- The Washington Times - Wednesday, August 12, 2020

Federal prosecutors have charged a D.C. man with fraudulently applying for and collecting more than $2 million in coronavirus relief funds, which they say he used to buy a $1.13 million townhouse, a $300,000 yacht and a $46,000 luxury sports sedan.

The U.S. Attorney’s Office of the District of Columbia also accused Kenneth Gaughan, 41, of embezzling more than $472,000 from the Archdiocese of Washington.

Prosecutors charged Mr. Gaughan, an assistant superintendent with the archdiocese, with one count of bank fraud, one count of theft of government funds, one count of wire fraud and one count of money laundering.

The criminal complaint unsealed Tuesday alleges that Mr. Gaughan applied for payment protection and economic injury disaster loans through multiple companies under the false claim of registering emotional support animals.

Mr. Gaughan allegedly forged paperwork and bank records in order to receive the loan funds, which he used a portion of to purchase a 2020 Cruisers Yachts 338 CX 33-foot watercraft, a 2020 Kia Stinger sports sedan and a rowhouse in Northeast Washington.

“During this time, many businesses are feeling the effects of the pandemic. To help businesses make it through, the government offered loans to provide economic relief to small businesses and non-profit organizations that are currently experiencing a temporary loss of revenue and enable them to keep their workers on the payroll. Unfortunately, there are greedy individuals who choose to abuse these programs in order to enrich their lifestyle,” said Kelly Jackson, IRS special agent in charge of the D.C. field office. “This conduct will be investigated to ensure crooks are held responsible for stealing this money away from those who were in need.”

Along with the defendant’s arrest, the government obtained a warrant to seize the yacht, the Kia Stinger and Mr. Gaughan’s investment and bank accounts, and is filing a civil forfeiture complaint against the rowhouse purchased with the coronavirus relief funds.

A separate, 12-count indictment unsealed Tuesday charges Mr. Gaughan with mail fraud, wire fraud and money laundering for an alleged scheme to defraud the archdiocese of more than $472,000 while serving as its assistant superintendent at its Hyattsville, Maryland, headquarters.

“We learned of the indictment and will fully cooperate in the prosecution of the scheme to defraud that was committed against the Archdiocese and, most recently, allegations of such a scheme against the funds created to support small businesses during these difficult times,” said Paula Gwynn Grant, communications secretary of Archdiocese of Washington.

As assistant superintendent, Mr. Gaughan was responsible for being the point-of-contact for contractors to provide different services to the 95 Catholic schools in Calvert, Charles, Montgomery, Prince George’s and St. Mary’s counties overseen by the diocese.

From at least June 2010 through April 2018, Mr. Gaughan allegedly faked invoices for anti-bullying and crisis intervention programs and had the archdiocese send payments to three companies he owned.

In addition to concealing the ownership and control over these companies, the indictment alleges Mr. Gaughan opened virtual and private mailboxes in order to receive checks for the fraudulent invoices. He then reportedly deposited the checks from the archdiocese into his bank accounts for personal use.

“Mr. Gaughan was so emboldened by deceiving a church for eight years he then, allegedly, turned his deception to the government, stealing funds that were meant to be a lifeline for struggling businesses during an unprecedented economic downturn, and greedily using them to satisfy his own materialistic desires,” said FBI Special Agent in Charge Jennifer Boone.

Prosecutors from the U.S. Attorney’s Office for the District of Columbia and for the District of Maryland are investigating and prosecuting the case.

The public can report suspected COVID-19 fraud schemes by calling the National Center for Disaster Fraud hotline (1-866-720-5721) or by e-mailing disaster@leo.gov.

Those who suspect fraud or other criminal wrongdoing related to the pandemic can also submit reports to the COVID-19 Pandemic Fraud Hotline by calling 202-252-7022 or emailing USADC.COVID19@usdoj.gov.

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