By Eric Heinz
Developers involved with defrauding local investors out of more than $1 million via the infamous Surf N’ Turf project in San Clemente were sentenced on Monday, Nov. 28, according to Orange County Superior Court records.
Michael Ruffner and Michael Scott Melcher were sentenced to five years of probation and one year in jail. They must also pay restitution to the victims for making untrue statements in an attempt to make a purchase. Jourdan Tyson Groves received the same sentence, except his probation is three years. The three men pleaded no contest to making untrue statements or omission in connection with purchase or sale.
The felony charges of aggravated white collar crimes related to more than $100,000 but less than $500,000 were dropped for all defendants.Christopher Schlegel was charged with fewer counts, but he pleaded not guilty to five counts of making untrue statements or omissions in connection with a purchase or sale.
One of the counts was related to defrauding the investors $1.118 million between Feb. 6, 2012 and June 26, 2014, according to ta Orange County District Attorney warrant issued on April 8.
The four men were all part of the company Surf N’ Turf Paradiso, LLC, which submitted applications to the city of San Clemente to build a wave pool, snack bar and restaurant and a miniature golf course next to the area that is now Courtney’s Sandcastle at Vista Hermosa Sports Park.
Melcher, the lease holder for the land, would charge $2,500 for the land’s use until $400,000 in revenue had been generated, and the city would receive 8 percent of the revenue after that. But according to the Orange County District Attorney, because returns on promissory notes had not been fulfilled and proper and thorough disclosure had not been made by the defendants, the charges of fraud applied.
The city of San Clemente awarded the lease of the land for the miniature golf course on Aug. 22, 2013 to Surf N’Turf, but the project fell through in October 2014 when the developers did not meet the city’s deadline to complete it.
It was officially abandoned by the city in May 2015.
Schlegel is out on bail but had a pretrial hearing on Monday, Nov. 28. The court schedule has not been updated to show his next court appearance. There is also an ongoing civil lawsuit between investors of Surf N’ Turf and the four defendants in the criminal case.