A Penn State employee lost his job and faces 199 criminal charges after allegedly running a 16-year scheme to pocket more than $300,000 of university money for himself and his friends, police and university officials said.

John C. Marshall, 60, of Port Matilda, was Penn State's director of outreach operations until he was placed on unpaid leave in November, when the police investigation started. Marshall had been a Penn State employee since 1966.

As part of his job, Marshall hired contractors to develop new courses.

On 62 occasions since 1988, Marshall paid four of his friends for services to Penn State that they never performed, such as developing courses to teach about health care issues, police said.

And three times since 1986, Marshall wrongly upped the pay for two of those friends who were Penn State employees, according to police.

On Friday, police charged Marshall with multiple counts of theft by deception, receiving stolen property and criminal conspiracy. Marshall waived his right to a preliminary hearing and was released without bail.

Most of Marshall's charges are third-degree felonies, but District Justice Carmine Prestia would not speculate what a possible sentence would be if Marshall is found guilty.

Neither Marshall nor his lawyer, Joseph Amendola, could be reached for comment during the weekend.

Penn State spokesman Steve MacCarthy said this was the biggest embezzlement scam ever uncovered at the university.

Penn State Police Services began an investigation of Marshall in November, after university auditors noticed financial discrepancies.

Police traced Marshall's illegal activities back to 1986, when he started a fraudulent $9,917 payroll payment to a friend.

But the scheme ballooned to involve $348,917, and even led Marshall to lie about his daughter being in a car accident to explain his delayed return from a university-funded trip to see a friend in San Diego, according to police.

Police plan to file charges later this week against three other suspects involved in the scheme. One of the four other suspects died in 1998. Police believe none of the four suspects knew there were others involved in the scheme.

Police gave the following account of the four men's involvement with Marshall:

Richard Butterfield, of Atlanta, Ga., received 20 separate checks from Marshall between February 1995 and June 2000, police said. The two men were fraternity brothers while attending Penn State in the 1950s.

The payments were for program development in specific areas, such as vacuum technology and melanoma prevention, which Butterfield never delivered.

Butterfield would split the money in half between himself and Marshall.

Police said Marshall and Butterfield embezzled a total of $125,300.

Joseph Szalanski, of Vandergrift, Pa., ran Management Decisions, Inc., a legitimate company that completed survey consultant work at Penn State McKeesport.

Marshall told police however, that he intentionally overpaid Szalanski for some of the company's business. Upon cashing the checks, Szalanski returned half the money to Marshall, police said.

Szalanski told police he met Marshall through friends who worked at the Penn State Monroeville Center.

The total value of the fraudulent payments to Szalanski was $85,600, according to police.

Michael Young, a resident of Lancaster, Pa., met Marshall while working at the Stevens Trade School in Lancaster and later worked for Penn State as an evening administrator.

Marshall told police that he and Young shared an interest in horse racing and sports.

Marshall proposed sometime between 1989 and 1990 that he would arrange for a fraudulent check to be sent to Young and that they would split the money. Young reluctantly went along, police said.

In total, Marshall paid Young through 15 transactions totaling $65,500, police said.

Robert Johnescu, of York, Pa., died in July 1998. He knew Marshall through his job as a Penn State instructor.

Police said Johnescu received a fraudulent payroll upgrade and several fraudulent contracts from Marshall. He and Marshall would split the profits.

Marshall embezzled a total of $53,000 through Johnescu, according to police.