According to the indictment of the priest, he told parishioners he had cancer, when he in fact had been diagnosed with HIV around September 2014. He solicited donations, saying they were to cover cancer treatments and to help build an orphanage and chapel in his home country of Mexico. His alleged scheme to defraud continued from about January 2015 through September 2018.
The indictment says that the money collected by Fr. Vargas was sent to Mexico to enrich himself and Sergio Picon, with whom he had a close personal relationship, as well as business ventures.
In April 2015, Fr. Vargas went to the Toronto-based Southdawn Institute, which treats priests and religious with addiction or mental health problems. He told parishioners it was for cancer treatment.
In a November 2018 statement, the Jackson diocese said that Bishop Kopacz ordered an internal accounting audit of the finances at St. Joseph, and that afterward the diocese placed constraints on Fr. Vargas' spending. The diocese added that it had demanded that Fr. Vargas stop soliciting charitable donations and that he do no more charitable fundraising without informing it.
A year later, in November 2019, the diocese said that "neither Bishop Joseph Kopacz, nor any Diocesan Official, committed, condoned or covered up fraudulent activity," and that "no Diocese official had any knowledge that Father Vargas was asking individuals for money until … November 2018."
It also said that the audit of St. Joseph parish was ordered in late 2017.
While facts about the priest's health are at issue, the diocese has said the federal privacy law HIPPA "prohibits our discussion of Father Vargas' medical condition." The diocese provides medical insurance for its priests, and has said that decisions about the discussion of the priest's medical condition were made "on the advice of its health insurance experts and legal counsel."