an 876,505-square foot resort constructed on 620 acres of land in the town of Hortobaby, approximately 137 miles east of Budapest. It is described as: “the premier vacation property in Eastern Europe. It will offer unique and luxurious accommodations, the largest casino in Hungary, championship golf with a yearly PGA tournament, spa and health facilities, world class dining experiences and entertainment for every generation, all in one complex.”

A Google search yielded no results for either Hortogaby or Hortobaby, both of which are used throughout the document to describe the planned resort or its location, although Hortobagy is both the name of a village and large national park in eastern Hungary.

Golfer Nick Faldo, Frank Russo, former executive director of the Hartford Civic Center, and U.S. Rep. John Larson, D-1st District, are listed as members of the resort’s advisory board.

But Larson’s staff said Monday that the congressman is not on the project’s advisory board and that DiRosa “used the Congressman’s name illegally.”

Christopher Licata, a spokesman for the congressman, said that Larson was first alerted that his name was being used on the project when the Maine Department of Insurance contacted him about a year ago, and that Larson has since complained to both the Connecticut and Maine departments of insurance that his name is being used illegally to advertise the project.

“Mayor DiRosa used the Congressman’s name illegally and he has since sent multiple cease and desist letters to force the former mayor to remove his name,” Licata said.

Licata said that Larson knew DiRosa through “local politics” and that DiRosa first approached him about the project 15 years ago when Larson was working in the private sector and did not hold elected office, but that the congressman has not been approached about the project since.

“I am disturbed about the entire situation and I hope the matter is tried and rectified in a timely matter,” Larson said by email Monday.

Fitzpatrick said he became worried about DiRosa and the group’s proposal after he searched for their names online and began to find arrest for conspiracy to commit wire fraud, which he said DiRosa never disclosed to him during the course of their meeting.

“You can’t go out and lie to people to get things done,” Fitzpatrick said. “There’s a fiduciary responsibility if you’re talking to people and trying to raise money.”

Present at the June 15 meeting, according to Fitzpatrick, were DiRosa, who is listed as director of operations and president of resort holdings international, Reka Somkuti, who is listed on documents as an accountant, Allan Stadler, who is listed as an architect, and Jerry Wolff, who is listed as the president of Total Communications, Inc. Fitzpatrick said that Ildikó Sárdy, who is listed as both the project’s attorney and as a member of its board of directors, attended the meeting via conference call.

Fitzpatrick, who has been the victim of bad development deals in the past himself, said he chose to alert the media after reading about DiRosa’s earlier arrest because he did not want to see anyone else lose hard-earned money to the promise of a quick return on investment.

“That’s a lot of bravado, but it’s also a lot of danger,” Fitzpatrick said of DiRosa and his proposed investment opportunities. “Because someone somewhere is desperate for a quick buck and is going to give him $10,000, $20,000, $50,000. When people get desperate, they’ll try anything.”

DiRosa, who served as mayor of Manchester from 1987 to 1989, was arrested alongside Thomas Renison of Glastonbury on June 2, based on a complaint filed by Frank Jablonski, a Kennebunk resident who alleged that the pair convinced him to invest $600,000 of his retirement savings into a plan to build a similar five-star resort and casino in Hungary 2008, known as the Castle at Polgárdi.

When the promised six-month return on his investment never materialize, and the pair repeatedly refused to return his money, Jablonski retained an attorney to try and recover his lost investment.

Fitzpatrick said that Renison was not part of the June 15 meeting.

DiRosa has referred requests for comment to his Portland-based criminal attorney, William Maselli, who did not return another call seeking comment Monday.

DiRosa and Renison were each released on a $50,000 bond; neither has been indicted on the charges.

One of the conditions of DiRosa’s release states that he “must not violate any federal, state or local law while on release.” 


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