NEW YORK (Legal Newsline) — New York Attorney General Eric Schneiderman said Tuesday his office has recovered about $1 million that was allegedly embezzled from a Catholic missionary group by its former chief financial officer.
The late Raymond Schroeck allegedly devised a scheme that allowed him to embezzle money from the Society for the Propagation of the Faith for close to a decade.
Kathleen Schroeck, Schroeck’s widow, is returning the money to the Manhattan-based organization, which is one of four Pontifical Mission Societies of the Roman Catholic Church in the United States.
Under the terms of a separate agreement, the Pontifical Mission Societies agreed to take several measures to strengthen financial controls of the organization to avoid the risk of future schemes.
“I’m pleased that we’ve been able to recover the stolen charitable funds and return a large sum to the (Pontifical Mission) Societies so they can continue their important mission,” Schneiderman said.
“Today’s agreement also ensures that these organizations will continue to enhance their controls to operate in a responsible fashion and prevent any future abuses.”
Starting in 2003, Schroeck allegedly came up with a scheme that let him steal funds from a pooled income investment fund. When a donor passed away, State Street Bank in Boston would send the group a check for the amount contributed by the donor.
Schroeck allegedly used a computer to add his wife’s name to the checks and then he would deposit them by ATM into an account of hers that was linked to other accounts he controlled.
Over a nine-year period, Schroeck allegedly diverted about $1,770,000 of the society’s charitable funds into his accounts.
“The late Mr. Schroeck flagrantly abused the trust placed in him, and his estate is paying a price for it,” Schneiderman said. “In these circumstances, it’s crucial that victimized organizations come forward and, like the Pontifical Mission Societies, take necessary steps to guard against future misconduct.”
Schneiderman’s office found no evidence that Kathleen Schroeck knew of or participated in her late husband’s alleged scheme, though it found that she benefitted from and was unjustly enriched.
Kathleen Schroeck assigned $1 million to the society and agreed to pay $25,000 to Schneiderman’s office to defray attorney costs.
The society also recovered about $400,000 from other entities.
Original Story: New York AG recovers $1 million from former missionary group CFO