Former Schuylkill County Clerk of Courts Steven M. Lukach Jr. has been indicted by a federal grand jury on 20 counts of mail and wire fraud and manufacturing records to obstruct an investigation.

Federal agents arrested Lukach, 68, of Nesquehoning, this morning, according to the U.S. Attorney’s Office, Middle District of Pennsylvania.

Lukach entered a plea of not guilty in federal court in Scranton, and was released on pretrial supervision.

If he is found guilty, Lukach faces up to 20 years in prison.

Lukach retired on April 17, 2014, from the office he had held for 27 years.

Federal authorities began investigating Lukach after irregularities were found in his 2012 records by Controller Christy D. Joy’s office in late March 2014.

“I’m looking forward to reviewing the charges and hoping for a conclusion,” Joy said Monday.

Lukach is suspected of using money from the automation fund, an account fed by money from court proceedings that is to be used solely for technology upgrades in the clerk’s office, to make his own car payments and to buy lunches, personal tax software, electronics and other items for himself.

The indictment alleges that in 2013-14, county auditors with the controller’s office began an in-depth examination of the clerk’s office and discovered misappropriation of funds by Lukach.

An FBI investigation ensued and while the audit was going on, Lukach allegedly interfered with the audit by stealing mail that was sent to banks, forged records and sent the fake bank records to the controller’s office, in an effort to conceal his thefts, said United States Attorney David J. Freed.

The conclusions of a state audit, released in February 2015, revealed a lack of checks and balances in the office, “inadequate internal controls in the Clerk of Courts office that were conducive to fraud,” Joy said at the time.

“These internal control issues … create an environment that is conducive to fraud and misappropriation,” the report stated.

The findings included that all receipts were not deposited on the same day they were collected; several deposits contained multiple days’ collections; bank deposit slips were not always validated by the bank; one deposit exceeded the total office collections by $20, and the segregation of duties in the Clerk of Courts office was inadequate.

The indictment also alleges that Lukach stole funds from various court accounts for his own personal purposes, such as paying a family member’s credit card bill, paying for meals, making car payments and other personal expenses.

The case was investigated by the Pennsylvania State Police and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Michael Consiglio.