Jury finds Weston not guilty? BULLS—T
MANITOWOC A Two Rivers businessman accused of not paying 33 employees of his defunct machine shop was found not guilty Thursday of deliberately withholding the workers' wages, health insurance premiums and 401 (k) contributions.
Michael E. Weston, 47, was charged with 33 counts of failure to pay wages and two counts of theft and faced more than nine years in prison if convicted.
A jury of 10 men and two women deliberated for about two hours before reaching its unanimous decision.
"It's good news, " Weston's attorney, Michael Lambert of Manitowoc, said of the verdict. "The jury's spoken. I think they made the correct decision."
According to the complaint, Weston, who owned Weston Machine and Specialty, didn't pay his employees for work performed Sept. 17, to Oct. 1. Weston owed more than $70,000 in wages.
Also, Weston failed to contribute funds to the employees' 401 (k) accounts and failed to pay health-insurance premiums leaving some employees with large medical bills after the business closed Oct. 1, according to Manitowoc County Assistant District Attorney Michael Griesbach.
In closing arguments, Griesbach said Weston, who owned a $400,000 home and luxury cars, should pay the employees using personal assets.
"There's something just not right about this, " Griesbach said. "It would be one thing if he tried to pay something early on, but he didn't pay anything. He didn't pay a dime. Nothing."
Employees can go after corporations for payments, but not the owner of the corporation, according to state law. Corporations and their owners are considered separate entities; however, corporate entities can be disregarded if the owner commits fraud or treats the company's funds as their own, Griesbach said.
Griesbach claimed Weston created a "sham" business to hide funds of Weston Machine and Specialty from creditors. The business, called Two Rivers Tool and Machine, paid money directly to Weston and his wife, Gail, who was the primary shareholder in Weston Machine and Specialty.
Gail Weston testified during the three-day trial that the money was transferred to Two Rivers Tool to later be used to pay employees.
During trial, Griesbach pointed out on a checking account summary from Two Rivers Tool that no employees received checks from the account. Several times, money was transferred to Weston Machine and Specialty without details of where those funds were used.
Lambert in his closing arguments, debunked the theory that Two Rivers Tool only was set up to benefit the Westons.
"It was done for the benefit of the employees, " Lambert said. Lambert said Michael Weston "wanted very much to pay the employees."
"He didn't intentionally defraud his employees, " Lambert said. "He ran out of money."
Lambert said Weston had payroll money in a safe inside the business, but M&I Bank seized the money when the bank foreclosed on the business.
"Everybody lost money here, " Lambert said. "Mike Weston lost everything he had."
Weston, who used a lot of personal money to fund the business, filed for bankruptcy in Lambert said.
Griesbach alleged that Weston knew the business was closing and didn't tell the employees, allowing them to essentially work for free. Lambert said Weston hoped to work things out with the bank to finish jobs the company was committed to.
"What's the best way to pay M&I?" Lambert said. "Finish jobs and get paid."
"The jury had to consider some thorny legal issues concerning corporate versus personal responsibility, " Griesbach said after the verdict. "They applied the law to this case, and they decided Mr. Weston should not be held personally responsible for his corporation's actions. I certainly don't agree with that decision, but I respect it all the same."
None of the former employees of Weston Machine and Specialty attended the hearing when the verdict was read. Some former employees attended the three-day trial.
"I'm sure this is very frustrating for the the employees who still have not been paid, but it is important that they respect the jury's decision since the jury is just applying the law, " Griesbach said.
Michael and Gail Weston, crying tears of relief, had no comment after Thursday's verdict.
Kevin Braley: (920) 686-2105 or [email protected]
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