Man who defrauded Art Institute seeks mercy at sentencing

By Bill Dwyer for Chronicle Media

Michael A. Maurello

The former Chicago Art Institute payroll manager convicted of stealing more than $2.3 million from his employer has thrown himself on the mercy of the court.

Michael A. Maurello, 56, formerly of north suburban Beach Park, is scheduled to be sentenced on Thursday, November 16 by Federal Judge Manish Shah. In a relatively brief and straightforward sentencing memo, Maurello cited a litany of woes and described a life all but destroyed by the consequences of his actions. He asked the court to sentence him to probation, or no more than a minimal prison sentence.

The government said federal sentencing guidelines call for a prison term of between 51 months and 63 months, and that it will “offer a more specific recommendation upon review of the defendant’s sentencing memorandum and any additional information concerning his current medical conditions.”

Whatever happens to Maurello at sentencing, though, his troubles will not be over. The Art Institute’s insurer, Berkley Insurance, recently filed a civil lawsuit against Maurello and his ex-husband, seeking at least $2.3 million.

Maurello started as the Art Institute’s payroll manager in 2001. Sometime in 2007, he began embezzling funds. The suspicious account activity finally was discerned in 2019, and the scheme began to unravel in January 2020 after the museum’s assistant controller asked Maurello about one of the phony payments.

After being shown bank records with his account number, prosecutors say, Maurello “merely acknowledged that the account belonged to him, but he then abruptly ended the interview. One week later, he emailed the museum’s human resources director, stating, ‘My goal is to fully cooperate with paying [the museum] back fully. I want to prevent this going public and possible prosecution, so anything I can do, I will. I have brought great shame on myself.’”

Maurello was fired in February 2020. In January 2023, following long investigations by both the Art Institute and law enforcement, he was charged in a criminal indictment with two counts of wire fraud and two counts of bank fraud, each carrying a maximum of 20 years in prison at sentencing. In April he pleaded guilty to a single count of wire fraud.

Defense attorney Frank Cece Jr. suggested that his client is already suffering through a litany of serious maladies, including the amputation of his leg below the knee, is barely able to walk, and is confined to an assisted living facility.

“(Maurello) is depressed and understandably concerned about sentencing,” Cece Jr. wrote in a sentencing memo. He portrayed his client as someone who “has become a recluse by circumstances and not by choice.” Maurello, he said, “has lost everything he cherished in life. His husband of 20 years divorced him. Most of his family has alienated him. He is no longer employed nor employable due to (his crime) and his medical condition … .”

“Defendant is genuinely remorseful and regretful of his prior conduct with the Art Institute,” Cece Jr. wrote.

Prosecutors, however, called Maurello’s fraud scheme “serious and unmitigated,” and emphasized “the length, extent, deliberation, and repeated nature of defendant’s offense. Over at least 13 years, defendant engaged in hundreds of fraudulent transfers totaling over $2.3 million — virtually all of which he has spent.”

Cece Jr. said that Maurello, “has substantial funds in his IRA account that can be used towards restitution,” and that Maurello intends to partially repay the money he stole.

Prosecutors scoffed at that contention, saying that “despite his promise to the contrary … almost four years after his scheme was discovered and he was terminated, he has not repaid even a small amount of the money he stole.”

The most criminally aggravating element in Maurello’s case, prosecutors said, was that he “had no need or reason to engage in the offense.” The money he stole, they said, “mainly went to subsidize his lifestyle … .”

Between October 2021 and April 2023 Berkley Insurance paid the Art Institute a total of $2.2 million, less the policy’s deductible and limits on coverage for the Institute’s investigative costs. Now it is going after Maurello and his ex-husband to recover what it can.

While Maurello’s husband was not charged criminally, he is named as a defendant in the civil suit, which has four counts, two against Maurello solely — one for illegal conversion and one for fraud — and two against both men, for unjust enrichment and fraudulent transfer.

As in the criminal case, Berkley contends that Maurello and his ex-husband used stolen funds to pay various personal costs including their mortgage, real estate taxes, home improvements and maintenance.

In June 2020, Maurello quit claimed the deed to the house to his then-husband. Berkley called that a “fraudulent transfer,” in that Maurello “conveyed his interest in the Gladys Street Property to (his husband) to hinder, delay or defraud (the Art Institute) in collecting the funds that he stole,” and conveyed the property “without receiving a reasonably equivalent value in exchange.”