State, county and city officials who track cases of contractor fraud in post-Hurricane Harvey repairs and rebuilds are surprised at the low numbers so far reported, more than five months after the storm made landfall.

But for homeowners who gave money to contractors who never did the repair work promised, the damage is monumental.

Joey Kukuch, who lives on Bayridge Drive in League City, turned to a contractor he knew for years and trusted when he needed repairs on his flooded home. Kukuch gave the contractor money on Oct. 13, 2017, but the work they agreed on was never done, he said.

The $12,750 Kukuch gave the contractor came from his Federal Emergency Management Agency disaster assistance, Kukuch said.

After trying to resolve the issue and getting the runaround, Kukuch went to the League City Police Department on Jan. 9. The police report describes the crime as theft of service.

UP SLIGHTLY

League City doesn’t have a specific number of how many post-Harvey contractor fraud cases they are handling. That’s partly because complaints can fall into many different categories, police spokesman Kelly Williamson said.

“As expected, after a natural disaster like Harvey there has been an increase in consumer-contractor disputes,” Williamson said.

The Galveston County District Attorney’s office, however, is closely monitoring contractor fraud. Robert Buss, an assistant criminal district attorney in charge of the major fraud office, tracks complaints and looks for patterns of fraud.

In League City, the police are investigating two such incidents, Buss said. He is also aware of one case that the Galveston County Sheriff’s Office is investigating as well as one that Dickinson police are investigating.

“I expect more cases are coming,” Buss said.

Friendswood police report no complaints of contractor fraud or theft of service since Harvey, spokeswoman Lisa Price said.

Dickinson police have seen a slight increase in such cases, spokesman Tim Cromie said.

“The majority of the cases are civil,” Cromie said. “There was not an intent to defraud.”

Dickinson police have also had complaints from contractors complaining about homeowners who are not paying for work done, Cromie said.

Buss is investigating two other cases that law enforcement agencies in the county assumed would be civil matters. His office also researches civil cases filed to see if those involve any contractor fraud.

LOOKS FOR PATTERNS

Contractor fraud is criminal when a contractor takes the money and knows the work won’t be done, Buss said. It can also be criminal if part of the work is done but not everything is completed, he said.

Determining which cases are criminal takes a lot of work. Buss collects bank records, credit reports and other data from other accounts. It takes 30 to 40 days to get those records. Then he sifts through the numbers and looks for patterns.

“It’s a whole lot of hurry up and wait,” Buss said.

After Hurricane Ike in 2008, complaints came into the district attorney’s office a year after the disaster. Some went through the civil court process first, with homeowners suing contractors then later filing criminal complaints, Buss said.

The statute of limitations is five years for contractor fraud cases, Buss said. Those involving more than $2,500 are felonies while those less than $2,500 are misdemeanors.

After Ike, Galveston County prosecutors argued cases against 34 contractors who committed multiple cases of contractor fraud, Buss said. Of the 34, 11 were accused of committing multiple felonies and 23 were accused of committing multiple misdemeanors.

Some cases were dismissed because of insufficient evidence while others were dismissed because the contractor paid the money back to the victim.

Because of those Ike cases, the district attorney’s office started the major fraud department to have a staff who could specialize in the details of proving fraud cases, Buss said.

VERBAL AGREEMENT

The Texas Attorney General’s office also tracks post-Harvey contractor fraud, spokeswoman Kayleigh Lovvorn said.

But FEMA does not track or have any oversight over contractor fraud, spokesman Jose Jimenez said.

“We give grants to disaster survivors, who then decide how to best use the funds to repair their dwellings,” Jimenez said.

FEMA recommends that disaster survivors use licensed contractors for any work done on their dwellings and that survivors get a detailed, written estimate before any work begins, he said.

While Kukuch did use a licensed contractor, he didn’t get a written estimate or a written agreement, he said.

“It was a guy I considered a friend,” Kukuch said. “We had a verbal agreement.”

Buss encourages homeowners with contractor complaints to file paperwork with authorities so he can compare data and find patterns of fraud.

“If people believe they’ve been cheated, they should call law enforcement,” Buss said. “If they don’t get anywhere with them, they can follow up with us.”

Valerie Wells: 409-683-5246; valerie.wells@galvnews.com

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(3) comments

Jl Hime

The state of Texas does not license builders, remodelers, etc. Anyone can be one. The state does license plumbers, electricians and hvac contractors.

To help homeowners the state passed a Disaster Remediation Statue that applies to disaster remediation contractors which cannot be waived by either party to the agreement and requires any construction disaster remediation contract to be in writing and contain the following disclosure statement in boldface type and at least 10 point font: “This contract is subject to Chapter 58, Business & Commerce Code. A contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered.”

As there is an increase of over-night instant contractors and contractors from out of state this law is directed to a contractor that lives more than one county away from the construction site. The problem is that either they don’t know the law or will purposely skirt it. Local government is encouraged to inform the public of these type laws so that the public may better protect themselves.

If a contractor set up an address in the county the home is located in for a year preceding the date of the construction work or an immediate adjacent county then the disclosure notice is not required. (it’s directed to out of state or other non-local contractors) There are other certain conduct prohibited.

It appears many are finally getting insurance money now so we shall how much this article changes. There are banks (Dickinson) that will not withdraw cash in order to pay contractors. They are insisting on paying contractors with cashiers checks and this has saved homeowners (their customers) money. This has proven to be effective in combatting fraud as the contractor now has a paper trail and requires proper ID. To see the elderly (or others) taken advantage of is especially troublesome. In Galveston county certain work must comply with the separate windstorm requirements. It is recommended to ask questions from third parties if you have a question or need help. Seek the help of a full ICC code certified inspector if you have a question. Although there are only a few answers to questions are always free which may save you thousands.

Jl Hime

A homeowner is encouraged to at least check out their contractor. The “sweet and fast talkers” are usually the worst. Get a copy of the top guys ID and any limited general liability insurance, photograph license plate number and vehicles, get a photo of the contractor and and check for civil or criminal records. Many are free including the sex offender database at the DPS. Don’t forget about obtaining lien waivers from the contractors sub-contract people when you make payments. Professional contractors will never have a problem with this and be happy to supply any information you want.

PD Hyatt

You have to watch out even if the contractor is on Angies List, Home Advisor etc.... I have hired one and it did not turn out well....

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