Judge approves fraud charges after DA declines
Couple uses state law to bypass prosecutor, petition circuit court
A Mequon couple who accused their luxury home builder of fraud and theft thought they were helping when they brought more evidence to the prosecutor about how they say the contractor used their money.
Ozaukee County District Attorney Adam Gerol dismissed the complaint he had filed, with plans to refile upgraded charges. But months passed and, after consulting with the state Department of Justice, Gerol decided not to pursue charges at all against Timothy Rigsby of Delafield.
That didn’t stop James and Michelle Friedman. Last summer, they directly petitioned the circuit court, under a little-used state law meant to provide a check on a prosecutor’s discretion.
Circuit Judge Joseph Voiland heard the argument for a case of theft by contractor, fraud and false swearing from the couple’s attorney, former prosecutor Daniel Vaccaro. Last week, Voiland authorized a criminal complaint against Rigsby and is expected to appoint a special prosecutor for the case.
How it started
According to court records, the Friedmans bought a lot in a new luxury subdivision near Lake Michigan in late 2012. Over most of 2013, they met with their architect Lynn Bichler and Rigsby and later signed a construction contract with the Rigsby Group Inc. in November. Rigsby Group was to be paid 10% of the actual cost of labor and materials. The total contract was for about $1.25 million.
The Friedmans got a construction mortgage loan and put more than $120,000 of their own money into escrow, from which Rigsby was to draw to pay subcontractors, suppliers, and his fee. They say he lied when he certified to the escrow agent that every draw went to the proper purposes over most of 2014.
The home was supposed to be done by December 2014. The Friedmans say they discovered in February 2016 that some subcontractors and suppliers weren’t getting paid the full amounts Rigsby claimed in the draws, and that they were getting charged for work that wasn’t done.
To the Friedmans, it quickly became apparent Rigsby was “in over his head,” and “ultimately became an impediment to completion” of the house.
They canceled the contract that month. Rigsby tried to “cure some of his misappropriations,” and eventually paid about $8,000 to subcontractors over the following months, according to court records.
In all, the Friedmans contend, Rigsby misappropriated $158,000, so much they could not afford to finish the house at the contracted price. They went to the police, who investigated and referred the
case to Gerol, who charged Rigsby in late 2015 with one count of theft by contractor greater than $10,000.
The Friedmans did eventually complete the home and live there now.
Meanwhile, the Friedmans also sued Rigsby and his wife, Nancy, his partner in Rigsby Group, Inc. The Friedmans know their way around the legal system — James Friedman is a partner at Quarles & Brady law firm and Michelle Friedman works in marketing for a different large firm, DeWitt Ross & Stevens.
The civil case has sprawled into a quagmire of extensive discovery battles, a special master, intervenors, and counterclaims that has bounced among several judges in three counties.
Though it began in Ozaukee County, the first judge recused himself and the case moved to Washington County, where it was managed by a couple more before parties asked for different judges. It is now pending with its second Waukesha County judge.
In the words of the cliché, it’s a dream home nightmare.
D.A.’s decision
The lawsuit affected Gerol’s ultimate decision to not recharge Rigsby. In a January letter to James Friedman, Gerol explained that after input from the state Department of Justice, he agreed that the couple’s modified standard contract blurs some of the clear statutory lines about safeguarding construction funds in escrow.
In the end, Gerol concluded, only $3,000 of costs remained unpaid from a $1.3 million job.
“I agree with the DOJ’s analysis that a jury would be reluctant to convict where the overwhelming majority of subcontractors were paid,” Gerol said.
He also said Mequon police found that many of the subcontractors “were reluctant to engage” with investigators.
Lastly, he said, he couldn’t “use this office to advantage a party in civil litigation.”
That’s partly how the Rigsbyssee it. They deny all of the Friedman’s civil claims. Their attorney, Jay Urban, accused Michelle Friedman of smearing the Rigsbys on social media, accusing him of fraud without any criminal conviction
“He’s a great guy, but you can’t outrun the internet,” Urban said.
He declined to let the Rigsbys discuss how the case has affected them, citing the coming criminal complaint. Timothy Rigsby’s attorney in the criminal case, Brent Nistler, did not return messages.
Likewise, James Friedman didn’t want he or his wife to speak at length with a reporter, citing the Rigsbys’ counterclaims.
“If she’s quoted, it’s just gas on the fire and allows them to keep going, and maybe we don’t get rid of this until a jury trial,” he said.
Builder claims malice
In the counterclaim, the Rigsbys say the Friedmans and their architect conspired to maliciously ruin his business by defaming him with bad reviews on the internet and the lawsuits. Some of the claims have already been dismissed, but others remain as the case heads to courtordered mediation.
Tim Rigsby, 57, was a home builder who got a degree in construction engineering and then did commercial construction management for Johnson Controls and Uihlein Electric. In 2011, he his wife Nancy, an architect, started their own residential design-build firm, based in Delafield.
They say Friedman made dozens of changes to the project, including many upgrades, and that Michelle Friedman, who they say wasn’t even a signatory to the contract, came to the worksite, yelled at subcontractors and “caused confusion in leadership at the worksite.”
It was James Friedman who breached the contract, they say, and claim he still owes Rigsby money for the balance of work.
Rigsby’s suit says it “became apparent ... that (Friedman) was seeking to build a $2M home on a $1M budget, by analogy.”