City Workers Robbed DPW, Taxpayers, Blew Cash at Casino

A Department of Public Works truck in front of dollar bills. Truck photo by Jeramey Jannene, cash photo is in the public domain.

Turning bulldozers into blackjack.

Kyle Hepp and Kelly Whitmore-Behling had a good scheme, at least for the couple of months they thought they were pulling it off.

According to newly-posted felony plea agreements, the two coworkers planned to sell Department of Public Works (DPW) equipment for cash, underreport the amount and blow the excess at Potawatomi Hotel & Casino.

But now the two, who formerly worked in fleet management for DPW, face up to 15 years in prison and a combined minimum of $357,511 in restitution and fines.

According to the federal plea agreements, from June through September 2022 the two orchestrated a three-step scheme to defraud the city.

The plea agreements say the pair sold “equipment and vehicles to their friends, family members and acquaintances, generally for far less than fair market value.” A bill of sale was produced for the buyer at the amount paid.

But even after selling the equipment for less than market value, the full amount wasn’t returned to the city. Instead, the cash was pocketed and money orders were purchased for much lower amounts.

Fraudulent bills of sale were created and remitted to the city along with the money orders. “Whitmore-Behling and Hepp then divided the excess cash between themselves,” the pleas explain.

The plea agreements spell out a specific instance of how the scheme was carried out.

On Saturday, Aug. 20, 2022, the two sold “approximately 22 pallets of materials, six pieces of welding equipment and a new replacement fuel tank for a city-owned truck to buyer ‘R.G.'” The fair market value was later estimated at $53,186, but the submitted records show R.G. only purchased three welders for a total of $150.

Surveillance video captured the two working at the Central Repair Garage, 2142 W. Canal St., to remove the items and R.G. driving them away.

The unidentified “R.G.” ultimately came to represent a “very large proportion” of DPW sales. In the subject period, he purchased at least 74 items. The city estimates the fair market value was $315,850 if an auction house or scrapper would have been used.

Based on interviews and undoctored bills of sale from the buyers, R.G. and “the few other buyers” connected to the scheme are said to have actually paid approximately $136,000 for $392,861 of equipment. But looking at the fraudulent records, R.G. is reported to have paid only $35,100. Whitmore-Behling and Hepp pled guilty to using the scheme to embezzle and obtain more than $100,000.

The agreements don’t suggest any criminal action is forthcoming against R.G., nor his relationship to the two. Nor do the plea agreements suggest an additional kickback was paid for selling the items below market value. However, the records do explicitly state that R.G made a “significant profit.”

The 16th and final point in a statement of facts indicates where the alleged criminals spent their money. “Whitmore-Behling and Hepp both gambled excessively at the Potawatomi Casino during the months that this scheme was ongoing, using funds embezzled from the City,” say nearly-identical agreements.

They didn’t have to go far to get to the casino. The Central Repair Garage is just west of the casino.

Each has entered guilty pleas on two felony charges: Conspiracy to Commit Theft From a Federally Funded Program and Theft From a Federally Funded Program. DPW used federal funding to buy some of the equipment and vehicles, which unlocked the resources of the U.S. Department of Justice to investigate and prosecute the matter.

The plea agreements list U.S. Attorney for the Eastern District Gregory J. Haanstad and assistant U.S. attorney Rebecca Taibleson.

Whitmore-Behling started with the city in 2014 and worked in administrative support roles. In April 2021 she became a program assistant in fleet services. That same month, Hepp started with the city as fleet acquisitions manager. They were placed on leave in October 2022.

Hepp and Whitmore-Behling were terminated in December 2022. According to a public salary database, Hepp was paid $74,641 in 2022, and Whitemore-Behling was paid $56,097.

According to the plea agreements and a 2023 inquiry with DPW, the standard practice for disposing of surplus equipment is to sell it via auction or to a scrapper. DPW employees, according to the plea agreements, may also purchase the equipment.

In October 2022, Urban Milwaukee observed several pieces of former DPW equipment being sold by non-city employees on Facebook Marketplace. We are not publishing the individuals’ names because they do not appear in the plea agreements, nor does the equipment description explicitly match the handful of items cited in the pleas.

The case is assigned to Judge Lynn Adelman. Sentencing will occur at a future date.

Whitmore-Behling is represented by attorney Murdoch Walker and signed a plea agreement on Dec. 21. Hepp is represented by attorney Jack Rettler and signed a plea agreement on March 4. The case was filed on Monday.