02/14/2007

Convicted duo await sentencing

Seniors lost $890,000 in 'Ponzi' scheme

By VICTOR SKINNER

vskinner@record-eagle.com

TRAVERSE CITY — Gary Singer and Margaret Zimmerman couldn't have known they were selling a scam to local senior citizens, contends Gerald Chefalo, Singer's lawyer.

"I think they got in over their heads,” Chefalo said. "It is just unfortunate. There is just no way they could have known this was a scam.”

But the former principals of the local investment firm Estate Growth Management are to be sentenced Friday in 13th Circuit Court, regardless of whether they knew they were targeting seniors with an elaborate "Ponzi” scheme.

Circuit Court Judge Phillip Rodgers last year delayed for 11 months sentences for Singer and Zimmerman on their felony convictions. The goal: Give them a chance to repay their victims about $890,000.

In a plea deal with the state attorney general's office, the couple each would be sentenced for one five-year felony if the money is paid in full. If they repaid at least $100,000 combined, they each would be sentenced for one of their two 10-year felonies.

State law requires them to be sentenced within a year of their conviction or the court loses jurisdiction.

Assistant state Attorney General Scott Teter will push for "serious prison time” if restitution is not paid, said Matt Frendewey, spokesman for the state attorney general's office.

Zimmerman last made a payment of $500 in January and has paid about $5,750 in total restitution. Singer's last payment on Feb. 1 was for $7,800, for a total of $10,650 paid as of Tuesday.

One payment of $203,095 was deposited in the Estate Growth Management account in June, according to circuit court records. The co-defendants are jointly liable for the $890,000 in restitution.

Singer was convicted last year of two counts of false pretenses over $20,000 and Zimmerman was convicted of one count of false pretenses over $20,000 and one count of embezzling from a vulnerable adult. Estate Growth Management was convicted of embezzling from a vulnerable adult and uttering and publishing. Singer and Zimmerman convinced 14 victims in six counties to invest almost $1 million in California-based companies that used the money to pay other investors.