By Greg Peterson, Upper Peninsula Breaking News
www.UpperPeninsulaBreakingNews.com
(Dowagiac, Michigan) – A federal grand jury has indicted the former executive director of marketing at Southwestern Michigan College in Dowagiac on 11 felonies including nine counts of mail fraud and two counts of money laundering for steering nearly a half million dollars in college contracts to a company he owned in Indiana.
Gregory Albert DeRue of Granger, Indiana is accused of committing the mail fraud and money laundering crimes between January 2011 and May 2013 as the executive director of marketing, enrollment management and development at Southwestern Michigan College – a position he held for about two and a half years.
The Indictment of Gregory DeRue states the college made many purchases “on the recommendation and request of its Executive Director of Marketing.”
Gregory DeRue and that SWM “college began using DMG Media in June 2011 as an advertising agency for purchasing all television, radio, and billboard advertising until May 2013.
The indictment states DeRue owned the company and did not inform SWM he was the owner – and allegedly tried to cover it up.
The investigation revealed the company was essentially a mail box.
DMG Media invoices list its place of business as 5776-51 Indian Grape Road # 164 in Mishawaka, Indiana that turned out to be a “UPS Store that rents mail boxes to various clients (and) Box # 164 was rented to DMG Media,” the indictment states.
“De Rue Marketing Group LLC is organized in the State of Indiana. The Indiana Business Entity Report on file with Indiana state government indicates that Greg DeRue is the
President of De Rue Marketing Group LLC. In August 2, 2011, De Rue Marketing Group filed
with the State of Indiana a Certificate of Assumed Business Name – DMG Media, the indictment states.
“While serving as executive director of marketing with the college defendant
DeRue never disclosed that he served as the President and sole employee of DMG Media, the indictment states.
“Rather, the college dealt exclusively through email with DMG Media’s purported agent, ‘Jack,'” the indictment states
From June 2011 to May 2013, DMG Media billed (SWM) a total of $487,427 and “all invoices were paid except the final invoice in May 2013 of $26,260, on which the College placed a stop payment order,” according to the indictment.
Of the “$487,427 gross amount invoiced to the College, DMG Media contracted with media
providers to provide $279,145 worth of services,” the indictment states.
The money includes “an agency commission of $32,360 paid to DMG Media by the college as a 15-percent commission on television and radio billings,” the indictment states.
Email billing invoices were sent from DMG Media to the College.
SWM “paid those invoices by cutting a check drawn on Fifth Third Bank in Western
Michigan and mailed via the United States Postal Service” from the Michigan college to the DMG Media address in Mishawaka, Indiana.
The indictment alleges that “DMG Media invoiced the College for more than the gross amount of the services actually provided and invoiced” but never provided.
DMG Media also “failed to pay some media providers for advertising that was completed on behalf of the college,” the indictment states.
DeRue “concealed from the College that he was the President and sole employee of DMG
Media, and that the College’s contact at DMG Media – ‘Jack’ – did not otherwise exist apart
from Defendant DeRue,” the indictment alleges.
DeRue was fired by SWM on May 23, 2013, the indictment states.
Before the DMG Media contract with SWM was terminated and after his firing, “DeRue contacted the College to advise that he would be handling the college’s account with DMG Media,” the indictment states.
The indictment alleges that DeRue invoiced the college for numerous advertising buys that did not occur.
For television advertising, the college cut checks to DeRue’s business totaling nearly $404,000.
Those bogus ad buys were mainly for WNDU-TV in South bend, Indiana but included WSJV, WBND, CW25, and Comcast, the indictment charges in the “manner and means” of the alleged crimes.
DeRue’s history includes a one-year stint as the marketing manager for Cumulus Broadcasting ending in 2008, according to his active LinkedIn page with over 500 connections.
Ironically most of his false advertizing buys were made to WNDU-TV – and that station’s call letters stand for his alma mater – Notre Dame University.
DeRue “was part of the scheme to defraud” as “DMG Media invoiced the College
for more than the gross amount of the services actually provided and invoiced for services
never provided,” the indictment states.
The indictment also lists forfeiture proceedings for DeRue’s property, money and a car.
The forfeiture includes $115,089.87 seized on June 26, 2014 from the Woodforest National Bank from an account named DeRue Marketing Group LLC; a 2012 Hyundai Santa Fe titled in the name of Gregory Albert DeRue and a sum of money equal to at least $61,272.53, which
“represents the balance of proceeds DeRue obtained, directly or indirectly from the scheme to
defraud charged in Counts 1-9.”
The July 24, 2014 grand jury indictment was signed by Assistant United States Attorney Clay M. West in Grand Rapids on behalf of U.S. Attorney Patrick A. Miles, Jr.
Gregory Albert DeRue
https://www.linkedin.com/pub/greg-derue/0/8b1/817
Click to access 146026SouthwesternMICollege20130214_412529_7.pdf
WNDU-TV
http://www.wndu.com
https://en.wikipedia.org/wiki/WNDU-TV
Upper Peninsula Breaking News by Greg Peterson 