By James F. Mccarty
The Plain Dealer
September 22, 2009
http://blog.cleveland.com/metro/2009/09/former_diocesan_accountant_sen.html
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| Anton Zgoznik |
CLEVELAND, Ohio — A former accountant who defrauded the Catholic Diocese of Cleveland will spend the same length of time in federal prison as his one-time boss: a year and a day.
A federal judge Tuesday rejected sentencing guidelines that called for Anton Zgoznik to spend four to five years behind bars, and sided with his lawyers who argued it would be unfair to punish him more severely than Joseph Smith, the diocese's former chief financial officer.
"This is the most difficult sentence I have encountered in my 28 years on the bench," U.S. District Judge Ann Aldrich said before announcing her decision. "It's a sentence that will make nobody happy."
Zgoznik, 42, of Kirtland, was a key figure in a financial scandal that enveloped the diocese five years ago. He was convicted in 2007 of paying $784,000 in kickbacks to Smith in exchange for $17.5 million worth of church accounting and computer business.
But on Tuesday, Aldrich was confronted by conflicting verdicts. Although Zgoznik and Smith were both accused of being part of the same kickback scheme, a separate jury convicted Smith only of tax evasion.
The rules of evidence allowed a jury to hear a secret recording of Zgoznik conspiring to cover up the scheme, but prevented the Smith jury from hearing the tape, which may have explained the different verdicts, Aldrich said.
"This is what happens when good intentions are carried out with bad mechanics," an emotional Zgoznik told the judge. "My intentions were never criminal."
Smith and Zgoznik each claimed that the Rev. John Wright was aware of the payments and approved of them as a way to compensate Smith, who had threatened to leave the diocese for a higher paying job in the private sector.
Wright, former Bishop Anthony Pilla, and other diocesan officials testified that nobody in the diocese hierarchy knew or approved of Zgoznik's payments to Smith.
Assistant U.S. Attorney John Siegel argued against leniency, accusing Smith and Zgoznik of being equally guilty.
"With kickbacks it takes two," Siegel said. "There was nothing that Mr. Smith did that he could have done without Mr. Zgoznik's assistance."
Federal Public Defender Timothy Ivy said Zgoznik already has been punished enough: he lost his $3 million accounting business, can no longer teach at Lakeland Community College, and is being separated from his wife and 6-year-old son.
"It would be completely unfair to take the lesser culpable of the two [Zgoznik] and to punish him more severely" than Smith, Ivy said.
In addition to prison time, Zgoznik also must perform 4,000 hours of community service work, pay a $1,500 fine and restitution of $784,000 to the diocese and an undetermined amount to the Internal Revenue Service.
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