Kilkenny-born Monsignor John Skehan (79) admitted directing funds into his own private bank accounts, according to a police report, saying that he was never properly paid for his role within the church. Skehan was arrested by police in Florida last month in relation to the misdirecting of money from his parish in Delray Beach, Florida.

"Skehan gave his opinion that he was never properly paid by the diocese, " said the police report, which was written following his arrest. "He was running a big business and getting nothing for it."

Skehan, alongside another Irish priest, Reverand Francis Guinan (63), has been charged with grand theft. Police have charged them with stealing more than $400,000 of parish donations. An audit conducted by the Diocese of Palm Beach alleges they misappropriated $8.7m, although their legal representatives deny the figure was this high.

Police believe the pair used the money to fund holidays, girlfriends and gambling trips to Las Vegas and the Bahamas. While Skehan has been charged and released on bail, Guinan is currently on a cruise holiday in Australia.

His lawyers have said he will surrender himself to police once he returns. Guinan hails from Eglish, Co. Offaly.

Police believe that some of the money was used to purchase property in Ireland, as well as in the US. The money was also alleged to have been used to fund Skehan's regular visits to Kilkenny, where he still has family. Relatives of the priest have declined to comment to the media.

Skehan is currently free on bail of $40,000. Both priests have been placed on administrative leave and cannot "to exercise publicly their priestly ministry" until the matter is resolved.