Investigation: New allegations against Catholic Online owner

Investigation: New allegations against Catholic Online owner

Update, Aug. 8, 2012: The state labor board ruled Tuesday that Catholic Online owner Michael Galloway must pay a former employee $5,000 in a settlement. A hearing officer ruled he will be forced to pay nearly $10,000, including interest if he fails to pay that worker. Jennifer Wood quit working for Galloway in June and claimed she was still owed for three pay periods.

The original story is below.

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BAKERSFIELD, Calif. (KBAK/KBFX) — He's the owner of one of the most visited for-profit Catholic websites on the planet. In an Eyewitness News exclusive investigation, we have new allegations against the Bakersfield man who owns Catholic.org.

"Look at me. I'm sitting here in jail, and I didn't do anything," said Jennifer Wood, shackled, distraught and in jail sometime back.

Wood was accused of threatening to kill her former boss, Michael Galloway.

"And I don't understand how he can call the police and tell them I was going to kill him, and they didn't want any evidence. They just come and get me," said Wood.

After more than two years of selling advertising for the website, Catholic Online, she found another job, quit and asked for her final paycheck. Claiming she was owed for three pay periods, more than $5,100, Wood sent multiple emails to Galloway.

"She is not an employee of Catholic Online and never has been an employee," Galloway told Eyewitness News from the driver's seat of his car, parked outside his office in the Westchester Neighborhood of downtown Bakersfield.

Galloway said he never paid Wood to work for him.

If Galloway's name sounds familiar, there's good reason. He's the owner of the highly valuable Internet domain, Catholic.org. In 2007, the Kern County District Attorney filed suit against Galloway for "unlawful, unfair and fraudulent business practices."

Archive stories: Allegations go back years against Galloway >>

As we reported in an Eyewitness News exclusive investigation, Galloway once owned the website, Catholic Financial Services, an online donation processing system. Nonprofit groups across the United States and Canada, such as disabled nuns in Branford, Conn., and the Archdiocese of New Orleans, accused Galloway of withholding their cash and not transferring funds to their bank accounts.

Galloway agreed to pay restitution of $210,000.

Then, in 2008, the California Labor Board sided with former Galloway employee Mark Lombard for back pay of $41,000.

Wood said she never threatened Galloway, though she admitted she's no angel, serving three years probation after firing a gun in the presence of her ex-husband.

A copy of a paycheck she supplied to Eyewitness News shows a signature she said belongs to Galloway. And an email responding to Wood dated June 20 states, "Your check was put in the mail," and shows it came from the Catholic Online accounting department.

Several of Galloway's employees have contacted Eyewitness News, claiming he hasn't paid them.

"You know what, they have a legal remedy. That's happening around the country," Galloway told Eyewitness News. "With the payroll situation being what it is, everyone is very much in limbo."

Nick Leyendecker said Galloway owes him roughly $5,000. He worked off and on for 18 years as an independent contractor, managing Catholic Online's network servers and systems infrastructure. He, too, recently quit.

"There have been other employees that have quit and have not been able to get final checks. The two causes they give us consistently are having to catch up on payroll taxes and a reduction of sales," said Leyendecker.

Galloway himself confirmed as much in a memo dated May 15, obtained by Eyewitness News, in which he signs off by adding, "I am sincerely yours in Christ, Michael Galloway."

But Galloway's payroll problems with his website don't end there. Eyewitness News has unearthed a pattern of not paying others he owes, and more.

The IRS has slapped him with a $239,594 tax lien. The state of California has issued a $11,324 tax lien. The Seven Oaks Homeowners Association claims it's owed more than $6,300 for association fees. The Bakersfield law firm of Klein-DeNatale claims it's owed $94,000.

There also several allegations of plagiarism on his website.

Emails Eyewitness News obtained by Huffington Post, CNET and AOL, to name a few, accuse Catholic Online of stealing their work.

But former workers stress more than anything, it's Galloway's demeanor, alleging a hostile work environment.

"I remember one of the first sales meetings I attended. He was at the meeting and slammed his hand on the desk and threw out an F-bomb four or five times, and this is supposed to be Catholic Online," said Steve Miles. "And I don't want to take God's name in vain, but he said that several times about how we were screwing him and taking money out of his pocket."

Miles said he worked 20 years as a salesman for a large national packaged goods firm. But after three months working Internet sales at Catholic Online earlier this year, he had enough.

"He has no skills. No skills of management. No people skills. No sales skills. Everything that he is about is the next big thing, and that's where he throws his money rather than paying employees on time," added Miles.

In the past, Galloway has literally run from our questions. But, for the first time, he decided to talk. However, his responses to Eyewitness News anchor and reporter Kurt Rivera turned combative.

"Do you like Catholics? Are you Catholic?" asked Galloway.

"You're an angry little Hispanic man. Geraldo. Isn't your name Geraldo? Is your name Geraldo? You're dressed like a pinhead. You are a pinhead," said Galloway.

Asking Galloway if he called his employees names, and asking whether he had anything else to say to the allegations of misdeeds, Galloway had a parting shot for the Eyewitness News reporter: "Goodbye little man. Go eat some tacos."

After four days in jail, ex-employee Wood was released and never charged. She is now working at a new job.

She filed a complaint for her back pay with the state labor board.

Monday, a day before a preconference labor board hearing, Galloway suddenly showed up with two checks for two pay periods, amounting to more than $1,700.

However, Wood said she is still short $1.600 for a third pay period, plus another $8,000 in penalties for missed paydays. A hearing date is pending.

She has also filed a complaint with the California Department of Fair Employment and Housing, alleging a hostile work environment.

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Archive stories: Allegations go back years against Catholic Online owner Michael Galloway