A press release from the Crystal Lake Police Department:

Phezer Enterprises President Arrested

Employees of the now defunct Phezer Enterprises (formally located at 150 E. Dartmoor Dr., Crystal Lake) reported that the President of the company, Michael Phelan, has exercised unauthorized control over employee funds.

It is alleged that Michael Phelan deducted heath care premiums from employee pay roll checks knowing that his company had been dropped from the insurance provider, Blue Cross Blue Shield of Illinois, for lack of payment.

It should be noted that Michael Phelan’s business practices had come to the attention of the police on a previous occasion when he was charged in March of 2009 with five counts of theft and four counts of deceptive practices, all of which were misdemeanor offenses related to his business and all remain pending in the courts

In part, those cases involved issuing checks to vendors and/or sub-contractors and immediately stopping payment depriving the recipient of compensation due for services or materials rendered.

In September of 2010 Crystal Lake Police again initiated an investigation in regard to the business practices of Michael Phelan.

Working in concert with agents from the U.S. Department of Labor, investigators were able to examine each employee’s payroll records at Phezer Enterprise. The purpose of which was to determine if there was any misappropriation of funds or violations of state or federal statutes as alleged by employees of the company.

The investigation revealed that Michael Phelan deducted approximately $11,000 in total health care benefits beginning in May of 2008 through the end of July 2008. During that time it is alleged that he exerted unauthorized control over those funds and did not make the insurance premium payments on behalf of his employees.

The business officially closed its doors on August 13, 2008 leaving many of the company’s employees’ with significant, unpaid medical bills.

The insurance provider dropped coverage for the employees in May of 2008 when the premiums went unpaid.

The investigation was reviewed by the McHenry County State’s Attorney Office and brought before the Grand Jury on May 4, 2011.

A 22 count Bill of Indictment was granted against Michael Phelan; each count being a Class 3 Felony for Theft over $300.00.

The 22 counts concerned 11 employees.

However, all employees originally enrolled in the company’s health insurance plan were impacted by the failure to pay the premiums and the lack of health insurance.

On May 6^th, 2011 Michael Phelan was taken into custody without incident when he made an appearance before the circuit court of McHenry County regarding his previously filed misdemeanor charges. The warrant issued for the Phelan subject had bond set at $150,000.

Offender: Michael J. Phelan
(M/W, D.O.B. 11/30/63)
2223 Maggie Lane
Sycamore, Illinois 60178

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The following press release from the McHenry County State’s Attorney’s Office, issued Monday, May 9th, adds some information:

Louis A. Bianchi, McHenry County State’s Attorney, announces that fifty year-old Michael J. Phelan, formerly the owner and president of Phezer Enterprises, Inc. of Crystal Lake, was arrested on May 6, 2011 after the grand jury returned a Bill of Indictment against him on May 4, 2011.

Mr. Phelan faces 22 counts of Theft (Over $300), class 3 felonies, for allegedly deducting health and dental insurance premiums from the paychecks of Phezer employees for nearly three months from May to July of 2008 after the employee health and dental care plan was canceled.

The indictment alleges that the defendant kept the funds from those health and dental insurance premiums.

Mr. Phelan remains in custody after bail was set in the amount of $150,000.

This case was investigated by Detective Kevin Doherty of the Crystal Lake Police Department and Angel Pena of the United States Department of Labor.