Police said Wednesday they reviewed financial records at the Blessed Sacrament parish in the Glebe neighbourhood following a complaint by the Ottawa archdiocese.
Fraud investigators examined records from January 2006 to May 2011 and allege they found more than $240,000 in cheques had been misappropriated.
They said they also they couldn't account for more than $160,000 in cash revenues.
It's alleged some $20,000 in furniture and household items were taken from the rectory and later recovered from a home outside the province.
Joseph LeClair is charged with fraud over $5,000, theft over $5,000, criminal breach of trust and laundering proceeds of crime.
He was released from police custody on a promise to appear in court on July 25.
The Archbishop of Ottawa said many in the Catholic community — especially in the parish — are "hurt and disappointed" by the news.
"(Members of the parish) have been particularly burdened and pained by what has happened over the last year," Rev. Terrence Prendergast said in a statement.
An online petition in support of "Father Joe" was launched last year after the archdiocese turned the matter over to police, but drew only a handful of signatures.
The site criticized the "weak to non-existent financial and accounting control system put in place by the archdiocese and the lack of support our parish priest received in the area of financial management from the diocese."
The archdiocese said the allegations have led it to establish tighter controls over the financial management of parishes.
Police urged charitable organizations — including religious groups — to establish "clear and up-to-date fiscal management practices."