Beloved Connecticut Priest Accused of Stealing $1 Million from Parish

June 22, 2010— -- A Connecticut priest with a reputation of caring for the poor has shocked his parishioners after being accused of faking a terminal illness to cover up the alleged theft of $1 million from his diocese.

The Rev. Kevin Gray, a 26-year veteran of the Hartford Catholic Diocese, is being investigated by the Waterbury, Conn., police department for allegedly taking money over a seven-year period from a savings fund established for the Sacred Heart parish, money that was to be used for building renovations and church debt, according to the police.

"It's hard for all of us to hear and believe this news," the Rev. John Gatzak, spokesman for the Hartford Archdiocese told ABC News today.

According to Gatzak, the archdiocese became suspicious over the past year as they asked Gray to submit several years' worth of annual financial reviews from his parish.

Gray allegedly said he was unable to complete the reviews because of a serious terminal illness he was battling and asked for more time. Gatzak said that although they gave Gray some leeway and extra time to submit his reports, they began to look at his parish financial records and say they made some troubling discoveries.

"It's been determined over the past seven years that annual reports were not forthcoming, and although every church has to have a financial counsel to make sure funds are used properly, Father Gray never had a financial counsel at Sacred Heart, we don't know how he didn't," Gatzak said.

Gatzak, 64, said the news has been ever more painful for the parish and it's parishioners because of the fact that they believed Gray was battling a serious illness, an illness they now believe may have simply been a lie to try and give the priest more time to allegedly cover up the lost funds.

Archdiocese Questioning Whether Priest Faked Terminal Illness to Cover Up Alleged Theft

"We are now questioning whether or not he was telling the truth regarding his illness. We don't know yet," Gatzak said.

Gray's priestly faculties have been removed, and he is awaiting the outcome of the investigation at an undisclosed location, Gatzak said. The diocese declined to diclose his whereabouts and he could not be reached for comment.

The archdiocese turned over their findings to the Waterbury Police on May 21, and news of the alleged embezzlement was delivered this past Saturday to parishioners.

Gatzak said they decided to tell the Sacred Heart parishioners because Gray had been removed and rumors of his absence had began to surface and the archdiocese wanted to get the truth out.

"We believe the parish has the right to know the truth. We wanted to wait for a police report, but there were rumblings in the parish, rumors beginning to spread. So rather than wait it was important to come out with the truth in what was going on," Gatzak said.

Gatzak said when the news was delivered during Saturday mass, parishioners were left heart broken.

"It's been especially tough on parishioners. Father Gray did such good work for the parish. He was very compassionate. He was helpful especially toward the poor. He has such an enormous impact on these people, he was good to his people," Gatzak said.

Gatzak said he visited with people outside the church after the 6 p.m. mass, finding them in tears over the news, and full of stories about a priest they loved and admired.

"People telling me how he visited their mother when she was in the hospital, saying he was right there when their grandfather dies. In crisis times, times of need he was there. These are the things people remember and love about him," Gatzak said.

According to Gatzak, some in the parish were even upset that the archdiocese made a report to the police. He said they told him they would have rather handled it privately in the parish.

"On one hand, it attests to the kind of priest he was," Gatzak said.

However Gatzak said the wake of anger over perceived cover-ups regarding church sexual abuse, not going public with this scandal would be impossible.

Waterbury Police Investigating Priest for Alleged Theft

"That's certainly not the way the church needs to operate in this day and age. We need total transparency. There is no way something like this could have, or should have been swept under the rug," Gatzak said.

Along with the parishioners, Gatzak said fellow priests in the Hartford archdiocese have been left stunned, especially in the wake of the many allegations in recent years of priestly sex abuse.

"The priests themselves are taking it very hard. They are kind of like, 'not again, what's next?'" Gatzak said.

Gatzak said they won't reveal what Gray may have allegedly used the money for until an arrest is made, but that they "have some ideas."

According to the Waterbury Police Department any arrest may take weeks due to the length of time the alleged theft took place.

"It's an overwhelming task. There are seven years of financial information we're going through, but approximately $1 million has been stolen," Waterford Police Lt. Christopher Corbett told ABC News today.

Although Gray has been a priest in the Hartford Archdiocese since 1984, police and church officials are not alleging that he took money from any other churches he held positions at.

Gatzak said a financial counsel has now been established at Sacred Heart and a new pastor, the Rev. Carlos Zapata has been appointed there. According to Gatzak as the investigation unfolds and parishioners grapple with the news, there is much healing to be done.

"The biggest tragedy, although the amount of money is significant, but maybe biggest tragedy in this has been the betrayal of trust," Gatzak said.