Chesla gets six years for money laundering

Even while skimming millions of dollars from bank clients of a now-defunct armored car company, "signs of the good-hearted Barry Chesla" always emerged, U.S. District Court Judge Robert J. Cindrich was told Friday.

In arguing for a light sentence for Chesla, 44, of Ligonier Township, Chesla's attorney, Edward Bilik of Mt. Pleasant Township, told Cindrich that his client often placed others before himself.

Whether it was volunteering at missions for the homeless in Atlantic City, N.J., where he lived in the early 1990s, anonymously paying funeral expenses of a slain infant in Ligonier Township or donating money to replace a leaking roof at the Waterford Volunteer Fire Department, Chesla frequently helped others, Bilik told Cindrich.

But Cindrich did not appear moved. Yesterday, the judge sentenced both the good and bad Barry Chesla to a six-year, six-month sentence in prison for money laundering and income tax evasion.

Cindrich also ordered Chesla to repay $3.77 million he stole from bank clients of his armored car business during the 1990s.

Chesla pleaded guilty to the charges Sept. 18. Assistant U.S. Attorney Dennis P. Kissane said the three-year investigation into Chesla's former Executive Cash Services armored car business, and later Tri-State Armored Services Inc., is among the largest money-laundering cases ever prosecuted in western Pennsylvania.

The armored car business, which was based in Hammonton, N.J., and had an office in Ligonier, replenished cash at more than 3,000 automated teller machines along the East Coast.

Kissane said Chesla began skimming cash from money wired to the armored car company using an associate from New Jersey, Janette Frattaroili-Reilly. Frattaroli-Reilly and another Chesla associate, David McGrath, have also pleaded guilty to conspiracy charges in connection with the scheme and are awaiting sentencing before Cindrich.

Prior to sentencing, Bilik told Cindrich that McGrath was the mastermind of the scheme.

Bilik said Chesla moved to the Atlantic City area in 1988 to join his wife, Amy, who had taken a job as assistant manager of a bank. After six months, Chesla took a job as a security guard with an armored car company.

Between 1988 and 1991, Chesla was earning less than $20,000 a year and had to take a second part-time job as a Pinkerton guard to supplement his income.

About 1994, Chesla met McGrath, who was working for Hook Financial Co. in southeastern Pennsylvania, according to Bilik.

"This is when Mr. Chesla lost his core principles. Mr. Chesla fell for Mr. McGrath's schemes hook, line and sinker," Bilik said.

Chesla at that time was working as an installer and repairman of automated teller machines.

"Mr. McGrath informed him (Chesla) that they were hardly making any money from the old machines," Bilik said.

Chesla began accepting thousands of dollars in kickbacks from McGrath for used ATMs and parts. McGrath also placed Chesla on Hook's payroll as a ghost employee, according to court documents.

"First, he (Chesla) received thousands of dollars, then tens of thousands, then millions. Mr. McGrath was very streetwise. He was also a big sports book in the Philadelphia area," Bilik said.

By the mid-1990s, using millions obtained through the money-laundering scheme, Bilik said Chesla was able to buy his way into the armored car business with Executive Cash Services.

"Basically, Barry was still a good-hearted guy. He's a nice guy," Bilik said.

While volunteering at the mission in Atlantic City, Bilik credited Chesla with developing a program whereby the casinos would donate leftovers from their buffet tables to the needy.

"Barry drove the truck to pick up the food," he said.

"There's a great amount of redeeming values in Mr. Chesla," Bilik said.

In a brief statement to Cindrich, Chesla apologized to anyone who was hurt by his thefts and apologized to his family. He also thanked prosecutors for their professionalism throughout the investigation.

While Kissane admitted Chesla has performed community service, "he's led a double life."

"Mr. Chesla has engaged in bank fraud, money laundering over a long period of time," Kissane said.

Chesla never could have afforded the lavish lifestyle he has lived over the last several years without the thefts, Kissane said.

Assistant U.S. Attorney Mary McKeen Houghton told Cindrich that prosecutors hope to recoup a large chunk of the $3.77 million when they liquidate numerous properties Chesla forfeited as part of his plea agreement. The Chesla holdings to be sold by the U.S. Attorneys Office include numerous residential and commercial properties in Pennsylvania, Connecticut, Maryland and New Jersey, plus several luxury vehicles, including a 2000 Cadillac and a 1998 Corvette.

Tri-State closed March 1 and filed for bankruptcy the day before its chief executives were indicted in New Jersey. Bankruptcy court documents in New Jersey estimated Tri-State's founders, including Chesla, took between $40 million and $50 million from customer banks.

Tri-State's former chief executive, William Mottin, pleaded guilty Sept. 10 in U.S. District Court in Trenton, N.J., to laundering more than $1 million that belonged to Tri-State's clients. Another Tri-State executive, Daniel Feuker, pleaded guilty March 12.

Chesla sold his interest in Executive Cash Services to Mottin and three others in 1998, and they changed the name to Tri-State Armored Car Services. However, Tri-State opened an office in Ligonier in a building owned by Chesla, who moved his family back to the Ligonier Valley in mid-1996.

As a first-time offender, Chesla could have received a sentence of up to 8 years and one month in prison.

Chesla remains free and will be notified when to report to prison by the U.S. Marshal's Office, Cindrich said.