(The following statement was released by the Archdiocese of Washington on September 26, 2018.) 

In April 2018 the Archdiocese of Washington became aware of financial irregularities that suggested possible mishandling of archdiocesan funds by an employee of the Catholic Schools Office, Kenneth Gaughan.

Immediately upon receiving the information, Gaughan was put on administrative leave and subsequently ceased employment with the archdiocese. The archdiocese conducted a comprehensive internal investigation and promptly contacted the Federal Bureau of Investigation, which undertook a thorough review of the financial issues. 

The FBI investigation resulted in the indictment against Gaughan today, September 26. The United States Attorneys’ Office in Greenbelt, Maryland has charged Gaughan with three counts of mail fraud arising from a scheme to embezzle funds from the archdiocese. If convicted, Gaughan could face a maximum sentence of 20 years in prison for each of the three counts.

The indictment alleges that between June 2010 through April 2018, Gaughan created vendors and generated invoices for anti-bullying and crisis intervention programs, as well as mass texting services. According to the indictment, Gaughan then transmitted the fraudulent invoices and submitted check requests for the services, and then deposited the checks issued by the archdiocese into the bank accounts that he controlled for his personal use. The indictment details three invoices paid from September 2016 through April 2018 totaling almost $45,000. Statute of limitations limits the government’s indictment to focus on about $45,000 of misappropriated funds, however, the archdiocese believes the actual amount of money Gaughan took for his own benefit to be significantly more. The archdiocese maintains comprehensive insurance to protect against such losses.

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 of Washington implements internal financial controls to ensure that contributions by the faithful are used for their intended purposes in carrying forth its ministries. Individuals who suspect financial or employee misconduct involving any parish, school, agency, archdiocesan office, and any archdiocesan employee are encouraged to report it to civil authorities and to the archdiocese.