Theft Case Against Non-profit Founder

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LOYALSOCK TOWNSHIP -- A man who founded a non-profit to help troubled kids was in court Tuesday in Lycoming County.

James McCloy is charged with taking more than a half-million dollars from the organization to use for his own benefit.

On his way into district court near Montoursville, McCloy let his attorney do the talking.

McCloy's accused of taking more than $500,000 from the non-profit Susquehanna House for personal use including gambling and strip clubs.

"Over the course of these years sometimes had to comingle his funds with that of the corporation, sometimes to get salary and sometimes to cover expenses," said McCloy's attorney Philip Masorti.

Susquehanna House is still in operation in Jersey Shore. The place helps troubled juveniles through day treatment programs. McCloy resigned as president after theft charges were filed earlier this month.

Investigators testified that a former bed and breakfast in Montoursville was foster parent housing for Susquehanna House. The place, now for sale, was owned and operated by Susquehanna House and paid for by Susquehanna House. But prosecutors made the point that Susquehanna House was McCloy's own personal piggy bank.

As part of a divorce settlement, McCloy was required to pay his ex-wife for a former Susquehanna House site near Jersey Shore. Investigators said McCloy used Susquehanna House money to make most of those payments.

Investigators also testified McCloy would spend Susquehanna House money at casinos in Atlantic City.

His attorney maintains McCloy and Susquehanna House were one-and-the-same nd if anything, McCloy has a tax problem, not a theft problem.

"But at all times acted in good faith and completely transparent, committed no wrongdoing, all transactions are lawful," said Masorti.

A district judge heard testimony and is expected to rule by Friday if the theft case against James McCloy should be forwarded to trial.