Man must repay $20.2 million to fraud victims

PROVO — They walked with canes to the podium, where their hands shook as they spoke of investing life savings, insurance policies and retirement nest eggs, hoping to secure a sound financial future.

But despite the heartache, dozens of victims, many of them elderly, asked the judge to be merciful Monday morning in 4th District Court.

They knew that if Michael J. Fitzgerald, 51, went to jail or prison for securities fraud they would never see their investments again.

"I firmly believe that restitution serves a far greater purpose, especially in this case," said Ken Dillree, who had invested money with Fitzgerald for nearly 10 years before payments stopped.

Judge Samuel McVey listened to several hours of comments from victims representing nearly 300 investors who gave money to Fitzgerald to develop land in California with the hope of huge returns.

But in November 2004, Fitzgerald, of Alpine, was charged and pleaded no contest in 4th District Court to a string of felonies, including securities fraud and pattern of unlawful activity.

Prosecutors allege he sold promissory notes on California developments with no collateral backing, and knowingly misstated facts and failed to state other facts to investors.

"It's troubling," said Chad Grunander, deputy Utah County attorney. "These cases are difficult for us. Our interests are split in trying to help the victims and send the message that this will not be tolerated in Utah County."

Adult Probation and Parole recommended 180 days in jail, but the victims begged Fitzgerald be forgiven and blamed wrongdoing on his brother, Charles Elliott Fitzgerald. Charles Fitzgerald has been indicted in a huge house-flipping and mortgage-fraud scheme in Southern California and will be sentenced in California's federal court Oct. 3.

After the tear-filled comments, McVey sentenced Michael Fitzgerald to five days in jail and 15 years of probation with the condition that he pay back $20.2 million.

"I believe that five days (in jail) serves two purposes," McVey said. "It lets you look forward to what you will be facing on a long-term basis if you do not meet probation and restitution ... and it does provide some up-front punishment."

McVey explained to the victims, who filled the courtroom benches, the difficulty of weighing competing interests of justice and mercy, then added a word of advice.