Kyle Hepp, one of two former Milwaukee Department of Public Works employees who pleaded guilty to embezzling more than $100,000 from the city, was sentenced Tuesday to six months home confinement and four years of probation.
Hepp and his colleague Kelly Whitmore-Behling each pleaded guilty in March to federal charges of conspiracy to commit theft from a federally funded program and theft from a federally funded program.
Whitmore-Behling’s sentencing is scheduled for Aug. 30. The two defendants agreed to pay together $357,511 in restitution to the city, according to their plea agreements.
“The reality is, I am a thief, a felon. I did the crime and I must be punished, whatever that punishment may be,” Hepp said at the sentencing. “I take full responsibility for my actions and don’t blame anyone else.”
When explaining Hepp’s sentencing, U.S. District Judge Lynn Adelman said that during the crime, Hepp “seemed to be following his co-defendant’s lead.” Adelman also cited Hepp’s cooperation with the investigation and his lack of prior criminal history in his sentencing.
Adelman set Hepp’s monthly restitution payment to the city at $400.
Rebecca Liane Taibleson, the U.S. attorney, said the prosecution was seeking a seven-month prison sentence. During the hearing, she said Hepp and Whitmore-Behling’s actions abused the public’s trust and their scheme robbed the city and wasted taxpayer funds.
Hepp and Whitmore-Behling’s responsibilities at the Department of Public Works included selling and disposing of equipment and vehicles the city no longer needed or that cost too much to repair. However, from at least June to September 2022, the pair sold the equipment to family, friends and people they knew for “far less than market value,” according to court records.
They then did not return the full value of the sale to the city, collecting cash for the sales and creating fraudulent bills for city records while dividing the remainder of the cash between themselves, the documents state. The pair gambled the money at the Potawatomi Casino Hotel.
Adelman said the scheme resulted in a “wealth transfer to Potawatomi Casino.”
City records show the city collected $35,350 for the sales, while interviews with the buyers and their records indicate payments of about $136,000 for the city’s equipment. The city estimated the items were worth about $400,000.
Hepp was hired at the department in 2021 as a fleet acquisition manager; Whitmore-Behling had been at the public works department since 2014. Both resigned in December 2022.
According to Hepp’s sentencing memorandum, submitted to the court on his behalf by his attorneys, Hepp was experiencing problems in his marriage at the time and he “self-identifies as someone who is naïve and too trusting of others,” leading him to form a closer relationship with Whitmore-Behling.
“I am embarrassed, humiliated and ashamed,” Hepp said at sentencing. “I loved my job … I am truly sorry for my selfishness.”
Under normal circumstances, DPW gets rid of old equipment and vehicles by selling them at auction, disposing them for scrap or selling them internally to employees.
An 18-page plea agreement, though, outlines a process where Hepp would collect cash for sold DPW equipment and convert part of it into money orders he would give to Whitmore-Behling, who in turn gave the money to the city.
In addition, the pair “more than once” took equipment from DPW property on the weekend, court records state.
Hepp and Whitmore-Behling both faced a maximum charge of five years in prison on the first count and 10 years on the second.
Adelman set Hepp’s monthly restitution payment to the city at $400.
Tristan Hernandez can be reached at thernandez@gannett.com.
This article originally appeared on Milwaukee Journal Sentinel: Former Milwaukee city employee gets probation embezzlement scheme
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