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Homeowners Fall Prey to the Con After the Storm

In New Orleans and beyond, complaints against fraudulent contractors have soared since Katrina and show no signs of abating.

September 27, 2006|Ann M. Simmons | Times Staff Writer

NEW ORLEANS — Like so many other homeowners whose properties were left in ruins by Hurricane Katrina, Wanda and William Mason wanted badly to get their house repaired so they could get on with their lives.

But after paying a $16,000 deposit to a contractor to begin work on their home in the Gentilly neighborhood, they got their second harsh blow in one year: Their contractor disappeared with their money after less than a week of work.

"I can't figure out how I didn't see this coming," said Wanda Mason, 58. "I want to kick myself because I know better. But we were so desperate, trying to get home."

Complaints against fraudulent contractors have skyrocketed since Hurricane Katrina, according to Louisiana state officials, city government and local attorneys.

"It's a huge problem in the Greater New Orleans area, and outside," said Cynthia Albert, a spokeswoman for the Better Business Bureau of New Orleans. "There are very good contractors, but also a lot of bad ones, more so than before. A lot of them are very, very new to this industry, but they see that this is a very lucrative opportunity and have taken advantage of it."

Charles Marceaux, executive director of the Louisiana State Licensing Board for Contractors, said his agency was fielding 491 complaints against contractors, all generated since Katrina hit. Most of the grievances involve charges of shoddy or incomplete work, and are against out-of-state and unlicensed contractors.

Marceaux said that since Katrina, the licensing board has issued about 3,500 citations to contractors for lacking state licenses or for substandard work. Before the hurricane, between 1,500 and 1,800 such citations were issued a year.

The Louisiana attorney general's office says it is pursuing criminal investigations of 183 cases of alleged contractor fraud, and another 48 are being reviewed for criminal activity. There have been 20 related arrests. And 135 other cases are being investigated as civil matters by the Consumer Protection Section of the state attorney general's office.

"It's awful," said Bradley Elizabeth Black, a staff attorney at the Loyola University School of Law, which has established a Katrina law clinic to help residents tackle post-storm legal issues, including contractor fraud. "People have been waiting for a year. They finally get their insurance money. They get a contractor. And then they get screwed."

The bilking of victims by dishonest service providers in the aftermath of a natural disaster is not unusual, lawyers and building industry officials said. But the scale of the destruction caused last year by hurricanes Katrina and Rita -- more than 200,000 homes and 81,000 businesses in Louisiana were damaged, according to state statistics -- has made the problem in New Orleans exponentially worse.

"Those who are unlicensed and uninsured and are not complying with the rules here in Louisiana, and are doing shoddy work ... will set the stage for tarnishing the reputation of all those who are licensed and insured and [working] with integrity," said Jon W. Luther, executive vice president of the Home Builders Assn. of Greater New Orleans, which has 1,000 members, including building contractors and industry suppliers.

The Masons' yellow wood-paneled, two-story home had a foot of floodwater in the front part of it, and 5 feet of water in the rear.

Keith and Shy Perique, relatives of the Masons, referred the couple to a Houston-based contractor, who drew up an agreement that included gutting the home, installing sheet rock, doing plumbing and electrical wiring and restoring a new kitchen and the property's downstairs master bedroom. At the time, the contractor had already started work on the Periques' house, less than a mile away, and that boosted the Masons' confidence in him. In addition, the company had a website, professional-looking business cards, and the lead contractor presented the appropriate Louisiana license.

So the Masons acquired a city permit to allow the repairs to begin and handed over a $10,000 check, a deposit for the job that was expected to cost $65,250.

According to the Masons, the main builder showed up with a team of laborers, worked for less than a week laying, but not connecting, some electrical wires. But after the Masons made another $6,000 payment, the contractor disappeared.

"We kept calling and calling," Wanda Mason said one recent morning as she sat on the porch of her home flipping through a file folder that included copies of the contract and deposit checks.

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