Crime - Sacto 911

Former El Dorado Hills man pleads guilty in case of misappropriated business funds

A former El Dorado Hills man has pleaded guilty in federal court to misappropriating funds in a scheme that involved marketing insurance to California employers.

Gregory J. Chmielewski, 46, currently of West Bend, Wis., pleaded guilty Friday in Sacramento to two counts of mail fraud for transferring business funds to his personal use, according to a U.S. Attorney’s Office news release.

According to his plea agreement, Chmielewski set up a professional employer organization called Independent Management Resources, or IMR. He solicited an Indian tribe to partner with him and provide employee insurance coverage and other employee services at a reduced cost.

He marketed the insurance coverage to California employers as a low-cost alternative workers’ compensation coverage. Because of the low rates, authorities said, he succeeded in obtaining clients.

Chmielewski then began diverting and misappropriating millions of dollars from IMR accounts for his personal use. The company eventually experienced serious cash flow problems and ceased operations, leaving approximately 117 injured workers with approximately $1.8 million in unpaid claims, authorities said.

Chmielewski is to be sentenced April 1 by U.S. District Judge Garland E. Burrell Jr.

The case resulted from an investigation by the United States Postal Inspection Service, the Internal Revenue Service and the California Department of Insurance.

Cathy Locke: 916-321-5287, @lockecathy