CONTRACTS BRING CALAMITY UNLICENSED BUILDERS FACING CITY PROSECUTION.

Byline: EUGENE TONG 

Staff Writer

Elmer Cortez wanted to remodel a fixer-upper he bought a year ago in Highland Park and flip it for a profit amid the still-sizzling housing market.

Instead, his plans belly-flopped because of an unlicensed contractor who left a pit of beer cans, torn drywall and charred lumber at the job site and put Cortez more than $37,000 in the hole.

"Once we gave him the (down) payment, then he started disappearing," Cortez said Wednesday after hiring another contractor to clean up the mess. "We just sold it for below market price because we couldn't take it anymore."

Now, the Los Angeles City Attorney's Office is prosecuting Cortez's case and defendants in 28 others on allegations of unlicensed contracting, grand theft, fraud and charging excessive down payments.

"We're sending a message that, in Los Angeles, we will not tolerate or allow our homeowners to be bilked out of their hard-earned money by con artists who flout the law and cut corners to turn profit," City Attorney Rocky Delgadillo said Wednesday as he announced the charges.

Delgadillo said his office has prosecuted some 80 contractors since a crackdown in cooperation with the Contractors State License Board began a year ago.

In fact, contractor fraud is an old problem exacerbated in California in recent years, with high property values driving equity-rich homeowners to remodel old homes or improve new ones.

"We're seeing a lot of people targeted in both groups," said Rick Lopes, a Contractors State License Board spokesman. "We've got teams conducting at least one sting on average around the state every week. ... We're usually busting 15 to 20 people a day when we're doing these things."

The 32 contractors the city attorney targeted Wednesday include at least seven from the San Fernando Valley and others who came from as far away as Oxnard and Riverside.

In one case, Mahmood Sotoudeh of Torrance is accused of collecting $195,000 to refurbish a South Los Angeles commercial building before he walked away. "Because of this fraudulent behavior, the property owner is left with no business, ... only shattered hopes and broken dreams," Delgadillo said.

Delgadillo spoke before a duplex in the 1700 block of West 25th Street, where he said an unlicensed North Hollywood builder ripped off homeowners Samuel and Isabel Rosa for more than $18,000 in 2004 before he walked off a $60,000 job to build an addition.

The couple's son, Sam Rosa, said builder Ricardo Araya had the confidence of his parents because he was recommended by a relative. He strung the family along for nearly a year with promises of a refund after he stopped showing up two months into the job, Sam Rosa said.

"My mom would call him up, and the guy would say, 'I got a problem; I got a divorce,'" he said. "My mom was still being nice to the guy. ... After a while, that's when I came in. I decided to put the complaint in."

Araya is now facing charges including unlicensed contracting, grand theft and charging an excessive down payment. If convicted, he could be jailed up to a year or fined $5,000 on several of the charges.

As for Cortez, he said his home-improvement nightmare began a year ago when he offered a $50,000 remodeling job to Albert Diaz and William Chacon, both of Los Angeles.

Cortez said he knew one of them because he had done small jobs for him. He decided to hire the pair when they told him they were state-licensed and one gave him the license number.

"They have an office and a business card," he said. "We found out that wasn't his license number, that he was using somebody else's license."

Cortez said he paid $12,500 every two weeks. Six weeks and $37,500 later, the contractors disappeared, he said, and left behind a mountain of trash, including a pile of charred lumber. Apparently, they had tried to save on trash fees by burning waste in the backyard.

"It looks like they ran out of money," Cortez said. "We did a calculation of how much they spent. They only spent about $8,000 in materials. They couldn't get the job done."

In both these cases, the unlicensed builders appeared reliable to their clients. But Lopes said it takes more than a good pair of hands to be a contractor. And a licensed one has passed a business-law test and carries proper insurance.

"A lot of these people get into construction because they're really good with their hands," he said. "Sometimes some of these businesses take on too many jobs, and they couldn't get their jobs completed."

Cortez said he would do thorough research for his next job.

"Even with licensed contractors, you never know what you're going to get," he said. "I would have to do my work -- make sure to get some references to begin with, a license number, a copy of the driver's license or ID. That would help."

eugene.tong(at)dailynews.com

[phone]

Tips to consider

The Contractors State License Board offers the following tips to consider before hiring a contractor for a construction job:

Shop around before hiring a contractor.

Get at least three written bids on your project.

Check with the Contractors State License Board to make sure the contractor is properly licensed; check the status and disciplinary history of the license.

Check out contractors with your local building department, trade associations or unions, consumer protection agency and the Better Business Bureau.

Get references for previous projects the contractor has done, and follow up on them.

Pay only 10 percent of the project price or $1,000, whichever is less, as a down payment.

Make sure everything you and your contractor have agreed to is included in your contract and don't sign anything until you understand and agree with all terms.

Make frequent inspections of the work, including a final walk-through.

Don't let your payments get ahead of the contractor's completed work.

Don't pay cash.

For more information, visit the CSLB Web site, www.cslb.ca.gov, or call the CSLB's toll-free line at [phone].

CAPTION(S):

3 photos, box

Photo:

(1 -- color) Sam Rosa stands by a duplex owned by his parents, who the city attorney says were victimized by an unlicensed contractor.

(2 -- color) - Elmer Cortez, left, also says he was ripped off -- for $37,000. The L.A. City Attorney's Office is prosecuting both cases.

(3) L.A. City Attorney Rocky Delgadillo speaks Wednesday about a crackdown on unlicensed contracting. Near him, a photo shows a project one fraud suspect abandoned.

Evan Yee/Staff Photographer

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Tips to consider (see text)