Ypsilanti Township real estate scheme victims testify against condo developer
Robert George, right, consults with attorney Tim Niemann during his preliminary hearing Wednesday morning.
Lon Horwedel | AnnArbor.com
Jolene Tomlinson-Tauss sold her Phoenix home to move to Crystal Pond Condominiums in Ypsilanti Township, but the condo she made payments on was never finished, she testified today.
After work stalled, she asked the project head, Robert George, in 2005 to return the $67,065 she put down. Tomlinson-Tauss received only $1,000, she testified.
“I asked him, ‘What’s going on?” she said, recalling a phone conversation. “No work’s being done in the community.”
“He said that he ran into some financial problems. He was trying to make me feel better because he knew my heart was breaking and things were going wrong.”
Tomlinson-Tauss’ testimony came during a preliminary hearing that began today for George. The hearing, in front of 15th District Judge Elizabeth Hines, is scheduled to continue Jan. 20.
Jolene Tomlinson-Tauss, left, testifies during the hearing for Robert George.
Lon Horwedel | AnnArbor.com
George is charged with 28 criminal counts, including obtaining money under false pretenses in excess of $20,000, larceny by conversion and fraudulent use of building contract funds.
George, who was president of Crystal Pond Inc., is accused of defrauding homebuyers and subcontractors out of $700,000 in the alleged real estate scheme. Only two of the 14 units in the project were completed, Washtenaw County sheriff’s investigators said. They say the rest were only partially built and accuse George of keeping deposits and other money for personal use.
Total losses, including those sustained by banks in Washtenaw and Monroe counties - where George took out construction loans - is estimated at $20 million, investigators said.
Tomlinson-Tauss’ was among six alleged victims who testified today. Prosecutors say the six lost a combined total in excess of $500,000 in the alleged scheme. Five were homebuyers, and the other was subcontractor Mark Otto.
Otto was working as a supervisor for a company that signed a contract to build the frame of one building housing three units. The work also included putting in windows and doors, and the contract totaled more than $104,000, he testified.
“We provided materials and labor and services were rendered, and we were never paid,” Otto said.
Beverly McDonnell, left, listens to defense attorney Tim Niemann during the hearing.
Lon Horwedel | AnnArbor.com
Otto said the development was like a “ghost town” in August 2005, but George told him nothing was wrong. Otto said he did work for George several years earlier at another development in Monroe County.
“We’re a small company,” Otto said. “This hurt us.”
Michael Jaffe, a salesman for Crystal Pond, testified he stopped working in 2005 after he wasn’t paid for a month. Prior to quitting, he said, construction was slow and contractors were changing. That may have been a sign the development was having financial difficulties, he testified.
Jaffe testified he was directed by George to tell buyers to make some checks out to Crystal Pond Inc., even though a contract called for the checks to be written out to another company.
Jaffe testified George never discussed the financial viability of the project with him. He also testified George never misrepresented anything to anyone about the project.
“Bob would always come in upbeat, fired up saying we’re gonna get this thing going.”
Lee Higgins covers crime and courts for AnnArbor.com. Reach him by phone at (734) 623-2527 or e-mail at leehiggins@annarbor.com.
Comments
treetowncartel
Fri, Jan 8, 2010 : 10:43 p.m.
H must be hiding money or dead broke to get a public defender.
LANDS
Thu, Jan 7, 2010 : 12:37 p.m.
Wow, I can not believe this story! I am sorry to hear this happened in our area of sophistication and high entegrity. It sounds almost like the Fake Ad. Thanks for the correction Beverly, at least they got the picture right and did not think you were a direct victim. I don't know why or how it could go on so long nor so far. Obviously there was not a REALTOR involved, or at least I hope not. Good luck to victims, and I hope they throw the book at the bad guys in this.
a2lady
Thu, Jan 7, 2010 : 10:13 a.m.
All points here are well taken. I want to point out that I did not mention Mr. Higgins' name in my original post, however I did use the term 'reporter' in a broad sense. I think of anyone who contributes to a story in the news (be it writer or photographer) as a reporter. In any case, the photographer acknowledged and promptly corrected the error. I thanked him for doing so. As for Rodney's comment, having my image portrayed with the wrong name was like adding insult to injury after what I've been through for the past 5 years. I apologize to AA.com if I offended them. Perhaps now we can focus on the facts of the case.
a2lady
Thu, Jan 7, 2010 : 6:36 a.m.
Thank you for making the correction, Lon.
halflight
Thu, Jan 7, 2010 : 12:15 a.m.
A little background on Michigan condominium law would help readers understand this story. Michigan law requires condominium developers to deposit any downpayment in a trust account pending the completion of the purchaser's unit along with the "common elements"-- those parts of the condominium owned by all the co-owners jointly. State law expressly forbids a condominium developer from receiving any deposited funds until this work is completed. The trustee of the trust account, usually a bank, is named in the condominium documents filed with the state of Michigan and the local register of deeds.. The article states:. Jaffe testified he was directed by George to tell buyers to make some checks out to Crystal Pond Inc., even though a contract called for the checks to be written out to another company.. This is where the condominium unit purchasers got stung. Don't EVER make out a deposit check to any other party but the trustee named in the condominium documents. If the condominium developer fails to complete the project, purchasers can hold the trustee liable for a return of the deposit-- but only if they designate the trustee named in the official condominium documents as the payee of the deposit check.. If Jaffe was qualified to sell these condominium units, he should have known that his employer's directions regarding the payee of deposit checks was illegal.
Lon Horwedel
Wed, Jan 6, 2010 : 11:14 p.m.
misti3K is correct. The dictation mistake was mine, not Lee Higgins. It will be corrected asap.
misti3k
Wed, Jan 6, 2010 : 10:50 p.m.
I don't know how AnnArbor.com does things, but reporters who write articles often do not select which photos are used or write the captions for them. Obviously a mistake was made somewhere, but the blame does not necessarily lie with Mr. Higgins. In fact I highly doubt he is at fault because you are only mentioned in the photo and not anywhere in the text of the article.
a2lady
Wed, Jan 6, 2010 : 10:04 p.m.
There is a mis-spelling in my previous comment. I meant article. That's why I'm not a reporter.
a2lady
Wed, Jan 6, 2010 : 9:40 p.m.
I find it hard to believe that someone who is a news reporter by trade cannot get the most basic facts straight. I am the witness shown in the second photo of this artical. When I took the witness stand, the first thing I did was state and SPELL my full name. Yet the reporter got it wrong. For the record, my name is Beverly McDonnell, not Barbara.