Federal prosecutors want to seize more than $100,000 from a stock account belonging to the late Roy McGrath, alleging the money traces to a fraudulent severance payment that he negotiated when he left the state environmental office to become chief of staff to former Gov. Larry Hogan.

The U.S. Attorney’s Office filed the case Wednesday in federal court and asked a judge to freeze the $119,000 in a TD Ameritrade account in McGrath’s name. Prosecutors are asking the money to be forfeited.

The amount represents about half of the allegedly fraudulent severance payment that McGrath negotiated when he changed jobs. In the court records, prosecutors wrote the Maryland Environmental Service made an initial payment of $125,517 to McGrath in June 2020 as a portion of the severance.

McGrath then transferred the money, in amounts of $99,000 and $20,000, into two personal checking accounts.

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“An examination of bank account records showed both transfers were entirely funded with proceeds of the $125,517.79 severance payment,” prosecutors wrote. They make no mention of the rest of the more than $230,000 severance.

Courts records show the FBI traced the money back and forth from McGrath’s checking and TD Ameritrade accounts as well as a corporate bond fund in his name.

The move by prosecutors comes as a probate case continues in Florida, where McGrath had moved, to settle his estate.

Joseph Murtha, McGrath’s attorney, said Thursday evening that he was trying to obtain more information about the case. He only had one remark.

“So much for resting in peace,” Murtha said.

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An attorney for McGrath’s widow did not immediately return a message.

McGrath resigned as chief of staff to Hogan amid controversy over the payout of more than $230,000 that he negotiated when he transferred to the governor’s office. A subsequent investigation found McGrath carried out a scheme to enrich himself personally by defrauding the government, prosecutors alleged. He was accused of misleading Maryland Environmental Service directors into believing the governor had approved the severance payment.

A federal grand jury indicted McGrath in October 2021 on charges of fraud, theft and falsifying records. He was also charged in Anne Arundel County Circuit Court with misconduct in office, embezzlement and wiretapping. Prosecutors accused him of recording other government officials, including Hogan, without their consent.

There has been much speculation about what Hogan and state officials said on those calls, but Maryland’s wiretapping law forbids authorities from releasing the recordings.

McGrath was scheduled to stand trial March 13 in Baltimore. When the 9 a.m. start time arrived, he didn’t show.

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He spent the next three weeks keeping ahead of the FBI and U.S. Marshals Service. Federal authorities offered $20,000 for information leading to his arrest and came to focus their search on the Southern U.S.

FBI agents tracked his cellphone to the suburbs of Knoxville, Tennessee, on April 3. McGrath was shot and killed in the confrontation with agents.

An autopsy found McGrath suffered two gunshot wounds to his head. Knox County prosecutors determined the shots were fired simultaneously, one by an FBI agent, the other by McGrath himself.

Local and federal authorities have cleared the agents of any possible criminal wrongdoing in the shooting.


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