Greenbelt, Maryland – A federal grand jury has indicted Kenneth Patrick Gaughan, age 40, of Washington, D.C., on mail fraud charges arising from a scheme to embezzle funds from the Catholic Archdiocese of Washington (ADW), where he was employed as Assistant Superintendent. The indictment was returned on September 24, 2018, and unsealed today upon Gaughan’s arrest.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
According to the three-count indictment, Gaughan was employed as the Assistant Superintendent of ADW, headquartered in Hyattsville, Maryland. In that role, Gaughan was responsible for recruiting and acting as the point of contact for contractors who provided various services to ADW. These included contractors that could help ADW implement anti-bullying, crisis intervention, and professional development programs at the approximately 95 Catholic schools overseen by ADW, located in Calvert, Charles, Montgomery, Prince George’s, and St. Mary’s Counties in Maryland, and Washington, D.C. Gaughan also obtained invoices for services from contractors and provided those invoices, along with requests for payment and supporting documentation, to his superiors for approval.
The indictment alleges that beginning in at least June 2010 and continuing through April 2018, Gaughan caused ADW to pay invoices manufactured by Gaughan purportedly for anti-bullying and crisis intervention programs, as well as for software used to send mass text messages to ADW’s students and families. To execute the scheme, Gaughan allegedly incorporated two companies using names that were almost identical to those of real companies and opened bank accounts in the names of those companies. Gaugahan also opened a bank account in the name of a third company, which was an unlicensed entity in Washington, D.C.
According to the indictment, Gaughan then transmitted fraudulent invoices and persuaded ADW to issue checks for services that Gaughan knew the companies did not provide. Gaughan allegedly opened virtual and private mailboxes in order to receive the checks that ADW issued to pay for the fraudulent invoices that Gaughan manufactured and transmitted to ADW officials. The indictment alleges that Gaughan deposited the checks issued by ADW into the bank accounts he controlled, and converted the money to his personal use. The indictment details three invoices paid from September 2016 through April 2018 totaling almost $45,000.
If convicted, Gaughan faces a maximum sentence of 20 years in prison for each of three counts of mail fraud. An initial appearance was held for Gaughan today in U.S. District Court in Greenbelt before U.S. Magistrate Judge Timothy Sullivan. Gaughan was released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the FBI for its work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Gregory Bernstein, who is prosecuting the case.