State of Michigan employee charged with embezzling more than $850K through well permit program
A former 24-year employee for Michigan's environmental agency embezzled more than $850,000 between 2018 and 2020 from one of the state's well-permitting programs, Attorney General Dana Nessel said Wednesday.
Joseph Pettit, 49, is accused of stealing roughly $1.5 million but about $855,000 is believed to have been taken between 2018 and 2020, Michigan State Police Detective Sgt. Scott Singleton wrote in a court affidavit on April 7. That timeframe falls within the statute of limitations.
Pettit is charged with three counts of embezzlement over $100,000, four counts of uttering and publishing and one count of using a computer to commit a crime.
Uttering and publishing is a 14-year felony while embezzlement and using a computer to commit a crime carry penalties of up to 20 years in prison.
As an employee for the Oil, Gas and Minerals Division within the Department of Environment, Great Lakes and Energy, Pettit is alleged to have set up a fake vendor scheme that allowed him to divert some bond money into those accounts, according to Nessel's statement.
Pettit's lawyer did not immediately respond to a request for comment.
Pettit's LinkedIn page indicates he left the department in January 2020 to join the Department of Health and Human Services Division of Environmental Health. It is not clear whether he still is an employee at that agency.
People drilling a well in Michigan must apply for a permit and post a bond that the owner eventually gets back when the well changes hands.
Pettit was responsible for releasing the bonds back to companies and the original owner. But instead of doing so, he created "fake vendors" in the state's SIGMA payment software to which he would divert some of the money, Nessel's office said.
"The legitimate companies were usually long-term well operators that would have the bonds on file for years or they were defunct companies that forfeited their bonds," Singleton wrote in the affidavit.
"Either way, the companies would not likely discover that their bond was cashed in."
Police wrote that Pettit completed 18 allegedly fraudulent transactions between 2018 and 2020, but "other fraudulent transactions prior to that time frame" brought the total loss to the state to $1.5 million.
Pettit left the agency in January 2020 and in September 2020 EGLE officials became aware of some discrepancies and contacted the Michigan State Police.
“Our discovery of potential crimes was immediately referred to law enforcement, and we continue to provide them everything they need to ensure justice is done on behalf of the State of Michigan,” said department Director Liesl Clark. “We are also doing everything we can to prevent this from occurring again, including strengthening internal financial controls to provide even greater checks and balances against fraud.”
Pettit's charges relate to alleged embezzlement between 2018 and 2020. "Suspected losses" between 2013 and 2016 are barred from prosecution by the statute of limitations, Nessel's office said.
He is expected to be arraigned Friday.
"This case is a reminder that my office treats it very seriously when anyone abuses the system for their own gain,” Nessel said.