Florida Builders Charged With Taking Customers & Subcontractors For $400,000+

The Daytona Beach News-Journal reports:

• The owners of another Flagler County home building company were booked into jail on multiple first-degree felony charges Tuesday. Herbert Heron and Noel Richardson, owners of Canterbury Estate Homes Inc. and Oxford Title Company Inc. (the company that handled Canterbury's real estate closings), were charged with grand theft, organized fraud, misapplication of construction funds and issuing worthless checks, investigators say. The men landed in jail after more than half a dozen people came forward saying the men took their money, more than $400,000 in total, but didn't provide the home building services they promised.

In addition to not getting what they paid for, in some cases, the customers had to pay twice for work that had been done. Reason: the builders stiffed the subcontractors for work the subs had performed, which resulted in the subs placing liens on customers' homes. The customers had to pay off the liens or risk foreclosure. For more, see Home builders charged with multiple felonies.

Go here for earlier posts on criminally implicated homebuilder Canterbury Estates Homes.

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Lehigh Valley Home Improvement Contractors In Hot Water

In eastern Pennsylvania, The Express Times reported earlier this month:

1. Michael Caprista, 45, of Nazareth, is sentenced to 90 days in jail and is required to pay $163,000 of restitution. He admitted taking money for poor or incomplete work from more than 20 customers and businesses in the Lehigh Valley and northwest New Jersey.
2. Robert Paul Westwood, 38, who previously lived in Bethlehem and operated Quality Construction and R&C Contracting in Nazareth, pleads guilty in Lehigh County Court to two counts of felony fraudulent business practices. He admitted to ripping off nine customers for more than $150,000.
3. Ronald A. Schmidt, 50, of Easton pleads no contest to taking $10,500 from a customer for work he never completed.

Source: Cracking Down on Crooked Contractors.

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Florida Builders Face Criminal Charges Of Misapplication Of Construction Funds, Grand Theft, Issuing Rubber Checks

According to a recent story in the Daytona Beach News-Journal, the Flagler County, Florida Sheriff's Office has been busy investigating and charging local home builders for taking customers' money and either not performing the work contracted for, or having the work done by a subcontractor, and then not paying the sub for the work. According to the story:

• Flagler County sheriff's Detective John Gaspar, who led two of the last three Flagler County building company investigations that resulted in arrests, said it appears to be a "trend" that local contractors and builders are involved in mismanaging their customers' money.

• In August, investigators arrested Gregory Bleyl, owner of Osprey Custom Homes Inc., after they say he bilked 18 Russian and Ukranian immigrants out of more than $700,000. He was charged with grand theft and misapplication of construction funds and remains in the Flagler County jail.

• And last week, authorities arrested Joseph Fasino, owner of Sandcastle Homes for operating a building scam that also involved liens on customers' homes, bad checks, and misapplication of construction funds, investigators said. Fasino is being held at the St. Johns County Jail on $287,500 bail.

In the most recent case, Herbert Heron and Noel Richardson, owners of Canterbury Estate Homes Inc. and Oxford Title Company Inc. (the company that handled Canterbury's real estate closings), were charged with grand theft, organized fraud, misapplication of construction funds and issuing worthless checks, for, among other things, allegedly taking over $400,000 from more than half a dozen people for work they promised, but never performed. For more, see Home builders charged with multiple felonies (no longer available online).

For related stories on:

• Gregory Bleyl and Osprey Custom Homes Inc., see Poor economy boosts Flagler crime (no longer available online).
• Joseph Fasino and Sandcastle Homes, see Another Flagler builder charged with fraud (no longer available online).

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Boca Builder Facing Foreclosure; May Leave Dozens Of Stiffed Subs, 30+ Homebuyers Holding The Bag

In Palm Beach County, Florida, the Daily Business Review reports:

• Bank of America is eager to recover $20.5 million it lent to Boca Raton-based developer Sterling Communities to build a luxury community of single-family homes in Lake Worth. [...] Sterling, headed by president Paul W. Asfahl, owes money to numerous subcontractors who worked at Talavera, a community northeast of State Road 7 and Lake Worth Road with 77 single-family homes with starting prices ranging from $700,000 to $1.5 million. The contractors are among 86 defendants named in the lawsuit.

