CSLB Press Release - 04/23/2007
Contractors State License Board Announces Decisions and Penalties in Major Central Valley Roofing Felony Case
Dozens of homeowners and over $350,000 in mechanic's liens involved in Modesto Roofing
Sacramento — A Tracy man was ordered to pay restitution and go to jail for contracting with dozens of homeowners and not paying a supplier, which resulted in mechanic's liens on the consumer's property. Tim Smith, Owner of Modesto Roofing (License #785746), pled guilty to misappropriation of construction funds, which is a felony. The Contractors State License Board (CSLB) and Modesto Police Department put in hundreds of hours of investigation time over the past four years on the case which at one point involved more than 100 consumers and creditors.
A mechanic's lien can be filed by any supplier or subcontractor involved in the work on a consumer's home. If the homeowner doesn't pay the liens, they could lose their property. ABC Roofing Supply Company filed liens (ranging from $1,300 to $7,900) against more than 100 homeowners, saying Modesto Roofing Company had not paid them for supplies.
Many of the 100 homeowners involved filed suits in Federal Civil Court against both Modesto Roofing and ABC Supply Company. (Modesto Roofing at one point owed in excess of $100,000 to Wisconsin-based ABC Supply, one of the largest roofing material suppliers in the country.) There was an out of court settlement in the amount of about $53,000 or .50 cents on the dollar.
Other recent rulings and court action resulted in the following for Tim Smith of Modesto Roofing:
- Sentenced March 20 to serve 180 days in jail starting May 21. (Court suspended 90 days of sentence);
- Three years of informal probation;
- Ordered to pay restitution to seven of the victims who were not part of bankruptcy settlement;
- Smith is searchable at any time of day or night for stolen property and fraudulent construction documents;
- Ordered to pay a restitution fund fine of $100;
- Contractor's license # 785746 has been revoked for a period of 5 years. (Smith can re-apply in 2011, only after showing that he complied with the terms of the criminal matter, payed the costs of investigation and enforcement, and provided proof of rehabilitation. Future licensing will also require a disciplinary bond for at least five years.
"This was a very long and trying case especially for the homeowners involved," said CSLB Registrar Steve Sands "Property owners should look for warning signs and learn how to protect themselves from actions like mechanic's liens".
There are some steps you can take to prevent mechanic's liens:
- Hire only licensed contractors and check their status at the CSLB website;
- Get a list of sub-contractors and check their licenses too;
- Ask suppliers and workers about the payment history of the prime contractor;
- Check with your local courthouse for a history of legal problems;
- Pay subcontractors and suppliers directly;
- Ask your contractor for signed conditional lien releases before making payments;
- Require a payment and performance bond;
Consumers can get information 24 hours a day using the CSLB's Website or toll-free automated telephone system at (800) 321-CSLB (2752). They can also download or order helpful publications like Preventing Mechanic's Liens free of charge. The Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. The CSLB licenses and regulates California's 308,000 contractors, and investigates more than 20,000 complaints against contractors annually. In fiscal year 2005-06, the CSLB helped consumers get more than $36 million in restitution