Archbishop Dolan Could Be Deposed over Bankruptcy Fraud Allegations, by Paula Brooks, Lez Get Real, February 14, 2011

Archbishop Dolan Could Be Deposed over Bankruptcy Fraud Allegations

By Paula Brooks
Lez Get Real
February 14, 2011

http://lezgetreal.com/2011/02/archbishop-dolan-could-be-deposed-over-bankruptcy-fraud-allegations/

It appears that NY Archbishop Timothy Dolan could be deposed over a possible money laundry scheme that may have moved as much as $130 million off the books Archdiocese of Milwaukee in an effort to shield the Church from having to pay sex abuse settlements.

According to the Journal Sentinel, Jeffrey Anderson, an attorney for victims of clergy sex abuse, is saying the archdiocese engaged in a shell game while under Dolan’s watch to hide funds in an effort to shield them from being paid to victims of priest sex abuse.

During a bankruptcy hearing before an Assistant U.S. Trustee last week, Anderson said that $75 million was moved in 2005 and another $55 million in 2007. Under questioning in that hearing, the chief financial officer for the archdiocese said he could not account for the missing money.

Dolan was archbishop in Milwaukee from 2002 to 2009.

The Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy sex abuse cases, filed for Chapter 11 bankruptcy protection in January, saying it was the best way to equitably compensate victims of clergy sex abuse and maintain the essential missions of the church. Its financial statements, filed with the court last week, list $40.7 million in assets and $24 million in liabilities, including $13.7 million for a health care plan for retired priests.

The church also maintains that the vast majority of its assets are in trusts and restricted accounts, leaving only about $7 million for settlements, though it became clear Friday that victims intend to challenge that.

But Anderson claims the archdiocese set the cemetery trust up in 2007 and transferred the $55 million into it only after a Wisconsin court gave victims the right to sue the Church for fraud.

So far, the courts have kept the archdiocese from tapping insurance to fund settlements because the allegations involve fraud, rather than accidents. However that is on appeal to the Wisconsin Supreme Court.

The meeting last week was the first opportunity for creditors to question the archdiocese about its finance.

After celebrating mass yesterday morning, Dolan told reporters in NYC that Anderson’s allegations were “reckless” and “irresponsible.”

“To think that there is 130 million in hidden funds like Dolan’s got some off shore account in the Cayman Islands or something? This is just ludicrous,” Dolan said.

The archbishop added the $55 million is part of the cemetery trust and protected by the state. The other $75 million, he says, belonged to the parishes and was simply returned to them.

Dolan also says he’s willing to cooperate with law enforcement officials because he has nothing to hide.

“If any law enforcement agencies want to talk to me, be my guest,” said Dolan.

Dolan became Archbishop of New York in 2009 and is also the current president of United States Conference of Catholic Bishops.