A Redwood City man was sentenced to a two-year prison sentence after defrauding a Los Altos resident of nearly $400,000 for a sham construction contract. He was in San Mateo County in June 2011 for charges against a Pacifica and Burlingame resident.
Michael George Schaeffer, 52, was convicted Friday of one felony count of Diverting Construction Funds, one misdemeanor count of Contracting without a License, one misdemeanor count of Accepting Payment before Completing Work and for being in violation of Business and Professions Code.
“She was so happy the case was resolved,” said Paul Colin, the Santa Clara Deputy District Attorney of the real estate fraud unit. “Any fraud case is a violation of trust. You create a relationship with your contractor, and this is a violation you live with every day.”
The victim contracted Schaeffer and his company, MGS Construction, to remodel her home in November of 2006. She had been planning to retire and was going to use the money she inherited from her father.
The victim said that MGS construction had been recommended by a consumer survey service, Diamond Certified. In June 2008, the project was abandoned and only 50 percent finished. The roof still leaks, and the light fixtures and windows don’t work to this day, Colin said.
The victim has postponed her retirement but is luckily employed.
He was originally sentenced to probation and eighteen months in county jail for his scams against the San Mateo County residents, but was re-sentenced on August 23, to two years in prison to match the sentence in the Santa Clara County case.
Schaeffer scammed the Pacifica resident of nearly $210,000. He completed the house demolition and gutted the property, but abandoned the project after eight days. In Burlingame, he worked on a bathroom project but nothing else, charging the resident $134,490. He has since received orders to pay restitution.
Schaeffer had funneled many of his clients’ money to his start-up, the Green Building Exchange (GBE). Schaeffer promoted the company as a clearing house for environmentally progressive building products and services, but never got past its initial start-up marketing phase. He then used the start-up to give MGS Construction an environmental license.
“This was a massive diversion to a new business venture, which went no where,” Colin said. “It was extravagant, and a pie in the sky venture.”
Schaeffer relocated from the greater Fresno area, where he also had civil judgements and financial issues, Colin said.
Schaeffer has also filed for bankruptcy protection.