AG arrests 3 in Ponzi scheme

Attorney General Mike Cox announced yesterday the arrest of three men accused of swindling 125 Michigan senior citizens in a Ponzi scheme. According to a press release from Cox’s office, the trio sold the seniors — some of whom reported losing their life savings — time-shares in foreign resort properties. The problem is that they sold more time-shares than the amount that were available.

The men were operating in multiple states, and allegedly took in some $350 million, including some $9 million in Michigan.

From the announcement:
Jeffrey Ron Mitchell, 39, of Walled Lake, Robert Valeri, Sr., 59, of South Lyon, and Robert Antonio Valeri, Jr., 32, of Canton allegedly participated with Indiana resident and scam mastermind Michael Kelly in a massive Ponzi scheme, selling time shares in the form of an unregistered security called a “Universal Lease” through a company called Resort Holdings International. 

They are accused of targeting senior citizens and retirees with marketing efforts that illegally promoted the lease as a safe investment opportunity with the promise of large monetary returns. 

While seniors purchasing the lease were allegedly given the option to use the vacation property during specified times over a 25 year term, they were also given the option of having a purported third-party management company arrange for the rental of the unit during the same time period for a guaranteed 9 percent return–whether the unit was rented or not.  They were encouraged to elect the latter option and everyone who purchased the lease did. In reality, Kelly also controlled the third-party management company.

 Read the entire release here.

Granholm makes probate court appointments

Gov. Jennifer Granholm has filled openings in the 18th Probate Court District and the Arenac County Probate Court.

Hersey attorney Marco Menezes has been appointed probate judge for the 18th District, which covers Mecosta and Osceola counties. His term expires Jan. 1, 2011. Menezes received his law degree from Thomas Cooley Law School and received his bachelor’s degree from the University of Florida. He replaces Judge LaVail Hull, who has resigned.

Richard Vollbach, Jr., the current chief assistant prosecutor for Arenac County and general partner with Broughton & Vollbach law firm, was appointed to the Arenac County Probate Court for a term expiring Jan. 1, 2011. Vollbach received his law degree from the Detroit College of Law and received his bachelor’s degree from Western Michigan University. He replaces Judge Jack Scully, who has resigned.

A Michigan Lawyers Weekly Unsolved Mystery: Exactly who is the Taylor city attorney?

As reported on The Michigan Lawyer last week, a recent bruhaha erupted in Taylor when newly elected mayor Jeffrey Lamarand tried to unilaterally fire city attorney Edward D. Plato and replace him with Randall Pentiuk, who agreed to work for $60 an hour less than Plato charges the city. Lamarand and the city filed an action in Wayne County Circuit Court to have Plato removed.

Since then, Taylor had a council meeting. While no one called anyone ‘Shrek’, it wasn’t much more dignified (Many thanks to The News Herald for a fantastic account of the meeting):

During the meeting, both attorneys attended and acted as corporation counsel.


Plato sat with the council, despite being told by Council Chairwoman Cheryl Burke that he was not welcome to.

“We removed his chair and he put it back,” she said. “It’s unfortunate he’s behaving that way.”

Yes, because grabbing a chair to sit down where the city attorney is supposed to sit is so immature. And since you brought it up, Ms. Burke, does a person or group that removed the man’s chair have standing to criticize his behavior when he… put it back and sat down?

Meanwhile, Pentiuk sat in the front row of the audience, probably wondering what he’s gotten himself into.

According to the News-Herald story, one of the items on the agenda was the appointment of Pentiuk (and de facto firing of Plato) as city attorney. The measure failed 5-2 as the five holdovers of the previous city council voted against it.

[UPDATE: From the comments:

Correction – four of the council members are "hold overs" one, John Delo ran independent.

Duly noted. Thank you.]

A second resolution was made by a council member to reappoint Plato and to prevent legal fees to be paid to anyone not approved by city council. Council president Cheryl Burke refused to allow a vote on the resolution.

Burke ruled the motion out of order for being illegal and against the charter, and refused to let it be voted on.

Molner suggested making a motion to overrule the council chairwoman, but Burke would not let her.

Molner contested that if two-thirds of the council overruled her, they would have a right to vote on it, but Brandana disagreed.

“You can’t just make any resolution out of the sky just because you have five votes,” she said. “If we were to do that, we’d be able to override the chair on any motions or resolutions that are unlawful.”

Um, don’t get me wrong, I don’t claim to know the Taylor city charter, but if the city council makes a resolution and votes on it, doesn’t that, in fact, make it lawful? And by not allowing a vote on a resolution that has a 71 percent majority, does that not allow the council president to, eh, what’s the word…

“Some members of the council are trying to usurp, or take away, the powers of the mayor,” [Brandana] said.

Yes! That’s the one. Usurp the powers of the mayor. Or council.

This was followed by the requisite accusations of breaking the Open Meetings Act:

“We have some very questionable activity going on on the council right now,” she said.

