Developer Scott Chappelle Headed to Federal Criminal Trial, With New Lawyers

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Andrew Graham for ELi

The Charles E. Chamberlain Federal Building in downtown Lansing, home to several federal courtrooms for the Western District of Michigan.

In a brief appearance in federal court on Thursday, longtime East Lansing real estate developer Scott Chappelle — who has been criminally charged with tax fraud, bank fraud, and other charges — and his legal team were pressed by Judge Hala Y. Jarbou about finding a new attorney to represent Chappelle, as plea negotiations have stalled. 

Chappelle’s current lawyers are withdrawing from the case, and a trial is imminent. Chappelle’s lawyers had claimed in June that he was not mentally competent to stand trial due to effects from Covid-19, but the judge ruled on Aug. 17 “that he is able to understand the nature and  consequences of the proceedings against him and to assist properly in his defense”.

Chappelle’s current attorney, Matthew Borgula of Springstead Bartish Borgula & Lynch, PLLC, filed a motion on Wednesday, Sept. 1 — the day before Thursday’s status conference — to withdraw himself and other lawyers from his firm. The filing stated that the withdrawal was due to “an irreconcilable conflict of interest.” 

From the bench, Jarbou said the motion to withdraw counsel was one she hadn’t wanted to get, and immediately asked Borgula about replacement representation for Chappelle. Borgula explained that there had been a couple of other attorneys hired by Chappelle to consult on the case, but that Chappelle and his current counsel were still working on trying to get those who had been consulting to represent him in the criminal trial.

Jarbou said she was “frustrated” by this and indicated that she thought there would be a new lawyer ready to represent Chappelle by this point. 

“I’m not insinuating that anyone has done this purposefully,” Jarbou said. 

Borgula explained a number of factors were inhibiting Chappelle’s ability to hire a new lawyer to represent him. Borgula suggested that the complexity of the case and Chappelle’s recent evaluation for mental competency to stand trial may have kept some attorneys away. 

Borgula also said that he had a “sincere hope” that a plea agreement could and would be reached between Chappelle and prosecutors as recently as Tuesday, Aug. 31, but negotiations have stalled and the case is going to trial. 

The original trial date was set for Sept. 13, 2021, and Borgula said that that short turnaround also made it difficult to hire an attorney to represent Chappelle. 

Jarbou noted that she had adjourned this specific case, by her estimation, eight times already, and that was a lot for her. While she granted the motion to adjourn on Thursday and allowed Borgula and his team to withdraw, she addressed Chappelle and made clear the expectation going forward.

After first asking him to clarify whether he had hired new representation — Chappelle said he is working with two attorneys to potentially represent him in a trial — Jarbou made clear with Chappelle that she would not have proceedings strung out any further. 

“You have to make some decision,” Jarbou told Chappelle. She said she would not allow an attorney-change to derail the trial schedule, and that if he can’t find an attorney, Chappelle should be prepared to represent himself. 

“Good luck in finding better representation,” Jarbou said to Chappelle. 

Another status conference was scheduled for Sept. 22, 2021 — 20 days from the status conference on Thursday. That is when a trial date will be set, Jarbou said.

Chappelle has filed a civil suit against East Lansing Info related to ELi’s reporting on his federal criminal indictment. That case was first heard in Washtenaw County at Chappelle’s request, but ELi’s motion for a change of venue was granted and the case has been moved to Ingham County to the court of Judge Wanda M. Stokes. The next action on that case is expected in December.

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