Port parish bilked out of $510,000 in donations

Money St. John XXIII thought it was paying to contractor went instead to scammers, chief says

Construction crews worked this week on a 19,700-square-foot addition to the east side of St. John XXIII’s St. Peter’s School in Port Washington and a 5,000-square-foot renovation of the existing school building . The work is expected to be completed by September, allowing the school to consolidate classes at the St. Peter’s Campus and the parish to sell its St. Mary’s School building. Photo by Sam Arendt
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press staff

St. John XXIII Catholic Parish in Port Washington was scammed out of more than $510,0000 that parishioners had donated for a school expansion project in a scheme being investigated by local police as well as the FBI and U.S. Attorney’s office.

The scheme has left parish officials and parishioners, who were notified of the fraud via a letter from Father Pat Wendt last week, stunned.

Wendt said parishioners who have spoken to him are “shocked and saddened that we’re in this position. It’s still pretty new and still pretty tender.”

“I was sick to my stomach,” School Board Chairman Wayne Chrusciel said of his reaction to the news. “It was a kick in the gut.”

Dan Becker, chairman of the parish finance council, said, “This was devastating news for our parishioners. However, we’re a vibrant and strong faith community and through prayer and with God’s help, we will persevere.”

Port Washington Police Chief Kevin Hingiss said Tuesday that the scheme began in late February when the parish received a letter purportedly from CG Schmidt, the general contractor on the St. John XXIII School expansion project, that said the firm was changing banks and provided different account numbers for payments.

A few days later, Hingiss said, a woman called the parish claiming to be CG Schmidt’s accountant asking whether the letter had been received — an attempt, he said, to make it seem “legitimate.”

When the contractor’s next bill came due on March 4, Hingiss said, parish officials went ahead with the transfer of funds only to be notified by Port Washington State Bank later that day that the transaction was fraudulent. CG Schmidt never received the funds.

The parish then notified police.

Officers have applied for and received a number of search warrants in the case already, Hingiss said, noting police are being helped in those efforts and the overall investigation by federal authorities.

Hingiss would not say whether authorities believe the fraud was perpetrated by someone overseas, elsewhere in the U.S. or locally, saying, “We will see where the electronic trail takes us.”

He would not comment further, saying he did not want to jeopardize the investigation.

However, he cautioned that these types of investigations tend to be lengthy.

“This is far from being over with,” Hingiss said. “We’re looking at everything.”

That includes how a small town parish came to be targeted.

Amy Grau, a spokeswoman for the Archdiocese of Milwaukee, said the scheme was “quite involved. There was definitely some planning there.” 

“We continue to be prayerfully optimistic that this matter will be resolved with a positive outcome,” she said.

Additional safeguards are likely to be implemented to prevent against any future issues, Grau added.

The funds that were stolen came from the parish’s building fund, all of it money raised by parish members to pay for the $5.6 million St. John XXIII School building project, which began in December, Wendt said.

Wendt said the parish is looking at whether any of the loss might be covered by insurance as well as options to replace the funds.

“We have to wait and see until the investigation’s over,” he said, adding that the building project is moving forward as planned.

The project — a 19,700-square-foot addition to the east side of St. John XXIII’s St. Peter’s School and a 5,000-square-foot renovation of the existing school building — is expected to be completed by September, allowing the school to consolidate classes at the St. Peter’s Campus and the parish to sell its St. Mary’s School building.

Whether any changes to the plans need to be made in light of the fraud remains to be seen, Chrusciel said.

Hingiss would not speculate on whether any of the money may be recovered, saying it’s too early to tell.

The fact someone would prey on a church and school is particularly heinous, Hingiss said.

“It’s terrible to do to anyone,” he said. “To do it to a church and school ....”

Hingiss recommended that any business receiving a letter from a client altering payment instructions verify the changes on their own before implementing them.

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