An Ohio man stole nearly $3 million dollars from the Catholic Diocese of Stubenville. Law enforcement said he made off with the money over a thirteen-year period between 2004 and 2017. The man, David Franklin, 67, worked as the comptroller for the diocese. So how’d he do it?
Tax Scheme
Officials say Franklin’s scheme involved not paying the payroll taxes withheld from the paychecks of employees of the Catholic Diocese, stealing nearly $300,000 in diocesan funds, and filing false tax returns of his own.
- From 2004 – 2016, he withheld payroll taxes for the Diocese and the Office of Social Ministry but did not pay the IRS the money
- Between 2013 – 2016, he withheld payroll taxes for the Mount Calvary Cemetery Association but did not pay the IRS.
Of course, when you don’t pay the IRS on time, there are going to be some penalties. The Diocese paid the IRS $2,778,462.68 in withheld payroll taxes and penalties. Nearly a million dollars of that total was interest and penalties for late payment.
“The actions of David Franklin were egregious and caused significant financial harm to Catholic Diocese of Steubenville and the Mount Calvary Cemetery Association,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Bringing to justice those who prey on their employers for their personal financial gain has been and will continue to be a top priority for IRS Criminal Investigation.”
More Charges
But that wasn’t all he was up to. “While he was failing to truthfully account for and pay over payroll taxes, Franklin also embezzled $299,500 from the Diocesan Entities by preparing fraudulent checks to be issued to himself,” said David M. DeVillers, United States Attorney for the Southern District of Ohio. “For four tax years, Franklin also filed false personal income tax returns, causing a tax loss of $33,672.25.”
Guilty Plea
Franklin pleaded guilty on Tuesday to:
- Failure to account for and pay over employment tax.
- Making a false income tax return
- Wire fraud
Willful failure to account for and pay over employment taxes is punishable by up to five years in prison. Making and subscribing a false income tax return is punishable by up to three years in prison. Wire fraud is punishable by up to 20 years in prison. The court will determine an appropriate punishment according to federal sentencing guidelines and other relevant factors.
Franklin agreed to pay $299,500 in restitution to the Diocese for the embezzlement. The court could also order restitution of the tax loss, interest, and penalties sustained by the Diocese.