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Bad contractors ruin the ruined in Katrina's wake

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NEW ORLEANS -- Herreast Harrison wanted to rebuild after Katrina and thought she did everything right: She hired a contractor who seemed kind and listened to Christian music on the job. Months later, she claimed, he pocketed $57,000 and walked off with work undone, leaving a mess behind.

Harrison said it took thousands more to put things straight.

Three years after Hurricane Katrina, complaints about contractors continue, swamping legal aid attorneys and watchdog groups alike. Victims are left coping with shoddy work, incomplete work and sometimes outright fraud.

"It seems like it's going on and on," said Cynthia Albert, a spokeswoman for the local Better Business Bureau.

Katrina, which pummeled southeast Louisiana and the Mississippi Gulf Coast, destroyed or damaged most of the occupied housing in New Orleans in August 2005. Long after the floodwaters receded, ravaged neighborhoods provided ample opportunity for shady operators to make a fast buck off desperate people.

In New Orleans, vast swaths of some neighborhoods are still devastated. A recent count put the number of federally issued trailers here at nearly 3,000, most outside homes people are trying to rebuild.

By one estimate, for every licensed contractor working in the state, there are five who aren't licensed. Thousands of complaints have been filed, and hundreds of criminal investigations have been conducted across the Gulf Coast.

Many wind up as civil matters. All too often in such cases, neither the homeowner nor the contractor has left a paper trail of what is expected and delivered.

"The one message I'd like to leave with the public is, 'Please do your homework before you hire somebody' and 'Please hire a licensed contractor,'" said Paulette Holahan, chief of screening for the Orleans Parish district attorney's office.

Asked if the total amount residents could have been bilked out of runs into the millions, she answered: "Collectively? Easily."

After Katrina, there were waves of complaints as homeowners, flush with insurance proceeds, turned to workers who promised fast, cheap results. The volume of work at hand kept legitimate contractors busy but also offered easy pickings for scam artists.

Some, lawyers said, were fly-by-night outfits whose operators could leave the area or the state after getting money upfront for work they never did. Lawyers and watchdogs also suspect there have been contractors who have been overwhelmed by the low-bid work they took and wound up leaving houses unfinished.

Some homeowners, after the storm and fighting contractors, have little fight left for court. And even if they do, it can be difficult to track down bad contractors.

The Louisiana attorney general's office received an average 45 contractor complaints a year before Katrina; in the last two years, it's received more than 6,000 complaints, at least 515 of them deemed criminal. A spokeswoman did not say how many cases are being actively prosecuted.

About 300 of the 1,200 complaints through the Mississippi attorney general's office have resulted in criminal investigations and at least 85 arrests; suspects have been tracked to at least seven states. Under a Mississippi home repair fraud law, shady contractors can face fines starting at $1,000, for a first offense, plus jail time.

In Louisiana, criminal cases tend to be classified as misappropriation of funds -- if, say, a subcontractor places a lien on a house because the lead contractor didn't pay him what he was due -- or felony theft, which allows for fines and jail time.

The state licensing board deals with complaints about unlicensed work, not damages or blame, and fines it levies go toward a contractor education campaign. There is no reimbursement fund for victims, who's recourse often is the courts.

In 2007, the board collected about $363,000 in fines -- 3.5 times an average pre-Katrina year.

In spite of having 25 investigators, "we don't have ... the foot soldiers or the strength to really offset the tide," said Charles Marceaux, the board's former executive director.

Resources are tight for the District Attorney's Office and legal aid attorneys, already spread thin by other housing and post-storm complaints.

Meanwhile, horror stories abound.

Susan Meredith expected to pay about $200,000 or more for a reconstruction job she said initially was estimated at $108,000. Her first contractor, she said, was an old friend of the family who asked for thousands of dollars to start, came "four days, maybe five," and never returned. She was on her third unlicensed contractor.

"That's a mistake of mine, that he isn't licensed," the hospital worker said.

Toni Wendel often hears such stories at the monthly administrative hearings of the Louisiana State Licensing Board for Contractors.

"Some people don't understand how they could be taken," she said.

Holahan said the DA's office is bracing for more complaints as the last of the roughly $10 billion in rebuilding aid finds its way from the state to homeowners in coming months. Then the complaints will ebb, she hopes.

Investigators were out recently with licensing board inspectors, examining partially finished homes in one eastern New Orleans neighborhood where residents George Augustin and Joyce Jackson hired the same contractor. Both claim they were cheated.

Jackson said the contractor, Christopher Neal Joseph, built two houses beautifully but left her with a shell of a home, including crooked beams and a leaky roof. Augustin and his wife have sued, claiming the contractor and his company did not complete the terms of their contracts.

Messages at a number for Joseph were not returned; his attorney also did not return calls.

"It's a mess," Jackson said, adding she must pay rent and the mortgage until her home is fixed.

As for Harrison, she doesn't know if she'll ever get her money back. She said she sued after waiting a year, saying she hoped her contractor would put things right. That contractor has refused interview requests.

Now she hopes for justice through the courts.

"I believe in a higher source," she said, "and I believe that higher source is a regulator."

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Related Link:

State Licensing Board for Contractors: www.lslbc.louisiana.gov

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