Category: Scam Alert
"If someone knocks on your door, that's a red flag"
The tornadoes have many storm victims feeling helpless. But when one person's tragedy is another's money making opportunity, it's time to take control.
In Republic with fence lines reduced to rubble and roofs ripped off homes, repairs have outgrown your typical honey-do list.
People there are seeking professional help. Most service companies are legit, but others are looking for a quick buck. So how do you know who to hire?
In a neighborhood where tarp coverings outnumber full roofs, storm victims like Tami Murphy could lose more than what was taken by the storm.
"An hour and a half after the storm hit, we had three people offer roofing and one for hail," says Murphy.
She says she knew better than to go with the first offers to fix her roof. She relied on research and experience to avoid a scam.
"We have had enough storms that you can call someone who's been through it and ask who they used," says Murphy.
Most people in Murphy's neighborhood are letting people they know do the repairs. But if you don't have that word of mouth relationship, there are other ways to safeguard yourself.
"Any time a disaster comes, so do the con artists," says Judy Mills, Better Business Bureau.
The Better Business Bureau is giving consumers the tools to combat crooks.
"If someone knocks on your door, that's a red flag," warns Mills.
Mills says put yourself in control. You should be the one pursuing a repair company. Not the reverse. But be prepared to sort through information. Ask to see a business license and proof of liability coverage and workers comp.
"There are companies we call storm chasers," says Mills.
Check the phone number and license plate of a potential service agency. Out of area can be a risk.
Mills says, "By the time you decide it's a scam, the money's gone."
Check and double check a contract. Only put one-third of the payment down, before a service agent goes up.
"If it sounds too good to be true, then it probably is," says Mills.
The Better Business Bureau says if a scam happens, report it. While the agency can't pursue litigation, it can forward the info to people who can. And, if you have a problem with an accredited business, the bureau can offer mediation and arbitration.
Texas Roofers
The newspaper story seemed familiar: A contractor in Jasper took $31,000 from the Jasper-Lakes Area Humane Society to construct a shelter and then was not seen again.
Although last week's story did not name the contractor, because he has not been arrested or named in a lawsuit, Richard Pelt, a 39-year-old Mauriceville man, recognized the man's operation, the way he promised to work cheaply and signed invoices with "God bless you!"
"I'm wanting to expose this guy," Pelt, a refinery worker, said by phone Wednesday morning. "I'm sure he's out there trying to find his next victim."
Hurricane Ike mangled the metal roof of the home Pelt shared with his girlfriend and child, and it became unlivable after rain washed inside.
Living in a hotel room for a month with their 6-week-old baby, the couple found the contractor's ad on SoutheastTexas.com, an online classified site. It promised to do work for "Cheap!" and said with the housing market down, the contractor needed work.
He had a good crew, and, with Christmas coming, he told Pelt, he didn't want to layoff anyone.
"He knows how to talk to people," Pelt said. "He knows what he's going to say."
Pelt said they were desperate to get back in their home. The contractor had the lowest bid of all others, and he had a large crew that could knock out the work in a few days - all he needed was $14,000 to buy some shingles and Sheetrock.
Quickly, the contractor began work. He and a small crew put in about 16 hours of work over two days, Pelt said, tearing off the damaged metal roof and placing some shingles.
Then he disappeared.
In Jasper, the man poured some concrete in early 2008, laid two courses of block and took off, the organization's director told The Enterprise in an interview April 27. They tried to press criminal charges, but police told them it was a civil matter, and they can file a lawsuit.
Pelt called the contractor's cell phone, sent him text messages and left voicemail messages.
Rain poured into their home and ruined the Sheetrock the contractor had put up, Pelt said, and he paid another contractor the remaining insurance money and "a few thousand dollars" out of pocket to finish the job.
After Pelt had not seen the contractor for a month, he called the Orange County Sheriff's Department. At first Pelt was told it was a civil matter to be dealt with in a lawsuit, which is often a first reaction for a case involving a contract, said Det. Roman Zelgowski, Orange County Sheriff's Department.
Pelt pursued charges, and Zelgowski interviewed the contractor. To make a criminal case, the detective had to prove the contractor's intent to steal. Because it has now been more than 100 days since the contractor last appeared, intent is easy to prove.
Zelgowski sent the case to the Orange County District Attorney and is prepared to pitch the case to the grand jury. If they choose to indict him, a warrant will be issued for his arrest.
