WOODSTOCK – A judge Monday ordered a former president of a now-defunct Crystal Lake business to pay more than $27,000 in restitution after being accused of mishandling employees' health insurance contributions.
Michael Phelan, 49, pleaded guilty last week to theft, a Class A misdemeanor, and was sentenced to six months of conditional discharge.
He was owner of welding and metal fabrication business Phezer Enterprises, which closed in 2008.
Police said Phelan deducted money from employees’ paychecks for health care premiums while knowing his company had been dropped by its insurance provider, Blue Cross Blue Shield of Illinois.
Phelan originally was charged with 22 counts of felony theft, 21 prosecutors dropped. The remaining count was amended to the lesser charge, which he pleaded guilty to as part of the plea deal accepted Friday by McHenry County Judge Sharon Prather.
Restitution in the amount of $27,214.13 was ordered to be paid to 10 recipients in various amounts, the largest of which is $13,936.19.
In September 2011, Phelan was ordered by a federal judge to pay $10,470 in back insurance premiums to 20 former employees.
Two months after that, following a bench trial, he was acquitted of passing bad checks to a staffing company.
Phelan's attorney, Thomas Glasgow, said his client should have never been criminally charged. The issues should have been handled as civil matters, he said.
"Every wrong is not entitled to a criminal case," Glasgow said. "It has to rise to the level of criminal intent."
Glasgow said Phelan did not have that intent. He said some people have tried to demonize Phelan, but 2007 and 2008 were especially tough times for business owners.
There is an inherent risk in any trial, with more on the line when it comes to felony charges, Glasgow said.
Phelan chose not to take that risk and accept the deal.
As part of his conditional discharge, Phelan is allowed to live outside Illinois, with a current address listed in Jacksonville, Fla.