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In Hillsborough, a legacy of recession: construction fraud spike

We know the major consequence of the housing bust of 2007 — the Great Recession.

But even as the economy recovers, one other consequence lingers — an uptick in construction fraud.

Many craftsmen who lost their jobs when the bubble burst set themselves up as building contractors without getting the required licenses, insurance or workers’ compensation coverage.

The building industry and Hillsborough County’s building department lobbied for law enforcement help and got it in 2012 when the sheriff’s office assigned two detectives to work exclusively on construction fraud.

“This is a 20-year problem in the state of Florida that’s become a hot topic with the downturn in the construction industry,” said Hillsborough County Sheriff’s Office Detective José Sanchez, one of the two members of the construction fraud unit.

Two cases investigated by the unit demonstrate a central theme of their work: Consumers can’t do enough to check the credentials of people they hire for construction.

In one case, the owner of Asian restaurant Duck Duck Express, 2224 E. Fletcher Ave., got caught between the man she hired for a remodeling job and the man he brought in for his contracting license. Criminal charges resulted, and the restaurant owner had to turn to civil court to recover the $25,000 she sought.

In another case, a homeowner took a man at his word that he had a contractor’s license and didn’t insist on keeping a copy of their contract. Only after her roof started leaking did she discover the man who did the work was unlicensed. He told investigators he didn’t think he needed one.

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Contractors without licenses can spell trouble for homeowners in a number of ways. They often don’t comply with building codes and cut corners to save money. Because they are unlicensed they can’t pull building permits, so city or county building inspectors don’t check the work.

“These people, they come in to put an addition, not following building codes, using bad materials, violating encroachments,” Sanchez said. “It ends up leaking, electric issues, hazardous workmanship.”

Unlicensed contractors usually don’t have liability insurance, either, said Roberto Bustamante, a county building investigator who works with Sanchez. That means the homeowner is liable if the contractor is injured on the job.

“If they fall on your property, they can sue,” Bustamante said. What’s more, he said, “insurance won’t pay if the addition burns down.”

Customers can pay more than they originally contracted for — and still end up with slipshod work.

There are warning signs, Bustamante and Sanchez said, like when the worker asks you to pull your own permits or says permits are not necessary.

“Unless you know what you’re doing, don’t pull your own permits,” said Bustamante, who has worked with the county since 1997. “Unless it’s minor repairs, always be leery of contractors who tell you to pull your own permits.”

Also, don’t give in if the contractor asks for a big down payment or payment in cash. Use a check or credit card.

“Don’t pay the contractor until the work has been inspected and you’re sure the work has been done to code,” said Sanchez, a 20-year sheriff’s office veteran.

General contractors can have either state licenses, which allow them to work anywhere in Florida, or a license from the county or counties where they work.

“We recommend you look at both,” Bustamante said.

The construction fraud unit gets many of its tips about unlicensed contractors from the public. Investigators also follow up on leads from sheriff’s deputies, county building inspectors, the county’s Consumer Protection Division, the state Department of Business and Professional Regulation, Tampa police and Seniors Versus Crime, a volunteer agency funded by the state attorney general’s office.

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A little more research might have helped Sau Ling Chow, owner of Duck Duck Express, who entered into a contract with Daniel Garcia last year to remodel her restaurant for $48,500.

Garcia was not licensed as a general contractor. He got José Galindez, a licensed contractor, to pull building permits for the job, but Galindez had no separate contract with Chow at first.

According to investigative records, Chow paid Garcia a total of $76,900 — $23,850 of it for work Garcia never completed. Chow was forced to pay licensed contractors to finish the work so the building could pass final county building inspections.

Garcia did not cooperate in the investigation, according to the records.

Contractor Galindez told Detective Sanchez he pulled the permits because he thought he was going to be hired for the job.

Galindez also told Sanchez he later felt remorse for substandard and incomplete work done under his license by Garcia.

Sanchez later discovered Galindez did contract directly with Chow to finish the work for $8,500.

Sanchez referred the case to the state attorney’s office. Garcia pleaded guilty to a misdemeanor charge of unlawful acts in the capacity of a contractor, according to court records.

He was sentenced to 12 months of probation and ordered to pay $270 in court costs.

Chow insisted Garcia pay $25,000 in restitution — an amount larger than usually granted in misdemeanor cases. Court records indicate she planned to seek restitution in civil court, but no case has been filed.

Galindez pleaded guilty to allowing an unlicensed contractor to use his certification, a misdemeanor, and was charged $265 in court and prosecution costs.

Chow did not respond to attempts to reach her.

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The case of the leaky roof shows how unlicensed contractors can be masters of diversion.

Mary Mathis, then of Tampa, hired Roger Thibeault to re-roof her house for $8,400. According to investigative reports, Thibeault made a point of telling Mathis she should hire a licensed contractor — even showing her newspaper clippings that illustrated the pitfalls of using someone without a license. Mathis never checked to see whether Thibeault was licensed.

Thibeault wrote out a contract, listing the work to be done, promising he would obtain the required permits, and provided a 10-year warranty. He never gave Mathis a copy, however, instead gathering up all the paperwork and leaving, according to the records.

That should have been a red flag, Bustamante said.

The customer should insist on a copy of the contract and make sure it contains the contractor’s professional license number.

It was not until after the job was finished, and the roof continued to leak, that Mathis checked and found Thibeault didn’t have a license. Mathis did not return a phone call.

In an interview with Detective Sanchez, Thibeault said he thought Mathis — his customer — had pulled building permits for the roof work and would schedule inspections. Thibeault said he had worked in the roofing business as an estimator and was not aware he needed a license to do the repairs to Mathis’ roof.

Thibeault was charged with a misdemeanor, unlawful acts in the capacity of a contractor, and a court judgment was withheld in 2013, records show.

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