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Business and Finance
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Business and Finance
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Former Finance Director Accused of Embezzling Over $1.2 Million from St. Leo the Great Parish

Lawsuit Alleges Embezzlement by Former Finance Director at St. Leo the Great Parish in Lincroft

LINCROFT, NJ – A civil lawsuit filed in Monmouth County Superior Court has brought renewed attention to allegations of financial misconduct at St. Leo the Great Roman Catholic Church in Lincroft, a parish serving the Middletown area. The suit, initiated by the Diocese of Trenton on behalf of the parish, accuses the former finance director, identified as Margaret "Peggy" Harlan, of embezzling more than $1.2 million over a period of seven years. The complaint, dated July 2025, seeks restitution, damages, and punitive measures against Harlan, who was terminated from her position in late 2024 following an internal audit.

According to court documents obtained by the Asbury Park Press, Harlan, 58, of Red Bank, allegedly siphoned funds from parish accounts through a series of fraudulent transactions between 2018 and 2024. The methods described in the lawsuit include falsifying expense reports, creating fictitious vendor payments, and diverting donations intended for church programs such as youth ministries and charitable outreach. Investigators claim that Harlan used the embezzled money for personal expenses, including luxury vacations, home renovations, and high-end purchases. One particularly egregious allegation involves the misappropriation of funds from the parish's annual festival, a major fundraiser that supports local food pantries and educational initiatives.

The Diocese of Trenton's involvement stems from its oversight role over parishes in the region, including St. Leo the Great, which has been a cornerstone of the Lincroft community since its founding in 1962. The church, known for its vibrant congregation of over 1,500 families, offers a range of services from elementary schooling to senior care programs. Parishioners expressed shock and betrayal upon learning of the allegations, with many voicing concerns during a town hall meeting held in early August 2025. "This isn't just about money; it's about trust in our spiritual home," said longtime member Elizabeth Torres, who has attended St. Leo's for over 30 years.

The lawsuit details how the embezzlement was uncovered. In mid-2024, discrepancies in financial records prompted the diocese to hire an independent forensic accounting firm, Kessler & Associates, based in Freehold. Their audit revealed irregularities totaling $1.23 million, including unauthorized wire transfers to accounts linked to Harlan's family members. Prosecutors from the Monmouth County Prosecutor's Office have been looped in, and criminal charges are pending, though no arrests have been made as of August 14, 2025. The civil suit aims to recover the funds through asset seizure, potentially including Harlan's home and retirement accounts.

Harlan's attorney, Robert Feldman of the Feldman Law Group in Asbury Park, has denied the allegations, calling them "overblown and unsubstantiated." In a statement to the press, Feldman argued that his client was scapegoated for broader financial mismanagement within the parish, pointing to outdated accounting software and lax oversight by church leadership. "Ms. Harlan dedicated over a decade to St. Leo's, and these claims ignore her contributions while exaggerating minor bookkeeping errors," he said. A preliminary hearing is scheduled for September 15, 2025, where both sides will present initial evidence.

This case echoes a troubling pattern of financial scandals in religious institutions across New Jersey. In 2019, a similar incident at another Diocese of Trenton parish led to the conviction of a business manager who stole $500,000, resulting in a five-year prison sentence. Experts in nonprofit finance, such as Dr. Elena Ramirez from Seton Hall University's Center for Catholic Studies, note that churches often lack robust internal controls due to reliance on volunteer staff and limited budgets. "Embezzlement in faith-based organizations erodes community bonds and deters donations," Ramirez explained in an interview. She recommends mandatory annual audits and training for financial officers to prevent such occurrences.

The impact on St. Leo the Great has been profound. Parish revenues have dipped by 15% since the scandal broke, as some donors withhold contributions pending resolution. Father Michael O'Connor, the current pastor, addressed the congregation in a recent homily, emphasizing themes of forgiveness and accountability. "We are a family of faith, and while this betrayal hurts, it will not define us," he said. The church has implemented new safeguards, including dual-signature requirements for expenditures over $1,000 and regular third-party reviews.

Community leaders in Middletown Township have also weighed in, with Mayor Anthony Perry expressing support for the parish. "St. Leo's is integral to our town, providing essential services like after-school programs and emergency aid. We stand with them during this difficult time," Perry stated at a township council meeting. Local businesses, including several sponsors of the parish festival, have pledged additional support to help offset the losses.

As the lawsuit progresses, it raises broader questions about transparency in religious nonprofits. The Diocese of Trenton, overseeing 107 parishes, has announced a diocese-wide review of financial practices to ensure compliance with best standards. "This unfortunate event underscores the need for vigilance," said diocesan spokesperson Lisa Moretti. Advocacy groups like the National Association of Church Business Administration are monitoring the case, hoping it leads to reforms that protect sacred funds.

Harlan, who held a certified public accountant license, faces potential professional repercussions, including license revocation by the New Jersey Board of Accountancy. If convicted criminally, she could face up to 10 years in prison under state theft statutes. The civil suit demands not only repayment but also compensation for investigative costs, estimated at $150,000, and emotional distress to the parish community.

Parishioners like Torres remain hopeful. "We've weathered storms before – hurricanes, pandemics – and we'll get through this with prayer and unity," she said. As the legal proceedings unfold, St. Leo the Great continues its mission, hosting events like a back-to-school drive and community prayer vigils, reminding all that faith endures beyond financial woes.

The case number is MON-L-002345-25, and updates will be provided as developments occur. For those affected, the diocese has set up a hotline for confidential reporting of financial concerns. (Word count: 912)

Read the Full app.com Article at:
[ https://www.app.com/story/news/local/courts/2025/08/14/st-leo-the-great-lincroft-middletown-lawsuit-embezzlement-finance-director/85640936007/ ]