The former assistant superintendent of the Archdiocese of Washington was arrested Wednesday after a federal grand jury charged him in an embezzling scheme, prosecutors said.
Kenneth Patrick Gaughan, 40, is accused of stealing nearly $45,000 from the Catholic-run school system that operates in the District and Maryland, according to the indictment that charges him with three counts of mail fraud.
As the assistant superintendent of a system that includes about 95 Catholic schools, Gaughan handled invoices and dealings with contractors hired to provide services for the archdiocese’s Catholic Schools Office, according to prosecutors and the archdiocese.
The government alleges that between 2010 and 2018, he manufactured invoices for anti-bullying and crisis intervention programs and had the payments funneled to fraudulent bank accounts that he set up for himself, officials with the U.S. attorney’s office in Maryland said in a statement announcing the indictment.
The bank accounts were tied to entities Gaughan incorporated with names that “were almost identical to those of real companies,” according to the Sept. 24 indictment that was unsealed Wednesday. In one case, Gaughan created a company that was supposed to provide anti-bullying initiatives for the school system called Solutions Counseling for Youth, the indictment states.
Gaughan sent fraudulent invoices and persuaded his employer to make payments for services that he knew would not be provided, the indictment states. Gaughan then had the checks sent to virtual and private mailboxes before depositing them into bank accounts he controlled and used the money for personal expenses, according to the indictment.
Gaughan could not be immediately reached for comment. He was released under supervision pending trial and could face up to 60 years in prison, prosecutors said.
The Archdiocese of Washington in a statement said it became aware of financial irregularities possibly involving Gaughan in April. Gaughan was immediately placed on administrative leave and then stopped working for the archdiocese, the statement said.
The archdiocese said it believes that the money Gaughan took for his own benefit exceeded the $45,000 listed in the indictment but statutes of limitations exclude authorities from including those funds in the federal investigation.
“Responsible stewardship of the financial gifts generously entrusted to the Church by the faithful is a responsibility that the archdiocese takes very seriously,” the archdiocese said in its statement, noting it immediately contacted the FBI and has completed an internal financial investigation.
Julie Zauzmer contributed to this report.