CHARLOTTE — The former principal of Charlotte Catholic High School has pleaded guilty to one felony count of misappropriating more than $160,000 from accounts associated with the school.
Gerald Healy appeared Sept. 4 before U.S. District Magistrate Judge David Cayer. During a hearing at the federal courthouse in Charlotte that lasted less than 20 minutes, Healy admitted to mishandling $161,399 from the non-profit Charlotte Catholic High School Foundation, using checks drawn out of a Bank of America account from April 2007 to February 2014 to pay for personal expenses.
He was sentenced April 19.
According to the U.S. attorney's charges, Healy "misappropriated both the School's and the Foundation's money for his personal use ... by writing or having his assistant write checks to him. On at least four occasions, Healy forged the name of his assistant on Foundation checks made payable to himself." (Read the U.S. Attorney's full bill of information against Healy.)
Healy resigned as principal on May 20, 2014, following a separate audit of school finances by the Diocese of Charlotte that uncovered unspecified "questionable disbursements" from high school accounts.
Specifics were not disclosed at the time, but a June 17, 2014, letter from the Charlotte Catholic High School Foundation, an independent fundraising organization that provides scholarships and supplies for the high school, said Healy had been "making personal use of funds held by the foundation."
Healy's attorneys had insisted that the foundation had no written procedures for use of the funds in the account, and that the money had been used to help members of the Charlotte Catholic High School community.
In the plea hearing, Assistant U.S. Attorney Kevin Zolot said Healy "has been completely cooperative" throughout the federal investigation that followed the audit of the funds.
Zolot said he is recommending probation, but a specific sentence has yet to be determined. Healy could have faced up to 10 years in prison and a $250,000 fine if convicted. He remains free on a $25,000 unsecured bond until his sentencing hearing.
Outside the courtroom before the hearing, Healy hugged a small group of supporters and wiped away tears as he signed documents. In the courtroom he gave no statement, but Healy's attorneys issued the following written statement after the hearing: "Jerry Healy is deeply sorry for his actions and the hurt and disappointment he caused. His mishandling of funds resulted in the end of a remarkable 44 years in the Charlotte Catholic school system, during which time he transformed the lives of countless students and families with his guidance, generosity, and compassion. He expresses his deep gratitude for the love and support provided by so many within the ... Charlotte Catholic High School family."
In a statement issued Sept. 4, diocesan officials said the case "is an unfortunate incident that will not impact the instruction, tuition or fees of Charlotte Catholic High School students or any Mecklenburg Area Catholic School."
The Charlotte Catholic High School Foundation is an independent organization which is not managed, administered or controlled by the diocese, the statement said. The investigation of the foundation's finances had no impact on the school's education program or tuition accounts, noted David Hains, diocesan director of communication.
"As we approach the Year of Mercy, as designated by Pope Francis, we as Catholics ask for prayers for all who were hurt by this unfortunate situation," the diocese's statement also said.
The investigation began in 2013 after the foundation lost its 501(c)(3) tax-exempt status after failing to report its finances to the Internal Revenue Service in 2008, 2009 and 2010.
The IRS notice led the foundation to investigate its internal financial practices, a review which it said found "a significant number of irregular and unauthorized transactions" by Healy and another former school employee who also worked with the foundation, according to the June 17, 2014, letter to donors.
"Those transactions included disbursement of Foundation funds to each other and to family members," the letter stated, as well as "payments of expenses unrelated to the Foundation" that included "personal travel abroad, monies re-directed from Foundation accounts to a personal checking account, unexplained cash disbursements from Foundation accounts and checks payable to families who did not have students at CCHS."
The foundation reported to the IRS that the amount lost, misappropriated or unauthorized totaled more than $88,000, but it acknowledged that "the ultimate dollar amount is not known at this time."
The foundation regained its tax-exempt status from the IRS in June 2014.
Foundation officials alerted diocesan leaders in March 2014 to the financial discrepancies. Deloitte & Touche then conducted an independent audit of the high school's finances, at the request of diocesan officials, in an "abundance of caution," diocesan officials said at the time.
"In addition to reviewing all CCHS accounts, their work included interviewing personnel and reviewing electronic files," diocesan schools superintendent Dr. Janice Ritter said in a letter to Charlotte Catholic High School parents following Healy's resignation. "Key staff at the diocese, along with the hired consultants, took the time to carefully review the information so that we would be certain that follow-up steps taken would be prudent, fair, and fact-based.
"The auditors did uncover instances of questionable disbursements from accounts belonging to CCHS; these transactions are separate and apart from Charlotte Catholic High School Foundation accounts."
Charlotte Catholic was founded in 1955. The school is continuing its strong tradition of faith and academic excellence under the leadership of new Principal Kurt Telford.
— Patricia L. Guilfoyle, editor