Priest had huge tax debts

The Rev. Earl Simone, 74, may have violated Catholic canon law because he was operating his businesses without the required permission from the archdiocese, said Dan Andriacco, spokesman for the Archdiocese of Cincinnati.

Andriacco said priests are expected “to be singularly devoted to the pastoral care of souls and to the ministries to which they have been assigned.”

“We are just becoming aware of Father Earl Simone’s extensive business dealings and the complicated legal matters related to them,” said Andriacco, who outlined a variety of administrative actions the archdiocese could take against Simone. “What we have learned so far is shocking and disappointing.”

Andriacco said many of the details uncovered in the newspaper’s investigation were unknown to the archdiocese. The newspaper found that Simone spent $2.8 million on his property purchases between 1994 and 2014. After accumulating huge tax debts over several years, court records show that by February of this year Simone had paid off all his back taxes except for $2,687 in taxes and penalties owed on an apartment building in Troy.

Simone resigned as pastor of St. Peter Catholic Church in Huber Heights and retired effective April 9, three weeks after the archdiocese said it had turned over to Huber Heights Police allegations of financial irregularities that a police spokesman said may involve a “substantial” sum of money.

“People need to know if you steal from the archdiocese you will get caught and we will cooperate with authorities,” Andriacco said.

In an exclusive interview with the Daily News, Simone said he didn’t know he needed permission to run his businesses, which included a Vandalia bagel shop and a realty company with more than two-dozen rental properties.

Simone acknowledged he is being investigated and that his attorney has advised him to not comment.

“I would like to tell you,” he said. “Everything isn’t as it appears to be.”

The Daily News examined court judgments, tax liens and other public records, and conducted interviews with government and church officials, tenants, property managers and others with knowledge of Simone’s business dealings. The investigation found:

The archdiocese has now begun a financial audit of four Old North Dayton churches that Simone oversaw: Our Lady of the Rosary, St. Adalbert, St. Stephen and Holy Cross.

“People in those parishes had a concern as to whether there might be some irregularities at their parish as well,” Andriacco said.

Simone called the new financial audit “a waste of their money.”

“I never signed a check from there, I don’t think,” said Simone, who became parochial administrator of the four Old North Dayton churches in July.

He said people have misinterpreted his resignation letter to parishioners, which cited “age, health and personal concerns” for his decision to step down and take a medical retirement.

“To those who I have angered or disappointed I ask your forgiveness and understanding,” Simone wrote in the April 7 letter.

In his interview with the newspaper Simone said, “Forgiveness was totally misinterpreted. Forgiveness was not for any action, but was for anyone I have offended or who I have hurt in 23 years at St. Peter’s.”

RELATED: See an interactive guide to properties owned by Rev. Earl Simone

‘Those were great days’

Simone was ordained in Cincinnati in 1977 and and served as associate pastor at St. Teresa in Springfield until he joined the U.S. Navy in 1980 and became a chaplain, ministering to the U.S. Marine Corps until retiring as a lieutenant commander in 1992.

“Those were great days,” Simone said of his time in the military.

He returned to the archdiocese and was appointed pastor of St. Peter in August 1992. In 1995 he incorporated Flynn Realty Enterprises and Flynn Systems Inc. All his current properties are owned by Flynn Realty, which Ohio Secretary of State filings show he incorporated in 2003.

Andriacco said Archbishop Dennis Schnurr and other archdiocese officials were unaware of Simone’s businesses even though the garnishment order sent to the archdiocese stated that Simone was operating a business. Simone also used the St. Peter mailing address for much of his business paperwork.

Andriacco said parishes have a great deal of autonomy and handle their own payroll. An archdiocese staff member likely forwarded the garnishment order to St. Peter, he said.

As pastor at St. Peter, Simone controlled finances, including payroll.

The garnishment order was canceled about a month after it was issued in June 2002 after Simone paid $2,971 to satisfy First National Bank of Southwest Ohio’s claim against him, Flynn Systems Inc. and The Bagel Shoppe.

Vandalia city records indicate that Simone’s company took over The Bagel Shoppe in the late 1990s from another owner, said Rich Hopkins, Vandalia spokesman.

