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Local business owner charged in auction scam, check fraud

January 29, 2014 - A Goodrich woman was arrested on Jan. 24 by Genesee County Sheriff's deputies for allegedly writing bad checks to pay sellers at her former consignment business.

Bernadette Jacobs, 34, was arrested in her driveway and later charged with four felony counts of check fraud.

On Jan. 25 Jacobs was arraigned in 67th District Court in front of Judge Larry Stecco. Each count has a sentence of two years in jail and/or $2,000. Bond was set at $10,000, a total of $2,500 for each of the four counts of fraud. Jacobs posted $1,000, a 10 percent surety and was released. She has no prior offenses.

In April 2012, Jacobs opened The B. Hive, 7285 M-15, in Atlas Township. The 22,000-square-foot facility included consignment items, a weekly flea market and was home to her auction company, Legacy Estate Services.

Jacobs closed the operation in December 2013.

"It was an auction Ponzi scheme," said Chris Swanson, Genesee County undersheriff, following the arrest. "She had a crew of individuals and several avenues to solicit business—they would buy goods from homes, Craig's List, flea markets or eBay and sell them and basically keep the money."

Sheriff's deputies searched her home following the arrest and recovered property belonging to several victims.

"People put their trust in her business and they were exploited. She took today's profits to pay off yesterday's purchases—it's a good run, but it all came unraveled. Clearly dozens and dozens of people were frauded—some complaints had more criminal components than others."

Swanson said as of Jan. 21 about $40,000 was allegedly scammed from individuals by Jacobs.

"I think there are victims that don't know they are victims," he said.

"Many times the items were sold for way more than what was paid back to the victim. The moral conflict comes in when you knowingly mislead people, at the expense of others."

Swanson added that as of Jan. 28, sixteen alleged victims say Jacobs never paid them for items she sold from her business. Many of the victims also claim the money received from Jacobs came in the form of a bad check.

The business included antiques, art, auction house collectibles, crafts and handmade goods, estate sales, furniture, general merchandise, home decor, jewelry and vintage items.

According to police reports, since The B-Hive closed in December all profits from the sales in November and December, owed to the vendors, were kept by Jacobs.

"The company owner should get paid last," added Swanson. "Victims were very specific to name only Jacobs.There are some very sad stories of victims."

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