HARRISBURG -- A Scranton priest was charged with perjury yesterday over statements he made to a grand jury investigating whether his friend, Louis A. DeNaples, lied in his application to open a casino in the Poconos.

The Rev. Joseph F. Sica, 52, wore both a white collar and handcuffs during his arraignment at the Dauphin County Court House. He was released on $20,000 unsecured bond.

Father Sica, chaplain at Mercy Hospital in Scranton, testified in an investigation into Mr. DeNaples' application to operate the $412 million Mount Airy Casino Resort in Monroe County, which opened in October.

Father Sica is accused of lying to the grand jury on Aug. 29 when he testified that he had met organized crime boss Russell Bufalino only in passing and had no relationship with him. Contradictory evidence surfaced during the investigation.

Photographs show the two arm-in-arm at a barbecue. A note from Father Sica to Mr. Bufalino and his wife was signed "love, Joe." A 1982 letter from Father Sica to former Pennsylvania first lady Ginny Thornburgh refers to Mr. Bufalino as "a friend." A witness recalled the Bufalinos attending Father Sica's ordination.

"Sica's testimony regarding the level of his relationship with Bufalino was intentionally false," the grand jury said in its presentment. "This relationship was far beyond the one described by Mr. Sica in his grand jury testimony.

"Because of the length and closeness of their friendship, Father Sica's relationship to known criminals was material to whether Mr. DeNaples had a relationship with the same known criminals," according to the presentment.

Mr. Bufalino had served prison time in the 1980s and '90s for extortion and conspiracy to commit murder.

The charges against Father Sica are ancillary to the ongoing DeNaples investigation, said Francis T. Chardo, first assistant district attorney in Dauphin County, who is prosecuting the case.

"This involves allegations of perjury before a grand jury in a matter ... that could involve billions of dollars. For someone not entitled to a gaming license, that's what would be reaped," Mr. Chardo said.

Currently, six casinos are open in Pennsylvania and eight more are on the horizon. Together, the 14 are expected to generate $1 billion a year in property tax relief for residents and, in aggregate, even more in gross profits for casino operators.

A Jan. 25 preliminary hearing for Father Sica has been scheduled before Dauphin County Judge Todd A. Hoover, who is supervising the grand jury.

Perjury carries a maximum sentence of seven years in prison, although probation is common, said defense attorney Robert Daniels, who represented Father Sica yesterday. He argued for his client to be released without bail.

"He's done many good deeds for the community by virtue of his employment and also beyond that," Mr. Daniels said. "It is humiliating enough for him to be dragged up here before a court in handcuffs."

Judge Hoover said Father Sica does not seem to be a flight risk, but set bail at $20,000 after Mr. Chardo revealed that the priest had purchased a handgun in the last year and that he was carrying $1,000 cash when he was arrested in front of his home yesterday morning.

"It's not something one would expect of a priest," he said, calling the details "disturbing."

Mr. Chardo also accused Father Sica of making "a veiled threat" against a trooper who transported him to the courthouse.

"That was inappropriate," Father Sica said quietly in one of the few clipped statements he made in court.

Mr. Chardo later told reporters that the threat did not involve physical harm, but related to defamatory information the priest allegedly learned about the officer from a former trooper who now works at Mr. DeNaples' casino. Mr. Chardo would not elaborate.

After his release, Father Sica averted his eyes and said nothing as two attorneys hurried him through a gaggle of reporters outside the courthouse.

Mr. Daniels paused briefly to say his client is "upset and alarmed."

He said Father Sica hadn't made any statements to him about his innocence or guilt.

"This is still the beginning of the process," Mr. Daniels said. "It's too early to comment as to what is going to happen."