An Irish-American priest has been arrested in Pennsylvania accused of stealing almost $100,000 in parish funds.

The Chester County District Attorney's Office has charged 56-year-old Fr Joseph McLoone with the theft of $98,405 from St. Joseph's Catholic Church in Downingtown, Pennsylvania.

Fr McLoone lives in Downingtown and his parents came to the US from County Donegal.

Prosecutors claim Fr McLoone diverted parish funds into a secret account, misappropriated fees charged to parishioners, and carried out other fraudulent activity.

He is accused of using the money to fund his personal lifestyle which, prosecutors say "included a beach house, travel, dining, and spending on adult men with whom he maintained sexual relationships".

Fr Jospeh McLoone was arrested on Wednesday and charged with felony theft and related crimes.

His bail was set at $50,000.

Charles Gaza from the Chester County District Attorney's Office said: "Father McLoone held a position of leadership and his parishioners trusted him to properly handle their generous donations to the church.

"Father McLoone violated the trust of the members of St. Joseph's for his own personal gain."

Fr McLoone's attorney, Melissa McCafferty, said the financial investigation was flawed and her client is innocent.

She told the Philadelphia Inquirer that the District Attorney's Office was overreaching.

"They filed these charges based off speculation, conjecture, and innuendo.... They won't be able to prove them," she said.