Former state worker pleads guilty in $855K embezzlement scheme
A former state environmental worker has pleaded guilty to embezzling from the state in a scheme officials alleged amounted to more than $855,000 in stolen funds.
Joseph Pettit pleaded guilty on Tuesday to two counts of embezzlement over $100,000 and one count of uttering a publishing. The embezzlement felonies carry up to 20 years in prison or three times the money taken, while the uttering and publishing felony is punishable by up to 14 years in prison.
Pettit, a 24-year employee of the Michigan Department of Environment, Great Lakes and Energy, is expected to serve time in prison and will be responsible for the roughly $855,690 embezzled at time of sentencing, according to a statement from Attorney General Dana Nessel's office.
“There are no winners here, least of all Michigan EGLE’s 1200-plus public servants who exemplify the highest standards of ethics and are disheartened to learn a coworker violated those principles,” said Liesl Clark, director for the Department of Environment, Great Lakes and Energy.
Clark said the department is increasing financial controls to ensure such an issue doesn't occur again.
About $855,690 is alleged to have been taken between 2018 and 2020 but investigators believe more money might have been taken prior to that, bringing the total to $1.5 million. Money taken prior to 2018 would have been banned from prosecution by the statute of limitations.
Pettit was charged in April 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.
As an employee for the Oil, Gas and Minerals Division within EGLE, 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.
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 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," Michigan State Police Detective Sgt. Scott Singleton wrote in an April 7 affidavit.
"Either way, the companies would not likely discover that their bond was cashed in."
Pettit left the agency in January 2020 and in September 2020 EGLE officials became aware of some discrepancies and contacted the Michigan State Police.
"State employees serve the many operations that keep Michigan running for our millions of residents," Nessel said in a statement. "Abusing that responsibility will not be tolerated by my office.”