A man from Washington DC allegedly stole more than $2.5million from the Catholic Church and the federal government’s coronavirus relief program and put the money toward extravagant personal purchases.
Kenneth Gaughan, 41, is facing a slew of federal charges under two separate indictments accusing him of fraudulently obtaining $2.1million in coronavirus relief loans and embezzling $472,000 from the Archdiocese of Washington.
Prosecutors say Gaughan used the money the buy a $1.13million rowhouse, a $300,000 yacht and a $46,000 luxury sports car.
On Tuesday Gaughan pleaded not guilty to one 12-count indictment related to his alleged eight-year scheme to embezzle money from the archdiocese in Hyattsville, Maryland, where he worked as an assistant superintendent.
He also appeared before a US District judge to face a another indictment charging him with one count each of bank fraud, wire fraud, theft of government funds and money laundering in connection with receiving Paycheck Protection Program and Economic Injury Disaster loans.
Prosecutors said Gaughan applied to Small Business Administration lenders on behalf of multiple companies falsely purporting to register emotional support animals.
He allegedly used false representations including forged paperwork and bank records to obtain the loans, according to a complaint filed Monday.
Gaughan then used a portion of the money to purchase a 2020 Cruisers Yachts 338 CX 33-foot watercraft, a 2020 Kia Stinger, and a rowhouse in Northeast Washington, prosecutors said.
Following Gaughan’s arrest authorities seized the boat and the car, as well as his investment account and bank accounts. They also filed a forfeiture complaint against the home.
‘We will not tolerate exploitation of this national emergency for personal gain,’ Acting US Attorney Michael R Sherwin said.
‘This Office will not allow fraudsters to steal taxpayer money intended to help small businesses that are currently struggling as a result of the COVID-19 pandemic.’
The separate 12-count indictment against Gaughan was also unsealed on Tuesday, painting a broader picture of his alleged history of fraud.
‘Mr Gaughan was so emboldened by deceiving a church for eight years he then, allegedly, turned his deception to the government,’ FBI Special Agent in Charge Jennifer Boone said.
The second indictment alleges that Gaughan faked invoices for anti-bullying and crisis intervention programs that were meant to serve approximately 95 Catholic schools overseen by the ADW.
From June 2010 through April 2018 Gaughan allegedly had the archdiocese pay three companies – which he owned and controlled using an alias – for the services that were never provided.
The then deposited checks from the diocese into virtual and private mailboxes so he could spend the money on himself.
This marks the second time Gaughan has been accused of embezzling money from the ADW, according to The Washington Post.
In September 2018 Gaughan was indicted by the US attorney’s office in Maryland on charges of allegedly embezzling $45,000 from the organization.
That case was dismissed following a five-day trial after a judge ruled that Gaughan should not have been charged because the payments in question were never sent or received there.
A spokesperson for the ADW said that it plans to fully cooperate with authorities on both of the new indictments.