Skip Navigation
Attorney General Bill SchuetteMichigan.gov
Michigan.gov Home
close print view

Schuette Announces Felony Charges Against Former CEO, Bookkeeper Who Allegedly Embezzled $2.6 Million from Insurance Company

Contact: Joy Yearout 517-373-8060

May 10,  2013

 

LANSING - 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 eleven-year period, working with CAOM bookkeeper, George Bauer, to cover up his tracks. 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. 


           
  "Stealing is wrong-no matter if you're at the top of the company or near the bottom," said Schuette. "There are consequences to breaking the law, and we will continue to aggressively weed out corruption."

 

"Special thanks to our partners at the Attorney General's office for their prompt action in this matter," said DIFS Director Clinton.  "The staff at the Department of Insurance and Financial Services will continue to protect consumers and fight against fraud in the insurance industry."

 

Stage was employed as CEO of CAOM from 1993 until his retirement; 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. 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.

 

            The rest of the embezzled funds allegedly came from Stage inflating his own pay raises and bonuses, totaling to approximately $200,000.

 

            The defendants surrendered to authorities in Livonia on May 9, 2013 and the following charges have been filed with the 16th District Court for Wayne County:

·         Jerry Stage - 2 counts

o   One count of Embezzlement Over $100,000, a 20 year felony with a fine of up to three times the amount embezzled; and,

o   One count of Conspiracy to embezzle over $100,000, a 20 year felony with a fine of up to three times the amount embezzled.

·         George Bauer - 1 count

o   One count of Conspiracy to Embezzle Over $500,000 but Less Than $100,000, a 15 year felony.

            Both defendants waived their right to a preliminary examination and were bonded over to the Wayne County Circuit court. Stage was arraigned before Judge Kathleen J. McCann in Livonia's 16th District Court. Stage's circuit court arraignment is set for May 23, 2013 at Wayne County's third circuit court at 8:30 a.m. Bauer's arraignment will be on May 23, 2013 before Wayne County's third circuit court at 8:30 a.m.

 

             A criminal charge is merely an accusation and the defendants are presumed innocent unless proven guilty.

Bauer mug shotStage mug shot

-30-

Related Content
 •  Schuette Announces $90 Million National Settlement with T-Mobile for Cellphone ‘Cramming'
 •  Schuette Praises Senate Passage of Legislation to Protect Patients
 •  Schuette Statement on Legislature's Lame Duck Passage of Corrections Reforms Bills
 •  Seeking Justice for Fungal Meningitis Victims: Michigan A.G. Schuette Joins Federal Officials for Boston Announcement of Multiple Criminal Indictments Following Investigation of New England Compounding ...
 •  Wyant, Schuette Issue Statement on Enbridge U.P. Pipeline Incident Following Pipeline Task Force Meeting
 •  Schuette: Using Detroit DDA Funds to Develop New Hockey Arena is Constitutional
 •  Schuette: President's Immigration Order Oversteps Constitutional Bounds
 •  Schuette, Spaniola: Mason Circuit Court to Proceed with Murder Charge Against Sean Phillips
 •  Schuette Announces $3.8 Million Consumer Protection Settlement with Sirius XM
 •  Attorney General Schuette's Statement on House Passage of Prison Reform Legislation
 •  Schuette Applauds the National #GivingTuesday Movement to Encourage Spending With A Purpose
 •  Schuette Urges FTC to Update the Telemarketing Sales Rule to Protect Consumers
 •  Statement by Attorney General Schuette on SCOTUS Decision to Review Michigan v. EPA Case
 •  Schuette Partners with Nonprofits to Help Michigan Citizens Make Smart Donations
 •  Attorney General Schuette's Statement on Proposed Sentencing Reform Legislation
 •  Schuette Fights Excessive Electric Rates for Upper Peninsula Residents
 •  Schuette: This Veterans Day, Two New Legal Guides Available to Michigan Military Families and Veterans
 •  Attorney General Schuette Supports Swift Appeal of 6th Circuit Ruling in DeBoer v. Snyder
 •  Statement by Attorney General Schuette on Detroit Bankruptcy Ruling
 •  Schuette Announces $747,000 in Restitution for Southeast Michigan Victims of Mortgage Fraud
QR code

Michigan.gov Home
PoliciesMichigan NewsMichigan.gov Survey


Copyright © 2014 State of Michigan