Swindled Port parish recovers some money

About half the $510,000 scammers stole from St. John XXIII intercepted by IRS, covered by insurance
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press staff

St. John XXIII Parish in Port Washington has recovered almost $290,000 of the $510,000 it lost in a scam earlier this year.

Of that amount, $143,166 is money recovered from banks where it had been transferred and $164,800 is insurance payments, Pastoral Coordinator Bill Henkle said.

“In all honesty, we didn’t expect to get any of this money back,” Henkle said. “It’s far exceeded our expectations.

“We’re very thankful. What looked like a totally hopeless situation is looking like something we’ll be able to fully recover from.”

And, he added, authorities have indicated they may be able to recover more of the money that was stolen from the parish.

“We don’t want to count our chickens before they’re hatched,” Henkle said. “But I’m anxious to see if that will be the case. Stay tuned.”

The parish was shocked this spring when it learned that a $510,000 payment intended for CG Schmidt, the general contractor for the St. John XXIII School expansion project, had been stolen.

According to authorities, in late February the parish received a letter purportedly from CG Schmidt that said the firm was changing banks and provided different account numbers for payments. A few days later, a woman called the parish claiming to be CG Schmidt’s accountant asking whether the letter had been received.

  When the contractor’s next bill came due on March 4, parish officials went ahead with the transfer of funds only to be notified later that the transaction was fraudulent and CG Schmidt never received the money.

Henkle said the Port Washington police department worked with the FBI, then the Attorney General’s office and the Internal Revenue Service, on the case.

Several months ago, Henkle said, the IRS notified the parish that it had traced its transfer of funds to a Texas bank. From there, the money had been split into eight deposits for eight other banks.

But for whatever reason, he said, one of the deposits didn’t go through and authorities were able to recover roughly $64,000 in the account.

“When we became aware of that, it was very, very welcome news,” Henkle said.

Authorities were then able to track down approximately $78,000 that had been transferred to another bank, he said.

That money, too, was seized by authorities and returned to the parish.

“It was fabulous news,” Henkle said. “I give a lot of credit to law enforcement.”

The IRS has since indicated that more of the parish’s funds may be recovered, he said.

The archdiocese’s umbrella insurance coverage through Catholic Mutual Insurance has also made two payments totalling $146,800 to the parish, Henkle said.

“Between the two, it’s just shy of $290,000 recovered,” he said. That money has been paid to CG Schmidt, which has given the parish until Aug. 1 to make that initial $510,000 payment.

“We’re hoping that by the end of this month, either by recovery or insurance, we’ll be able to pay the balance,” Henkle said. “I’m fairly confident that will happen. What was an extraordinarily bleak situation has become much more positive.

“It’s a tremendous relief to us. It allows us to focus our energy and resources on the construction project itself.”

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 the St. Mary’s School building to Ansay Development.

Henkle said the project is “still on track. We’re very excited about it. It’s going to be wonderful, but there’s still lots more to do in the next two months.” 

Although the school is expected to be completed by the time classes begin in September, work in other parts of the church may still be ongoing, he said.

Because of issues with asbestos in the ceiling tiles, the parish had to close St. Peter of Alcantara Church for the past couple weekends, Henkle said, but it is expected to reopen for Mass this Sunday. 

In the meantime, the parish has instituted measures to prevent scams like the one it fell victim to from happening again, he said.

But, he said, “It’s shocking. People are trying to keep up with the scams out there, and even people who are on top of things still get duped because it seems so authentic.”

Henkle noted that although some funds have been recovered, the crooks who defrauded the church haven’t been caught. All the accounts where the money was deposited were created fraudulently.

“As thrilled as we are with the recovery, the potential for actually identifying the person responsible is practically zero,” he said.

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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