A state grand jury investigation into misappropriated public funds in the financially strapped Beaver County town of Rochester culminated yesterday with the arrests of a borough council member, two former borough employees and the treasurer of a defunct borough authority.

The presentment names Councilman Joseph Glenn, 45; former manager Edward Piroli, 57; former secretary Lois Sutter, 54; and Jeffrey Simmons, 43, Mr. Glenn's business partner and the treasurer of the former Rochester Community Network Authority.

All were arraigned before a district judge on theft charges and released on $15,000 bonds pending a preliminary hearing next week.

Attorney General Tom Corbett said the grand jury, sitting in Pittsburgh, began its investigation in November based on a referral a month before from the Beaver County district attorney's office.

As context for the charges, the grand jury noted that the borough's financial condition had declined sharply in recent years and by Dec. 31, 2006, Rochester owed more than $725,000 on various invoices.

According to the presentment, Mr. Piroli diverted state grant money intended for police department security upgrades and used the funds to pay the mortgage on the borough building; withdrew money from the police pension fund, with the reluctant approval of a Sky Bank official, to pay borough bills; and failed to deposit state aid checks into the pension fund for years until his departure in 2007.

According to the grand jury, Mr. Piroli used the state money and $47,000 in police pension fund money to increase the general fund, which he then used to fund longevity pay, unauthorized pay raises, vehicle stipends and fuel for himself and Ms. Sutter.

When a borough police officer began looking into the fact that pension money was not being deposited, according to the presentment, Mr. Piroli tried to quash the probe.

"The grand jury learned that during an executive session of borough council, Piroli made his displeasure known and required that Chief [Joseph] DeLuca remove Officer [Dawn] Shane from the investigation," the presentment says. "Piroli based his demand in part upon his fears that Officer Shane's diligent investigation would ruin his life."

Because of Mr. Piroli's misconduct, Mr. Corbett said, the state grant money from the Department of Community and Economic Development will now be lost to the borough.

In 2006, without the knowledge of Chief DeLuca, Rochester was approved to receive a $50,000 community revitalization grant for renovating the police department with new security equipment.

But the department never got the money. The grand jury said Mr. Piroli used it to pay the mortgage for the borough building.

Mr. Corbett said Rochester will have to return the $50,000 and won't be able to get any more grants from the agency.

The grand jury also found that Mr. Glenn and Mr. Simmons, a couple who live together and ran a computer business, privately contracted with the borough for their personal benefit and eventually stole borough computer equipment bought with taxpayer money.

In 2005, the borough created the Rochester Community Network Authority to oversee adult education, including police and fire training, administer a borough amphitheater and help start the Rochester Area Digital District project.

Mr. Glenn, who served as president of borough council, also was president of the authority; Mr. Simmons was the treasurer.

According to the grand jury, the authority rented out the basement of the borough building to a day-care company, Adelphoi Village, but the borough never received any of the rent money.

Instead, the grand jury said the authority, under the direction of Mr. Glenn and Mr. Simmons, used the rent proceeds and a federal grant from the U.S. Department of Education to buy computer equipment from their private company, Khitomer Computer Services, which Mr. Glenn incorporated in 1998.

When the authority was terminated, the grand jury said, Mr. Glenn and Mr. Simmons took the computer equipment and stored it at the house they share on Harmony Avenue.

Agents serving a search warrant at the house June 1 said they found computer keyboards, monitors, printers and other equipment. The grand jury said Mr. Glenn was using one of the computers for his personal benefit.

A preliminary hearing is scheduled for all the defendants next Friday.