A former Three Rivers City Finance Director who was fired and subsequently settled a lawsuit with the City has pled guilty to embezzlement from the City of South Haven in court. Wendy Hochstedler was fired by the Three Rivers City Commission in a 2007 for incorrectly reporting her hours on her timecard according to Mayor Tow Lowry, who was serving at that time.
During much of her tenure in Three Rivers, Lowry said Hochstedler seemed trustworthy. He credited her with being the first to achieve an award for the city for the quality of its accounting practices, which the city has consistently won since. “We all thought highly of her,” he said.
At the time of her firing, City Manager Joe Bippus provided documentation showing falsified hours on Hochstedler’s timecards. Over a three-week period, she was reporting an 8:00 a.m. arrival while other staff said that “she wasn’t showing up until “nine, ten o’clock,” Lowry said.
After her dismissal, in 2008, Hochstedler filed a whistleblower suit against the City. Her suit alleged the real reason she was fired was that she had called out City Manager Joe Bippus for attempting to avoid paying a $28,000 special assessment against his home, which was the only residence in his subdivision at that time.
Bippus eventually paid the assessment in question, but Lowry said the City Commission settled with Hochstedler for back pay and other damages during the tenure of Allen Balog, who served as mayor for one term between two of Lowry’s terms. In that settlement, Hochstetler received $200,000 plus another $12,000 toward her retirement, according to MLive coverage.
After a multi-year period of unemployment, Hochstedler became Finance Director for the City of South Haven in 2011. An investigation by the Fifth District of the Michigan State Police (MSP) in Paw Paw began after some city personnel noticed unusual charges on her credit cards and reported them to the city’s auditor.
Hochstedler was suspended in November 2018 after the MSP investigation confirmed several financial irregularities in her conduct. Those included three years’ worth of embezzlement using five different city credit cards, totaling more than $130,000, according to an MSP press release. The embezzlement took the form of personal purchases including food, pet supplies, jewelry, household items, and other items.
Hochstetler was arrested in February 2020, and in late July, she reached a plea arrangement with the Van Buren County Prosecutor’s Office. MSP announced her guilty plea in 36th Circuit Court in its press release last week, along with that of another member of her household who was also involved in the embezzlement. The codefendant, Daniel Beck, also pled guilty to illegal possession of a financial transaction device.
The two are scheduled for sentencing on September 21. The charge of embezzlement comes with a potential sentence of up to 20 years of prison plus a fine. According to Michigan state law, that fine must equal the greater of either up to $50,000 or three times the amount embezzled. A related civil suit brought by the City of South Haven against the two defendants was settled in July.
In a statement, Interim South Haven City Manager Kate Hosier said, “the city is pleased to have a resolution in the criminal case against Wendy Hochstedler. The city thanks the Michigan State Police, Van Buren County Prosecutor’s Office and others for their assistance.”
Dave Vago is a writer and columnist for Watershed Voice. A Philadelphia native with roots in Three Rivers, Vago is a planning consultant to history and community development organizations and is the former Executive Director of the Three Rivers DDA/Main Street program.
