I think using funds to help start a business is a good idea as long as you are upfront. This is what kickstarter is and there is nothing inherently illegal about it. Some people have called it a ponzi scheme which it is not. In a ponzi scheme initial investors have to get some return. If this was the case he would have sent some trees to the first buyers so they would talk it up to get more money.
This is simply put a failed business at first. He tried and failed to deliver on his own promises, which he changed with no cares given. In fact he stated himself that trees were set to ship already, this was months ago and nothing was shipped. At this point the failed business has become a con. He built confidence initially by sending good cuttings to people or so I have heard. Once he stopped caring to engage with customers and just post ambiguous updates every couple months, then it was a full on con. If he would just shut the site down, be clear he failed but will either refund you or wait to ship the trees, that would be the honest approach.
Perhaps he will deliver at some point, but honestly nobody will trust in this venture or he will have to raise prices up to much higher levels.