Marrese's
1982 re-election bid was marked by two separate controversies. He was arrested on June 16, 1982 on charges of "breach of trust, and as a public official seeking to accept a reward and agreeing to vote for consideration" relating to the sale of the school board's former headquarters on Laird Drive. At around the same time, fellow trustee Antonio Signoroni suggested that Marrese may have been in a
conflict-of-interest by voting to give school board contracts to his cousin
Peter Caruso, a trustee on the North York Board of Education with whom Marrese shared an office. Marrese acknowledged that the contracts in question were awarded to Caruso, but denied any wrongdoing and said that he had never shown preference to his cousin. He questioned Signoroni's motives in raising the matter, noting that another of his relatives was challenging Signoroni in the 1982 election. Notwithstanding the controversies, Marrese was again re-elected for Ward Thirteen in the 1982 Toronto municipal election. Marrese's trial took place in late 1983. He was formally charged with one count of breach of trust and six counts of accepting a benefit. His accuser, John Lonergan, testified that Marrese approached him in June 1982 and "asked to be paid $30,000 for ensuring that the [separate school] board accepted a $1,925,000 offer". Marrese pleaded not guilty to all charges. His lawyer argued that Marrese had been set up by Lonergan, a charge that Lonergan denied. The six acceptance charges against Marrese were dismissed on a legal technicality in mid-October 1983, when the judge ruled that a school trustee cannot be considered a municipal official. Defending himself against the remaining breach-of-trust charge, Marrese told the court that he had only agreed to make an improper financial arrangement with Lonergan to procure evidence that the realtor was trying to bribe him. He testified that he had been planning to take his evidence to the next board meeting in order "to reveal the bribe and vote against Lonergan's offer"; this course of action was, he added, made impossible by his arrest. In his closing remarks, the Crown council described Marrese's explanation as "unmitigated lies" and "nonsense". The judge agreed, describing Marrese's testimony as "untruthful" and "a total fabrication". Marrese was found guilty of breach-of-trust on November 7, 1983. Marrese's criminal conviction meant that he automatically lost his seat on the separate school board.
Jack Graham, the board's acting chairman, described the conviction as the most embarrassing incident in the history of Catholic education in Ontario. On November 23, Marrese was stripped of his real estate license and sentenced to a year in prison. He was forced to resign from the Ontario Mortgage Corp. and the Ontario Land Corp. At the time of his arrest, Marrese served as director of the Toronto Columbus Lions Club, and vice-president of the Italian-Canadian Benevolent Fund. ==Late career==