Saturday, July 9, 2005

Investment company owners, employee accused of defrauding customers

Associated Press

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TRAVERSE CITY -- The two owners and an employee of an investment company were charged Friday with defrauding 14 people of a combined $1.1 million.

The defendants persuaded their clients to invest in two California-based companies that were shut down in April 2004 for violating securities laws, Michigan Attorney General Mike Cox said.

The Michigan victims included an 80-year-old nursing home resident who was forced onto the Medicaid rolls after losing her savings and a 74-year-old patient in an assisted living facility, he said. Both live in Traverse City.

Other victims are residents of Grand Traverse, Leelanau, Benzie, Cheboygan, Charlevoix and Manistee counties, Cox said in a statement.

Margaret Florence Zimmerman, 47, and Gary Louis Singer, 54, co-owners of Estate Growth Management, were arraigned in district court. Zimmerman was charged with embezzlement and related counts, and Singer with obtaining money under false pretenses.

Also charged with embezzlement was company employee Jonathon Lee Brzezinski, 24, of Traverse City.

All three were released after posting 10 percent of a $25,000 bond.

Charges also were filed against the company, which could be ordered to pay fines, costs and restitution and to forfeit corporate assets.

Gerald Chefalo, an attorney who represented Zimmerman and Singer at the arraignment, said they had believed they were offering their clients a legitimate business opportunity but were misled by others.

"They are shocked by this," Chefalo said. "I think they have been drawn into a much bigger scheme and they are as much victims as the people making the complaints."