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CSLB Press Release - 10/19/12

Contractors State License Board Cracks Down on Unlicensed Activity during California Blitz

Repeat offenders slow to learn crime doesn’t pay


SACRAMENTO — Nearly 100 people face the possibility of criminal charges after being caught in simultaneous statewide undercover sting operations this week conducted by the Contractors State License Board (CSLB). Among those arrested during CSLB’s fall California Blitz were several repeat offenders, including one who was caught in a CSLB sting just two weeks ago.

Investigators from CSLB’s Statewide Investigative Fraud Team (SWIFT) conducted stings on October 17 and 18, 2012, in Alameda, Los Angeles (2 locations), Monterey, Placer, San Diego, San Luis Obispo, and Sonoma counties. SWIFT investigators posed as homeowners seeking bids for home improvements such as painting, flooring, landscaping, fence repair, tree trimming, gutter installation, and water heater replacement.

A total of 92 individuals were arrested and now may face misdemeanor charges for contracting without a license (Business and Professions Code section 7028). The penalty for a conviction is up to six months in jail and/or a fine of up to $5,000. At least two are repeat offenders and now face a mandatory 90-day jail sentence if convicted a second time.

Seventy-seven of the individuals also may be charged with illegal advertising (Business and Professions Code section 7027.1). State law requires contractors to place their license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. The penalty is a fine of $700 to $1,000.

Twelve others may be charged with requesting an excessive down payment (Business and Professions Code section 7159.5). In California a down payment cannot exceed 10 percent of the contract total or $1,000, whichever is less. This misdemeanor charge carries a maximum penalty of six months in jail and/or up to a $5,000 fine.

Fourteen of the phony contractors also were issued Stop Orders (Business and Professions Code section 7127). CSLB investigators can halt job site activity when any person with or without a contractor license does not have workers’ compensation insurance coverage for employees. One licensee also was given a Stop Order. Failure to comply with a Stop Order can result in misdemeanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines.

The totals may increase as some suspects are expected to provide their bids via email or fax.

STING HIGHLIGHTS

Andy Karl Kelly is all too familiar with what it’s like to get stung by CSLB. Kelly was arrested at a sting in Yolo County two weeks ago (Press Release). Even though his CSLB license (#931776) expired in April 2011, he has continued to work, regularly placing multiple ads on craigslist.org. Those ads continued to be posted after Kelly’s recent arrest, so CSLB investigators invited him to the Roseville sting. Kelly and his business partner, Anthony Lester Arriola, showed up. Even though they did not give a bid, both were taken into custody for fraudulent use of an invalid license number (Business and Professions Code section 7027.3) in some of the craigslist ads. That violation can be charged as a felony, which carries a possible penalty of up to one year in jail and a fine of up to $10,000.

A suspect caught in the Union City sting is connected to one of CSLB’s Most Wanted. Investigators contacted Samuela Lavulavu and invited him to give a bid for concrete work. Lavulavu sent someone else to give the bid. That man gave the undercover investigator a CSLB-issued pocket license for a different company. He left the sting house midway through the bid process, saying there was an emergency. Vaionita Foketi arrived a short time later, stated he was from Lavulavu Concrete, and gave the CSLB investigator a bid. Foketi was arrested for contracting without a license. Investigators now will try to determine if the legitimately licensed contractor will face administrative action, for either not carrying workers’ compensation insurance, or for aiding and abetting unlicensed activity.

A few of those caught were formerly licensed contractors. Gary Gene Gayer had a contractor license from 1988 through 1990. It is unknown how many of the last 22 years he has worked without a license. But, during this week’s sting in Arroyo Grande, he gave a CSLB undercover investigator a bid for concrete work. The next day, he posted an ad on craigslist that included a greeting to the investigator.

CSLB investigators at the Redondo Beach sting were assisted by the federal Immigration and Customs Enforcement (ICE) Fugitive Unit. Agents helped when suspects could not be identified or were in the United States illegally. ICE was responsible for identifying the suspects and determining if they had prior criminal history or previously had been deported. Eleven suspects were booked by ICE during the two-day operation.

Also in Redondo Beach, CSLB investigators noticed a house next door to the sting property was being painted. During a break, an investigator asked the man doing the work for a business card and determined that he was the business owner and might be unlicensed. He invited the man, Jacinto Borjas-Ayon, to the house to give a bid. Borjas-Ayon bid and was arrested. He also was booked by ICE and his vehicle was towed because he did not have a driver license.

“CSLB and its partners in law enforcement are serious about enforcing our state’s consumer protection laws,” says CSLB Registrar Steve Sands. “Unlicensed, illegal activity that puts homeowners at risk and puts those who follow state laws at a competitive disadvantage will not be tolerated.”

"The Alameda County District Attorney's Office remains dedicated to protecting citizens from unlicensed contractors," says District Attorney Nancy E. O'Malley. "This Office receives a number of complaints each year from individuals who have been defrauded by unscrupulous contractors. When appropriate, we file criminal charges and always seek restitution on behalf of the victims."

Participants and results from the two-day blitz are noted below:

STING LOCATION NOTICES TO APPEAR
PARTNER AGENCIES
Arroyo Grande 8 Arroyo Grande Police Department

San Luis Obispo County Sheriff's Office

San Luis Obispo County District Attorney's Office

Manhattan Beach 11 California Highway Patrol

Los Angeles County District Attorney's Office

California Employment Development Department

Redondo Beach 18 Redondo Beach Police Department

Redondo Beach City Attorney's Office

Immigration and Customs Enforcement

Roseville 12 Roseville Police Department

Placer County District Attorney’s Office

Amador County District Attorney’s Office

San Diego 5 San Diego Police Department

San Diego City Attorney’s Office

California Department of Insurance

Santa Rosa 7 Department of Consumer Affairs' Division of Investigation

Sonoma County District Attorney's Office

Seaside 17 Seaside Police Department

Monterey County District Attorney’s Office

Union City 14 Union City Police Department

Alameda County District Attorney’s Office

CSLB urges consumers to follow these tips before hiring anyone to work on their home or business:

  • Only hire licensed contractors and ask to see their license and a photo ID to verify their identity.
  • Always check the license number on CSLB’s Instant License Check feature to make sure the license is in good standing, and that employees are covered by workers’ compensation insurance.
  • Never make a down payment of more than 10 percent of the contract price or $1,000, whichever is less. There is an exception for about two dozen licensees who carry speial bonds to protect consumers. These exceptions are noted on CSLB's website.
  • Don't pay in cash, and don't let payments get ahead of the work.
  • Get at least three bids, check references, get a written contract, and make sure you understand all terms before signing the contract.

The California Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. More information and publications about hiring contractors are available on CSLB’s website or by calling (800) 321-CSLB (2752). You also can sign up for CSLB email alerts. CSLB licenses and regulates California’s 300,000 contractors, and is regarded as one of the leading consumer protection agencies in the United States. In fiscal year 2011-12, CSLB helped recover nearly $36 million in ordered restitution for consumers. .