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Former health center CEO guilty of diverting employee taxes, retirement contributions

Former Baltimore Behavioral Health CEO pleads guilty in federal court.

An Ellicott City man who now works as a fiscal officer for the Howard County government pleaded guilty in federal court Tuesday to stealing from an employee retirement plan and mishandling employee income taxes at his previous job with a Baltimore treatment center.

William "Kris" Hathaway, 52, was chief executive officer of Baltimore Behavioral Health, a nonprofit that offered mental health and addiction treatment.

Hathaway withheld nearly $2.5 million employee paychecks from 2009 through 2011 at the nonprofit, but did not send the money to the IRS, according to his plea agreement.

Hathaway spent the employee tax withholdings on company expenses, including his salary, the salaries of relatives on the board of directors and payments to another company owned by his mother and stepfather, according to the agreement.

He also admitted to taking out more than $53,000 from employee paychecks for a retirement plan — but instead of putting it in the plan, he used it for company expenses. The plea agreement said Hathaway improperly tried to cover those funds with money in the plan that had been forfeited by former employees.

Hathaway "paid lucrative salaries to his family members while cheating the IRS and the employee pension plan," said U.S. Attorney Rod J. Rosenstein in a statement.

Baltimore Behavioral Health filed for bankruptcy in 2012 and its addiction center was sold to another company.

Former employees sued Hathaway and Baltimore Behavioral Health over the 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 retirement funds, and another judge ordered that the ruling be satisfied by paying money from Hathaway's retirement fund. Hathaway never responded.

Hathaway works for Howard County in its Department of Citizen Services. Contacted Tuesday evening, county spokesman Andy Barth said he was unaware of Hathaway's guilty plea.

Hathaway faces up to five years in prison for each of the two convictions. Sentencing is scheduled for June. Through his public defender, Douglas R. Miller, Hathaway declined to comment Tuesday.

The Baltimore Sun first reported on questions about the Baltimore Behavioral Health retirement plan contributions in 2010. Earlier, The Sun published an investigation of the nonprofit that revealed unusually high Medicaid billings and six-figure salaries paid to Hathaway and relatives who controlled the nonprofit.

pwood@baltsun.com

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