Michigan’s attorney general has charged the former CEO and a bookkeeper with embezzling millions from a workers’ compensation insurance-related organization.
Michigan Attorney General Bill Schuette announced felony charges for Jerry Stage, 67, of New Hudson, and George Bauer, 55, of Commerce Township.
The charges allege that Stage, former CEO of the Compensation Advisory Organization of Michigan (CAOM), embezzled approximately $2.6 million from the company during an 11-year period
Bauer, a CAOM bookkeeper, allegedly helped cover up Stage’s tracks, the AG said.
The charges follow an investigation initiated after then OFIR Commissioner, now current DIFS Director Kevin Clinton, referred the matter to the Michigan Attorney General’s Office for an investigation.
Stage was employed as CEO of CAOM from 1993 until his retirement in July 2012.
CAOM is a non-profit corporation providing administrative and customer service support for the Michigan Workers’ Compensation Placement Facility.
It collects data from member insurers licensed to sell workers’ compensation insurance in Michigan and is not associated with state government.
As CEO, Stage had the authority to issue checks, but company policy required two signatures on any check over $1,000. To evade that requirement, it is alleged Stage wrote checks to himself for $995 over a 14 year period, totaling approximately $1 million, the AG said. Stage was also issued a company credit card to pay for business-related incidentals that he allegedly used for personal expenses.
Following Stage’s 2012 retirement, CAOM undertook a review of expenditures to assess the company’s financial health. Upon the discovery of a number of financial reporting irregularities, the company consequently retained Plante Moran to conduct an official audit. Plante Moran discovered Stage had allegedly embezzled approximately $2.6 million.
It is alleged Stage paid Bauer to help him cut checks to himself, paying Bauer for his silence. Plante Moran alerted OFIR with their concerns of embezzlement and OFIR referred the case to the Department of Attorney General for further investigation. Attorney General Investigators confirmed Plante Moran’s findings.
Stage also allegedly submitted false or inflated expense reports for events including: week-long family vacations at Disney World, tuition, wedding expenses, pet care and family dinners. Allegedly using this scheme, Stage embezzled approximately $1.4 million. This conduct was not discovered during annual audits because as CEO, Stage did not have to submit documentation of his expenses, as other employees were required to do. The false expense reports were submitted to allegedly cover the amount of funds Stage was siphoning from the company.
Source: Michigan Attorney General’s Office
Topics Workers' Compensation Michigan
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