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.
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.
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.”