Shop ‘n Save owner gets clipped for coupon scam

At the end of almost every weekend, store employees from four North Hills Shop ‘n Saves would grab whatever Sunday newspapers were left on the racks and strip out the coupons so that managers could later clip them and submit them for reimbursement.

It was a scam that netted Michael Mihelic, the stores’ owner, more than $250,000, and it has now earned him a fiveyear period of probation.

Mihelic, 60, of Franklin Park, pleaded guilty Monday to theft by deception and has already paid $275,895 in restitution — with the bulk of it recovered from him on Feb. 27, 2019, in a gray vinyl suitcase.

According to a criminal complaint filed in the case, a former employee at the Rochester Road Shop ‘n Save in Ross told authorities in mid-2017 that he believed Mihelic was engaged in coupon fraud.

Mihelic owns Shop ‘n Save locations on Rochester Road as well as at Pines Plaza in Ross, in Shaler and at the Richland Mall.

He submitted 14 letters to the court from various friends and supporters, who praised him for being active in his community, charitable, generous and a good man.

“He is, in short, one of the most trusted and respected people in the retail food industry, and there are many others who know and have worked with him who can also vouch for his character,” wrote Scott P. Moberg, of Employee Management Consultants.

Mihelic’s supporters also said he treated his employees like family — many of whom worked for him and his father for decades — and provided countless jobs in the community.

According to a criminal complaint, Jacqueline Barness, an accounting manager, told investigators that she had been working for Shop ‘n Save for 28 years and worked under Mihelic’s dad, who died in 2014.

Ms. Barness said that about a year and a half before Don Mihelic died, he asked Ms. Barness if she would cut coupons for him from unsold newspapers and put them in a bag in the store office.

She then would take them home, with instructions from Don Mihelic to cut $500 worth of coupons for the Rochester Road store and $400 worth for the Pines Plaza store each week.

She returned the cut coupons to each store on Tuesday mornings.

According to the criminal complaint, Ms. Barness would then pull an equivalent amount of cash from the store’s cash deposit to offset the value of the coupons turned in. For her efforts, Ms. Barness told investigators, she received $140 each week, paid to her every four to five weeks, in cash in an envelope.

After Don Mihelic died, Ms. Barness said, she continued the same thing under Michael Mihelic.

An office manager for the Shaler store, Jody Ferraro, told investigators a similar story about the Shaler location and the Richland Mall store.

Once the coupons were collected at a store, they would be boxed up and shipped to SuperValu, now UNFI, where they would be weighed. The company then used a calculation based on the weight, to find an average value per coupon of 65 cents.

Credits were then provided to the retailer, the criminal complaint said, and the coupons were further sent on to NCH Marketing Services, which calculated the actual value and paid SuperValu.

According to the criminal complaint, the value of the fraud at Rochester Road was $105,400; at Pines Plaza, $53,450; at Shaler, $122,000; and at Richland, $25,700.

The investigators found that Mihelic then paid his managers 20% of the proceeds.

A statement was issued Monday on behalf of Shop ‘n Save:

“Shop ‘n Save stores are independently owned and operated. United National Foods Incorporated (UNFI), distributor of Shop ‘n Save stores, provides clear coupon submission processes to our owners based on our vendors’ stipulations and encourage all independent owners to follow them.”