Former Crystal Lake businessman charged with theft

A former Crystal Lake businessman is charged with taking about $11,000 in health insurance premiums from his employees, but not making the payments on their behalf.

Michael J. Phelan, 47, of Sycamore, was indicted Wednesday on 22 counts of theft over $300 — all felony charges. He was taken into custody Friday following an appearance in a McHenry County courtroom on separate misdemeanor charges.

Phelan was president of Phezer Enterprises, a metal fabrication business that closed in August of 2008. Authorities said Phelan deducted health care premiums from payroll checks from May through July of 2008 — but the company’s coverage had been dropped by Blue Cross Blue Shield of Illinois for lack of payment.

Many employees of Phezer were left with significant, unpaid medical bills, Crystal Lake Deputy Police Chief Gene Lowery said in a news release.

Last September, investigators from the Crystal Lake Police Department and U.S. Department of Labor examined payroll records to see if there was any misappropriation of funds.

The 22 counts concerned 11 employees, though Lowery said all employees enrolled in company’s health insurance plan were impacted by the lack of insurance.

Phelan already had been charged in March of 2009 with five counts of theft and four counts of deceptive practices — all misdemeanors — related to issuing checks to vendors or subcontractors, then immediately stopping payment, authorities said. Those charges are still pending.

Phelan’s bond was set at $150,000 Friday.