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Thursday, Aug. 13, 2015 12:07 am

Five years for $13 million rip-off

Scam went undetected for years

 

Michael Keebler sounded sorry Monday when he finally faced the music.

He turned emotional, putting his forehead down on the defense table for several minutes after tearfully apologizing to U.S. District Court Judge Sue Myerscough, who sentenced him to five years for stealing more than $13 million from the Illinois Environmental Protection Agency.

“I don’t get emotional ever,” Keebler told the judge. “I’ve worked ever since I was born. I’ve worked to help my mom out. This has just killed her. It’s torn my family apart. … I can make more money if I need to – that’s not the issue. I can’t come back and spend the time (in prison) with my kids.”

It could have been worse for Keebler, who faced a maximum of 20 years in prison if he’d fought the charges. Instead, he pleaded guilty last spring in a plea bargain that should have him out of prison in time to see his eldest child graduate from high school.

Keebler, an engineer who lives in Sherman, stole millions from the IEPA in massive fraud scheme that went undetected for a dozen years. The money came from a surcharge on gasoline sales that was supposed to pay to clean up leaking underground storage tanks. It was supposed to keep drinking water clean and protect public health. Instead, it went into the pockets of Keebler and his co-defendants, including two of his brothers, who have also pleaded guilty and are expected to receive lesser sentences.

“It was small at times, it was huge at times,” Assistant U.S. Attorney Patrick Hansen told the judge on Monday. “Every time someone went to the pump to fill up, they were funding the fraud.”

The scheme began in 2001. The methods varied. Sometimes Keebler, head of a Bradforton company called Environmental Management of Illinois (EMI) that employed as many as 50 people, would submit invoices for work never performed. At other times, he would collect on bills submitted by phony companies created to skirt competitive bidding requirements. He would also pad invoices, paying subcontractors a lesser amount than what he collected from the government.

The scheme began unraveling in 2010, after a routine EPA inspection at a McLean County cleanup site revealed that no work had been done. After discovering that he was under investigation, Keebler put assets, including his home worth nearly $340,000 according to tax records and a parcel of industrial property in Springfield worth nearly $115,000, into a trust in an attempt to harbor them in the event that he became subject to a restitution order. It didn’t work. Under terms of the plea bargain, Keebler agreed to pay nearly $13.4 million in restitution to the Illinois Environmental Protection Agency, and the trust is being dissolved to help make the government whole. The court received the first check of more than $900,000 on Monday.

The fraud was somewhat of a family affair. Joel Andrews of New Berlin, who founded EMI in 1997, and his brother, Eric M. Andrews of Springfield, who joined the company two years later, have also pleaded guilty to fraud and are set for sentencing in October. Duane T. Keebler, who lives in Missouri, and Joseph R. Keebler of Carbondale, both brothers of Michael Keebler, have also pleaded guilty and will be sentenced later this month. They have agreed to pay $179,438 in restitution. Jeremy L. VanScyoc of Springfield, an EMI engineer, received a one-day sentence in June and must pay $262,000 in restitution.

The fraud began the same year that Michael Keebler joined the firm in 2001, according to the government. He was the kingpin and is expected to spend more time in prison than any of his co-defendants, who cooperated with prosecutors. During Monday’s sentencing hearing, Keebler alluded to his brothers turning against him in the case.

“I still love my brothers, even though they did this to me,” Keebler told the judge. “I thought I was trying to help my brothers out.”

That line of thinking drew a sharp rebuke from Myerscough.

“Let one thing be clear today, Mr. Keebler: Your brothers didn’t do this, you did it to yourself,” the judge said. “You taught your brothers how to do this.”

The judge said that she was concerned about an unsigned letter she received indicating that Keebler had boasted that he would never be caught. Before handing down sentence, Myerscough took a five-minute recess, saying that she was having a difficult time accepting the plea bargain. While Keebler’s guilty plea saved the expense of a trial that could have lasted for months, the crime was “breathtaking in scope,” the judge said.

“While this is your first encounter with the criminal justice system, it is none too soon in coming,” Myerscough said. “It is unfortunate we cannot staff our agencies to uncover this years before it was uncovered.”

Contact Bruce Rushton at brushton@illinoistimes.com.

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