Former Art Institute of Chicago Employee Pleads Guilty to Embezzling $2 M. from Museum

A former payroll manager at the Art Institute of Chicago plead guilty in federal court this week after he was indicted in January on several fraud charges for stealing more than $2 million from the museum over 13 years.

The written plea agreement states that Michael Maurello redirected payments from the museum’s payroll system into his personal bank account at JP Morgan Chase between 2007 and 2020.

“The Art Institute thanks law enforcement for their handling of the case, and we look forward to the resolution of this matter,” a museum spokesperson told ARTnews by email.

According to the indictment filed in the U.S. District Court of Chicago, Maurello classified these payments for accrued paid time off, as well negative payroll deductions for life insurance premiums, payroll taxes, and tuition reimbursement, as being made to other staff members or former employees. Maurello was able to hide the alleged scheme through spreadsheets and notes to track the redirected funds in the museum’s payroll system.

After the Art Institute’s assistant controller asked Maurello about one of these payments in January 2020, he said the transaction was a test of the payroll system.

“Maurello then edited and altered a report from the museum’s payroll system to conceal information about the misappropriated funds, including by falsely changing the employees’ names and the dates and dollar amounts of the payments,” the U.S. District Attorney’s office in the Northern District of Illinois said in a press release.

As a result of the case, the Art Institute of Chicago said it implemented new procedures to detect any future payroll theft. The missing funds are being recovered through insurance. 

“The cumulative loss was significant, but because of the length of time and manner in which it was taken, it did not impact decisions around staffing, payroll, scholarship funding, programming or other financial aspects of the organization,” a museum spokesperson told the Chicago Sun-Times in January. 

Maurello, 56, will be sentenced on September 14. According to the DA’s office, he faces a maximum sentence of 20 years in prison followed by up to 3 years on supervised release. Maurello may also be sentenced to pay a fine of up to $250,000, or twice the gross gain or loss from his offense, whichever is greater, and he must be sentenced to pay restitution to the museum of $2.3 million.

News of the the plea agreement was first reported by the Chicago Tribune.