***

• At Talavera, Sterling has closed on about 49 homes, according to Palm Beach County public records. [...] Dozens of contractors are named in Bank of America’s suit, including Certified Security Systems, which is owed about $60,000, Florida Builder Appliances, $35,000; Production Plumbing, $41,828; and Dobson Construction Services and Roofing, about $31,000. [...] A subcontractor, who spoke on condition of anonymity, said Sterling paid him for his services but the checks bounced. Several homebuyers who had deposits to purchase Talavera houses are also named in the lawsuit.

For more, see Bank of America files foreclosure suit against builder Sterling Communities.

To view the lawsuit, see Bank of America v. Sterling Communities at Talavera, LLC, et al.

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Florida Builder Accused Of Pocketing Loan Proceeds & Stiffing Subs; Homebuyers Pay Twice For Same Work

The Daytona Beach News-Journal reports:

• "Several Palm Coast residents say they hired Canterbury Estates Homes Inc. to create their dream homes, many of them on Lewiston Court in Palm Coast. But the company has left them scrambling to pay the people doing the work. At least a half dozen people who contracted homes from Canterbury said they filed complaints against the company's owners with the Flagler County Sheriff's Office. At least two contractors said they have filed complaints with the State Attorney's Office against Canterbury."

• "Stephen Rende, owner of Rende roofing, a longtime Palm Coast business, said this is the first time his company has ever had to file criminal complaints against a builder. Homebuyers like Anthony Rappa say Canterbury's owners, Herbert Heron and Noel Richardson, didn't pay the subcontractors who worked on their homes. Rappa and several others say Heron and Richardson took money from them either directly or from their bank-drafted construction loans, which should have been used to pay subcontractors."

One Palm Coast resident said he has spent 80 to 90 hours each week for the last few months finishing the construction of his new home that was left unfinished by the builder. For more, see Flagler builder investigated over liens, bad checks.

Go here for earlier posts on criminally implicated homebuilder Canterbury Estates Homes.

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Another Financially Troubled Homebuilder Stiffs Customers & Subs

WGCL-TV Channel 46 in Atlanta, Georgia reports on the problems some new home buyers in brand new subdivisions developed by Tradewinds builders may face. In the case of one recently married new home buyer couple who just moved into their first home:

• Just weeks after moving into the house in Clayton County, lien letters started arriving in the mail. [The homeowners'] liens totaled about $22,000 all because the builder had not paid contractors. Court documents show long lists of contractor liens on Tradewinds properties in several Georgia locations.

As new homebuyers, they weren't aware of the need for title insurance and say it was never offered to them. When CBS 46 Investigates tried to reach Tradewinds at their headquarters, they discovered newspapers covering the windows and the doors locked. For more, see CBS46 Investigates: The Broken American Dream.

Go here to watch the WGCL-TV Channel 46 story.

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West Palm Beach Developer Stiffs Customers Out Of $10 Million In Deposits For Unbuilt Condo

In Florida, The Palm Beach Post reports:

• Finally, an answer for why a developer won't return about $10 million in deposits to buyers of the unbuilt Palladio Terrace condo: Merco Group says it doesn't have to return the money! Merco Group has been a virtual stone wall when it comes to explaining why it is keeping money from its prospective buyers, even though the company canceled plans for the luxury West Palm Beach condo in January. Buyers have begged, cried and sued to get their money back, mostly to no avail. But in a recent court filing, Merco says that state law allows it to keep deposits for "construction and development," Merco emphasized. We're not exactly sure what "development" means, especially since Merco lawyer Harold Patricoff didn't return a phone call to explain.

A lawsuit on behalf of customers has reportedly just been amended to include civil theft, which carries a possible award of triple damages, plus interest and attorneys fees. For more, see Fight over Palladio deposits rages on.

