Former Diocese of Reno Employee Claims Fraud in Virginia City Church Renovation

By Martha Bellisle
Reno Register-Journal
October 30, 2010

A former employee with the Diocese of Reno has filed a federal lawsuit claiming he was fired for objecting to and reporting allegedly illegal and fraudulent acts by diocese officials relating to a federal grant to refurbish a historic Catholic church in Virginia City.

Among Carmen "Nick" Nicosia's concerns was a $500 donation to the church project by Joe Conforte, former owner of the Mustang Ranch brothel and now in exile in Brazil after fleeing tax-evasion charges, the suit said.

Nicosia said the money was laundered through Conforte's lawyer, Virgil Bucchianeri.

Bucchianeri did not return phone messages. Brother Matthew Cunningham, chancellor of the Diocese of Reno, said he could not discuss Nicosia's case because it was a personnel issue. And Bishop Randolph Calvo said the claims were "entirely false."

"The diocese has ample documentation and witnesses to refute Nicosia's claims," Calvo said in a statement Thursday. The chief of the grant program visited the church in September and said they were pleased with the work that was accomplished, he said.

Cunningham said Nicosia, who was not a sacramental minister, was the administrator at St. Mary's in the Mountains until a priest became available to serve in that position. When Nicosia's contract was up, it was not renewed, Cunningham said.

Michael Quilici, chief development officer on the project to renovate the church, said Nicosia's claims were false, and said his objections to the way the project was handled were "emotion-based."

"We've got nothing to hide," Quilici said. "We had reporting requirements that we needed to follow, and we've never been told that we were not in compliance. We can account for every dollar."

Quilici also denied Nicosia's claim that Quilici directed Bucchianeri to write a new $500 check after he submitted one that said "donation from Joseph Conforte" on the "for" line. Bucchianeri then allegedly wrote a new check stating it was a "client donation."

"Nick brought the check in, and I laughed," Quilici said. "It's not every day you see something like that. But I said we won't accept that. I'm not going to accept this check from Mr. Conforte. I took no check from Mr. Conforte."

Quilici also said he was not privy to who was behind 99 percent of the checks that came in supporting the grant, and he said lawyers sometimes make donations from clients who wish to remain anonymous.

In the lawsuit, filed Monday in U.S. District Court in Reno, Nicosia, 70, said he was hired in July 2005 and developed a five-year plan to make the church self-sufficient and financially stable. In 2006, he learned about a National Park Service grant program called "Save America's Treasures."

He discovered that they could receive SAT funds if they followed a set of criteria, including raising money that would be matched by the federal program, the suit said. He submitted an application in April 2007 and eight months later, the church got preliminary approval.

But when Quilici took over, the suit said, he did not follow the grant requirements on several points. Instead of forming a committee consisting of parishioners to oversee the funding and other elements of the plan, he set up a panel of architects, contractors and church officials -- allegedly in violation of the grant, the suit said.

"They were receiving the money and overseeing their own spending," Nicosia's lawyer Terri Keyser-Cooper said. "The committee should have been made up of people who were not benefitting from the funds."

The suit also said Quilici also allowed noncompetitive bidding, bonus payments to contractors, unauthorized expenditures, "deliberate misrepresentation" to the Park Service on engineering and other "fraudulent activity" that violated the grant requirements.

Nicosia said when he raised concerns to the diocese about the alleged violations, diocese officials fired him, evicted him from his church housing and prohibited him from church property except for mass.

Keyser-Cooper said Nicosia was a "deeply religious man" and was shocked by their actions.

Quilici said he disagreed with Nicosia's allegations. Quilici said he surrounded himself with the best consultants and tried to keep the project moving forward, but Nicosia was not helping their efforts.

"There came a time when he just became very disruptive and defiant," Quilici said. "We just kept moving the thing along. We tried to maintain the integrity of the project. It's beautiful, and we're very proud of it."

Calvo added: "I acknowledge that Mr. Nicosia put his heart into St. Mary's in the Mountains and so it is sad to note that his meritless lawsuit damages the church he loves."


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