01/23/2007

Pair face prison if restitution isn't paid

By VICTOR SKINNER

vskinner@record-eagle.com

TRAVERSE CITY — They scammed nearly $900,000 from area senior citizens in a so-called "Ponzi” scheme and had almost a year to repay their victims.

But Gary Singer and Margaret Zimmerman, former principals in Grand Traverse County-based Estate Growth Management, so far have repaid only a fraction of the looted funds.

They face a court hearing next month that could result in lengthy prison terms for both.

Singer, 55, and Zimmerman, 49, are due back in court Feb. 16, 11 months after 13th Circuit Court Judge Philip Rodgers delayed sentencing on their felony convictions. They are obligated to pay $860,000 restitution, and authorities warned they'll seek serious penalties if they haven't done so by then.

By late last week, Zimmerman had paid $5,050 and Singer, $2,850. Estate Growth Management made one payment of $203,095 in June, court records show.

"They are all bound to the total amount. If Estate Growth is now defunct and does not pay its portion of the restitution, the burden still falls upon Zimmerman and Singer to pay back the full amount,” said Matt Frendewey, a spokesman for the state attorney general's office.

"We will ask and we will push for serious prison time if they show up Feb. 16 without the full restitution paid,” Frendewey said.

Several local residents who were victimized by the pair declined to comment on the upcoming hearing.

Zimmerman awaits sentencing on one count of false pretenses over $20,000 and another count of embezzling from a vulnerable adult over $20,000.

Singer faces two counts of false pretenses over $20,000. Both could be sentenced to up to 10 years in prison. Estate Growth Management was convicted of embezzling from a vulnerable adult over $20,000 and uttering and publishing.

Zimmerman and Singer currently are on probation and cannot leave the state, according to the Department of Corrections Web site.

As part of the plea agreement, and if restitution was paid, the felony counts against Singer and Zimmerman would be replaced with one five-year sentence each, which likely would result in some jail time and probation, Frendewey said.

Through Estate Growth Management, Zimmerman and Singer convinced 14 victims in Grand Traverse, Benzie, Leelanau, Cheboygan, Charlevoix and Manistee counties to invest about $1 million in California-based companies that used the money to pay other investors.

Several others were investigated in the scheme, including area resident Johnathon Brzezinski, who in March was sentenced to 24 to 60 months in prison.

Their looming convictions have made it difficult for Singer and Zimmerman to repay their victims, but they have paid off more than the commissions they made from the scam, said Gerald Chefalo, attorney for Estate Growth Management and Gary Singer.

"It is just a daunting and monumental restitution,” Chefalo said. "Maggie has been working two jobs and Gary has started his own company to pay back their restitution. They are not working in the financial industry, plus they have the convictions on their record so it's challenging to make the payments.”

Chefalo contends that sending Singer and Zimmerman to prison wouldn't be in the victims' best interests.

"I am just wondering how much restitution gets paid off when someone is in prison. I think none,” he said. "They are guaranteeing their victims no money if they ask for a prison sentence.”

Margaret Zimmerman declined comment last week.