March 20, 2015

Marketing Director for Local College Sentenced for Defrauding the College

GRAND RAPIDS, MI—U.S. Attorney Patrick A. Miles, Jr. announced today that Gregory A. DeRue of Granger, Indiana was sentenced to 21 months in prison for mail fraud. DeRue was also ordered to pay restitution of $208,133 to the victim of his scheme, 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. DeRue pleaded guilty to the charge before Chief U.S. District Judge Paul L. Maloney on November 17, 2014.

DeRue admitted in a plea agreement 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 himself, 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 this period, and ultimately calculated the loss amount at $208,133 connected to DeRue’s mail fraud. Chief Judge Maloney adopted this loss amount number in calculating restitution owed and DeRue’s ultimate sentence.

The President of Southwestern Michigan College, Dr. David Mathews, spoke at sentencing about the negative impact on student enrollment and College finances from DeRue’s actions while Executive Director of Marketing.

U.S. Attorney Pat Miles commented that “People, like DeRue, who commit frauds not only face significant prison sentences and restitution orders, but they truly harm others. In this case, an institution of higher education and its students, faculty, and staff were harmed. I hope this conviction, sentence, and restitution will help deter others from committing selfish white collar crimes.”

“The defendant’s criminal actions, as a university employee, were selfish and inexcusable” stated Paul Abbate, Special Agent in Charge of the FBI Detroit Field Office. “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.”

The Dowagiac Police Department and the Federal Bureau of Investigation investigated this case, with assistance from Southwestern Michigan College. Assistant U.S. Attorney Clay M. West prosecuted the case.