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New Jersey Contractor Convicted Of Stealing $375K+ From Customers

The Asbury Park Press reports:

• A 47-year-old home improvement contractor from Point Pleasant Beach has been convicted of stealing more than $375,000 from three homeowners, authorities said.
  Following a three-week trial in state Superior Court, Monmouth County, Mark A. Tracey, 47, was found guilty Thursday of five counts of theft by deception and three counts of theft of services. [...] Those homeowners had contracted with Tracey's business for home improvements, including remodeling and new construction. They paid for the work, which was started, but not completed, the news release said. Tracey also did not pay three subcontractors who completed jobs he hired them to perform, according to the Prosecutor's Office.

For more, see Home improvement contractor convicted of taking $375,000 (Man, 47, never did the work).

For press releases from the Monmouth County Prosecutor's Office:

• Jury Convicts Contractor Of Stealing Over $375,000,
• Contractor Sentenced To 7 Years For Stealing Over $375,000.

Go here for message board on this story.

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NJ Consumer Advocates Call For Law To Protect Customer Deposits Paid To Homebuilders

In New Jersey, the Asbury Park Press reports:

• In the wake of Kara Homes Inc.'s bankruptcy, New Jersey should pass a law that would safeguard home buyers' deposits until the home is complete, a consumer group said last week. A law, modeled after an existing law in California, would change a common practice in which home builders use deposit money to fund their operations. As it stands, if a home builder goes under, buyers risk losing thousands of dollars.

• [The bankruptcy filing] left many Kara customers in the lurch. Elliot Egenburg, 40, of New York City, put down $220,000 to purchase a Kara home at Crine West in Marlboro. The project's lender, Amboy National Bank, eventually foreclosed on the property, leaving buyers to get reimbursed through bankruptcy court.

For more, see Consumer advocates want law to protect buyers.

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Delaware Contractor Arrested For Allegedly Defrauding Homeowner Of $200K+

The News Journal (Wilmington, Delaware) reports:

• A 48-year-old Delaware City man has been arrested for allegedly bilking a Middletown homeowner out of more than $200,000 for contracting repairs to her fire-ravaged home, state police said today. Paul Zugehoer, of Clinton Street, was charged last week with felony home improvement fraud and felony issuing a bad check over $1,000. Zugehoer, who was identified as a self-employed insured general contractor for Absolute Equity, was released on $3,000 unsecured bail and ordered to have no further contact with the 48-year-old woman who hired him to do the work.

After paying $226,000 when given an itemized list of expenditures for over $228,000, the victim sought out two independent contractors to appraise the work completed. The first independent contractor estimated that only 20 percent of the work had been completed. The second contractor estimated the value of the 20-25 percent of work completed by Zugehoer as between $100,000 to $125,000. At that point, she contacted state police. For more, see Del. City man charged in home improvement fraud.

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Nine Home Repair Contractors Screwed Illinois Homeowners, Says State AG

From the office of the Illinois Attorney General:

• Attorney General Lisa Madigan filed lawsuits [last] week against nine separate home repair businesses operating around the state, alleging that they defrauded Illinois consumers of more than $625,453 in down payments by performing substandard work or no work at all.

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• The complaints allege that the defendants violated the [Illinois] Consumer Fraud and Deceptive Business Practices Act and the [Illinois] Home Repair and Remodeling Act by accepting thousands of dollars in down payments from consumers, but performing substandard or incomplete work or, in some cases, no work at all.

• In each suit, Madigan's office is seeking a permanent injunction preventing the defendants from engaging in the home repair trade, restitution to consumers, a civil penalty of $50,000 per defendant, additional penalties of $50,000 for each act committed with intent to defraud and an additional $10,000 for each act committed against a senior citizen, and costs.

For more, see Madigan Sues Nine Illinois Businesses For Alleged Home Repair Fraud (Reminds Consumers to Make Informed Decisions When Choosing Contractors).

