A civic leader who authorities said defrauded two Bay City nonprofits of more than $750,000, driving one into bankruptcy, has been sentenced to two years in federal prison.
In addition to incarceration, Michael Bacigalupo, 64, of Essexville was ordered to pay $196,641.17 restitution to the Bay County Historical Society and $151,000 to the historic Bay City State Theatre, or its successor, officials with the U.S. Attorney’s Office in the Eastern District of Michigan announced on Friday.
Bacigalupo held leadership positions with both nonprofits from June 2020 to November 2023, the U.S. Attorney’s Office said. During that time, he illegally diverted funds to pay for renovation of a bandshell at Wenonah Park, without the consent of either organization’s board.
“Fraud in the garb of civic leadership is still fraud. And this man’s fraud hurt cherished Bay City organizations,” said U.S. Attorney Jerome F. Gorgon Jr. in a statement.
Bacigalupo allegedly secured an $800,000 loan from a local nonprofit lender using the Bay City State Theatre building as collateral. Officials said he provided the lender with falsified documents indicating the board had signed off on the transaction.
He repaid $277,000 of the loan before ceasing payments altogether, the U.S. Attorney’s Office said. The Bay City State Theatre ultimately defaulted on the loan and declared bankruptcy.
Separately, Bacigalupo diverted $231,541 from the Bay County Historical Society toward the bandshell project by manipulating the organization’s accounting records and fabricating invoices, federal authorities said. As a result, the historical society was unable to complete planned renovations to its museum and was forced to lay off staff.
He also allegedly tried to obtain a $900,000 federal grant from the Michigan Economic Development Corp. by misrepresenting his identity and the purpose of the funds. Officials caught onto the scheme after determining that invoices and accounting records Bacigalupo submitted were bogus.
In September, Bacigalupo pleaded guilty to conspiracy to commit wire fraud, according to court records. The crime is punishable by up to 20 years in prison.
Once released from prison, Bacigalupo will spend two years on supervised release, according to federal officials.
His attorney, Jeffrey J. Rupp, didn’t immediately return a message seeking comment.
mreinhart@detroitnews.com
This article originally appeared on The Detroit News: Bay City civic leader sentenced in fraud scheme that bankrupted group
Reporting by Max Reinhart, The Detroit News / The Detroit News
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