IRS Has Eyes on Priest's Ministry
INS Seeks Removal of Certification; Fees from Poor Spent on Leaders

By Brooks Egerton
The Dallas Morning News
January 24, 2003

Federal and state authorities are moving against a Catholic priest's ministry that has spent large sums of money to benefit its leaders while charging poor people millions for help, sources say.

The Internal Revenue Service, reacting to recent articles in The Dallas Morning News, has assigned a criminal investigator to scrutinize Casita Maria, a tax-exempt ministry that counsels foreigners on how to deal with the Immigration and Naturalization Service.

The INS' Dallas office, in turn, is urging an end to government certification of Casita Maria as an organization fit to provide such counseling. Two Dallas lawyers who formerly served on the charity's board said such unprecedented action, which needs U.S. Justice Department approval, would put Casita out of business.

INS spokeswoman Patricia Mancha confirmed that the agency's primary concern is that Casita improperly depends on client fees for income, instead of raising outside funds and offering free or nominally priced aid to the poor. She declined to comment further.

The IRS would not discuss its investigation.

Casita also faces inquiries from state authorities. The Texas attorney general's office, which oversees the conduct of nonprofit organizations, declined to comment.

Casita board member Fred Fields said he was unaware of the developments. "There are so many things we need to change," he said.

Other charity officials did not respond to interview requests Thursday.

Some Casita officials have previously acknowledged that the charity made incorrect statements to federal agencies about its activities. They have described those as mistakes that can be corrected, with Mr. Fields saying he expected "we may have to pay the government money."

The Rev. Justin Lucio, a priest in good standing with Dallas Bishop Charles Grahmann, controls the charity as executive director and board chairman. The charity receives no diocesan funding or supervision.

Father Lucio has refused to be interviewed in detail by The News, but he did talk last week to WFAA-TV (Channel 8), saying: "There's nothing to hide."

Asked about a suburban house that he and Casita's maintenance man bought with funds borrowed from the charity in late 2001, he initially gave an account that some of his former board members and others contradict.

"When I became ill, the board gave me the house to live in for the rest of my days," Father Lucio said in videotaped footage that has not aired. "They tried to buy the house for me as a confirmation of my life service."

Deal to buy house

Guadalupe Granados, who recently resigned from Casita's board but remains on its paid staff, told The News two weeks ago that it was the priest's idea to buy the house in DeSoto. Father Lucio conceded that point when pressed by WFAA.

Ms. Granados said that Father Lucio telephoned her to get a proxy vote approving a house loan, and that there is no record of the vote. Another board member who recently quit, Dallas lawyer Jose Pineda, said Father Lucio did not contact him about the decision.

One of the sellers of the house, Rhonda Alvarado, said the priest and the maintenance man, 28-year-old David Villatoro, paid $179,000 in cash to close the deal. She said she was shocked to learn from recent articles in The News that the money had come from fees paid by undocumented immigrants.

Ms. Alvarado said Father Lucio contacted her about three days before closing and said his loan had fallen through. "He called to assure me," she said, "that he had the cash, that he was going to borrow it from a friend."

Father Lucio later transferred the house's title to Casita, and board members decided to charge him and Mr. Villatoro $10 in monthly rent. Board meeting minutes reflect no discussion of why Father Lucio needed housing, given that he already had a home – a duplex in East Dallas that he still owns.

When WFAA asked why he needed the new house, the 59-year-old priest cited poor health and said, "It seemed to me at the time that the house in DeSoto was a little bit closer." In fact, it is several miles farther from Casita's office in north Oak Cliff than the duplex is.

Allegations denied

Father Lucio started Casita in 1989 after Bishop Thomas Tschoepe removed him from his last pastor's job because of sexual and financial misconduct allegations. Bishop Tschoepe let the priest run the charity as a "special assignment," as Bishop Grahmann has done since taking over the Dallas Diocese in 1990.

The priest has denied the misconduct accusations, which diocesan spokesman Bronson Havard has said were never substantiated. Mr. Havard has downplayed sworn statements by four people corroborating the allegations and the priest's acknowledgment, in a 1991 deposition, that he sometimes handled Latino parishioners' genitals when they had health concerns.

The priest told WFAA that "I don't check the genitals of parishioners," and insisted he was celibate.

"I have dedicated my life to service to the poor," he said. "I live by God's standards."

Mr. Havard did not respond to interview requests Thursday. He has said Bishop Grahmann had been unaware of the 1991 acknowledgment, which was first reported in The News last week.

Yet the attorney who defends the diocese in sexual abuse cases had a copy of the testimony in his files. And other diocesan officials had to testify in the case, a slander suit that Father Lucio filed against a lay leader who reported the sexual and financial allegations to the diocese.

The priest ultimately dropped the case, agreed not to refile it and won no settlement.

That accuser and one of his brothers later testified in depositions that the priest, using promises of immigration aid and threats of deportation, had pressured them into intercourse when they were about 17. The brother later testified that Father Lucio used similar tactics to try to get them to lie under oath.

Mr. Havard previously said that Bishop Grahmann has restricted Father Lucio to nonparish ministry since the early 1990s, when he was supposed to work part time at an East Dallas parish and sometimes didn't show up to celebrate Mass.

The News reported last week that Father Lucio initially testified that he didn't remember whether he had ever touched another man's genitals. Then, before acknowledging that he had, he said he couldn't answer a lawyer's question about the matter because "there's a lot of things that you, as an Anglo, do not take into consideration with our culture."

Asked to explain, Father Lucio said Hispanics with health concerns have no inhibitions about showing "what's wrong and what needs to be corrected. ..."

"They simply go like this and they show you. And they say, look, what is – what is this?" he testified. "Yes, that's what my people do."



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