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, and go here. contractors stiff subs customers alpha

Building Contractor Gets 15 Years Probation For Leaving Homebuyer, Sub High & Dry

In Colorado, The Greeley Tribune reports:

• "A former Windsor homebuilder who made Weld County's Most Wanted list in June 2006 was sentenced [August 10] for felony theft. Richard Browning was sentenced to 15 years of supervised probation, 500 hours of useful public service and will have to pay full restitution plus 12 percent interest. His probation will be transferred to California where he lives and is now working."

Reportedly, Browning stole nearly $28,000 from a property owner who hired Browning to build a home, and also accepted $175,000 from Bank of Choice that was to be paid to another contractor, but Browning pocketed the cash instead. For more, see Former Windsor home builder sentenced to 15 years probation in felony theft.

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Central Florida Builder In Foreclosure Facing Homebuyer Lawsuits For Failure To Deliver Homes

Court filings say that real estate developer Platinum Properties of Central Florida has taken in more than $22 million in deposits on at least 400 contracts on homes in Lake and Polk counties in Florida that have yet to be built or completed, according to a story in the Orlando Sentinel. At least 10 disgruntled homebuyers have filed lawsuits against the developer for its failure to deliver the homes that are past due. The Florida Department of Law Enforcement is investigating the dealings. No criminal charges have been brought at this time.

Platinum's chief executive officer, David N. Weiker Sr., says he's confident another round of financing will come through to save the properties from foreclosure, proceedings that already have begun. Reportedly, Weiker had been accused by a company officer in an unrelated 2006 lawsuit of using the deposit money:

• to buy a spa for his home, invest in other companies, buy property in Georgia, use $178,000 to pay off his home's mortgage and pay a former business associate $150,000 for some of his stock shares, among other things.

For more, see Home buyers wait years, but lots are still empty.

Go here to watch Video: Developers Could Face Jail Time After FDLE Investigation.

For other articles on this story, see:

• Controversial Developer Is Selling Homes For New Subdivision,
• No Homes Built In Subdivision, Developer Under Investigation.

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Las Vegas New Home Buyers Demand Return Of Deposits; Construction At Standstill

In Nevada, KVBC-TV Channel 3 reports that at least 12 people are out $3 million in deposits on the purchase of condominiums in a yet to be completed condominium project. Construction of the Spanish View Towers stopped months ago. It was supposed to be done by now. The question now is where the deposit money went. The 12 purchasers are currently represented in their dispute with the builder by local attorney Terry Coffing, who claims that his clients' deposits have have already been spent and that a future trial will determine how the funds were spent. For more, see Spanish View Towers: Will people get their money back?

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Failure To Complete Work Leads To Arrest Of Repair Contractor

In Harrington, Delaware, WBOC-TV Channel 16 reports:

• Harrington police have arrested a 49-year-old Smyrna man for home improvement fraud. Police [...] charged Steven M. Hewes for one count of home improvement fraud. Police say that on Nov. 5 they were notified of an agreement between Hewes and the victim to remodel the victim's home. According to police, the victim paid Hewes a down payment, however, Hewes failed to complete the work.

Source: Smyrna Man Charged With Home Improvement Fraud.

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Central Florida Man Charged In Alleged Home Improvement Scam

The Tampa Tribune reports:

• "Frank Edmund Donofrio, the Seminole man who has been accused by at least a dozen Pinellas County residents of failing to properly renovate their property and of setting them up with high interest loans to pay for the work, was arrested in Tampa last week. Donofrio, 41, was charged with grand theft and acting in the capacity of a contractor without a license. The charges were the result of his dealings with a Tampa homeowner."

In addition to the current legal matter, Donofrio reportedly also has hanging over his head (1) a pending 2005 criminal case for a charge of grand theft in connection with another contract, and (2) a civil case in which he was sued by almost a dozen homeowners for shoddy work and for setting them up with high interest loans (some have since agreed to undisclosed financial settlements, but four are proceeding with the suit). For more, see Controversial renovator charged with grand theft (Civil and criminal charges are not new for Frank Donofrio, who took over his parents' business).

