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Man pleads guilty to defrauding 100 small businesses

Man pleads guilty to defrauding 100 small businesses

The owner of a Bethel Park news publication pleaded guilty Tuesday to duping 100 small business owners into giving him money for advertising that was never produced.

Nicholas Markunas, 45, pleaded guilty to one count each of theft and deceptive business practices before Allegheny County Common Pleas Judge David Cashman, who sentenced him to seven years probation and ordered him to repay more than $25,000 to the victims.

Mr. Markunas was charged by Bethel Park police in January 2016 with failing to deliver the promised number of magazine copies to his advertisers, according to a criminal complaint filed in the case.

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Mr. Markunas had solicited advertisements for his Neighborhood Gazette from South Hills businesses including The Rice Inn and Salon Richards, investigators wrote in the complaint.

Some of the advertisers, who had been dealing with Mr. Markunas for years, had spent thousands of dollars to get their businesses’ names circulated in the community.

In 2014, Mr. Markunas changed the format of the Neighborhood Gazette from a newspaper to a magazine. The circulation dropped from 10,000 to 5,000 copies in January 2014, then as low as 50 copies in February 2015, according to the criminal complaint.

Police said Mr. Markunas misrepresented the production numbers to his advertisers and continued to receive payments from multiple businesses for advertising.

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Based on checks cashed by Mr. Markunas at the Ace Cash Express, investigators said that between July 2014 and July 2015 he charged 12 of his advertisers $12,450, and there were likely others that were duped.

Mr. Markunas also failed to make payment of $17,850 and $22,545 to Sunset Designs and Butler Eagle Printing respectively, according to the complaint. The former provided graphic design services while the latter printed the magazine for Mr. Markunas.

One of Mr. Markunas’ advertisers  —  Dr. Amy Jennings, a chiropractor with offices on Library Road — said she paid $500 for her business to appear on the cover of the magazine.

Dr. Jennings told police that rather than the usual 12 copies, she just received one copy of the magazine’s March 2015 edition.

She asked Mr. Markunas for more copies but did not hear from him after that.

Investigators found that several other businesses were never informed of the change in number of copies that were being distributed throughout the South Hills. They believed the magazine was being delivered to every business that was advertising.

Police also interviewed Todd Diperna, who said he was a driver for Mr. Markunas, earning $50 a day.

Mr. Diperna told investigators that Mr. Markunas has a $300 per day heroin habit, according to the criminal complaint.

First Published: July 18, 2017, 9:26 p.m.

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