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Builder accused of bilking customers
Saturday, 22 January 2005

Illinois sues remodeling firm
Builder accused of bilking customers out of $470,000; cops seek president
The company was supposed to build an $80,000 second-floor addition on her Arlington Heights home, but so far, no workers have shown up to do the job.

Illinois sues remodeling firm
Builder accused of bilking customers out of $470,000; cops seek president

By Trine Tsouderos and Crystal Yednak
Tribune staff reporters
Published January 21, 2005

Teresa Backes still wonders what she paid for in October when she handed MoMax Builders a down-payment check of $20,000. The company was supposed to build an $80,000 second-floor addition on her Arlington Heights home, but so far, no workers have shown up to do the job.

"He's done no work, but he took our money," said Backes, one of a number of irate homeowners who filed complaints against the Northbrook-based home remodeler with the Illinois attorney general's office, which sued the company Thursday for allegedly bilking customers out of more than $470,000.

Also Thursday, an arrest warrant was issued for company President Fred Resnick of Highland Park on criminal charges, said a spokeswoman for the Cook County state's attorney.

The MoMax situation is an extreme version of a tale heard far too often, say officials and consumer advocates.

Complaints about home remodelers have become so common that Web sites such as Rip-off Report are popping up to give customers places to vent and, more importantly, warn others before they sign away their life savings. Bad-contractor tales have even become recurring story lines on TV shows such as "The OC."

In 2003 the Illinois attorney general's office received 2,207 consumer fraud complaints about construction and home improvement.

Consumers complained more about only one thing that year: telemarketers.

With home improvement magazines multiplying, along with shows like "Extreme Makeover: Home Edition" and "Trading Spaces," remodeling is more popular than ever. Americans spent nearly a quarter of a trillion dollars fixing up their homes in 2003, according to a study released this month by the Joint Center for Housing Studies at Harvard University.

As these projects grow in number and in cost--home improvement jobs with price tags of more than $25,000 accounted for nearly a third of all money spent in the industry in 2003, according to the study--so do horror stories of leaking roofs, tangled wiring and muddy pits in the back yard where the new sun porch was supposed to be.

Linda Sherry, a spokeswoman for Consumer Action, a national non-profit consumer education group, said homeowners can try to protect themselves by asking for a timeline when signing a contract and always checking with the state agency that regulates contractors.

It's also a good idea to interview at least three licensed contractors before signing on the dotted line, Sherry said.

"And I would never pay more than 10 percent as a down payment," she said.

But sometimes even the most careful consumers can become mired in a remodeling mess far beyond their control.

Many of MoMax's fuming customers say they had little reason to expect their projects would not go smoothly. They often signed contracts after friends gave glowing recommendations or after reading gushing testimonials on the company's Web site, which touts its corporate slogan, "Making Dreams Happen."

They also checked with the Better Business Bureau, but nothing raised a red flag.

"We did our homework. We checked, like, 20 references, and they all had positive things to say," said Tim Strevell of Kildeer, another MoMax customer who has filed a complaint.

Sometime in the last year, some customers say, MoMax stopped being reliable, started dodging calls, began doing shoddy work or, in some cases, stopped showing up altogether.

The state attorney general's office has received 18 complaints against MoMax since 2003 from people in Cook, DuPage and Lake Counties.

And in the last seven months, at least three MoMax customers have sued the company.

Resnick said his company had completed "a good portion of these jobs" and they were "trying to work through everything right now." Though he promised to explain further, Resnick failed to return calls.

The attorney general's lawsuit charges MoMax and Resnick with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act. They also are accused of failing to obtain proper permits, among other things.

The lawsuit asks the court to prohibit MoMax from engaging in home repair and remodeling business. It also seeks fines for each violation and restitution for the consumers.

"Their slogan is we build dreams. Well, that slogan has turned for many people into a living nightmare," said Melissa Merz, spokeswoman for the attorney general. "Obviously we see a lot of home repair cases, but this is unusual in the high-end amounts of money involved."

David Okon and his wife, Karyn, paid $39,000 last year on a $75,000 addition to their Mt. Prospect home, and he is fearful he will never gets his money back. The remodeling project never became anything more than a big muddy hole in the yard. "It's an incredible disaster, not only for us but for the other people involved," David Okon said.

Meghan and Joseph Sebek said their home improvement problems began shortly after they signed a contract with MoMax in February 2004 for a second-floor addition to their Evergreen Park home. They gave MoMax an initial payment of $33,000 and were told work would begin soon.

"Then nothing happened," Meghan Sebek said. "I would call all the time and I'd get fed a line."

A handful of workers finally showed up in July but disappeared for weeks at a time, she said. Workers installed flooring on the second floor before they finished electrical work, forcing them to punch through the first-floor ceiling, which made the house unlivable for nine weeks, said Meghan Sebek, who had a newborn baby at the time.

Eventually, the job was left unfinished, and the Sebeks said they had to call in other contractors. The couple, who said they paid MoMax $75,000 for the work, said they now cannot afford to file a lawsuit.

Neither can Brian Stuchl, who said he would sue if he could but would rather pull together the $15,000 he said it will take to get his kitchen and second-floor addition finished. Stuchl said MoMax abandoned both projects after signing an $85,000 contract with the Bolingbrook homeowner in November 2003.

Work began in May, but by August, no workers were showing up, Stuchl said.

"[MoMax] basically walked away," said Stuchl, who said he paid the company about $80,000.

Left with an unfinished kitchen and second floor, plus a raft of problems, including plumbing, he said MoMax rarely returned his calls. When someone did, all he heard were excuses, Stuchl said.

"I don't bother calling anymore," he said. "I don't even know if the company exists."

Top 5 consumer complaints received by the Illinois attorney general's office in 2003:
1. Telemarketing: 10,040
3. Credit: 1,997
4. Mail order-catalog: 1,393
5. Business and professional services: 1,267

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