For other articles on the alleged escapades of Eddie Donofrio, see:

• Renovator pleads no contest to theft (Frank Donofrio must pay $13,200 in restitution to a St. Petersburg homeowner. He still faces lawsuits related to other incidents).
• Remodeler faces new complaints (A couple accuse him of shoddy work at a steep price) (St. Petersburg Times, 1-28-2007),
• Home renovator wants to settle suit (Ed Donofrio sends checks to at least two couples. They say it's not nearly enough) (St. Petersburg Times, 2-13-2005),
• State investigators home in on renovator ("Eddie" Donofrio says he is trying to satisfy clients who complained of incomplete and incompetent work) (St. Petersburg Times, 4-18-2004),
• In a fix (Homeowners were promised affordable home improvements, but say they were delivered high payments, shoddy work and stress), (St. Petersburg Times, 3-21-2004).

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"Brand New" vs. Used - Beware Of Bad Builders

For those who view purchasing a newly constructed home as a superior choice over buying a resale (used home), you might want to check out these two stories (both in Florida, coincidentally) of homebuyers whose buying experiences have turned into disasters.

Palm Beach County, Florida

The South Florida Sun Sentinel reports of some owners of one- and two-year-old homes in one development are scared to stay in their townhouses when it rains because water seeps in behind fuse boxes. They point to water stains around leaky windows and report mold spreading inside new walls. One woman holds up a picture of a toilet that trickled water onto her front porch with every flush — spoiling the pleasure of walking through the front door of the first home she owned. Examples of other complaints are:

• plumbing problems, such as bathtubs leaking into downstairs ceilings; leaky windows and doors and the spread of mold,
• electrical issues such as outlets that don't work and lights that dim when the air conditioning is running,
• one homeowner complained that she would get a shock while washing dishes if one of the kitchen switches was turned on,
• another homeowner complained that a retaining wall behind her home is made of stacked bags of cement mix, instead of a poured concrete wall or one reinforced with other supports.

A group of the owners, frustrated by a builder who they say failed to fix problems at their 64-home neighborhood have launched a new kind of attack: They have teamed up to try to stop one of their developers from getting approval for 48 new homes more than a mile away. They have been showing up at county meetings to oppose the builder's plans for a new project.

For more, see Angry owners target builder after leaks, mold plague PBC townhouses.

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Lake County & Polk County, Florida

WFTV Channel 9 in Orlando, Florida reports that hundreds of would-be homeowners bought into three new neighborhoods being offered by one builder in Lake and Polk counties. After three years, not a single home has been built, and reportedly, the builder has started selling homes in a new project. The Florida Department of Law Enforcement is investigating builder Platinum Properties' owners David Weiker and Larry Maloney. For more, see:

• Home buyers wait years, but lots are still empty,
• No Homes Built In Subdivision, Developer Under Investigation,
• Video: Developers Could Face Jail Time After FDLE Investigation,
• Controversial Developer Is Selling Homes For New Subdivision.
• Central Florida Builder In Foreclosure Facing Homebuyer Lawsuits For Failure To Deliver Homes.

For a message board organized for those who have bought into the unbuilt development to air out their complaints, see PlatinumPropertiesOwners.com.

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Builder Faces 30 Years In Conviction For Grand Theft, Contracting Without License

The News Herald (Panama City, Florida) reports:

• "Steven Palmer faces more than 30 years in prison when he's sentenced [September 11] for grand theft of more than $100,000 and contracting without a license. Jurors convicted Palmer [last month] after a two-day trial of taking $600,000 from a project he had contracted to do with Ashley Griffin to build a home in the Cook's Bayou area. Griffin paid Palmer $950,000 from December 2004 to Nov. 30, 2005, but the work done during that time amounted to about $350,000."

Palmer's situation is exacerbated by the fact that the contract period went through a hurricane season in which a state of emergency was declared. For more, see Contractor convicted, faces 30 years.

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