The restaurant quickly began amassing debt, with The Ohio Bank winning a $57,744 judgment for unpaid debt in 2000. Liens for unpaid state taxes totaled $31,341, while judgments for unpaid Vandalia taxes totaled $8,674. Federal tax liens naming Simone totaled $126,487, although records filed at the Montgomery County Recorder’s office do not specify which business those were associated with.

All tax liens were released after payments were made between 2003 and 2012.

“I put everything I had into it and couldn’t salvage it,” Simone said of the bagel business. “It wiped out almost everything I had.”

Simone said the business “went belly up” and he blamed a man he said was his partner, James Michael Duckett, then of Tipp City.

“I was a silent partner,” Simone said. “I was supposed to finance the thing. He ran it. He ran it into the ground.

“He disappeared and I was left cleaning up the mess.”

However, court documents from 2006 show Simone said he was the sole shareholder and employee of Flynn Enterprises and responsible for The Bagel Shoppe’s taxes. The many court actions and liens filed against Simone and Flynn do not name Duckett as a defendant except for one state tax lien filed in 1998 in Greene County that included Duckett as a co-defendant with Simone.

Duckett, who appears to now live in Hawaii, could not be reached for comment.

While Simone was accumulating personal tax debts, his church failed to make payments on a $5.5 million loan from the archdiocese for the 1994 construction of the church’s Family Life Center, which houses parish administrative offices, a cafeteria, gymnasium, early learning center, senior center, the youth ministry and meeting rooms.

By 2012, the amount owed on the loan had ballooned to $7 million. The loan was restructured, requiring St. Peter to borrow $3.5 million from a bank while the archdiocese will over five years forgive an amount equal to what is paid to the bank, Andriacco said.

A church campaign was launched to pay off the debt, said the Rev. Robert Hadden, the associate pastor who took over as pro-tempore administrator of the 2,450-family parish along with another St. Peter priest, the Rev. Matthew Robben, following Simone’s resignation.

A $422,866 judgment

Simone’s Flynn Realty owns mostly residential properties — brick ranch homes or apartments along with a 7760 Waynetown Blvd. building housing a dance studio and Super Subbys. Over the years property taxes were delinquent on a dozen of his properties, many of which had delinquencies for multiple years before the owed taxes were paid.

Since 2002 Simone paid $140,291 in taxes on delinquent properties, a figure that may include non-delinquent portions of taxes due at the same time he brought the delinquencies current, said Montgomery County Treasurer Paul Robinson.

Robinson said Simone settled the last of his Montgomery County delinquencies on Feb. 24, but the Miami County treasurer’s office shows Simone’s company owes $2,687 in delinquent property taxes on his 1311-1315 Imperial Court apartment building in Troy.

Simone’s rental property business also was the source of the largest single court judgment against him, a February 2013 order to pay $422,866 to Mainsource Bank on unpaid loans for three properties. The three properties are the one in Troy, the Powell Road apartment and a house at 5980 Leycross Drive in Huber Heights.

In June of that year Mainsource asked the court to vacate the order as the lender had reached a settlement with Simone and was reinstating the loans.

‘You should’ve seen the mold’

Two tenants of his four-unit apartment building at 4327-4333 Powell Road say Simone has failed to resolve major problems with their apartments.

Ashley Washington’s back door doesn’t work properly and she said her windows have been broken for years. Mold lines the wall where her air conditioner is installed. The toilet runs constantly.

Firefighters disabled electricity running to a hallway light that wasn’t secured properly, and also cut the wires to her ceiling fan after it started smoking, Washington said.

“The only reason I got a new water heater is because it was shooting out flames,” said Washington, who pays $500 a month for the apartment where she’s lived with her two children for five years.

She said a friend tried to clean black mold from  around her bathtub.

“You should have seen the mold. It was everywhere,” Washington said. “It was in the tub. It was like to the point where we started taking baths at other people’s houses or washing up at the sink.”

Since 2011, the Powell Road property has had 11 property maintenance code violations filed by the city of Huber Heights. City records show all were resolved by the owner.

Samantha Burdette, 41, also complained to the newspaper about conditions in her apartment at the Powell Road complex. Burdette shares a $495-a-month apartment with her husband and two sons.