“(Plato) was handing them papers and documents (Tuesday), and those are violations of the Open Meetings Act. It’s breaking the law; you cannot deliberate or make a decision together (outside the meeting).”

Anyway, so surely that was the end of it, right? Of course not. Remember when Plato had to grab his own chair because the council removed it? He also had to find a microphone to speak into as well.

Plato, after arguing with Burke over which microphone he was allowed use, walked to the public podium to speak.

He said the council should be allowed to make their motions and recommendations, despite what the chair thinks of the legality of them.

“If it’s null and void, fine, let the court decide it,” he said.

Someone cue up “Onward, Christian Soldiers.”

Considering that both Plato and Pentiuk were at the meeting to serve the role of city attorney, its conceivable to think that both attorneys were billing for their time.

The matter will (hopefully) be settled on January 15 by Wayne County Circuit Court Judge Susan Borman.

[Again, major HT to The News Herald for this story. A+].

A surprise objection

Last week, the Michigan House of Representatives judiciary committee took up for the first in what certainly will be many discussions on a statewide funding and oversight structure for indigent defense.

Among the supporters were a host of nonprofit advocacy groups, the NAACP, Ruth Lloyd-Harlin who is the sister of Michigan’s first DNA exoneree Eddie Joe Lloyd. Retired judges and law school deans supported the proposed bill.

The sole objection was a surprise — William J. Winters III, president of the Wayne County Criminal Defense Bar Association, who wrote a letter to the committee expressing his views (not those of the association) and concerns over the possible politicization of indigent defense. Thinking that the state-funded system would be free of undue political preference is a “hopeless illusion,” Winters wrote, adding that no legislation can eliminate the distinctly human traits of nepotism, cronyism and favoritism.

Though he doesn’t claim that the system is adequately funded as it is now, Winters wrote that he doesn’t see how statewide funding will make the situation any better.

The proposal could be taken far more seriously if its proponents summoned the political courage to fund this new system with an increased tax on legal products and services which directly and disproportionately contribute to crime: the beer, wine and spirits industry and casino ‘gaming’ interests. These purveyors of misery and despair have enjoyed a tax haven in our state for far too long. A fair and reasonable tax is overdue, but these competing interest groups are apparently off-limits because they are too powerful to take on. Instead, proponents take the easy way out: they want defendants, most of whom are desperately poor, to fund the system.

Winters addresses the pink elephant in the room, a simple reality that few want to discuss: Michigan’s pool of money is shrinking. Within those limits, what legislator would put an unpopular population — those charged with crimes, some of whom are (gasp) guilty — over the interests of populations to which we pay plenty of lip service — in particular, school children? We can’t, or won’t, even adequately fund our schools if it means paying higher taxes. Is it possible that we’ll have the political stones to adequately fund indigent defense?

Read Winters’s entire letter here.

Asian carp target of lawsuit

The Detroit Free Press reports that Attorney General Mike Cox has ratcheted up the war on the potential Asian carp invasion into the Great Lakes. 

You may remember, these are voracious, up to 100-pound carp that can be expected eat our domestic species out of house and home. They are a highly acrobat ic fish that can jump into boats, endangering boaters. They are a lose-lose for the entire Great Lakes ecosystem, and those who say Cox is overreacting, just think zebra mussels only 100 times worse.

Holiday schedule for MSC, COA and admin office

The state’s appellate courts and the court administrative office have announced their holiday closings.

The Michigan Supreme Court, the Court of Appeals, and the State Court Administrative Office (SCAO) will be closed for the holidays on Thursday, December 24; Friday, December 25; Thursday, December 31; and Friday, January 1.

The Supreme Court, Court of Appeals, and SCAO will be open on Monday, December 28; Tuesday, December 29; and Wednesday, December 30.

MSC will hear indigent defense system case

In June, a split panel of the Michigan Court of Appeals ruled in Duncan, et al. v. State of Michigan, et al. (majority opinion here) (dissenting opinion here) that plaintiffs can proceed with claims that the indigent defense systems in Berrien, Genesee, and Muskegon counties are constitutionally deficient.

The Michigan Supreme Court, in an order released Friday, has agreed to review the case.

The leave granted order comes as the Legislature mulls ways to improve the delivery of legal services to indigent criminal defendants, including a state-funded public defender system.

The MSC’s order directs the Clerk of the Court

to place this case on the April 2010 session calendar for argument and submission. Appellants’ brief and appendix must be filed no
later than February 8, 2010, and appellees’ brief and appendix, if appellees choose to submit an appendix, must be filed no later than March 11, 2010.

The Criminal Law Section of the State Bar of Michigan, the Prosecuting Attorneys Association of Michigan, and the Criminal Defense Attorneys of Michigan are invited to file briefs amicus curiae, to be filed no later than March 29, 2010. Other persons or groups interested in the determination of the issues presented in this case may move the Court for permission to file briefs amicus curiae, to be filed no later than March 29, 2010.