Posted on 05/31/2002 4:51:59 PM PDT by LarryLied
For nearly a decade, the Diocese of Palm Beach failed to tell church members and top lay leaders that a trusted financial manager embezzled $400,000 and blew some of the money on a sport fishing boat and a Rolex watch.
The coverup in the early 1990s allowed the alleged swindler, Robert Schattie, to land a job as chief financial officer of the Jewish Community Center in suburban West Palm Beach, which is now enmeshed in a financial scandal of its own.
Former Bishop J. Keith Symons worked out a deal with Schattie that called for him to quietly repay the church $200 a month -- a payment plan that would have spanned more than a century. As part of the deal, the diocese did not report the missing money to law enforcement authorities.
Even when Schattie stopped making payments -- he hasn't made one in more than seven years -- church officials never called prosecutors.
The deal might have remained a secret had Schattie not fought with his former wife over child support payments. Furious at a judge's refusal to force her ex-husband to make his child support payments, Darlene Kott went public with details of his problems, forcing the diocese's hand.
"I think they should have been pursuing him to pay what he rightfully owes the Catholic people of Palm Beach," Kott said. "They keep lying. They're hiding things. They don't want the public humiliation."
The revelations further stoked discontent among local Catholic laity already incensed by the national church sex scandal. Some longtime benefactors, led by lawyer Edward Ricci, have threatened to withhold contributions unless the church becomes more forthcoming.
"As a fund-raiser for the diocese, it's the kind of thing that makes my hair crawl," Ricci said.
Even longtime church finance committee member Phil Lewis, who also chairs a special lay panel looking into allegations of sexual misconduct by local priests, was disturbed by the secrecy.
"I honestly don't know what happened," Lewis said. "All I know is it did happen. He left. I don't know if he resigned or was fired. If it was improper, they should have told us."
The church must quit keeping such news from the public, Lewis said.
By choosing to cover up the incident, the diocese allowed Schattie to get jobs with the Jewish Federation of Palm Beach County and at the JCC, 3151 N. Military Trail.
Schattie left the JCC in October 2000, just as budget irregularities began to surface. He ended his JCC career as a consultant who was paid nearly $50,000 a year to oversee the $5 million expansion of the organization's Boynton Beach facility, Schattie stated in court documents.
The JCC's budget problems precipitated a state attorney's office investigation into financial wrongdoing by JCC employees. The agency declined to say whether Schattie is a target of the investigation. However, a JCC executive said he has been questioned about Schattie.
Schattie, 39, who now lives in North Carolina, could not be reached at his home or business Thursday for comment.
The diocese hired Schattie, a former John I. Leonard High School quarterback, in 1988. Though Schattie attended Florida State University for one year and Florida Atlantic University for several years, he never earned a degree.
Despite that, the diocese promoted Schattie to chief financial officer in July 1991.
At the diocese, Schattie quickly built a reputation as a fun-loving, personable boss. He was a devoted Seminoles football fan. He befriended Symons, who baptized Schattie's twins in November 1993 at St. Edward Catholic Church in Palm Beach.
Diocese lost $40,000 on boat
Just five months later, diocesan officials confronted Schattie with records showing that he brazenly used the diocese checkbook for personal expenses, such as mortgage payments and the purchase of a 25-foot fishing boat, dubbed the Reel Seafishent, according to sources.
A diocesan investigation revealed that Schattie also spent $42,500 in church money to buy an empty lot in Banyan Lakes, west of Florida's Turnpike near Forest Hill Boulevard.
Records show that Schattie spent nearly $400,000 in diocesan money, said the Rev. James Murtagh, the diocese's interim leader.
Schattie resigned and agreed to repay the money. He deeded the empty lot to the diocese, which resold it for the same amount, property records show.
He also handed the diocese the keys to the fishing boat. Payments from the diocesan checking account for the boat topped $70,000, sources said. The diocese recouped just $30,000 in selling the vessel, Murtagh said.
The diocese declined to pursue criminal charges because Schattie vowed to repay the money, said Murtagh, who was not involved in striking the deal with Schattie.
"Prosecution wouldn't have done any good," Murtagh said.
But Schattie stopped making payments just nine months after his resignation, church documents show. The diocese did nothing for more than a year. On Aug. 15, 1996, diocesan attorney J. Patrick Fitzgerald warned Schattie that he was failing to meet his obligation.
"It is my understanding that you have met with the bishop to discuss this matter but as of this date no payments have been made since January 1995," Fitzpatrick wrote. "Failure to make your payments will force my client to take legal collection steps that I am confident you want to avoid."
Schattie responded that he was unable to pay because of his divorce settlement and child support, Murtagh said. The diocese hasn't tried to collect since then, said Basil Zaloom, diocesan financial administrator. However, court records show that Schattie claims he cannot make child support payments, either.
Schattie has returned only 22 percent of the missing money, Murtagh said.
The diocese did not tell its finance committee about the missing money or about its efforts to recover the losses, Lewis said.
Lewis, a former state senator, said he had nothing to do with the diocese's decision to hire Schattie even though Schattie's uncle, Richard Schattie, is a longtime sales employee in Lewis' Riviera Beach real estate office.
