Crooked builders hit storm victims
Unlicensed contractors are preying on Gulf Coast residents whose homes were ravaged by Hurricane Katrina and are in dire need of repair, state and FBI officials say...Phony contractors are collecting down payments for work and then disappearing, Marceaux says. One scam involves workmen who take down payments and even drop materials off at work sites, only to return in the night to retrieve the materials and sneak away.

USA TODAY
Crooked builders hit storm victims

"There's not enough skilled labor out there, and it's causing chaos," says Charles Marceaux, executive director of the Louisiana State Licensing Board for Contractors.

Phony contractors are collecting down payments for work and then disappearing, Marceaux says. One scam involves workmen who take down payments and even drop materials off at work sites, only to return in the night to retrieve the materials and sneak away.

Marceaux said there are an estimated 20,000 licensed contractors in New Orleans alone. Getting an exact tally of how many unlicensed repairmen are operating is impossible, but he estimates that their number exceeds that of legitimate contractors.

Other crooked contractors have told homeowners that they had installed plumbing or electricity in their houses, even though they put nothing behind the walls, Marceaux says.

James Bernazzani, the FBI's special agent in charge in New Orleans, says the federal government will have jurisdiction in many cases because the money the contractors took often comes from federal rebuilding grants.

It's unusual for the FBI to get involved in cases involving relatively small amounts of money, Bernazzani says.

"Before the storm, the threshold for the FBI to take a fraud case was $1 million," he says. "But we're assuming non-traditional roles down here, and we're trying to be a deterrent."

The problem could get even worse. The vast majority of residents in Louisiana and Mississippi haven't received their share of $10.2 billion in federal rebuilding grants. Grants can be as high as $150,000. Hurricanes Katrina and Rita destroyed about 300,000 homes along the Gulf Coast.

The Louisiana attorney general's office says it is investigating more than 140 cases of contractor fraud. Many claims, however, are simply too small to be taken on. Under current statutes, a case needs to involve at least $7,500.

Marceaux and others are working to increase penalties. In Mississippi, where the attorney general's office is investigating 264 cases of fraud, a law passed in March reduces the minimum amount necessary for criminal action to $5,000 for a first offense and as low as $1,000 for a second offense.

Among the victims is June Collins, whose New Orleans home was hit by a tree during Katrina. She says a roofer insisted she needed a new roof, and charged her $7,000 to install it.

"There was no hole, and it was not leaking, but I was nervous and in a hurry to fix it," she says. She later discovered she needed only a minor roof repair. And she found out that the roofer had installed cheaper shingles than those originally on the roof.

Collins, 65, tried to take her case to the attorney general but was turned away since it involved less than $7,500.

"I know it's a small amount of money, but when it's in your pocket, it's a lot," she says.

http://www.usatoday.com/news/nation/2006-10-23-gulf-coast-contractors_x.htm?POE=click-refer