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Builder Who Defrauded Two Homeowners Sentenced to 18 Months in Jail

Redwood City owner of MGS Construction Company must also pay over $400,000 in restitution to the victims.

A Redwood City builder who defrauded two Pacifica homeowners was sentenced to 18 months in county jail and ordered to pay more than $400,000 in restitution to the victims on Tuesday.

Owner of MGS Construction Company and former Green Building Exchange CEO Michael George Schaeffer, 52, took $209,000 from one Pacifica resident between December 2007 and April 2008 to add a second story to a home and $52,000 from another Pacifica resident in July 2007 for a remodel and addition to a home. He began both projects, one without proper permits, and abandoned them unfinished. One house was left nearly uninhabitable, said San Mateo County District Attorney Steve Wagstaffe.

According to Wagstaffe, Schaeffer gave no explanation for abandoning the projects. He was charged with felony fraud, felony grand theft, misdemeanor acceptance of down payment over $1,000 and misdemeanor contracting without a license. 

On April 15, 2011 after a three day trial, the jury returned verdicts of guilty on charges of felony diversion of funds, misdemeanor acceptance of a down payment over $1,000 and misdemeanor contracting without a license, said Wagstaffe. The judge granted a defense motion to dismiss the two counts of felony grand theft.

In the San Mateo County Superior Court Tuesday, one of the victims spoke to Judge Jack Grandsaert and a jury about the financial ruin Schaeffer’s fraud left her in. The prosecution asked that he serve two years, eight months in state prison for the crime, but Grandsaert opted for the lesser sentence, which also includes three years supervised probation and a series of court fines.

Schaeffer, who was out on $50,000 bail, was taken into custody to begin serving his sentence. He faces similar charges in Santa Clara County.

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