Father Joseph Palanivel Jeyapaul, who now serves as Secretary of Education Commission in the Diocese of Ootacamund (Tamil Nadu) had been charged with sexually assaulting two girls while he was posted at the Crookston Diocese in Northern Minnesota in 2004.
The victim, Megan Peterson, 20, said Jeyapaul sexually abused her when she went to speak to him about becoming a nun.
Jeyapaul ministered three parishes in Crookston where he was accused of misappropriating church funds and sexual abuse.
Charges were filed by the girl after the Church refused to answer her calls. Jeyapaul returned to India before the charges came to light.
"Right now Jeyapaul is a fugitive from justice in the United States. The Vatican and Bishop of Ootacamund in India are admitting him to remain in the ministry in India and are putting their reputation over the well being and safety of children of whom we are concerned right now," the woman's attorney Jeff Anderson told PTI over phone.
The plaintiff, Megan Peterson, and the Diocese of Crookston agreed to terms of settlement on July 13, 2011, prior to a trial.
A payment of USD 750,000 was agreed upon, an amount covered by Diocese's insurance.
Peterson says she was 14 and aspiring to become a nun when she was raped several times by Jeyapaul.
Jeyapaul has said he is innocent and denied ever knowing the two girls. The other girl was 16-years-old at the time of alleged abuse.
The terms of the agreement include a commitment by the Diocese of Crookston to continue its safe environment work.
Jeyapaul has refused to return from India to face two criminal charges in the US.
According to KSTP-TV Channel, Peterson appeared at a news conference yesterday to announce the settlement of USD 750,000.
"I'm here today to speak my truth, and to protect kids," the victim said.
Peterson said that she tried to kill herself a couple of years ago and was hospitalised.
She said her faith in God and the church was "taken" by Jeyapaul, and she wants to make sure he can't hurt other kids.
"I just think he needs to be out of ministry and away from kids and that's my main concern right now," she said. "I won't rest until he is."
The settlement requires the Crookston Diocese to post a picture of Jeyapaul on its website along with details of the abuse.
The diocese must also warn parishioners about Jeyapaul and notify Catholic authorities in India to express concern that children were at risk from him.
Last year Jeyapaul had agreed to come to United States and fight the charges against him, but later changed his mind.
Prosecutors in Roseau County are seeking to extradite Jeyapaul to face two counts of criminal sexual conduct.
Jeyapaul has said he is innocent and has refused to return to Minnesota.
The Diocese of Crookston said in a statement that it regrets any harm that may have caused to any person due to the actions of Jeyapaul, and the hardships the parishes have endured during this difficult time.
The Safe Environment programme in the Diocese of Crookston mandates that every volunteer, employee or clergy who serves the Church is subject to a criminal background check and safe environment training.
The statement added that on August 25, 2005, the Diocese of Crookston received a complaint against Father Jeyapaul alleging inappropriate behaviour with a teenage girl.
Upon receiving this complaint, the Diocese notified the proper civil authorities.