No jail for Saratoga builder

(NY) Authorities charged James McLagan with taking more than $215,000 in down payments from customers but instead of using the money for subcontractors and material suppliers, McLagan diverted the cash for other purposes, and the homes were not completed or were lost in mortgage foreclosure.

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By DENNIS YUSKO
June 30, 2009

BALLSTON SPA -- A Saratoga County custom builder who admitted to taking money from customers for homes he never constructed escaped sentencing without jail time Tuesday.

County Judge Jerry Scarano sentenced James McLagan of Mechanicville, who had pleaded guilty to two counts of grand larceny and other misdemeanors, to five years probation and restitution of just more than $200,000. McLagan will pay off the restitution in installments.

Authorities charged McLagan with taking more than $215,000 in down payments from customers in Saratoga, Stillwater and Saratoga Springs. But instead of using the money for subcontractors and material suppliers, McLagan diverted the cash for other purposes, and the homes were not completed or were lost in mortgage foreclosure, county District Attorney James A. Murphy III said.

Murphy's office prosecuted the case's two felony counts that involved 4-6 unidentified victims. Scarano ruled that McLagan must pay those victims $72,085 by 2014.

Special Prosecutor Chris Belling was assigned to handle cases involving two victims, including thoroughbred horse trainer H. James Bond. Scarano ordered McLagan to pay back $130,650 to the victims by 2012.

Bond hired McLagan in 2006 to build a home on the family's horse farm on County Route 75 in Stillwater. McLagan took a $158,000 down payment and provided only minimal work, said Bond, who attended Tuesday's court session and repeatedly called it "very, very disappointing."

"He milks you out of $158,000 and the justice system doesn't seem to care," said Bond, who races horses at Saratoga Race Course and across the country. "I thought I was helping this community by making this known. The investigators did a great job, and it didn't seem to matter. Now he can go screw somebody else."

Last year, Saratoga Springs Mayor Scott Johnson posted $16,000 bail for McLagan when he was arrested, citing his son's friendship with McLagan's sons.

Belling could not be reached.

Murphy said Scarano's sentence "serves the interests of justice."

"These felony convictions serve as a warning to contractors that New York State law forbids a contractor from taking money from one customer and using that money for another," Murphy said. "A contractor cannot use a new customer's money even to pay off debt from an old job."

McLagan had no prior criminal record, Murphy noted. "The victims' voices have been heard and they have been able to resolve their complaint by a successful criminal prosecution."

Dennis Yusko can be reached at 454-5353 or by e-mail at dyusko@timesunion.com.

http://www.timesunion.com/AspStories/story.asp?storyID=815432