Illinois Attorney General Madigan Seeks Temporary Restraining Order Against Home Repair And Remodeling Company And Owner
31 Consumers Allegedly Bilked For Approximately $2.1 Million

January 28, 2005 -- Chicago – With an avalanche of consumer complaints piling up and at the request of the office of Attorney General Lisa Madigan, Cook County Judge Peter Flynn this afternoon entered a temporary restraining order (TRO) against a Cook County construction and home repair company and its president after they allegedly bilked 31 consumers out of approximately $2.1 million.

Madigan’s office filed a motion for the TRO late Wednesday in Cook County Circuit Court against MoMax, Inc., and company president Fred Resnick of Northbrook. The TRO, which was granted late this afternoon, prohibts Resnick and MoMax from engaging in the home repair, improvement or remodeling business; spending, withdrawing, concealing or transferring money except to pay taxes, attorneys fees or ordinary living expenses; and orders Resnick and his company to preserve all business-related records and materials.

Today’s TRO is effective until further order of the court. A status hearing has been scheduled for February 8 at 10:30 a.m.

Since December 1, 2004, Madigan’s Consumer Fraud Division has received 27 consumer complaints against MoMax and Resnick. In total, Madigan’s office has received 31 complaints against the company since 2003. Twenty-two of the 27 latest complainants reside in Cook County; the other five reside in DuPage, Kane, Lake and Will Counties.

“What started out as a small blizzard of complaints has turned into an avalanche of alleged fraud,” Madigan said. “From the stories we are being told, the amounts of money lost and the problems these defendants have caused appear to be truly enormous. While these defendants advertised themselves as being in the construction business, very often, they were in the destruction business. We are making every effort to ensure that they will be held accountable.”

Using a flashy, colorful Web site to entice consumers, MoMax solicits business online and then sends a representative to visit consumers in their homes to negotiate and sign contracts for home repair and construction projects. According to the complaints, the MoMax salespersons promised that large-scale construction projects could be finished in a few months and that MoMax’s own qualified construction experts would be used to complete the jobs.

The following are examples of the complaints against MoMax and Resnick:

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One Evanston couple allegedly gave MoMax more than $100,000 to begin a second story addition to their home. To do this work, MoMax was required to seek permits from the Village of Skokie (some Evanston residences are under Skokie zoning); however, the company allegedly failed to submit the paperwork, then never appeared at a Skokie zoning meeting which was required to obtain the permit. The couple, who were expecting their first child at the time, returned from out of town and learned Resnick had done nothing and put their project months behind.
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One Highland Park resident allegedly gave the defendants $80,000 to remodel a basement. The resident paid 60 percent of the project’s cost up front after the defendants promised substantial savings and that workers could begin more quickly because of the payment. The resident also was allegedly pressured to write several checks instead of one single check. In the first two months after entering the contract, the workers were on the job only four days. Each time, a conflicting excuse was given by defendants. The homeowners allegedly also found several items missing from their home after workers were there. The homeowners requested several meetings with defendants which did not occur, and project was never completed.
* One Mt. Prospect couple filed a complaint with Madigan’s office alleging a detailed saga of a contract with MoMax for a kitchen addition. The couple, who contracted with MoMax in June 2004, made down payments totaling more than $39,000 and spent months wrangling with MoMax and Resnick after the consumers’ gazebo and patio were removed, leaving a large hole in the backyard and huge mounds of dirt covering the landscape. Intermittent work has taken place, but as of today, the gaping hole is still there and little to no work on any kitchen addition has been completed. The victims also received a “stop work” order on construction at their home because the builder’s check to the village for a building permit bounced – more than once.
* A Hoffman Estates couple contracted with MoMax in March 2004 for a sunroom addition and paid the total cost of the job, which amounted to more than $55,000. While MoMax completed this job, unlike other cases, the company forged two waivers of lien, which resulted in liens against the couple’s home because MoMax allegedly never paid vendors for the sunroom windows.

MoMax, Inc., which also does business as MoMax Builders, Inc., is an Illinois corporation currently not in good standing for failure to file annual reports with the Illinois Secretary of State. Resnick and MoMax have been engaged in the practice of home repair and construction and have advertised their services since at least 1992.

Resnick and MoMax are charged with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act for accepting money and then failing to either begin work on the consumers’ homes or finish projects they did start, failing to refund homeowners’ down payments after the homeowners had canceled their contracts, providing consumers with invalid certificates of insurance and waivers of liens, and accepting money for the home repair projects and then deposited it into personal accounts or used it for personal expenses.

In addition, the defendants allegedly failed to obtain proper permits before beginning work on the consumers’ homes, failed to provide consumers with the legally-required notice of consumers’ three-day right to cancel and failed to provide homeowners with copies of the home repair consumer’s rights pamphlets.

Madigan’s original January 20 lawsuit asks the court to prohibit the defendants from engaging in the business of home repair and remodeling and from further violating Illinois’ consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Finally, Madigan’s lawsuit asks the court to order the defendants to pay restitution to consumers.

Assistant Attorney General Adam Sokol is handling the case for Madigan’s office. Consumers who believe they have been the victim of MoMax, Inc., or another consumer fraud scam can download a complaint form at www.IllinoisAttorneyGeneral.gov/consumers or call the Attorney General’s Consumer Fraud Hotline at the following numbers:

Chicago: 1-800-386-5438 and 1-800-964-3013 (TTY)
Springfield: 1-800-243-0618 and 1-877-844-5461 (TTY)
Carbondale: 1-800-243-0607 and 1-877-675-9339 (TTY)

In addition, Madigan’s office offers online consumers tips on how to avoid becoming a victim of a costly home repair scam at:
www.illinoisattorneygeneral.gov/consumers/sept04_consumer_issue.pdf and www.illinoisattorneygeneral.gov/consumers/homerepair_construction.html and
www.illinoisattorneygeneral.gov/consumers/tips.html.