Kansas City diocesan employee accused of stealing $155,000 from financial aid fund

A former employee of the Diocese of Kansas City-St. Joseph has been accused of stealing $155,000 intended for financial assistance at urban Catholic schools – almost 10 times the average annual income of the families he was hired to serve.

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Jeremy Lillig, 44, was indicted on one count of wire fraud in a U.S. district court last week. He has pleaded not guilty. His trial is scheduled for March.

Lillig served as the director of the stewardship for the diocese, and was also the executive director of the Bright Futures Fund, which provides financial assistance for students to attend three urban Catholic schools in Kansas City.

According to prosecutors, Lillig took grant money given to the fund and used it to purchase more than 400 Visa gift cards, which he then used on himself and others, submitting falsified expense reports to hide his actions.

Court documents allege that Lillig stole $155,000 from 2017-2021. But he is only facing one charge of wire fraud, for a single $500 gift card he allegedly purchased.

The court documents did not explain the discrepancy between the total amount allegedly stolen and the amount in the charges.

But Robert Warren, a retired IRS investigator and professor of accounting at Radford University, said it could be, in part, because there is a five-year federal statute of limitations for wire fraud.

However, he told The Pillar, when it comes to sentencing, the other allegations can also be factored in.

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In a Nov. 5 statement, Bishop James Johnston, Jr. of Kansas City-St. Joseph called the news “unsettling.”

“I was shocked to learn of such a gross violation of the trust and integrity that is essential to any institution, especially one upheld by Catholic teachings,” he said.

The bishop said the diocese recognized the possibility that criminal activity had taken place shortly after Lillig left his position at the diocese in October 2023.

Diocesan officials reported the matter to law enforcement, handed over all financial records to the FBI and cooperated with the investigation that followed, he said. A full third-party audit was also conducted.

“Importantly, the FBI has assured us that their investigation did not find any individual donor funds which were diverted prior to secure deposit into the Bright Futures Fund.”

Johnston said that the amount Lillig is accused of stealing is “within the range of what is covered by insurance.”

The bishop said that in December 2023, he ordered that the Bright Futures Fund be brought under standard diocesan policies for fund management.

Among the changes made are the strengthening of annual financial audits by an outside firm.

In addition, accounting and donor tracking for the Bright Futures Fund has been integrated into the diocese’s system, and is now overseen by the diocese’s finance office, the bishop said. The Diocesan Finance Officer has also begun attending board meetings for the fund.

“We are fully committed to preserving the long-term stability and financial security of the Bright Futures Fund,” Johnston said in his statement.

Lillig had been a celebrated volunteer in the local community, praised as a ‘Rising Star of Philanthropy’ by The Independent, a Kansas City magazine, in 2015.

That article noted that the average family whom Lillig served through the Bright Futures Fund was “a family of four with an annual income of less than $16,000.”

Lillig told The Independent that he was inspired by Dorothy Day, “specifically her theory that ‘the greatest challenge of the day is how to bring about a revolution of the heart, a revolution that has to start with each one of us.’”

If he is convicted, Lillig could face 20 years in prison and a $250,000 fine.

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Warren, who has conducted extensive research on financial crime in Catholic institutions, said it is not unusual to see gift cards used in cases of fraud.

“I can give you, for comparison, three or four cases that are exactly like this,” he said.

He stressed the importance of having internal controls in place to safeguard against situations where employees have the ability to steal from an organization.

In addition to running background checks and credit reports on potential employees, Warren said that organizations should take special care to track gift cards that are purchased and distributed.

“It’s very hard to have internal controls on cash,” he said. “And gift cards are cash equivalents, because once you give them to somebody, it’s hard to track.”

Organizations should keep a log of every gift card that is purchased, tracking the amount, the identification number on the back of the card, and the recipient, Warren said.

Furthermore, he said, gift cards should be locked away, with only certain people having access to the key or combination. There should also be an inventory tracking the cards in the safe, to ensure that they all accounted for.

“Gift cards are cash. You have to treat them like cash,” he emphasized.

Additionally, there should be “two sets of eyes on the money at all times,” he said.

“When he gives out a gift card, you’ve got to have two people, him and somebody else, witness it. Now that seems like a lot of work. I understand. But if two people are witnessing it…you’re not going to have this happen.”

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