Cleveland diocesan officials testify in trial of former employee

Published: 2007-09-07

CLEVELAND (CNS) -- Even though a former assistant treasurer for the Cleveland Diocese is the one on trial in U.S. District Court for an alleged kickback scheme involving church money, observers are getting a look at the financial operations of the diocese. Anton Zgoznik, 40, a certified public accountant, has been on trial since Aug. 20 for allegedly paying money to former diocesan chief financial officer Joseph Smith in return for business from the diocese for consulting work. Zgoznik is charged with 15 felony counts including conspiracy, mail fraud and obstructing tax laws. Smith also is facing 23 similar charges and his trial is expected to begin after Zgoznik's concludes. Federal officials allege that the diocese paid $17.5 million to Zgoznik's firms for computer, accounting and financial work between 1996 and 2003. The government charges that Zgoznik's companies then paid $784,000 in kickbacks to Smith's companies. But defense attorneys for Zgoznik say the lifelong Catholic, who was raised in the St. Vitus Church community and a traditional Slovenian family, was merely following directions from his clergy superiors and that the diocese often paid consultants for work in special compensation accounts. They also contend that all work that Zgoznik's firms received was approved by the diocesan Finance Council.

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