Dec. 7, 2009  -- Catholic sex-abuse victims' groups are decrying a Vatican decision to clear a former high-ranking Long Island priest, and longtime friend of former New York Mayor Rudy Giuliani, of sex-abuse allegations.

The Diocese of Rockville Centre announced on Friday that the Catholic Church had found Monsignor Alan Placa not guilty of molesting teenage boys, an allegation that first surfaced in a local grand jury investigation in 2002. The grand jury report concluded that Placa could not be prosecuted criminally because the statute of limitations had expired.

Victims' rights groups harshly criticized the Catholic Church's decision and the process of trying the accused priest.

"While not surprising, it's still heart-breaking to see that a victim deemed credible by virtually everyone else -- prosecutors, grand jurors, journalists, survivors, relatives and lay Catholics -- is deemed not credible by a couple of Vatican bureaucrats thousands of miles away," said David Clohessy, the national director of the Survivors Network of those Abused by Priests.

Anne Barrett Doyle of BishopAccountablity.org, a group that tracks sex abuse allegations against Catholic priests, called the decision a "slap in the face to survivors and all Catholics who want to believe the Church can change its ways."

Placa was placed under investigation by the Church after he was identified as "Priest F" in a grand jury investigation in New York's Suffolk County. The grand jury heard testimony from three alleged victims, two students and an altar boy, who said that a "Priest F" had molested them in the 1970s.

Richard Tollner, the only accuser to come forward publicly, told ABC News in a 2007 interview that Placa was Priest F, and that Placa had repeatedly molested him in 1975 when he was a teenage student at an all-boys Catholic high school in Uniondale, N.Y.

Alan Placa's Past Reveals Abuse Allegations

Placa later served as a lawyer for the diocese in dealing with allegations of abuse against other priests. According to the grand jury report, Priest F became instrumental in a church policy that used "deception and intimidation" to keep the church scandal quiet. Priest F claimed he had saved the church hundreds of thousands of dollars in his handling of possible litigation.

When the allegations first surfaced, Placa was serving as the Vice Chancellor of the diocese. After Placa was placed under investigation, and told by the Church to stop performing his priestly duties, Giuliani hired him to work at his consulting firm, Giuliani Partners. Placa accompanied Giuliani and his wife Judith on a trip to Rome in January of 2007, around the time a canonical panel was trying him in Albany.

On Sunday, Tollner told ABC News.com that he stood by his testimony and was "astonished" by the Catholic Church's decision to absolve Placa.

"What upsets me most is that it sends a message that it is okay to be a sex abuser," said Tollner. "The Church will just ignore it, sweep it under the rug, and nobody is going to care."

Tollner says he was kept in the dark about the testimony presented at the proceedings and unsuccessfully sought information on its outcome for the past two and a half years. He did not learn about the "not guilty" ruling until a reporter called him about it on Friday.

"We do not know what the basis is for this decision" said Doyle of the Church process. "It's very secretive, that's why we can't put any stock in it."

Tollner told Good Morning America in 2007 that the sexual abuse started when he and Placa were making posters for a Right to Life march.

"As he started to explain how these posters should be done, I realized that something was rubbing my body," Tollner said. "After a minute or two, I realized that he's feeling me, feeling me in my genital area."

The grand jury report concluded that Priest F abused the boys sexually "again and again and again."

"Priest F was cautious, but relentless in his pursuit of victims. He fondled boys over their clothes, usually in his office," the report said.

Giuliani Defended, Employed Priest

Several former students from the same high school say they were asked by the "Giuliani organization" to contact ABC News and vouch for Placa.

"There was absolutely not a hint of rumor of a speculation or a whisper, in four years, or in decades after of any sexual predatoriness on the part of Rev. Placa," wrote Matthew Hogan in an e-mail to ABCNews.com.

Placa did not respond to a request for comment left at his office at Giuliani Partners, and a spokesperson for Giuliani did not respond to a request for comment. A spokesperson for the Diocese of Rockville Centre did not respond to a request for comment by press time. According to the Diocese's official announcement of Placa's not guilty ruling, "Msgr. Placa will not be given a diocesan assignment. Msgr. Placa will reside at St. Aloysius parish, Great Neck. Msgr. Placa's status is that of a retired priest in good standing."

In 2007, Giuliani said during a Wisconsin campaign appearance that he stood by Placa despite the accusations. "I know the man; I know who he is, so I support him," Giuliani said.

"We give some of the worst people in our society the presumption of innocence and benefit of the doubt," said Giuliani. "And, of course, I'm going to give that to one of my closest friends."

Placa has been friends with Giuliani since they both attended Bishop Loughlin High School in Brooklyn. They were in an opera club together and would sometimes double date. Giuliani and Placa later attended Manhattan College together, where they were also fraternity brothers.

Placa was ordained as a Catholic priest in May 1970. He was the best man at Giuliani's first marriage in 1968, then helped Giuliani get an annulment in 1982 so he could marry second wife Donna Hanover. Placa officiated at Hanover and Giuliani's 1984 wedding. He officiated at the funerals of Giuliani's father and mother and baptized both of Giuliani's children. Click Here for the Blotter Homepage.