No charges will be filed against Schmidt or 22-year-old Matthew Mojak, Kent County Prosecutor William Forsyth wrote Tuesday in a report.
Mojak initially was promised $450 and convinced to change his address and voter registration to the 76th District. Mojak also signed an affidavit claiming he had been a Kent County resident for 22 years.
Democrats were angered because Schmidt waited until just before May's filing deadline to announce his switch, thus guaranteeing re-election by avoiding a primary fight.
Mojak later withdrew from the race.
"As a Republican elected official, I am embarrassed and offended by what transpired," Forsyth wrote. "At a minimum, the Legislature should put a time limit on when a candidate may 'switch' parties prior to a filing deadline."
Text messages also show House Speaker Jase Bolger had a part in Schmidt's plan.
On May 14, Bolger wrote in a text to Schmidt: "Any luck finding ur Dem in ur district? That's the last piece we need."
Schmidt responded: "I believe we do."
"Although this scheme by Rep. Schmidt and Speaker Bolger was clearly designed to undermine the election and to perpetrate a 'fraud' on the electorate, it was nonetheless legal," Forsyth wrote.
Forsyth also said he forwarded investigative reports to Michigan's Secretary of State to determine if a $2,000 check written on Schmidt's campaign account and payable to his son, Ryan, who recruited Mojak, violated campaign contribution rules.
Schmidt was elected in 2008 and can serve one more House term. He is running unopposed in the Aug. 7 primary, but will face a Democrat in the November general election.
"I'm happy he found there were no criminal violations," Schmidt told The Associated Press on Tuesday. "I made a poor political decisions and something I'll probably regret the rest of my life.
"I was a moderate Dem and now a moderate Republican. On the other side, I'm sure they felt betrayed. I knew it was going to be rough but never thought it would be that rough."
Bolger said in a statement Tuesday that "political fights can be ugly."
"Roy Schmidt switched out of motivation to work for the people of Grand Rapids," Bolger wrote. "But some of the actions surrounding the recruitment of another candidate were politically motivated. I encouraged a Democrat to be recruited to run, but today even I am still learning about all of the actions that took place surrounding that recruitment."
Michigan Democratic Party Chairman Mark Brewer called their actions "despicable" and called for Bolger to "step down immediately from leadership in the House."