Michigan Pair Plead Guilty to Embezzling from Workers’ Comp TPA

June 6, 2013

Michigan’s attorney general announced that the former CEO and a bookkeeper of a non-profit workers’ compensation insurance-related organization have pleaded guilty to embezzling millions.

Michigan Attorney General Bill Schuette said Jerry Stage, 67, of New Hudson, and George Bauer, 55, of Commerce Township both pleaded guilty to embezzling from the Compensation Advisory Organization of Michigan (CAOM) for more than a decade.

Stage, former CEO of the CAOM, embezzled approximately $2.6 million from the company during an eleven-year period, conspiring with CAOM bookkeeper, George Bauer, to cover up his tracks, the AG’s office said.

Stage pleaded guilty to one count each of embezzlement over $100,000 and conspiracy to embezzle over $100,000, both felonies punishable by up to 20 years in prison.

Bauer pleaded guilty to one count of conspiracy to embezzle $50,000 to $100,000, a 15 year felony.

Both defendants together must repay $2.6 million per a joint restitution order.

The inquiry into allegations of embezzlement was 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.

The embezzlement was discovered during a financial audit of CAOM after Stage retired.

Stage’s sentencing is set for Sept.10, 2013; Bauer’s sentencing will be on June 26, 2013.

Source: Michigan Attorney General’s Office

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