updated 10/2/2007 9:34:35 PM ET 2007-10-03T01:34:35

A former Cleveland Catholic Diocese accountant was convicted Tuesday of funneling $784,000 in kickbacks to a church official in a scheme to get diocesan contracts for his firm.

Anton Zgoznik arranged the payments to his former boss, Joseph Smith, from 1997 through 2004 in exchange for diocesan accounting work, federal jurors concluded.

During his testimony, Zgoznik tearfully denied wrongdoing and said he was a middleman who handled payments between diocesan leaders.

“The diocese maintains a mentality and atmosphere that encouraged this kind of activity,” said his attorney, Robert Rotatori. “He (Zgoznik) thought that he was doing what he had authority to do.”

The diocese, which includes eight counties and about 780,000 Catholics, issued a news release Tuesday saying it has strengthened its financial controls.

Assistant U.S. Attorney John Siegel declined to discuss specifics of the trial because charges are pending against Smith, 50, who was chief legal and financial officer for the diocese. Smith has pleaded not guilty.

Zgoznik, 40, was convicted of conspiracy, mail fraud, defrauding the Internal Revenue Service and other charges. He faces up to 20 years in prison on the most serious counts, but will likely receive less time under federal sentencing guidelines.

He remained free on bond pending sentencing and left the courthouse without commenting. U.S. District Judge Ann Aldrich set his sentencing for Feb. 20.

Rotatori said he would appeal.

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