Symons, the bishop at the time, resigned in 1998 after admitting that he had sexually abused young boys early in his career.
Less than two years after leaving the diocese, Schattie went to work as an accountant for the JCC. Six months later, Schattie and his wife filed for bankruptcy to wipe out about $50,000 in credit card and loan debts.
Eugene Philips, who hired Schattie at the federation, said he didn't recall whether anyone checked Schattie's employment history or résumé.
"That was a very long time ago. I don't want to speculate about it," said Philips, who now works for the American Jewish Joint Distribution Committee in New York.
Schattie charmed the federation staff, who "felt he walked on water," one source said.
In 1998, accountants from the local office of Arthur Andersen told the Jewish Federation that it refused to audit the JCC's books as long as Schattie was the organization's top financial officer, sources said. The accountants had audited the books at the diocese while Schattie worked there.
The federation asked Schattie to submit to a lie detector test, but he refused, a source said.
The JCC's budget problems prompted the federation to investigate. The federation's staff auditors alleged that top employees of the JCC were swindling the organization. The auditors submitted their evidence to the state attorney's office in January.
Credit card scam alleged
But the federation's internal investigation stopped short of looking into Schattie. Furthermore, the federation dismissed its primary investigator into the JCC budget mess, Bob Eisen, soon after reporting its findings to local prosecutors.
Eisen, then the federation's chief financial officer, declined to comment. Federation President Norman Goldblum said Eisen was fired because of a personality conflict with Jeffrey Klein, the organization's director.
Provided with evidence uncovered by Eisen and his staff, the state attorney's office has been investigating an alleged credit card scam that enabled key employees in the JCC's financial department to swindle hundreds of thousands of dollars from the organization. Investigators are reviewing JCC financial records and interviewing its employees.
"I believe Mr. Schattie's name came up during that discussion," said JCC Executive Director Thomas Marion when asked about his interview with investigators.
The state attorney's office declined to comment on its investigation.
The JCC's financial scandal spans several years. Schattie's successor, Wendy Korb, quit as chief financial officer in November during the federation's investigation into the JCC's money problems. Though the JCC has its own budget and board of directors, the federation contributes about one-fourth of the center's $7 million budget.
Korb, who denied any wrongdoing, said she resigned for health reasons. But the JCC has barred Korb and her husband, a sheriff's deputy, from the JCC's property at 3151 N. Military Trail in West Palm Beach.
Federation and JCC officials won't comment on Schattie's performance as the JCC's chief financial officer or why he left the position.
Marion acknowledged that Schattie was retained as a consultant after he stepped down as chief financial officer. His job was to oversee the $5 million expansion of the JCC's Boynton Beach facility, which started construction three years ago.
The JCC had no written contract with Schattie, nor did the JCC issue him an IRS form showing his payment, according to sources who discussed the transaction on the condition they remain anonymous. The JCC paid him between $4,000 and $5,000 each month. Schattie flew from his North Carolina home to West Palm Beach once a month to collect his pay.
Though the project was unfinished, Schattie was eventually let go. He wasn't fired, Marion said. "It was more of a budget situation," he said.
But sources said Schattie flew into West Palm Beach and returned to North Carolina in a matter of hours on the day his career ended at the JCC. Shouting was overheard in the JCC's hallways, sources said.
Not everyone at the JCC shared Marion's satisfaction with the management of the project.
Boynton Beach resident Fred Silverman, who co-chaired the campaign to raise money for the expansion, said his disappointment with the project prompted his resignation from the JCC's board of directors.
"I didn't like what was going on," he said. He declined to elaborate. "I don't want to be the bad guy here."
This is a huge story in PBC. The diocese did not tell the Jewish Community Center of Schattie's embezzlement when they called for a recomendation. No one knows how much he stole from them yet.
Any freepers in the area?
That sort of thing is against the law.
What is illegal? Not telling the JCC?
It's practically illegal to give a bad reference. I don't think you can offer information like that. If the organization had specifically asked if the guy had embezzled, I think they'd be within their rights to say "Yes" and that's about it.
I'm sure we could get a labor lawyer in here to correct me but I believe it's part of the Title legislation protecting Stupid People, thieves, insane people and fang-tooth bitches who file frivolous lawsuits against their employers ... stuff like that.
It's like using c-notes to scrape the gum from the bottom of your crepe sole shoe in the middle of July to get rid of the employee in the first place and then you're generally precluded from giving him a bad reference.
His lawyer was on TV this evening and said there was nothing in the contract preventing the diocese from telling anyone what Schattie did (think he was shifting the blame for the JCC fraud from his client to the Church).
He actually owns a few businesses in Waynesville, NC, the accounting business, a restaurant called Bocelli’s, a bar next door to that called Pub 319, and also a property rental/management business. All are under a business license for EMP Holdings. Oddly enough, EMP Holdings’ contact name is Todd Escaravage, not either of them, and the phone number listed is to Bocelli’s, a phone that they NEVER answer, and are always “out” or “in meetings” when someone calls. Very shady stuff.
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