Wednesday, April 14, 2021

Former Diocese of Steubenville comptroller jailed for embezzling $300,000 in diocesan funds

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The former Diocese of Steubenville comptroller who admitted fudging the books as well as his tax return has been sentenced to a year in prison and ordered to pay more than $1.3 million in restitution.

David A. Franklin, 67, had pleaded guilty in July in federal court to willful failure to account for and pay over employment taxes, filing a false income tax return and wire fraud, along with embezzling just under $300,000 in diocesan funds over an 11-year period beginning in 2008.

The diocese had to pony up nearly $1 million to cover interest and penalties assessed by the Internal Revenue Service on top of the nearly $2.8 million payroll tax debt that was owed.

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During Tuesday’s virtual sentencing hearing, Bishop Jeffrey Monforton told the court the Diocese of Steubenville’s ability to carry out its mission of service had been compromised by Franklin’s actions.

“We reach out to those in greatest need, those in need of healing,” he said.

“This ministry requires financial resources, resources that we were denied for years. Many people have had their trust in the church compromised. It’s easy and relatively quick to lose one’s trust, but the arduous and longer road is in the work to regain that very same trust.”

Documents filed with the court showed that, from 2004-2016, Franklin caused payroll taxes to be withheld from employee paychecks for the diocese and the Office of Social Ministry, a social services and charitable nonprofit in the diocese, but did not pay the withheld funds over to the Internal Revenue Service.

From 2013 through 2016, Franklin did the same thing at the Mount Calvary Cemetery Association.

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He also admitted embezzling almost $300,000 from diocesan entities “by preparing fraudulent checks to be issued to himself,” David M. DeVillers, U.S. Attorney for the Southern District of Ohio, said in a release issued late Tuesday. “For four tax years, Franklin also filed false personal income tax returns, causing tax losses of more than $33,000.”

Franklin had served as the diocese comptroller from 1985 until 2017, when he retired.

The diocese claimed it discovered “irregularities” in Franklin’s accounting records and financial reports after he left their employ, and an independent accounting firm subsequently determined the payroll taxes had never been turned over to the IRS.

The diocese had to liquidate unrestricted investments in order to cover the tax debt.

The diocese had filed suit in January to recover $339,000 in performance bonuses Franklin had been paid as well as the interest they’d paid to the IRS on the payroll tax debt, plus accounting and attorney fees.

U.S. District Judge Sarah D. Morrison ordered Franklin to pay $1.3 million in restitution to the diocese, the Office of Social Ministry, the Mount Calvary Cemetery Association and the IRS, and also ordered him to forfeit the nearly $300,000 he admitted embezzling.

“The Diocesan Entities provide support to individuals and families, youth educational programs, a thrift store, an emergency food bank and more,” DeVillers said. “Franklin’s actions cost the Diocese — and the community — $1.3 million.”

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Franklin, who had relocated to Kentucky, will also be on supervised probation for two years after his release.

Source – heraldstaronline.com

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