"As long as I do my job in the grand jury, I don't see a problem with it happening," Zelgowski said.
Before choosing a contractor, Zelgowski said, property owners should investigate whether the company has any complaints filed with the Better Business Bureau and ask for references from other homeowners who used the contractor.
However, he knows after a hurricane, any contractor promising to work quickly will get work.
"It's hard to get a contractor because everybody is so busy after the hurricane," he said.
Montgomery County Clerk’s Office
The general contractor hired to renovate the 20-story hotel and conference center at La Torretta Del Lago has filed a mechanic’s lien against the resort’s owner, claiming more than $7 million in unpaid work.
Ewing Construction Inc., of Corpus Christi, filed its affidavit April 20 with the Montgomery County Clerk’s Office. The company seeks $6.67 million for work it said it completed on the project, plus an additional $1.105 million for work related to damages at Del Lago caused by Hurricane Ike in September.
Ronnie Ben-Zur, CEO of French Quarter VIII and the owner of La Torretta Del Lago, said there is no merit to Ewing’s claim.
“I don’t owe them that money,” he said. “There is no basis for that amount.”
At the heart of the dispute is Ewing’s claim that Ben-Zur withheld $3.04 million for work already performed by Ewing and its subcontractors. The mechanic’s lien also includes $3 million for “pending” change orders to the renovation project not yet approved by Ben-Zur.
“That number (amount) is due when they are finished, which they didn’t do,” Ben-Zur said. “They (Ewing) have created significant damages.”
Ewing’s filing shows an original contract with French Quarter of $30.12 million and approved change orders of $754,731. The company reports it has been paid $26.656 million – less the $3.04 million “retainage,” which is normally set aside for last-minute changes to a project.
“It is the position of Ewing Construction that the owner has withheld payment to which Ewing Construction is entitled and that Ewing Construction has performed extra work for which it has not been paid,” the company stated in a two-page press release.
Among Ben-Zur’s complaints is that Ewing is months behind schedule on the project. Ewing contends it is not responsible for the delays and is entitled to additional compensation.
Ben-Zur filed for arbitration against Ewing April 17. The company ceased its operations at the Lake Conroe resort April 22, Ben-Zur said.
Ben-Zur said Ewing’s filing of the mechanic’s lien was in “retaliation” to his filing for arbitration.
“We did expect them (Ewing) to file a baseless lien,” he said.
Although Ewing officials have declined comment in the past, the company issued a press release last week saying it and French Quarter would attempt to resolve their differences over the next 60 days. If unsuccessful, the companies would pursue nonbinding mediation before proceeding to arbitration.
Ewing’s filing is the latest in a series of legal actions that have involved the resort since it reopened in November. More than a dozen subcontractors have filed mechanic’s liens against Ewing and the Del Lago property, claiming they are owed money for work completed. As of Thursday, four subcontractors and vendors had filed lawsuits against Ewing for nonpayment of services.
Ewing has filed suit against one of its former subcontractors, Precise Plumbing, of Montgomery, because Precise “failed to properly perform its obligation” and caused Ewing to incur “substantial additional costs and expenses in completing the work” required by Precise, according to Ewing’s statement.
Precise initially filed suit against Ewing for $364,395 it claims it is owed for work at the resort. The company said another former subcontractor, RJ Plumbing, was terminated from the Del Lago project because it failed to meet its contractual obligations with Ewing Construction.
“Ewing Construction considers its relationships with owners and subcontractors very important to the success of its business,” the company stated in its release. “The issues that have arisen related to the construction of the Del Lago Project are unfortunate. Ewing intends to continue to seek to resolve those issues through the use of the appropriate forums and does not intend to resolve or discuss the issues related to the disputes with the Press as had been done by other parties.”
Meanwhile, Ben-Zur is taking a former general contractor – Majestic Palms Nursery and Landscaping – to arbitration after the Conroe company was terminated from the project. Some of Majestic’s subcontractors have accepted settlement offers from Ben-Zur, while others are contemplating lawsuits.
Because some of the claims by Ewing’s subcontractors involve work related to Hurricane Ike, the company stated it has submitted a claim with Liberty Mutual Surety, holder of French Quarter VIII’s performance bond.
“When Ewing Construction receives payment from the Builder’s Risk Insurance carrier for work performed, it is the intent of Ewing Construction to pay those subcontractors who were involved in the extra work related to the Hurricane Ike damage,” the company said.