Indictment — United States v. Kenneth Patrick Gaughan, District of Columbia (Document 1)

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An Indictment in United States of America v. Kenneth Patrick Gaughan, also known as Richard Strauski, Case 1:20-cr-00128-TSC, in the U.S. District Court for the District of Columbia, filed July 22, 2020 as Document 1. Counts One through Five charge mail fraud under 18 U.S.C. § 1341, Counts Six through Eleven wire fraud under 18 U.S.C. § 1343, and Count Twelve a monetary transaction under 18 U.S.C. § 1957. The grand jury alleges that as Director of Counseling and Assistant Superintendent of the Archdiocese of Washington, the defendant took over $472,832 from the Archdiocese between about June 2010 and April 2018 through false invoices from companies he secretly controlled, including 11 checks worth a total of $391,385.50 to Company 1. The United States seeks forfeiture money judgments of at least $472,832.95 and at least $12,000.00.

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Case 1:20-cr-00128-TSC Document 1 Filed 07/22/20 Page 1 of 11

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

Holding a Criminal Term

Grand Jury Sworn in on January 8, 2020

UNITED STATES OF AMERICA : CRIMINAL NO.
v. . : GRAND JURY ORIGINAL

KENNETH PATRICK GAUGHAN : VIOLATIONS:

also known as Richard Strauski,
18 U.S.C. § 1341 (Mail Fraud);

Defendant. : 18 U.S.C. § 1343 (Wire Fraud);
: 18 U.S.C. § 1957 (Monetary
Transaction of Criminally Derived
Property);
18 U.S.C. §§ 981(a)(1)(C), 982(a)(1),
21 U.S.C. § 853(p), 28 U.S.C. § 2461(c)
(Criminal Forfeiture).

INDICTMENT

The Grand Jury charges that:
Introduction

At all times relevant to this Indictment: |

1. Defendant KENNETH PATRICK GAUGHAN (“GAUGHAN”), also known as
‘Richard Strauski, a resident of Washington, DC, was employed as the Director of Counseling and
Assistant Superintendent of the Archdiocese of Washington, DC (“‘ADW”), headquartered in
Hyattsville, Maryland.

2. ADW oversaw approximately 95 Catholic schools that educated approximately

27,000 children in the District of Columbia and multiple counties in Maryland. ADW also
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 2 of 11

provided counseling, shelter, adoption and foster caré, health care, immigration and legal aid, and
affordable housing to members of the community.

3. GAUGHAN began working for ADW in 2008, as its Director of Counseling. In
2013, ADW promoted GAUGHAN to be an Assistant Superintendent of ADW, entrusting
GAUGHAN with additional responsibilities. In these roles, GAUGHAN had the duty to recruit
and act as the point of contact for vendors who could provide various services to ADW, including
vendors to help ADW implement anti-bullying, crisis intervention, professional development, and
mass messaging programs for its schools.

A, As the Director of Counseling and Assistant Superintendent of ADW, GAUGHAN
was entrusted with obtaining invoices for services from certain vendors and providing those
invoices and supporting documentation regarding requests for payment to his superiors at ADW.
By submitting the requisite invoices and documentation, GAUGHAN indicated to his supervisors
that the services were appropriate, had been rendered, and justified payment.

5. GAUGHAN ’s supervisors relied on his recommendations on the appropriateness
of the invoices, supporting documentation, and payment requests due to GAUGHAN ’s status as a
long-term, trusted employee of ADW.

6. ADW maintained employment policies regarding conflicts of interest, that
prohibited GAUGHAN and other employees from expending funds belonging to ADW and its
schools for personal gain. GAUGHAN acknowledged to ADW that he received, reviewed, and
agreed to ADW’s employment policies. In or around June 2016, GAUGHAN certified to ADW

that he did not hold 5% or more interest in an entity that transacted business with ADW.
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 3 of 11

COUNTS ONE THROUGH FIVE
(Mail Fraud)

7. Paragraphs 1 through 6 are hereby realleged as if fully set forth herein.

The Scheme to Defraud

8. Between at least in or about June 2010 and in or about April 2018, in the District
of Columbia and elsewhere, GAUGHAN devised and executed a scheme to defraud ADW, and
to obtain money and property from ADW, by means of materially false and fraudulent pretenses,
representations, and promises, with intent to defraud and knowledge of the scheme’s fraudulent
nature (“the scheme to defraud”).

Goal of the Scheme to Defraud

9, It was a goal of the scheme to defraud that GAUGHAN would take money from
ADW to which he was not entitled through false representations, totaling over $472,832, and spend
the money for his own personal benefit and enjoyment.

