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An Ellicott City man accused by federal prosecutors of mishandling money from employees of a nonprofit health organization has been working as a fiscal officer for the Howard County government.
William "Kris" Hathaway, former CEO of Baltimore Behavioral Health, was charged Tuesday in federal court with one count of failing to account for employee taxes and one count of theft from the employee retirement plan.
Andy Barth, a spokesman for the Howard County government, confirmed that Hathaway works in the county's Department of Citizen Services.
Employees are subject to background checks when they are offered jobs, Barth said, adding, "What was done did not produce anything that would keep this gentleman from being hired." He declined to comment further, citing rules against publicly discussing personnel issues.
The Department of Citizen Services oversees county programs for children, seniors, the homeless and people with disabilities. It also includes consumer affairs programs.
Federal prosecutors allege that under Hathaway's direction, Baltimore Behavioral Health — which offered mental health and addiction treatment — withheld payroll taxes from employee paychecks but didn't send the money to the IRS. While prosecutors allege that nearly $2.5 million was not sent to the IRS from 2009 to 2011, Hathaway is charged only with mishandling $344,000 that should have been sent for the second quarter of 2009 and instead spending it on company expenses, including his salary.
Prosecutors also allege that Hathaway deducted more than $53,000 from employee paychecks from 2009 to 2010 for a retirement plan, but diverted the money for company expenses.
Former employees had sued Hathaway and Baltimore Behavioral Health over diverted retirement contributions, and a federal judge ordered in 2013 that the funds be repaid. Later that year, the U.S. Department of Labor sued Hathaway in an effort to restore the employee retirement plan contributions, and another judge ordered that the ruling be satisfied by paying money from Hathaway's retirement fund. Hathaway never responded.
Hathaway is scheduled to appear in U.S. District Court in Baltimore on March 17.
His attorney, assistant public defender Douglas R. Miller, declined to comment on Friday. Miller said earlier in the week that Hathaway is not accused of taking money for his personal gain.
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