Burdette said said there is black mold in the bathrooms, bedrooms and kitchen. The air conditioner is unusable because it “throws sparks,” her cabinets are falling off, and the patio and back door are broken, she said.

“A man that’s supposed to be a person of the Lord, he’s the one person that you would have thought would make sure that we lived in good living conditions,” Burdette said.

Simone says he has a property manager handle the rentals and he doubts many of his tenants even realize he is the owner.

The property manager is Matt Heidenreich, owner of Mak Gregor Management. He said he’s done the job for about a year and he has no knowledge of past property code violations or complaints from tenants.

“It sounds as though it’s a smear story when the first thing you bring up to me is problems about broken windows and violations and things like that,” Heidenreich said. “I’m not interested in partaking in a story like that.”

Simone’s former property manager, Tom Marts, who handled the job for several years, said he didn’t want to comment on specific tenant complaints but that Simone wanted the properties to be kept in good repair.

“He had a lot of property and things go wrong,” said Marts. “And a lot of times things are caused by tenants.”

‘I haven’t had any issues’

Other tenants interviewed by the newspaper praised Simone’s property management, saying any problems are quickly fixed.

“I haven’t had any issues,” said Jessica Collins, who has lived for two years in one of Flynn Realty’s Lambeth Drive houses.

Robert H. Brady Jr., who is buying a Kingsbury Drive home on land contract from Simone, said he had nothing but praise for the priest. Brady said he first met him when Simone was one of the priests sent to Beirut after the 1983 barracks bombing that killed 241 Americans. Brady, a retired Marine, said he didn’t see Simone again until a real estate agent connected the two men for the house sale.

“First thing he said is ‘Marines take care of their own,’” Brady said.

Simone gave him a fair price and a good interest rate and the house was in very good condition, Brady said.

Marts also praised Simone, saying he is a generous man.

“I’m telling you the whole city of Huber Heights knew who he was. And everybody I knew had respect for him,” Marts said. “And I don’t think you get that. It doesn’t just happen. You earn it.”

‘We’re all upset’

Hadden said the police investigation into financial irregularities has unsettled some parishioners. He’s received “a couple” of notes from members who say they are withholding further contributions to the parish until they see the results of the police investigation.

No staff have left since the financial investigation began, Hadden said.

Church officials are reviewing the parish’s “checks and balances” to determine if changes are needed, Hadden said. Unlike many parishes, St. Peter has never had a business manager. The bookkeeper doesn’t handle money, according to Hadden, who said a variety of people deal with revenue from church school tuition, early childhood center fees and Sunday collections.

Andriacco said the church’s budget calls for $1.5 million a year from the collection plate.

Parishioners interviewed said they’ve been kept in the dark about the situation.

“We’re all upset and we are waiting for them to get it all straightened out so we know what’s going on,” said Sara Freihofer, a member of the pastoral council.

Hadden said he and the other priests who say Mass at St. Peter are doing their best to comfort members of the church. He said they are going to “take it hard” if it turns out that substantial sums of money are missing.

“First we pray for one another. (Pray) that if anyone is responsible for any wrongdoing that there is help to be gotten,” Hadden said. “We also need to look at forgiveness, that we are a faith that practices forgiveness and we want to be forgiven so we need to forgive others.”

RELATED: See an interactive guide to the financial details of properties owned by the Rev. Earl Simone here.

Our coverage of this story:

Priest had huge debts

Huber Heights pastor to plead in $1.5 million church theft

Former Huber pastor pleads guilty to stealing $1.9M

By the numbers

$2.8M: Amount of property purchased by the Rev. Earl Simone between 1994 and 2014.

$670,637: Amount in court judgments, settlements and tax liens released after payments by Simone between 1999 and 2013.

91: The number of zoning and property maintenance code violations on 24 properties owned by Simone’s business in two cities. All were resolved, records show.

31: The number of residential and commercial properties in Huber Heights and Troy Simone’s business owns.

3: The number of businesses the Rev. Simone incorporated since 1995. The Cincinnati Archdiocese says it was unaware of his business dealings and that he may have violated Catholic canon law.

Sources: Montgomery County Recorder, Auditor, Treasurer and Common Pleas Court Clerk; Ohio Secretary of State; cities of Huber Heights and Troy.

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