Manner and Means of Scheme to Defraud

It was part of the scheme to defraud that:

GAUGHAN’s Receipt of More than $60,000 Through a Fake Youth Counseling
Company

10. In or around 2010, GAUGHAN presented Soulutions Counseling for Youth
(“SCY”), a company that GAUGHAN had created, to ADW as a vendor for anti-bullying, crisis
intervention, and professional development programs. GAUGHAN failed to disclose his
ownership and control of SCY, and submitted an IRS form for SCY to ADW displaying the
signature of his alias, “Richard Strauski,” and an address in the District of Columbia.

11. GAUGHAN failed to register SCY to do business in the District of Columbia.
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 4 of 11

12. Beginning around May 2010, GAUGHAN persuaded ADW officials to issue
checks to pay SCY, falsely representing that the company provided anti-bullying, crisis
intervention, and professional development services. On or about June 10, 2010, GAUGHAN
opened a PNC Bank account ending in 5615 (“PNC 5 615”) in the name of SCY and using as the
company’s address a mailbox at a UPS store in the District of Columbia. GAUGHAN was the
sole signatory on the bank account.

13. Between in or about Spring 2010 and continuing through in or about Fall 2016,
GAUGHAN tricked ADW into issuing 14 checks for more than $60,000 by submitting false
invoices, concealing his ownership and control of SCY, and representing that SCY provided anti-
bullying, crisis intervention, and professional development services that GAUGHAN knew SCY
did not provide. GAUGHAN knew and reasonably foresaw that ADW would mail checks in the
ordinary course of business via the U.S. Postal Service.

14. Between in or about June 2010 and Fall 2016, GAUGHAN deposited and caused
to be deposited these 14 checks into PNC 561 5, thereafter using the money to pay his own personal

debts and for his own personal use.

. GAUGHAN’s Receipt of Over $390,000 Through False Invoices from Company I

15. On or about June 22, 2011, GAUGHAN submitted documents to the State of
Oregon organizing a limited liability company, identified in this Indictment as “Company 1.”

16. On or about June 22, 201 L, in the District of Columbia, GAUGHAN opened a PNC
Bank account ending in 4978 (“PNC.4978”) in the name of Company | and used as Company 1’s

mailing address a virtual mailbox that he established and controlled. GAUGHAN was the sole

signer on the bank account.
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 5of11

V7. GAUGHAN falsely presented to ADW, as services provided by Company 1, online
programming that was, in fact, provided by a company based in Georgia, and that GAUGHAN
obtained for less than $16,000.

18. | Between in or about_June 2011 and December 2017, GAUGHAN tricked ADW
officials into issuing 11 checks worth a total of $391,385.50 by providing false invoices, making
misrepresentations that Company 1 performed work for other Catholic Archdioceses, concealing
his ownership and control of Company 1, and representing that Company 1 provided anti-bullying
and crisis counseling programs that GAUGHAN knew that Company 1| did not provide.

19, Between in or about June 2011 and in or about December 2017, GAUGHAN
deposited and caused to be deposited the checks ADW made out to Company 1 into PNC 4978,
then spent the money for his own personal use.

GAUGHAN’: Imitation of a Mass Messaging Service Company

20. While ADW had an ongoing contract with a mass messaging service company to
provide information via text message and automated telephone calls—for instance, information
related to a blizzard, flood, or active shooter—to ADW’s students and parents, GAUGHAN filed
a trade name application with the Nebraska Secretary of State using the same name used by the’
messaging service company for its software application, and with his alias Richard Strauski
(“Company 2”). 7

21.. In March 2018, GAUGHAN opened a virtual mailbox in the name of Company 2

with directions that the mail be forwarded to “Ken Gaughan” at his home address in the District

of Columbia.
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 6 of 11

22. In April 2018, GAUGHAN, concealing his ownership and control of Company 2,
submitted a false invoice to ADW making it appear that Company 2 was providing the mass
messaging service to ADW. The invoice requested $21,060 for services that were allegedly
provided by Company 2, which GAUGHAN knew had not been provided as represented.

23. In April 2018, GAUGHAN opened accounts at Bank of America, ending in 7460
and 7473 (“BoA 7460” and “BoA 7473”) held in the name of “DBA [doing business as] [Company
2]... Kenneth P. Gaughan Proprietorship.” GAUGHAN was the sole signer on both accounts.

- 24. On or about April 17, 2018, GAUGHAN deposited and caused to be deposited the
$21,060 ADW check, obtained through GAUGHAN’ false representations to ADW.

GAUGHAN’s Certification of No Conflict of Interest

25, On or about June 30, 2016, GAUGHAN signed and submitted to ADW a conflict
of interest statement falsely certifying that he did not have an official relationship as an officer,
director, employee, partner, proprietor, or holder of 5% or more interest in an entity that transacted
business with ADW, and that, as an individual, he did not transact any business, directly or
indirectly, with ADW.

