Laguna man among four charged in investment scheme

A Laguna Beach resident was one of four men arraigned in Orange County Superior Court on Friday on charges of defrauding investors of more than $1 million for a proposed project in San Clemente that included a miniature golf course and water park, prosecutors said.

Jourdan Tyson Groves, 37, and San Clemente residents Michael Ruffner, 50, and Michael Melcher, 55, were each charged with 12 felony counts of using an untrue statement in the purchase or sale of a security and one felony count of using a device with a scheme to defraud, according to the Orange County District Attorney’s office.

Sentencing enhancement allegations include losses of more than $100,000, aggravated white-collar crimes of more than $100,000 and $500,000, respectively, and property damage or loss of more than $65,000 and $200,000, respectively.

If convicted, Groves, Melcher and Ruffner each face a maximum sentence of 24 years in state prison.

Groves has posted a $1-million bail. Melcher and Ruffner are being held on $1-million bail and must prove the money is from a legal and legitimate source before posting their bonds.

The fourth defendant, Christopher Schlegel, 36, of Rancho Santa Margarita is charged with four felony counts of using an untrue statement in the purchase or sale of a security, and one felony count of using a device with a scheme to defraud.

If convicted, Schlegel faces 16 years in prison.

The city of San Clemente entered into a 20-year lease with Melcher in 2009 to use land within the city’s Vista Hermosa Sports Park for two miniature golf courses. The City Council subsequently amended the lease in 2011 and 2013 to add different elements of the project, including a wave pool and an Oggi’s pizza restaurant.

Between Feb. 6, 2012, and Dec. 31, 2012, Schlegel, Groves, Ruffner and Melcher are accused of seeking out investors and collecting money with the intent of using the funds toward the project and promising investors they would see a return on their initial investment, prosecutors allege.

The men are suspected of collecting more than $500,000 and misrepresenting to investors about directing their money into the project, according to the D.A.’s office.

Schlegel is accused of keeping the majority of the initial investment money initially and misusing funds for personal use.

Groves, Ruffner and Melcher are accused of taking a significant percentage of investor money as commissions, salaries or payments without disclosing that to investors. The men are also accused of failing to disclose that the California Department of Business Oversight issued a desist and refrain order against Schlegel, as mandated by state law, prosectors allege.

The work never materialized, as the city of San Clemente terminated the lease agreement in October 2014, when project deadlines were not met, prosecutors said.

A pretrial hearing is scheduled June 22.