2nd man arrested in suspected insurance fraud

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A Universal Restoration Services employee has been arrested for his suspected role in a Milwaukee County employee’s alleged scheme to steal insurance money.

Wheeling, Ill.-based Universal is the contractor overseeing the Milwaukee County Courthouse restoration project stemming from a fire in the building’s basement in July. That project has cost about $17 million so far and is ongoing.

The Milwaukee County District Attorney’s office arrested Dennis Dietscher, the county’s former safety coordinator, Feb. 19. He is suspected of misconduct in a public office, fraudulent writings and private interest in a public contract.

His alleged accomplice, Universal salesperson Mark Siegwald, was arrested Feb. 20 and later released, according to Milwaukee County Office of the Sheriff records.

Neither has been charged.

Dietscher was the interim director of risk management during the courthouse restoration project.

According to the probable cause statement for Dietscher’s arrest, he and Siegwald conspired on multiple occasions in 2010 and 2011 to use Milwaukee County insurance money to pay for work done on their own properties.

Siegwald previously worked for a local office of Birmingham, Mich.-based Belfor USA but later left for Universal. According to the statement, the misconduct occurred while Siegwald worked at each of the companies.

“The amount of work awarded to Universal has grown significantly,” according to the statement, “since Siegwald left Belfor and went to Universal.”

According to a written statement attributed to Dan O’Brien, vice president for Universal, the company is cooperating with the district attorney’s office’s investigation and believes the allegations against Siegwald are limited to his time at Belfor.

Don Tyler, the county’s director of administrative services, told members of the County Board of Supervisors’ Judiciary, Safety and General Services Committee on Thursday that Dietscher submitted his retirement paperwork Feb. 28. He said he does not believe any other county employee is under investigation.

The county’s recently hired director of risk management director, Amy Pechacek, is acting as the interim safety coordinator.

Tyler said he went to the district attorney’s office when he learned that county employees might have stolen copper from the courthouse restoration project to sell as scrap metal. That alleged theft is now part of the broader investigation into Dietscher’s actions, Tyler said, which he suspects will extend beyond the 2010 and 2011 events described in the probable cause statement.

Supervisor Theo Lipscomb Sr., chairman of the judiciary committee, said during the meeting that the news of Siegwald’s arrest and the possible copper theft “strikes at the very heart of the concerns” raised by supervisors when Universal was given the no-bid, sole-source restoration contract.

Tyler said the emergency nature of the project gave the county the authority to award the contract in that manner.

Brendan Conway, communications director for County Executive Chris Abele, said Universal is one of the insurance company’s preferred vendors, which is one reason why the county chose that contractor.

According to an expense summary provided to the committee, the county’s insurers have made $13.5 million in reimbursement payments so far, and the county has spent most of the money in a $200,000 contingency account for repairs determined necessary during the restoration but not stemming from the fire.

The county also has $2 million set aside for upgrades or equipment replacement required by the restoration project. Those issues also were not directly caused by the fire. For example, the courthouse was exempted from some building code requirements, but the restoration project eliminates that exemption. The county has not spent any of that money, according to the summary.

The $2 million contingency account was created in the fall of 2013.

Tyler said insurance company representatives continue to tell the county that all repairs directly related to the fire will be covered. Follow @bkevit