The Charges

26. Onor about the dates set forth below, in the District of Columbia and elsewhere,

the defendant,

KENNETH PATRICK GAUGHAN,
also known as Richard Strauski,

for the purpose of executing and attempting to execute the scheme to defraud, knowingly caused
to be deposited into the mail, and delivered by mail and by private and commercial interstate

carrier, the following matters, in the form of envelopes containing the following checks:
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 7 of 11

Count Date Description

1 September 23, 2016 | Check number 35821 from ADW to SCY for $1,600.

2 September 23, 2016 | Check number 35768 from ADW to Company 1 for
$22,275. ,

3 February 10,2017 | Check number 38494 from ADW to Company 1 for
$22,275.

4 December 7, 2017 | Check number 43905 from ADW to Company 1 for
$2,000.

5 April 6, 2018 Check number 45889 from ADW to Company 2 for
$21,060.

(Mail Fraud, in violation of Title 18,
United States Code, § 1341).

COUNTS SIX THROUGH ELEVEN
(Wire Fraud)

27. Paragraphs 1 through 25 are hereby realleged as if fully set forth herein.
28. On or about the dates set forth below, in the District of Columbia and elsewhere,

the defendant,

KENNETH PATRICK GAUGHAN,
also known as Richard Strauski,

for the purpose of executing and attempting to execute the scheme to defraud ADW, transmitted

and caused to be transmitted by means of wire communication in interstate commerce, the

following writings, signs, signals, pictures, and sounds:
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 8 of 11

Count |

Date

Description

October 20, 2015

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN’ s deposit of Check
Number 29528, written from ADW’s bank account in the
amount of $1,500, and deposited into PNC 5615.

May 10, 2016

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN ’s deposit of Check
Number 33382, written from ADW’s bank account in the
amount of $2,100, and deposited into PNC 5615.

August 7, 2015

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN’ s deposit of Check
Number 27777, written from ADW’s bank account in the
amount of $45,549, and deposited into PNC 4978.

March 17, 2016

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN ’s deposit of Check
Number 32491, written from ADW’s bank account in the
amount of $22,774.75, and deposited into PNC 4978.

10

February 21, 2017

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN ’s deposit of Check
Number 38494, written from ADW’s bank account in the
amount of $22,275, and deposited into PNC 4978.

11

April 17, 2018

An interstate wire signal originating from the District of
Columbia generated by GAUGHAN’ s deposit of Check
Number 45889, written from ADW’s bank account in the
amount of $21,060, and deposited into BOA 7460.

(Wire Fraud, in violation of Title 18,
United States Code, § 1343).
Case 1:20-cr-00128-TSC Document1 Filed 07/22/20 Page 9 of 11

COUNT TWELVE
(Monetary Transaction of Criminally Derived Property)

29. Paragraphs 1 through 25 are hereby realleged as if fully set forth herein.
30. On or about August 11, 2015, in the District of Columbia, the defendant,

KENNETH PATRICK GAUGHAN,
also known as Richard Strauski,

did knowingly engage and attempt to engage in a monetary transaction by, through, and to a
financial institution in and affecting interstate commerce in criminally derived property that was
of a value greater than $10,000, and was derived from specified unlawful activity (specifically,
wire fraud, in violation of 18 U.S.C. § 1343) at PNC Bank, a financial institution, in that the
defendant transferred and caused to be transferred $12,000 from PNC 4978 to PNC 5615.

(Monetary Transaction of Criminally Derived Property,
in violation of Title 18, United States Code, § 1957).
Case 1:20-cr-00128-TSC Document 1 Filed 07/22/20 Page 10 of 11

FORFEITURE ALLEGATION

1, Upon conviction of any of the offenses listed in Count One through Count Eleven
of this Indictment, the defendant shall forfeit to the United States any property, real or personal,
which constitutes or is derived from proceeds traceable to these offenses, pursuant to Title 18,
United States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c). The

. United States will also seek a forfeiture money judgment against the defendant in the amount of at
_ least $472,832.95.
| 2. Upon conviction of the offense alleged in Count Twelve of this Indictment, the
defendant shall forfeit to the United States any property, real or personal, involved in this offense
or any property traceable to such property, pursuant to Title 18, United States Code, Section
982(a)(1). The United States will also seek a forfeiture money judgment against the defendant in
the amount of at least $12,000.00.

3. If any of the property described above as being subject to forfeiture, as a result of
any act or omission of the defendant:

a, cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the Court,

d, has been substantially diminished in value; or

e. has been commingled with other property that cannot be divided without
difficulty;

the defendant shall forfeit to the United States any other property of the defendant, up to the value

of the property described above, pursuant to Title 21, United States Code, Section 853(p).

10
Case 1:20-cr-00128-TSC Documenti1 Filed 07/22/20 Page 11 of 11

(Criminal Forfeiture, pursuant to Title 18, United States Code, Section 981(a)(1)(C), Title 18,
United States Code, Section 982(a)(1), Title 28, United Sates Code, Section,2461(c),
and Title 21, United States Code, Section 853(p))

A TRUE BILL:
FOREPERSON

Attorney of the United States in

and for the District of Columbia

1]


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