The Daily Globe - Serving Gogebic, Iron and Ontonagon Counties

Pope orders almost $1.4 million restitution in township embezzlement case

 

May 12, 2018



BESSEMER — Just under $1.4 million — that’s the amount former Ironwood Township Treasurer Jyl Renee Olson-DeRosso is ordered to pay in restitution as part of her criminal case on embezzlement and forgery charges.

After listening to arguments from both sides May 1, Gogebic County Circuit Judge Michael Pope ruled Friday the township is owed $1,398,654 in restitution to cover both the amount stolen and some of the costs the township incurred investigating the embezzlement.

“We understand that collecting this amount from the defendant certainly has its challenges, but this is something that will follow her for the rest of her life,” Gogebic County Prosecutor Nick Jacobs said. “It should also enable the township to successfully pursue the collection against their bonding and available insurance.”

He added he was pleased with the court’s findings, which granted the majority of what he requested at the May 1 hearing.

In March, Olson-DeRosso, 48, pleaded guilty or no-contest to 10 counts related to forgery and embezzlement which occurred between 2011 to 2016 while she served as a treasurer.

Friday’s restitution order breaks down the amount owed into $1,243,535 in stolen money — including $218,765 in fraudulent checks and $1,024,770 in other embezzled funds — and $155,118 in costs incurred during the investigation.

“In this case, the testimony and exhibits clearly established the township sustained direct financial losses as a result of the defendant’s criminal actions,” Pope wrote.

“We’re not surprised,” township supervisor Steve Boyd said, regarding the restitution figure. “As we’ve done all the research — between the different audits that have come through, the forensic audit, all of our own records — everything we’ve done for this was validated. I’m pleased with the court’s decision that it recognizes the severity of what she did.

“Of course we’re all still … saddened by the whole situation. But restitution shows justice has been done, as far as the restitution goes, and we’re hopeful we can begin to recover the taxpayers’ dollars so they can be put where they were supposed to be put in the first place.”

The May 1 restitution hearing included testimony from Plante Moran’s Michelle McHale, who the township hired to conduct a forensic audit over the past financials in an effort to determine a total for the amount of money missing from the township, as well as Olson-DeRosso.

The Plante Moran forensic audit concluded the amount of cash diverted from three township accounts from June 2013 to November 2016 was between $959,864 and $1,024,770. This figure didn’t include an additional $196,862 in fraudulent checks written from the township’s tax collection and trust and agency accounts, which the Michigan Department of Treasury discovered in its earlier investigation and which Olson-DeRosso admitted to taking.

In his opinion on restitution Friday; Pope explained he used the high end of the forensic audit, as the lower figure didn’t include a complete accounting of the township’s garbage fund for 2013 and 2014 — which would have increased the lower end of the range.

He also said he used a larger figure for the amount in fraudulent checks as Boyd testified in the hearing additional checks were discovered after the state of Michigan’s report came out.

Pope largely dismissed Olson-DeRosso’s testimony in her defense.

“(The) defendant acknowledged she was poor at accounting and even conceded she probably never should have been township treasurer. As such, the court puts no weight on her testimony challenging the Plante Moran forensic audit,” Pope wrote. “Given her acknowledged deficiencies in accounting, the court also puts no weight toward defendant’s testimony on other possible causes for the missing funds.”

Pope didn’t award any money for hours township employees spent investigating the matter, take part of Olson-DeRosso’s salary for time spent embezzling funds or profits from the sale of items allegedly purchased with township funds. He explained the necessary burden of proof wasn’t met or the profits from sales were accounted for in other calculations.

Going forward, Boyd said claims had previously been filed with the township’s bonding and insurance companies but were stalled until a restitution figure was announced and the criminal trial concludes.

While there is also a civil suit against Olson-DeRosso and counter-suit against the township, Boyd said the township was waiting for the conclusion of the criminal case Monday before continuing with the litigation.

While McHale testified at the restitution hearing the numbers in the forensic audit likely didn’t represent the township’s complete losses, it likely isn’t cost-effective to pursue the investigation further given the already sizable figure as well as the bonding and insurance caps.

“We’re satisfied with the conclusion of the court,” Boyd said, when asked whether the figure included the full amount Olson-DeRosso took while treasurer.

Olson-DeRosso will be sentenced on the 10 felony counts Monday.

 
 

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