Home Builders Association helps cover criminal history of Builder
Monday, 23 July 2007
Homebuilders clients say watchdogs asleep Part 1 As he tried to deflect attention from his criminal history and rumblings about his business practices, homebuilder Scott Binsack used two powerful shields: the Lackawanna Home Builders Association and the Better Business Bureau. Mr. Binsacks membership in the two highly regarded local groups helped him reassure clients about his Mansions & Estates International LLC even as his criminal past emerged, civil lawsuits mounted and unpaid bills piled up.
Homebuilders clients say watchdogs asleep
BY DAVID FALCHEK, STAFF WRITER
Scott Binsack, right, is led in handcuffs Wednesday from district court in South Abington Township. JASON FARMER / STAFF PHOTOGRAPHER
Previous articles on Scott Binsack
As he tried to deflect attention from his criminal history and rumblings about his business practices, homebuilder Scott Binsack used two powerful shields: the Lackawanna Home Builders Association and the Better Business Bureau.
Mr. Binsacks membership in the two highly regarded local groups helped him reassure clients about his Mansions & Estates International LLC even as his criminal past emerged, civil lawsuits mounted and unpaid bills piled up.
As a consumer, you put trust in these organizations and they have an obligation to the area, said Laura Sampone, a former Mansions & Estates client. Scott was shut off by banks, contractors and vendors, but not these groups. All they had to do was Google the guy to see what he was: (a) convicted swindler.
Previously convicted of writing bad checks and fraud in New York state and in Monroe County, Mr. Binsack now faces legal action on multiple fronts. He was arrested and charged last week with two counts of passing bad checks a potential violation of his parole. He is fighting scores of civil lawsuits throughout the state and a court order to pay $100,000 restitution to past victims in Monroe County.
For four years, Mr. Binsack allegedly left projects incomplete, took money for work he didnt do, and failed to pay vendors, employees and subcontractors all while emblazoning the logos of the Lackawanna Home Builders Association and the Better Business Bureau on his marketing material.
LHBA continued to list Mansions & Estates as a member on its Web site as of Sunday. The Moosic-based regional chapter of the Better Business Bureau, meanwhile, removed Mansions & Estates as a member on July 11 not for alleged wrongdoing or questionable business practices, but for not paying dues.
Both groups have cited by-laws and other procedural issues that prevented them from removing or suspending him, so long as his dues were paid.
And while both groups are considering revised membership rules, that may be too late for those who say they were burned by Mr. Binsack.
Covering for convicts
When Beth Clauss considered hiring Mr. Binsack in 2005 for a massive renovation and expansion of her home, he not only touted his membership in the LHBA, he told her he was going to serve on its board of directors.
Combined with the rest of Mr. Binsacks pitch, that convinced Mrs. Clauss and her husband, Chris, to hire him.
It was the beginning, she said, of a two-year nightmare that cost them $50,000 in unfinished work, plus the cost of remediating flawed work.
The LHBA Web site says its members are committed to quality in home building and urges consumers to select from its roster of members. Mr. Binsack had been a member since March 2005, when he sent in his application and a check for $390.
LHBA Executive Director Dottie Gentile said the group didnt know about Mr. Binsacks criminal history in Monroe County or New York at that time. His references checked out, she said.
While Mr. Binsack didnt disclose his crimes on the application, it hardly mattered. Mrs. Gentile said the organization wouldnt hold that against him because the crimes occurred under a different business name, and outside Lackawanna County.
They wouldnt count, Mrs. Gentile said.
As recently as early July, after an investigative report on Mr. Binsacks problems appeared in The Times-Tribune, LHBA President Joe OConnor said he was not aware of any wrongdoing by Mr. Binsack.
Mr. OConnor, who works indirectly with contractors as an employee of natural gas utility UGI, declared Mansions & Estates a member in good standing, saying the LHBA comprises only qualified professionals. When asked about Mr. Binsacks criminal record, he declined to comment and ended the conversation.
Even committing new crimes, Mrs. Gentile said, is not grounds for removal from the LHBA because there are no provisions in the groups by-laws to exclude felons or other convicts from the ranks.
A rarely invoked consumer complaint process could hypothetically force a suspension or removal in the event of multiple unresolved complaints. But in the past decade only four minor complaints were filed to the group. The only other basis for removal, Mrs. Gentile said, is nonpayment of dues.
Knowing of the LHBAs loose membership policies may have changed the perspective of some consumers, such as Camari Gaines, of Greentown. She attended the Lackawanna Home Builders Association Home Show in March. A real estate broker, Mrs. Gaines thought the Home Show would be a good place to find reputable builders. There she met Mr. Binsack, whom she hired to build a $600,000 home. In April, she gave Mansions & Estates a $60,000 deposit to start building her home.
Work never began.
