Human Resources, Law, and Marketing, PR & Advertising

Judge sentences ex-marketing exec for fraud

March 23, 2015
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A former marketing director at a college in the region has been sentenced to prison for defrauding the school.

Gregory DeRue, of Granger, Ind., was sentenced to 21 months in prison for mail fraud in connection with his role at Southwestern Michigan College in Dowagiac, according to Grand Rapids-based U.S. Attorney Patrick Miles, Jr. on Friday.

He pled guilty to the charge before Chief U.S. District Judge Paul Maloney last November.

In addition to jail time, DeRue was ordered to pay restitution of $208,133 to Southwestern Michigan College and agreed in a plea agreement that his asset forfeiture liability was $199,282.

Following DeRue’s release from prison, he will serve a 24-month term of supervision by the court.

Assistant U.S. Attorney Clay West prosecuted the case.

Mail fraud

In his plea agreement, DeRue admitted that while employed at Southwestern Michigan College as the executive director of marketing, he contracted with DMG Media to handle all of the college’s television, radio and billboard advertising.

Unbeknownst to the college, DMG Media was a front company for DeRue, who invoiced the college for more than the gross amount of the services actually provided by DMG Media, invoiced the college for services DMG Media never provided and failed to pay certain media outlets for services that had already been invoiced by DMG Media and paid by the college.

The college discovered financial discrepancies in the summer of 2013 regarding DMG Media’s invoices, which totaled $487,427 over the period, and ultimately calculated the loss amount at $208,133 connected to DeRue’s mail fraud.

David Mathews, president of Southwestern Michigan College, spoke at sentencing about the negative impact on student enrollment and college finances from DeRue’s actions.

"Selfish" crime

Additionally, U.S. Attorney Miles said people like DeRue “truly harm others.”

“In this case, an institution of higher education and its students, faculty and staff were harmed,” Miles said. “I hope this conviction, sentence and restitution will help deter others from committing selfish white-collar crimes.”

Paul Abbate, special agent in charge of the FBI Detroit Field Office, said the defendant’s criminal actions, as a university employee, were "selfish and inexcusable."

“The FBI, together with our local, state and federal partners will continue to fight white-collar crime and corruption and hold perpetrators accountable for their greedy actions,” Abbate said.

Investigation

The Dowagiac Police Department and the FBI investigated this case, with assistance from Southwestern Michigan College.

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