Diocese of Fall River settles with priest accused of embezzling funds

Associated Press/May 17, 2005

Barnstable, Mass. -- The Catholic Diocese of Fall River has reached a $1.3 million settlement with a priest accused of embezzling money from two Cape Cod parishes.

The diocese sued the Rev. Bernard Kelly in March in Barnstable Superior Court after auditors found that Kelly had written hundreds of thousands of dollars worth of checks to himself or to cash.

The Cape Cod Times reported money for the settlement was secured through a mortgage on Kelly's home, which is for sale at a listed price of $3.2 million. The 4.3-acre property features an in-ground pool, a six-car garage and a 10-stall horse barn.

Both Kelly and the diocese had expressed their desire to settle the civil case before it went to trial, which had been slated for August.

"Since the outset, I promised parishioners that the diocese would take whatever steps were necessary for restitution of any missing funds," Fall River Bishop George Coleman said in a statement, "and I am pleased that this settlement will provide for that."

Kelly was pastor at Our Lady of Lourdes in Wellfleet, then at St. Joseph's Church in Woods Hole, until he resigned in 2003.

"Parishioners are very happy this has come to a conclusion," said Rev. John Andrews, of Our Lady of Lourdes. "They're very happy he's making everything right by paying back what he took."

The diocese said when it receives the settlement money, the parishes will be paid back.

A Barnstable County grand jury has indicted Kelly on criminal charges of embezzlement and filing false income tax returns. Kelly has pleaded innocent to those charges.

Kelly would not comment Monday evening. Francis O'Boy, Kelly's attorney, emphasized that the recent civil settlement should not imply guilt.

His name also surfaced during an investigation into the 2003 murder of 20-year-old Jonathan Wessner. Kelly's friend and church handyman Paul Nolin is serving a life sentence for Wessner's murder.