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Robert George (right) pictured with his attorney during a December 2010 hearing.

(Ann Arbor News file photo)

In 2008, Bev McDonnell and her husband paid for a new condominium planned for a development off Tuttle Hill in Ypsilanti Township.

But that condo was never built, the money paid to the developer disappeared and their life was temporarily wrecked.

The McDonnells were one of 12 Washtenaw County families who Robert Paul George, the former developer of Crystal Ponds Condominiums, defrauded by taking for personal use money meant for new condominiums.

After pleading guilty to a dozen felony charges in December 2010, George was ordered to repay $873,000 to the victims over a five-year period instead of going to prison.

But late last year, George stopped making those payments with no consequence from the court system. That means McDonnell and the other victims, for now, no longer receive payments while the man who the court found guilty of defrauding them walks free and continues to work in development.

Most restitution payments were made on time, but in 2014 George told then-Washtenaw County Circuit Court Judge Donald Shelton he could no longer pay despite bringing in $450,000 in revenues last year.

Shelton told George to find the money before a Sept. 16 probation violation hearing or face jail time. But Shelton retired before the hearing and a visiting judge didn't order George to continue paying his restitution and didn't send him to jail.

George is now over $40,000 behind on his 2014 payments and still owes victims $633,887.

“We’re pretty disappointed that he didn’t go to jail,” McDonnell said. “That’s what we were expecting – if he’s not going to pay then he would face jail time, but we’re left hanging at this point. If he can’t afford it then that’s his problem and should probably go to jail because he stole from us.”

Brenda Taylor, the Washtenaw County prosecutor handling the case, said investigators from the Washtenaw County Sheriff’s Office first received complaints in October 2005, shortly after George filed for bankruptcy. The more detectives dug, the more money they found missing from George developments in Monroe, Wayne and Washtenaw counties.

“This was on a grand scale. Perhaps it was not an intentionally designed criminal enterprise, but it ended up leading to a great deal of loss to a great deal of people ranging in the millions of dollars,” she said.

George couldn't be reached for comment.

Because the alleged crimes occurred in multiple jurisdictions, investigators presented the case to the U.S. Secret Service, which twice presented evidence to a U.S. District Attorney. Both times, federal prosecutors sent the cases back to local jurisdictions.

Taylor said the Washtenaw County Prosecutors’ Office decided to take those cases in the county, which included the 12 condos never built in the Crystal Ponds development.

Some of the victims lost the $5,000 deposit, while others lost the full $183,000 cost of a condominium.

Complicating the case and prosecution’s effort to force George to pay is the money trail, Taylor said. Investigators believe millions was funneled through nine bank accounts opened by several George businesses. He regularly made small deposits and withdrawals of less than $1,000, and it's still unknown where most of the money landed.

“Throughout the investigation, the detective was able to obtain multiple bank accounts that he was filtering money through and following the money trail was nearly impossible. I attempted over several years and couldn’t find it,” Taylor said.

In his first year of probation, George paid $50,000 up front and $4,000 monthly in restitution. The monthly payments were supposed to increase by $1,000 for each year thereafter until probation was complete, at which point a balloon payment would be due.

The money was disbursed among the victims, and McDonnell and her husband received $300 monthly before the payments stopped in 2014.

Despite claims that he had no money, George hired a private attorney in 2011 and appealed the case all the way to the Michigan Supreme Court.

In February 2014, the Supreme Court ruled that the prosecution must show “manifest hardship” for the plaintiffs, meaning they would suffer significant financial hardship if George didn't pay.

The court also required George to show that he would suffer manifest hardship if he continued making payments - in other words, George needed to prove that he couldn't pay. A manifest hardship hearing for the victims and hearing on George’s ability to pay was set for July 10 in Shelton’s courtroom.

Shelton found three plaintiffs wouldn’t suffer manifest hardship and ruled George no longer immediately has to make payments to them despite having stolen their money, though George is still obligated to pay eventually.

On the question of whether George could afford to continue making monthly payments, tax information revealed during the hearing showed he brought in $450,000 in revenues in 2013 working for his son's construction company. At a subsequent hearing, George confirmed to a different judge that he was working under his wife's business and development licenses.

That led Shelton to order George to continue making monthly payments at a level of $6,000 and pay $21,500 in past due payments.

When George only produced $3,000 in August, he was found in violation of probation, and a probation violation hearing was set for Aug. 19, while Shelton was still on the bench.

Taylor said the message from Shelton at that time was clear: George needed to find the money or he was going to jail.

“Shelton told George ‘If you’re not caught up, you better bring your toothbrush,’” Taylor said, meaning Shelton intended to send him to jail for violating the terms of his restitution payments and probation.

But that hearing was delayed until Sept. 16, Shelton retired during that time and visiting Judge Daniel Burress presided over the hearing. Burress changed the course Shelton had set, and didn't require George to continue paying or go to jail despite violating his probation.

Taylor explained that a provision in the law says that judges cannot send defendants to jail for probation violations if they are out of funds and can’t make payments, and Burress told the prosecution it was incumbent on them to prove that George could make the payments.

Because the money has been hidden so well, Taylor said, prosecution can’t prove that George has the funds.

Still, Taylor requested Burress listen to the July 10 hearing in which Shelton found George had the ability to pay and threatened to send him to jail, but Burress declined to do so.

By declining to listen to the previous hearing, George, who allegedly stole millions of dollars, was convicted of twelve felony counts related to his scams and still owes $633,000, is, for the time being, walking free and not required to make restitution payments per judge Burress's order.

Taylor said Burress is unquestionably within his right not to send George to jail, but added he unquestionably had the option to do so. And that’s where she said she disagrees with the judge and expressed disappointment Burress didn’t listen to the previous hearing.

The only positive, Taylor said, is that there is still an order for George to repay those he defrauded and prosecution is planning to bring the case in front of Judge Carol Kuhnke, the new judge permanently assigned to it.



But in the meantime, McDonnell says she's losing faith in the justice system.

“It has been a long hard road for all of us. We were at least happy to be getting money back in small payments but now we’re pretty discouraged with the whole situation,” she said. “We don’t have a lot of faith that we’ll get more money and now we’re discouraged, confused and the prosecutor has done her best, but she only can only do so much.

“Ultimately it comes down to the judge to make the right call.”