The Daily Globe - Serving Gogebic, Iron and Ontonagon Counties

Embezzlement charges selected top story of 2017


December 30, 2017

Editor’s note: The Daily Globe is counting down the top five local stories of 2017. Ironwood Township’s financial irregularities and the criminal charges against former township treasurer Jyl Olson-DeRosso was selected as the biggest story of the year.

Ironwood Township – News broke in May that former Ironwood Township Treasurer Jyl Olson-DeRosso was facing felony charges for allegedly embezzling money while in office.

Gogebic County Prosecutor Nick Jacobs initially charged Olson-DeRosso with nine felonies — five counts of forgery, one count of embezzlement by a public official, refusing to turn over records to a successor, removal and destruction of public records and using public money for her own use.

A tenth charge, diversion of taxes or public money by a public official, was added at a bond hearing three days later.

The most serious charges against Olson-DeRosso, the forgery charges, each carry a potential maximum sentence of 14 years in prison.

The charges stem from between 2011 and 2016, when Olson-DeRosso lost her re-election bid to current treasurer Maria Graser.

“Upon taking office, Graser discovered the former treasurer removed all township records stored on her computer and also failed to turn over other important records essential for the daily operations of the treasurer’s office,” Jacobs said in a press release announcing the charges. “Further inspection revealed township money had been diverted by Olson-DeRosso to her own personal use, prompting an investigation by the Michigan State Police-Wakefield Post in conjunction with the Michigan Department of Treasury, who performed an audit of the township’s Trust and Agency accounts and Tax Fund analysis from 2011 to 2016.”

When announcing the charges, Jacobs alleged Olson-DeRosso took a total of $196,862 from the two township funds over the five-year period, primarily by issuing checks to herself and using cash funds.

Township Supervisor Steve Boyd expressed dismay at the news of the charges, and said they resulted from the Department of Treasury investigation into discrepancies with the township’s 2015 audit which began in September 2016.

The fallout from the township’s financial issues spread beyond its borders, with the Ironwood Area Schools Board of Education learning May 22 the district was facing a potential deficit due to not receiving any of the expected $389,805 in taxes from the township. District Superintendent Tim Kolesar told the board county records show the amount — which represents close to 5 percent of the district’s budget — was collected from residents but never given to the district.

The district later took steps to temporarily carry the amount on its books without incurring an actual deficit until it receives the money.

Given the consequences for the township, its board of trustees voted May 25 to sue Olson-DeRosso.

The suit, filed June 15, seeks “in excess of $1.2 million in damages” it said resulted from Olson-DeRosso’s alleged embezzlement.

While Boyd told the Daily Globe at the time some of this amount included expenses related to the investigation into the financial irregularities, the suit also expanded the scope of her alleged actions both beyond the five-year time-frame used by Jacobs and into other township accounts.

A response to the township’s lawsuit came in July when Olson-DeRosso’s attorney, Jim McKenzie, filed a counter claim against the township.

This suit, which largely left calculating any damages up to the court’s discretion, denied all the allegations of financial impropriety against Olson-DeRosso and said any shortfalls were the result of the actions of others.

The counter claim also alleged township officials made false statements about her at public meetings and in the press when discussing the case.

A clearer picture of the scope of the issues was presented at the board’s June 12 meeting, when the Michigan Department of Treasury gave its long-awaited report into the 2015 audit discrepancies.

The report discussed 15 findings regarding the township’s water and sewer, trust and agency and tax collection funds. Among the findings were insights into the lack of checks and balances that allowed the alleged embezzlement to go undiscovered for as long as it did.

Boyd and the other board members not only promised to follow the state’s recommended policy changes, but said many had already been implemented since the new board took over after the November 2016 election.

To further clarify the scope of the financial issues, and to determine a total number it could use in the civil and criminal cases against Olson-DeRosso, the township hired Plante Moran to complete a forensic audit of the township’s finances.

With two lawsuits and a criminal case now in the courts, most of the year’s remaining news regarding the issue resulted from motion hearings in Gogebic County Circuit Court.

In July, Circuit Judge Michael Pope ruled against a motion for him to step down from hearing the cases. The defense motion had argued Pope’s role as township attorney until 2005 was a conflict of interest that prevented him from presiding over the cases.

In October, Pope also ruled the trial could remain in Gogebic County, at least for the time being, and the statement Olson-DeRosso gave to the police following her arrest was admissible during a trial.

Little has happened with the cases since the October hearing, as the sides await the results of the forensic audit. There had been hope it would be completed by mid-December, however more work was needed.

A court date is set for early January in the cases. However, that would likely be rescheduled — as other dates have been — if the audit hasn’t been completed and a final figure for the township’s alleged damages has yet to be reached.


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