The owner of a posh downtown salon faces up to five years in prison on a charge that he stole tip money from his staff.

Robert Lee Derrer, 62, co-owner of Allure Salon & Spa, faces a charge of larceny by conversion between $1,000 and $20,000; he was arraigned Wednesday and faces a preliminary exam Nov. 6.

The case, which was investigated by the Traverse City Police Department, began in late 2017 when a front desk manager who was in charge of payroll suspected that stylists were not receiving all of the tip money owed to them, according to the charges.

The manager would cut weekly checks for each stylist based on amounts listed on staff commission sheets, which were compiled by Derrer. With her suspicions raised, the manager retrieved six weeks of staff commission sheets and checked them against accounting records of tip amounts and service charges. She determined that staff were being shorted, according to the charges.

A TCPD detective investigated and confirmed the manager’s findings: over six weeks for which there were records in October, November, and December of 2017, stylists were paid $1,340 less than they were owed.

The manager quit upon discovering the alleged theft; three stylists told investigators that after the theft came to light, Derrer offered them $500, $1,000, and $1,000 respectively in repayment if they would stay on the job.

Reached by phone Thursday afternoon, Derrer said he had no comment. Earlier this month, Derrer’s wife and Allure co-owner, Shelly Derrer, told The Ticker that Allure was moving from its long-time location at 300 East Front Street to a new location on West Fourteenth Street.

Shelly Derrer cited availability of parking as motivation for the move.

Robert Derrer’s bond conditions forbid him to enter his business or have any contact with current or former employees, except his wife.