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CSLB Press Release - 03/25/10

Contractors State License Board Stings 161 in Largest-Ever Statewide Undercover Operation

Criminal backgrounds underscore huge risk consumers take when hiring phony contractors


SACRAMENTO —Investigators have wrapped up the largest undercover sting operation in the Contractors State License Board's (CSLB) 81-year history. On Tuesday and Wednesday, March 23 and 24, 2010, nearly three dozen CSLB investigators, including members of CSLB's Statewide Investigative Fraud Team (SWIFT), partnered with 15 law enforcement agencies to conduct simultaneous sting operations in 11 cities around California.

The "California Blitz" targeted unlicensed contractors, with a particular emphasis on repeat offenders and those who don't carry workers' compensation insurance for their employees. Over the two-day period, 161 people were arrested. Most were issued a Notice to Appear (NTA) in court and will face misdemeanor charges of contracting without a license and, in many cases, illegal advertising.

Four suspects were taken to jail on felony charges; three of them had arrest warrants, including one suspect who had five different warrants for charges including obstruction of justice, possession of a controlled substance, and two DUIs. Another had a warrant for embezzlement and diversion of construction funds. One of the misdemeanor suspects had previously been convicted of burglary, child abuse and domestic violence. Another had his CSLB license revoked in 2005 and is a registered sex offender. A third was previously convicted of armed robbery and possession of a dangerous weapon.

A total of eight repeat offenders were caught, including one suspect who was convicted by a jury last month in Orange County for contracting without a license. There were more than three dozen no-shows at the various sting locations and, in other instances, suspects fled when they thought they were about to be stung. This indicates that the true number of repeat offenders might have higher, had they been caught.

The sting operations were conducted in Sonoma, Santa Clara, Sacramento, El Dorado, Madera, Kern, Santa Barbara, Los Angeles, Orange and San Bernardino Counties. Joining CSLB were local law enforcement agencies and district attorney offices, as well as the California Department of Insurance and the Department of Toxic Substances.

At all the undercover locations, CSLB investigators posed as homeowners and invited suspected unlicensed operators to bid on various construction jobs ranging from landscaping, tree trimming, and roofing to masonry, concrete, tile and painting. By law, all contractors who perform work that totals $500 or more for labor and materials must be licensed by CSLB. Since 2005, those applying for a new license or to change their license have been required to submit fingerprints for a criminal background check.

"Homeowners need to be aware of the risk they take when they hire someone who is not licensed to do work in their home," said CSLB Registrar Steve Sands. "What seems like a good deal almost always ends up costing a lot more. Many of these phony contractors are people you really don't want inside your house or around your children."

Because unlicensed operators don't carry workers' compensation insurance, they often submit lower bids. But, if one of their workers is injured on the job, the homeowner could be liable. Plus, if there is a disagreement or something goes wrong with the project, the homeowner may have few options for recovering their money from an unlicensed contractor.

The goal of the "California Blitz" is to draw attention to the dangers to consumers who hire these phony contractors, to educate unlicensed workers about California laws, and to encourage those who qualify to get their contractor license. The misdemeanor charges carry a maximum of six months in jail and/or a fine up to $5,000 for the first offense. A second violation carries a mandatory 90-day jail sentence as well as a possible fine up to $5,000.

"Unlicensed activity is a threat to all Californians," said Department of Consumer Affairs Director Brian Stiger. "It threatens the safety of consumers, it robs our communities of resources, and it puts reputable, licensed professionals at a disadvantage. The efforts of the Contractors State License Board are crucial in helping to protect consumers from physical and financial peril and ensuring that our economy is not imperiled by unlicensed individuals."

"When consumers hire unlicensed contractors, the contractors' work is unverified and is often times unsafe and unfinished. This leaves an even greater burden on their victims, who are already vulnerable and in need of help," stated Orange County District Attorney Tony Rackauckas. "These types of cases protect consumers and put unlicensed contractors on notice that they will be prosecuted."

The following are highlights from the enforcement operations:

Location Agencies Participating Highlights

Santa Rosa
Sonoma County

Contractors State License Board
Sonoma County District Attorney's Office

One-Day Operation (3/24/10)
9 Notices to Appear

El Dorado Hills
El Dorado County

El Dorado County District Attorney's Office
Department of Insurance

Two-Day Operation (3/23-24/10)
12 Notices to Appear

Morgan Hill
Santa Clara County

Santa Clara County District Attorney's Office

One-Day Operation (3/23/10)
8 Notices to Appear
1 Taken to Jail

Rancho Cordova
Sacramento County

Rancho Cordova Police Department
Rancho Cordova Code Enforcement

Two-Day Operation (3/23-24/10)
24 Notices to Appear
23 Citations for no business license
2 Repeat Offenders

Chowchilla
Madera County

Madera County Sheriff's Department

Two-Day Operation (3/23-24/10)
10 Notices to Appear

Delano
Kern County

Kern County District Attorney's Office
Kern County Code Compliance
Department of Insurance

One-Day Operation (3/23/10)
6 Notices to Appear
DA issued 3 Notices to Appear (No Workers' Compensation Insurance)

Bakersfield
Kern County

Kern County District Attorney's Office
Kern County Code Compliance
Department of Insurance

One-Day Operation (3/24/10)
13 Notices to Appear
2 Repeat Offenders

Santa Maria
Santa Barbara County

Santa Maria Police Department

Two-Day Operation (3/23-24/10)
15 Notices to Appear
DA issued 8 Citations (No Workers' Compensation Insurance)
1 Suspect's CSLB License was Revoked in 2005 - Registered Sex Offender

Calabasas
Los Angeles County

Department of Toxic Substances Control

Two-Day Operation (3/23-24/10)
22 Notices to Appear
1 suspect driving with suspended license
1 suspect had no driver license
1 suspect brought 6-year-old daughter

Orange
Orange County

Orange Police Department
Orange Code Enforcement
Orange County District Attorney's Office

Two-Day Operation (3/23-24/10)
18 Notices to Appear
1 Taken to Jail - Burglary, Child Abuse, Domestic Violence
4 Repeat Offenders - Two of them were caught in sting last October in San Clemente. One was convicted by jury last month. Another asked why he was called again since he'd been caught before
1 Registered Sex Offender

Chino Hills
San Bernardino County

San Bernardino County Sheriff's Department
Department of Insurance

Two-Day Operation (3/23-24/10)
24 Notices to Appear
2 Taken to Jail - One had five arrest warrants; the other had an unpaid $1,000.00 administrative citation that resulted from a complaint to CSLB. He also had an arrest warrant out of Riverside County for embezzlement and diversion of construction funds. He could also face additional charges in San Bernardino County because narcotics were found in his vehicle.
1 Freebie: Uninvited tree trimmer showed up at front door with a flyer and asked undercover investigator if they had any tree trimming or landscaping they needed done. He submitted a bid for $2,000.
1 72-year-old suspect said he'd "Had it with California and is moving to Florida"

The Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. More information about hiring contractors is available on the CSLB Web site (www.cslb.ca.gov or www.CheckTheLicenseFirst.com) or by calling 800-321-CSLB (2752). CSLB licenses and regulates California's 310,000 contractors, and is regarded as one of the leading consumer protection agencies in the United States. In fiscal year 2008-09, CSLB helped recover nearly $36 million in ordered restitution for consumers.