October 22, 2014LAPEER — Circuit Court Judge Byron Konschuh was last Wednesday bound over for trial on five counts of embezzlement by a public official of more than $50.
The charges were brought against Konschuh in July by special prosecutor Deana Finnegan following an investigation into allegations that he deposited fees from BounceBack and training fees from the Law Enforcement Officers Regional Training Commission into personal bank accounts. BounceBack is a Missouri based bad check recovery company. Konschuh in 2009 contracted with the company to relieve pressure on the prosecutor's office with regard to prosecuting writers of bad checks. The company remits a small fee to the Lapeer County Prosecu-tor's office for each collection.
Shiawassee District Court Terrance Dignan, who was assigned to hear the case, said contrary to defense attorney Michael Sharkey's argument, he's satisfied that the funds in question are public funds, and that Konschuh knew they were public funds when using them to cover unauthorized office-related expenses.
"If it looks like a duck and quacks like a duck, I'm not convinced there's probably cause to believe it's not a duck," Dignan said.
Special Prosecutor Deana Finnegan objects to defense attorney Michael Sharkey's line of questioning during last Wednesday's hearing as Judge Byron Konschuh looks on. photo by Catherine Minolli.
Last Wednesday's hearing was the second in Konschuh's preliminary exam; the first took place on Sept. 24. Dignan heard testimony from prosecution witness Det. Sgt. Mike Pendergraff of the Michigan State Police and from defense witnesses Steve Beatty, former Lapeer County Prosecutor and Chief Assistant Prosecutor and James T. Schmid, a forensic accounting and fraud investigation expert.
At the Sept. 24 hearing, testimony was heard from Lapeer County Prosecutor Tim Turkelson, assistant prosecutor Caylin Wilson, county treasurer Dana Miller, county controller John Biscoe, county chief finance officer Craig Horton and office manager/victim's ad-vocate Lee Hauxwell.
Pendergraff detailed the findings of his investigation, which included 40 Bounce-Back checks made payable to the Lapeer County Prose-cutor's office from 2009 through 2013. The totals were : $108.19 in 2009; $326.95 in 2010; 264.44 in 2011; $213.00 in 2013 and $110.00 in 2013. He also investigated two checks from LEORTC made payable to the prosecutor's office for training fee reimbursement; one for $300 and another for $480.
Pendergraff said all of the checks but one were deposited into bank accounts owned by Konschuh and his wife and/or son at four local banks; the exception was a check signed over to former Lapeer County Prosecuting Attorney Matt Funke which was cash-ed at Abruzzo's in Lapeer.
Prendergraff prepared a spreadsheet detailing the deposits and corresponding receipts Konschuh provided to show how the funds were spent—on Secretary's Day and holiday lunches, retirement plaques, donuts for staff members, attorneys, witnesses, police officers and the like. Earlier, Prosecutor Finnegan asserted that those were "unauthorized expenses" when it comes to the use of public funds.
Beatty testified that the lunches and Friday donut offerings were "for the benefit of the office," and that staff members used the opportunities to discuss policies and procedures. He said staff members looked forward to participating, and that the events helped boost morale.
Schmid said the funds in question were not public funds and therefore no crime had been committed.
Dignan obviously disagreed and bound Konschuh over for trial.
That's a mistake, according to defense attorney Sharkey, who says the charges should have been dismissed.
"As argued in court, the statute the prosecutor refers to applies to "county" or "public" monies that are assigned by the government, i.e. tax dollars, licensing fees and the like," he says. "It does not and cannot—by statutory definition—apply to the petty or miscellaneous cash of a government office."
Sharkey says the statute only applies to amounts greater than $50, noting that the BounceBack payments were for $5 each.
"The elements of embezzlement do not exist here and therefore cannot be proven," he says.
He has filed a motion to quash the bindover, and believes Dignan's 'walks like a duck' basis for binding the case over should be helpful in his motion.
Sharkey says should the case proceed to trial, Finnegan will have trouble proving that Konschuh converted county money to personal use.
"On the contrary, Konschuh has receipts that were admitted into evidence in excess of $7,500 to prove he spent all the money he received from BounceBack and teaching fees, in addition to his own money, on items for the office and the public including coffee and donuts," Sharkey says.
Konschuh is expected to be arraigned in Circuit Court. Chief Judge Nick Holowka will likely ask the State Court Administrator to assign a special circuit court judge from another venue to hear the case.
Konschuh has been on paid administrative leave since July pending the outcome of the case.
Catherine Minolli is Managing Editor of the Tri-City Times. She began as a freelance writer with the Times in 1994. She enjoys the country life, including raising ducks and chickens.