When she heard of Mr. Binsacks arrest last week, she frantically called the Mansions & Estates office, the Lackawanna County district attorney and the state attorney general, wondering if she ever will get that money back.
I dont know what Im going to do, she said. I think that Im done.
The reluctance of local builder groups to remove or challenge questionable builders frustrates the Pennsylvania State Home Builders, said that groups spokesman, Scott Elliot.
The organization is bottom-up, he said, with local chapters such as LHBA setting the rules and calling the shots. Some chapters are better at policing their members than others, Mr. Elliot said.
Other locals have reprimanded members or ejected them from their groups, he said. Most of us in this industry realize we need to police ourselves.
Ethics and standards
In the end, what cost Mr. Binsack his touted membership in the Better Business Bureau was his lack of dues.
BBB Executive Director Jay Schectman said the group sent several letters to Mr. Binsack urging him to renew his membership in the group that promises to hold members to higher standards.
Mr. Binsack didnt disclose his criminal history on his BBB applications, and the board researches by business name, rather than the individual, Mr. Schectman said.
The BBB came closer to acknowledging Mr. Binsacks past and present. A member of the BBB board of directors earlier this year raised questions about Mr. Binsack, and his membership was revoked. Mr. Binsack appealed and even appeared before the committee.
His membership was re-instated, but Mr. Schectman refused to say why, saying the process was private. But the board said the BBB would monitor Mr. Binsack.
Its easy for people to say Scotty was hiding behind the BBB, Mr. Schectman said. But we were monitoring him.
Also, Mansions & Estates has a good record, as far as the BBB was concerned. No complaints. Even today, the firm has only one complaint and it was resolved. For homebuilders, complaint numbers can be lower than, say, mechanics, who may serve hundred of clients.
The BBB reliability reports are a joke, said Janet Ahmad, president of the San Antonio, Texas-based Home Owners for Better Building, an advocacy group that monitors the homebuilding industry.
She said she has seen cases in which complaints are administratively rejected, so as not to count against a business. In other cases where a BBB arbitration is looking bad for the business, the business will simply drop out of the group and leave the consumers issue unresolved, Mrs. Ahmad said. Later, the business rejoins the group with a clean slate.
People think they will file a complaint with the BBB and really show them, Mrs. Ahmad said. The BBB numbers and reports are unreliable.
When people do nothing
Both the LHBA and the BBB say the only way they could act is through written complaints from consumers and vendors.
The LHBAs Mrs. Gentile never received a formal written complaint about Mr. Binsack, only hearsay and accusations.
In March, Mrs. Clauss shared with Mrs. Gentile her experiences with Mr. Binsack: the breach of contract, failure to complete a patio and swimming pool, leaving $50,000 of paid work undone, flawed floors and walls. She also mentioned threats Mr. Binsack allegedly made against her, in the presence of her three young children.
She (Mrs. Gentile) led me to believe she had heard a lot she called it grumbling but never got a written complaint, and that they couldnt kick off a member unless it was very serious, Mrs. Clauss said. She said I would have to allow him back on my property to fix the problems, but I told her people are threatened by this man.
Mrs. Clauss decided not to file a complaint. Today, she said, she has other contractors completing and fixing the work she paid Mansions & Estates to do.
Too bad Mrs. Clauss felt threatened and didnt file a formal complaint, Mrs. Gentile said. Had someone filed a complaint, maybe we could have started the procedure.
LHBA members include vendors and subcontractors, some of whom say they were passed bad checks by Mr. Binsack. While Mrs. Gentile said she heard their woes, none was willing to put it in writing.
The wave of informal complaints hit Mr. Schectman at the BBB, as well. He said he personally called suppliers and customers, urging them to file written reports.
With no new complaints, we had no reason, he said. I asked myself why people arent filing complaints if he is so bad. It poses a problem for us.
For the last several months, the LHBA has been reviewing its by-laws to prevent other convicts from joining the group, Mrs. Gentile said.
Despite by-laws that allow convicts to escape notice by changing an address or business name and which overlook misdeeds committed outside Lackawanna County Mrs. Gentile insists that membership in the LHBA remains a mark of quality and a consumer safety net.
This is an extreme situation that organizations rarely face, she said. He is just one bad apple.
The one bad apple, though, has allegedly caused hundreds of thousands of dollars in damage to families and local businesses.
The BBB is revising its membership application to include more-direct questions about criminal history.
For now, Mr. Binsack remains a member of the Lackawanna Home Builders, even as he sits in Lackawanna County Prison awaiting a parole hearing. When asked if Mr. Binsack is a member in good standing, Mrs. Gentile said, Mr. Binsack is in a membership cycle that is good until August.
The BBBs Mr. Schectman said if Mr. Binsack were to reapply for membership, he would probably not get it.
Because of her experience, Beth Clauss said she wont put much stock in professional associations.
People assume that organizations like these are advocates for the general public, she said. They are just a group of people who (collect) dues.
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