Investors recount investing with ex-reality TV star Michael Skupin
Clarkston — Six people testified Monday of being persuaded to invest in a “Pay It Forward” financial program by a former reality TV contestant who promised it would bring them all big profits.
The six claimed in Clarkston District Court that Michael Skupin, 54, of White Lake Township showed them charts and pocketed their cash but months later returned only promises and excuses — finally refusing to even return their calls or emails.
Skupin is best known for appearing on two seasons of “Survivor” — including one in which he had to be airlifted off the island after he fell into a campfire.
He is charged with 12 offenses of bilking investors in a pyramid scheme and also possession of child pornography.
The six witnesses told Judge Kelley Kostin how Skupin persuaded them to individually invest cash ranging from $300 to nearly $14,000 in his program which promised returns of up to eight times their investment. They said Skupin was likeable, had charts and all the answers — even months later, if they could reach him.
One by one they told how they initially learned of Skupin’s investment program through close friends or relatives and set up meetings in which they handed over cash, obtained no receipts and hoped for great returns.
Skupin’s attorney, Steven Lynch, said his client only appealed to greed and people seeking “a quick buck that didn’t come.”
Skupin is charged with larceny, a felony with a five-year prison penalty, and racketeering-conducting a criminal enterprise offense, punishable by up to 20 years in prison.
“It’s clear he did not solicit any of these people and other people were making references to him because it (program) was working,” Lynch said after several hours of testimony Monday. “They are having buyer’s remorse because they didn’t get paid, despite knowing there was risk involved, like in any investment.”
Investigators said Skupin’s business model was nothing more than a classic pyramid scheme aided by his celebrity status where early investors may receive payoffs and even unwittingly help recruit later investors and new money.
But once the investments slow, so do the payoffs.
Diane Salter, an investigator with the State Attorney General’s Office, said she opened an investigation in December 2013 after being provided with information, including one investor, from Fox 2’s (Channel 2) Rob Wolchek, who is known for his “Hall of Shame” reports on those he deems notorious.
Wolchek was ordered to leave the courtroom by Kostin because Lynch said he might decided to call him as a witness. Witnesses are routinely kept out of courtroom proceedings until they are called to testify so as not to affect their own testimony.
The investors took turns recalling how they had contacted Skupin themselves or through others and set up meetings at restaurants and bars in Oakland County to learn more and hand over cash.
“He explained ‘Pay It Forward’ ... a program he came upon that a young woman had created to collect money for charity and he was going to apply this to business,” said Clark Sherman Justin, who was introduced to Skupin by a Milford bar owner in the summer of 2013.
“He explained it was like buying a seat on an airplane — 16 seats with different values,” Justin said. “As airplane filled up, you got to move up to finally getting eight times your investment ... and seats were filling up fast.
“I gave him $500 cash,” said Justin, who arranged a second meeting where he handed over another $900 in cash.
Weeks later when he hadn’t received any of the anticipated payoff, Justin emailed him: “ ‘this was an investment not a hobby. Where’s my money?’ ”
Nabil Beyboun said he learned of the program from an employee who knew Skupin. Beyboun later invested $10,000 after a brief meeting at a Red Lobster in Novi.
“I called him later about why I hadn’t seen any money and he told me it ‘blew up in his face’ or ‘he got busy’ or ‘was training a new employee’ and asked me to be patient,” Beyboun testified. “I saw the report on TV and he told me it was a ‘simple legality and government took his computers and eventually it would be fine.’ ”
That was the last he heard from Skupin. He noted it could have been worse because, despite no payouts, he was considering investing an additional $20,000.
Mark Ruggles, a returning military veteran now in construction work, said he is tight with his hard-earned money and doesn’t trust banks. But after Ruggles overheard co-workers discussing their pending investment returns he wanted in, too. They met up in the Walled Lake high school parking lot in the summer of 2103 where Ruggles handed over to Skupin an envelope containing $1,000.
“I was skeptical but he showed me how it worked ... ,” Ruggles said. “ ... I didn’t know anything about ‘Survivor’ but felt it might pay off. Besides, he told me if I was uncomfortable he would give me back my investment.
“I called. I texted. The response was it was ‘going to take time.’ Two years later I just gave up.”
Charlene Morris, who had known Skupin for about 15 years, said he called her up and wanted to discuss the program which she understood as a “multi-layered marketing company.” It sounded good to her and she invested $2,800 even though Skupin said he was going to be leaving town on “his next adventure.”
“He told me not to worry that things were going to be in good hands with someone we both knew,” Morris recalled. “When I contacted her several weeks later she said she had no idea.
“I heard he was back in town from some friends and sent him a text welcoming him home and suggesting we get together.”
She never heard back.
Karla Worthington said she met up with Skupin at The Root, a White Lake Township restaurant, where he was meeting with several other investors. She parted with $1,300 and later met him at a nearby Coney Island to plunk down another $300.
“I never really understood how it worked because he seemed to talk in circles,” Worthington testified. “But it involved something called ‘cycling’ which had been around for 100 years and was extremely legal.
“He seemed sincere and I never thought he would steal my money,” she said. “And I was introduced through a friend. That was another layer (of confidence.)”
Skupin, who remains free on $350,000 cash surety bond, is scheduled to return to court June 3 for examination on charges that photographs involving child pornography were also found on his computer seized by investigators.
The child pornography charge is a felony that carries up to four years in prison.