Virginia City man sues diocese over retaliation claim

RENO (AP) - A man suing the Diocese of Reno claims his termination as lay administrator was in retaliation for reporting alleged violations over a federal grant to restore the oldest active Catholic church in Nevada.

Nick Nicosia contends his 2009 firing at St. Mary's in the Mountains church in Virginia City violated the retaliation provision of the False Claims Act, which is designed to combat fraud by government contractors.

Nicosia's federal court complaint says a $500 donation from former Mustang Ranch brothel owner Joe Conforte to the church project was among concerns he voiced about a $500,000 grant from the National Park Service.

He alleges the diocese accepted the money from Conforte even though federal rules prohibit matching-funds donations under such grants from fugitives. Conforte fled to Brazil in 1991 to avoid prosecution on tax-evasion charges.

He contends grant requirements were violated with bonuses to contractors, a lack of competitive bidding, misrepresentation of engineering studies and unauthorized expenditures of grant money.

Under the False Claims Act, Nicosia merely has to prove the retaliation resulted from the fact he "reasonably believed" there were violations of grant requirements, said his attorney, Terri Keyser-Cooper.

"He doesn't have to prove whether or not there was fraud," she said. "We think we'll have no problem proving he was reasonable to bring up the questions and problems that he saw. We're confident that we're on very strong legal ground."

The complaint over the grant for the 133-year-old church's $2.2 million restoration was filed Oct. 4 in U.S. District Court in Reno.

The diocese intends to file a motion to dismiss the lawsuit by a Dec. 17 deadline on grounds that Nicosia's termination had nothing to do with the allegations reported by him to the park service, said Brother Matthew Cunningham, chancellor of the diocese.

The termination resulted from Bishop Randolph Calvo's responsibility to appoint a priest for the church, he said. No priest was available when Nicosia was named its lay administrator in 2005.

"This lawsuit claims that Mr. Nicosia was terminated because he was a whistle-blower, which is not true," Cunningham said. "We didn't know until this lawsuit was filed that he had ever contacted the National Park Service."

The diocese denies Nicosia's allegations - including the one concerning Conforte - and intends to release a financial audit of the church project, he said.

"The claims he's making against the diocese are way over the edge," Cunningham said. "We don't feel we have any reason to be concerned that there was financial malfeasance or any inappropriate activity going on that would raise any questions."

Nicosia, 70, of Virginia City, has been told by the diocese not to enter the church except for regular Sunday Mass and not to talk to parishioners and donors, Keyser-Cooper said.

"We believe a jury listening to him will absolutely conclude he was very wrongfully and shamefully treated by this church," she said.

Cunningham declined to comment on the restrictions imposed on Nicosia.

The church, which was dedicated in 1877 after a fire gutted the original one built in 1868, is listed on the National Register of Historic Places.