Jefferson County grand jury indicts ex-Diocese of Steubenville comptroller
STEUBENVILLE – Former Diocese of Steubenville comptroller David A. Franklin has been charged by a Jefferson County grand jury with four counts of theft, receiving stolen property, falsification and defrauding creditors.
Wednesday’s charges, all felonies, come just one day after Franklin admitted in federal court in Columbus to embezzling nearly $300,000 in diocesan funds, wire fraud and violating federal tax laws.
The county indictments allege Franklin, 63, who now lives in Independence, Ky., pocketed more than $150,000 intended for the Society for Propagation of the Faith and paid himself more than $339,000 in performances bonuses he’d done nothing to earn.
“I think it’s the first step in the process to bringing justice to the people in the diocese. So many people in our community donate money, even though many times they may not (have a lot themselves),” Prosecutor Jane Hanlin said. “They deserve to know what happened to their money, and I think they’re entitled to know the money they donate to the diocese actually goes where it’s supposed to go and helps the people it’s supposed to help.”
Specifically, the grand jury returned true bills charging Franklin with:
— One count of aggravated theft and one count of theft by deception for allegedly failing to deliver the bequest to the Society for Propagation of the Faith.
— One count of aggravated theft, one count of theft by deception and one count of receiving stolen property for allegedly paying himself $339,000 in performance bonuses without diocesan consent.
— One count of falsification for allegedly altering financial records and reports so no one would be able to tell what he was actually doing with the diocese’s money.
— One count of defrauding creditors, for not reporting the money he allegedly stole as income, thus depriving the U.S. Department of the Treasury of money he would have paid in taxes.
All seven county charges are felonies of the third degree, Hanlin said, and are “absolutely separate” from those Franklin admitted to in federal court Tuesday – willful failure to account for and pay employment taxes he’d withheld from employee paychecks at the diocese, the Office of Ministry and Mount Calvary Cemetery Association, one count of wire fraud and one count of filing a false income tax return. His federal plea deal requires Franklin to repay $299,500 in restitution to the diocese for the money he embezzled.
The court also could order him to make restitution for the tax loss, interest and penalties sustained by the diocese.
Hanlin said the diocese was deprived of “an extraordinary amount of money” during Franklin’s tenure as comptroller, but said the damage extends much further than that.
“People in the Catholic church believe they’re donating to the poor, to the less fortunate and that the money they donate will benefit people who live and worship here,” she said. “They certainly don’t think that they’re donating money (so) someone can pay themselves over $300,000 in bonuses, and not pay the taxes on it to boot.”
Hanlin said “an extraordinary amount of money” was allegedly involved.
“Certainly, people in the diocese deserve answers to that and they deserve to have the money repaid,” she said.
Franklin served as the diocese comptroller from 1985 until 2017, when he retired. The diocese claims it discovered “irregularities” in his accounting records and financial reports after he left their employ, and an independent accounting firm subsequently determined $2.8 million in payroll taxes had been collected but never turned over to the IRS. The diocese had to liquidate unrestricted investments in order to cover the tax debt and the $999,713 in interest and penalties assessed by the IRS.
Diocese Communications Director Dino Orsatti had little to say, pointing out indictments “are allegations.”
“We have to have faith in the judicial process and let it take its course,” he said.
In addition to the criminal charges against Franklin, the diocese filed suit against him in common pleas court to recoup its losses, but those proceedings were stayed for 180 days in May so Franklin could address the federal case.