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Former Art Institute payroll manager pleads guilty to embezzling more than $2 million

By WBBM Staff

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    CHICAGO (WBBM) — A former Art Institute executive has pleaded guilty to charges he embezzled more than $2 million from the museum over the course of 13 years.

Michael Maurello, 56, was indicted in January on two counts of wire fraud and two counts of bank fraud. He pleaded guilty on Wednesday to one count of wire fraud.

The indictment accused him of abusing his position as payroll manager to deposit money from the museum into his personal bank accounts from 2007 to 2020, by disguising the payments in the payroll system as having been made to other employees or former employees.

Maurello also entered false reasons for the payments into the payroll system; including claims that the payments were for an employee’s accrued paid time off when the employee in question either didn’t have any paid time off or had already been paid for it, according to the indictment. There were also false claims that the payments were for insurance premiums, withholding of taxes, or tuition reimbursement, the indictment said.

The Art Institute said it discovered unusual account activity during a review of its financial control procedures in 2019. The museum said it immediately launched an internal probe, and discovered the fraudulent payments.

When the assistant controller of the Art Institute asked Maurello about one of the payments in January 2020, Maurello lied and said the transaction was just a test of the payroll system, according to the indictment.

Maurello also edited and altered a report from the Art Institute’s payroll system to hide information about the funds he had misappropriated, including falsely changing the employee names, dates, and dollar amounts for the payments, according to the indictment.

Maurello was fired for cause over his embezzlement.

“This individual stole in excess of $2 million from the organization over the course of approximately a decade. The cumulative loss was significant, but because of the length of time and manner in which it was taken, it did not impact decisions around staffing, payroll, scholarship funding, programming, or other financial aspects of the organization,” the Art Institute said in a statement after Maurello’s indictment in January. “We have implemented additional controls and procedures to help detect and prevent any future malfeasance and are recovering funds through insurance.”

Maurello, of Beach Park, faces a maximum sentence of 20 years in prison, according to federal prosecutors. His sentencing has been scheduled for Sept. 14. He also faces payment of $2,308,772 in restitution to the Art Institute.

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