Thread: Oregon unlicensed contractor steals $400,000 from locals

http://djcoregon.com/news/2016/08/17...ctims-line-up/






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Unlicensed contractor’s victims line up

By: Garrett Andrews in Construction August 17, 2016 12:24 pm

Rainier resident Michael Smith says he paid several thousand dollars for work on his driveway that was never done. According to the CCB, the contractor who took Smith’s money has defrauded at least 20 people for a total of $400,000. (Sam Tenney/DJC)

It’s not the driveway Michael Smith wanted.
The retired electrician had agreed to terms with a Craigslist contractor to pave the approach to his Rainier home and add a retaining wall and drainage. But after taking some measurements – and a $7,000 check – the man never came back.
Smith, 68, is now trawling Craigslist daily and offering a reward to help find the man he says ripped him off – Jose Francisco Guerrero Alvarez. And Smith is far from alone. According to the Oregon Construction Contractors Board, this one unlicensed contractor – one of the most egregious violators of contracting law in the state in years – has defrauded at least 20 people to the tune of around a half-million dollars.
Calls and text messages to Alvarez’s cell phone this month were not returned.

Paper trail
In the mid-1990s, Oregon moved from a registration-based system to a licensure system that involves more education and standards.
Some contractors adamantly opposed licensure because they didn’t think government had any business getting involved, construction attorney Jeremy Vermilyea said.
The second major revision to the state’s licensure laws came around a decade ago, in response to an explosion of construction defect lawsuits. The problem was that the CCB regulated commercial construction in about the same way as residential – and there are vast differences between the two. The result of the revisions – which Vermilyea helped write – was more direct CCB oversight of the residential side, where there was said to be more “bad apples.” The commercial side got more focus on education and insurance and bonding requirements.
Today, Oregon’s licensure system is a bit more robust than other states’ – Idaho, for example, has only a registration requirement.
The problem in the case of Jose Alvarez is that so far, this residential contractor has been unwilling to act within the normal bounds of society.
“If someone’s just bound and determined to be a serial violator, it’s really tough, short of throwing him in jail, to stop him from doing that,” Vermilyea said. “It’s just like getting a judgment in a lawsuit. It’s only as good as the paper it’s written on, and only as much as the person against whom the judgment is issued is willing to pay.”

‘Salesman-and-a-half’
These days, the name “Jose Francisco Guerrero Alvarez” is a fixture on the CCB’s monthly civil penalties report, appearing in most cases alongside the common offense of working or advertising without a CCB license, which often carries a $5,000 fine.
Today he owes the administration $45,000 in civil penalties tied to 10 cases. The CCB has six more completed investigations waiting to serve him.
Overall, the CCB has interviewed 20 victims, each out between $3,000 and $35,000, for a total somewhere between $300,000 and $400,000, according to CCB investigator Tim Lenihan, who’s worked on Alvarez cases for the past 14 months. Lenihan has spoken with an additional 25 possible victims who’ve declined for one reason or another to help prosecute Alvarez for fraudulent activity.
The way Alvarez typically operates, Lenihan said, is by moving into a neighborhood and performing one home improvement project that looks pretty good. This garners him more clients.
“In a short period of time, projects are having less and less work completed on them, to the point where the last people to sign on, he doesn’t perform any work for their project – he just takes the money,” Lenihan said.
CCB officials call Alvarez a “salesman-and-a-half,” a confidence man expert in separating homeowners from checks. Lenihan has spoken with people who’ve given Alvarez personal loans of between $5,000 and $25,000, including one man who owned an establishment where Alvarez liked to gamble.
In July 2015, KATU News interviewed a Beaverton woman who said Alvarez failed to deliver on a promise to build a ramp for her disabled son. Without signing a contract, she wrote him a check for $3,500. Then he stopped answering her calls. A neighbor of hers claimed Alvarez cheated her of $25,000.
What’s frustrating to Lenihan, is that he’s actually spoken in person with Alvarez many times – they’re on a first-name basis.
“At one point, I could call him up and he’d tell me where he was and I would go and serve him papers,” Lenihan said. “Now he won’t return my phone calls.”
Lenihan said that in the eight years he’s been a field investigator with the CCB he’s never encountered an offender so prolific.
Alvarez is said to live a transient lifestyle – 30 to 60 days at each stop. Lenihan has known him to live at six different addresses over the past year, including those of an ex-wife, a girlfriend and some friends. He’s known to change vehicles frequently. He recently bought a Lexus, according to Lenihan.
“I don’t know what the endgame is,” he said. “I’ve never had somebody take it this far.”
To be sure, Alvarez isn’t the only offender the CCB is after. In the past quarter, it took 350 new cases – 218 for July. From 572 jobsites checks, it issued 90 field investigation reports.
Lenihan recently served a man who had stolen $100,000 in scams similar to Alvarez’s. Earlier in his career, Lenihan saw cases where the Department of Justice got involved, injunctions were ordered and equipment repossessed to pay for fines. But other than keep doing what he’s been doing, Lenihan doesn’t know what more he can do.
“Discouraging,” is one way to put it, he said, but added, “We refer to it as job security.”

Low-impact man
One limitation facing the CCB is that working without a license is only a Class A misdemeanor, meaning the offense has to get the attention of local law enforcement and the district attorney. Otherwise, about all the CCB can do to compel an offender to stop committing crimes is notify the Department of Revenue so it can withhold money from a tax return refund.
“If (authorities are) not willing to take them on because they think it’s a low-impact crime, we’re pretty much done,” said CCB enforcement manager Stan Jessup.
This is why most habitual offenders deal strictly in cash and don’t report income. They’d have to prove the offense without any doubt, and that isn’t as easy as it might sound. Discerning an “employee” from a CCB licensee on a jobsite can be a challenge for an investigator.
Because the CCB is a civil administrative agency, the most Lenihan can do to offenders when he witnesses a violation is write a report and send it to his office (unless he teams with a local official like a police officer or a building inspector). He can neither issue a stop-work order nor a penalty in the field. A report must be written and a case officer assigned before penalties can be determined.
“The fastest I’ve seen that happen is three or four days,” he said.
Though Lenihan has had the most involvement with Alvarez, all Oregon CCB investigators are aware of him, Jessup said. They’ve been in contact with local authorities around the Portland-metro area and Southwestern Washington – police departments, building code divisions and cities.
The Washington State Department of Labor and Industries knows of Alvarez, and its inspectors are aware of his patterns of behavior, according to spokeswoman Debby Abe.

Solo project
After Alvarez stopped answering his calls and texts, Michael Smith said he realized Alvarez didn’t intend to do his driveway. Soon enough the materials arrived, and waited for days outside on pallets.
The cancer survivor ended up performing most of the work himself, and spending three days on the couch recuperating.
Smith is now offering $200 through a Craigslist ad to help find Alvarez. So far the ad has only helped him find other victims of Alvarez.
“I have to do it,” he said. “I’m still here.”