The former owner of Marshall, Michigan-based Dark Horse has pleaded guilty to one count of conducting a criminal enterprise and has been ordered to make full restitution to former employees in order to avoid a 20-year prison sentence, Michigan attorney general Dana Nessel announced Wednesday.
Aaron Morse, who has not owned Dark Horse since 2020, “intentionally and illegally withheld employee retirement contributions and healthcare premiums for his own purposes,” Nessel’s office wrote.
Morse was charged in 2022 with passing $20,972.82 in bad checks to employees. Further investigation revealed he mishandled employee benefit withholdings, resulting in the failure “to remit more than $36,000 in retirement contributions, $29,000 in employer match retirement funds, and $24,000 in health insurance policy premiums, which eventually lead to more than $50,000 in unpaid health claims to employees.”
Three dozen employees were enrolled in Dark Horse’s retirement or health care plans.
A victim restitution sum is being calculated, which Morse will have to pay by the time he completes a court-ordered drug addiction course of at least 18 months, according to Nessel. If he fails to make the payment, he will be sentenced to prison time.
“Payroll fraud and benefit contribution thefts often go undetected for years, and can cause significant financial harm to victim employees,” Nessel said in a press release. “And it’s indisputably stealing from the very people powering your business. This plea agreement secures restitution to the working men and women Morse scammed out of thousands of dollars and benefits.”
In addition to conducting a criminal enterprise, Morse was charged with five counts of larceny by conversion, five counts and receiving and concealing stolen property and five counts of larceny by false pretense.
In 2020, Roak Brewing acquired Dark Horse in a deal that closed just weeks before the COVID-19 pandemic upended the craft beer industry. At the time Morse was planning to remain at the combined company.
Dark Horse produced an estimated 4,645 barrels of beer in 2022, the most recent year for which data is available from the Brewers Association (BA).
In 2014, Dark Horse was featured in its own unscripted show on the History Channel, “Dark Horse Nation.” The show ran for one season. In its trailer, the employees are described as Morse’s “best friends” and the staff members “play by their own rules.”