Contractor pleads guilty to fraud

ROGERS CITY – A contractor involved with a project to turn a former sausage shop in Rogers City into county offices has pleaded guilty to a count of contractor fraud.

Kris Kurt Gerke of Hubbard Lake pleaded guilty to fraudulent use of a building contractor fund Monday as part of a plea deal reached with Special Prosecutor Daryl Vizina. In exchange, he’s set to receive a one-year delay of sentence, and must pay $35,000 in restitution.

“If he pays back 100 percent (during the year), the charge is dismissed, and he has no conviction,” Vizina said. “If he pays back 50 percent, it’s reduced to a misdemeanor.”

Gerke, of Hubbard Lake, told 53rd Circuit Court Judge Scott Pavlich his secretary had issued sworn statements on his behalf and under his authorization that, in one or more cases, misstated how much he had paid subcontractors working on the project. In response to Pavlich’s questions, he said the purpose was to keep the money for himself.

NorthShore Construction, Gerke’s company, was the main contractor for a 2012 project to turn the former Nowicki’s Sausage Shoppe into county offices. In September of that year, County Resource Officer Joe Libby told county commissioners he believed a sworn affidavit containing a list of subcontractors for the project submitted by NorthShore was incomplete, and in violation of the law. He had been contacted by a subcontractor not on the affidavit who said he was owed money. Commissioners asked the Michigan State Police to investigate, and in December voted to pay more than $68,000 to project subcontractors.

Vizina said he believes the plea agreement meets the main goal of getting the county reimbursed, and county Board of Commissioners Chairman Carl Altman agreed. Altman added the county simply wanted its money back, and not to slap Gerke with a felony conviction that would hang over his head forever.

“I’m just glad that it’s been resolved, as far as we’re concerned,” he said. “It’s been resolved pretty much to the extent that the county is going to be reimbursed on the money spent to make all these subcontractors whole.”

Matthew Wojda, Gerke’s attorney, said he viewed the case as a civil one, and believes Gerke may have over-relied on his office manager.

“I hope (Gerke) will be able to pay this off in the time set forth,” he said.

Pavlich set Gerke’s sentencing for June 2.

Jordan Travis can be reached via email at jtravis@thealpenanews.com or by phone at 358-5688. Follow Jordan on Twitter @jt_alpenanews.

Read his blog, A Snowball’s Chance, at www.thealpenanews.com.