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Stopping cheating contractors

Measure would require builders to register with state

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Seven years after Hurricane Sandy tore through Long Beach and left many homeowners at the mercy of home improvement contractors, local officials introduced a bill on Monday to protect homeowners from fraudulent contractors in the event of another natural disaster.

State Sen. Todd Kaminsky and Nassau County District Attorney Madeline Singas unveiled the Home Improvement Fraud Prevention Act, a state bill that would require home improvement contractors to receive a certificate of registration with the state and carry insurance, making them liable if they defrauded a customer. The bill would also ensure that contractors could be criminally charged for scamming homeowners following a natural disaster.

After Sandy, many homeowners lost tens of thousands, even hundreds of thousands, of dollars to fraudulent contractors, and when they attempted to take legal action, officials said there was insufficient protection under the law to allow them to prosecute the contractors. Long Beach Building Commissioner Scott Kemins said there are now about 20 to 25 homeowners inLong Beach who still have not returned home because of fraudulent contractors.

Kaminsky’s bill would help ensure that homeowners would not be subject to this kind of fraud in the future. “There has been a bad track record of prosecuting fraudulent contractors, and this bill will change that,” Kaminsky said. He added that current laws make it hard for homeowners to prove that they have been scammed by unscrupulous contractors, and so prosecuting them is difficult. The registration process, he said, would also create a “first-of-its-kind” database that would track contractors and would tell homeowners if the contractors were acting in “good faith,” Kaminsky said.

Miriam Sholder, a spokeswoman for Singas, said that the district attorney’s office has six open cases involving contractors defrauding homeowners after Sandy.

In 2018, Nassau County officials held a news conference urging residents to file complaints with the Department of Consumer Affairs if they had been defrauded by Sandy contractors. According to Vicki DiStefano, a spokeswoman for County Executive Laura Curran, there have been roughly 320 consumer complaints regarding fraudulent contractors since Hurricane Sandy. Of these, about two-thirds are related to 13 contractors.

“Our consumer affairs department has been working diligently to investigate and take action against companies and contractors who took advantage of vulnerable homeowners who were devastated by Superstorm Sandy seven years ago,” Curran said in a statement.

West End resident Terri Dunbar is among a number of South Shore residents who said they paid contractors for work that remained unfinished for years. Dunbar was displaced after Sandy and hired Fred Gutterman, of JBJ General Contracting, in 2016, only to have him abandon the work before it was completed, she said. Dunbar received funds from NY Rising — the program assisting storm victims with financial aid — after FEMA declared her home substantially damaged, requiring her to elevate it.

Dunbar said she paid Gutterman in installments, according to a contract that she signed with him, and he worked on raising her home for about three months. In March 2018, she said she paid him a total of $130,00, and he walked off after what she describes as a “shoddy job.”

Dunbar, who just got back into her home in June, said that it was a painful experience and has trouble rehashing the story. She was not alone.

In May 2018, 27 families went before the Village of Freeport Board to lodge complaints against Gutterman. The village filed a criminal complaint against him for filing a false document with the village. At the time, the Nassau County Department of Consumer Affairs had received 38 complaints — four in 2017 and 34 in 2018 — against JBJ General Contracting. 

“It’s wonderful,” Dunbar said of the fraud bill. “People need to be protected from the pain and anguish and the loss of money. I hope it goes through to protect innocent people from people that are so greedy.

Long Beach resident Liz Treston, co-chair of the Long Beach Community Organizations Active in Disasters, an organization that helps residents after natural disasters, along with the South Shore Recovery Coalition, said the organization supports Kaminsky’s bill as well. However, Treston stressed that enforcement of the bill and proper communication with state and county agencies needs to be put in place to ensure this type of fraud doesn’t happen again.

“As advocates for homeowners, we would’ve liked to see this legislation passed sooner than having to wait,” Treston said. “This bill will mean zero unless there’s better communication between consumer affairs in every county, and every individual’s building department at the time the permits are pulled. Half of this nonsense should’ve been stopped at the door, but there was no procedure in place.”

She added that she hoped the bill could be tweaked to include Sandy homeowners who were defrauded by contractors.

“These, primarily men, got away with hundreds of thousands of dollars that the district attorney was unable to prosecute for theft,” Treston said. “Theft of services, theft of financial resources, frauding government agencies, and nothing has been done in New York state.”

Treston has previously mentioned contractor Cody Lawrence, of Turnkey Contractor Solutions, who was arrested last year in April in Calhoun County, Texas, on an outstanding warrant from Louisiana. Lawrence faced 36 complaints from residents along the South Shore who said he defrauded them. He was charged in Texas with contractor fraud and misapplication of payments and was released the next day on a $1,000 bond, according to Texas law enforcement records.

Though Kaminsky said that the bill is not retroactive, he vowed to continue to fight for Sandy homeowners to receive justice.

Kevin Reilly, an advocate for Sandy victims and a Long Beach resident, said he was not a victim of fraudulent contractors, but many of his friends and neighbors were scammed. Reilly spoke about the troubles that homeowners faced with NY Rising because of fraudulent contractors. He said NY Rising’s protocol requires them to claw back funds if there is a lack of progress made on Sandy-affected properties, which caused more anguish for homeowners.

However, Reilly said, NY Rising has set up a process to help homeowners continue the construction of their homes, even if they have been defrauded.

Reilly said he supports the bill and its ability to help future victims. “We learned a lot about the recovery process from Sandy,” Reilly said. “The Kaminsky bill is part of that learning process. We know that we can’t go back and make things right, but we can try and move forward for the next time.”

Kaminsky said there is no doubt that this is a bipartisan issue, and added that he was confident that it would receive bipartisan support. Further discussion of the bill will take place in January at a Rules Committee meeting in the State Senate.