New Jersey Division of Consumer Affairs Files Complaint Against Contractor Alleging Fraud in Connection with Rebuilding and Repair of Sandy-Damaged Homes

NEWARK – (RealEstateRama) — Attorney General Christopher S. Porrino and the Division of Consumer Affairs have filed a complaint alleging that a contractor doing business along New Jersey’s coast used deceptive practices to obtain more than $1.3 million in federal relief funds from 23 homeowners who sought to have their damaged homes rebuilt, elevated and/or repaired after Superstorm Sandy.

The complaint, filed in the Superior Court Chancery Division in Atlantic County, alleges that Werks Intended LLC (d/b/a McAllister Building Group), along with the company’s owners, Lawrence “Tre” McAllister, III and Monica McAllister (“Defendants”), violated the New Jersey Consumer Fraud Act, the Contractors’ Registration Act, the Regulations Governing Contractor Registration, the Regulations Governing Home Elevation Contractors, the Regulations Governing Home Improvement Practices and the Regulations Governing General Advertising.

The complaint alleges that the company and its owners took money from consumers to renovate, rebuild and/or elevate Sandy-damaged homes and then abandoned unfinished projects without returning for weeks, months or at all. The complaint also alleges the defendants who maintained an office in Somers Point, repeatedly stalled customers and made excuses concerning when work would commence, continue or be completed.

“It is an outrage that unprincipled, shameless contractors have taken advantage of residents whose homes were damaged by Superstorm Sandy,” said Attorney General Porrino. “This office will continue to pursue those whose fraudulent behavior has victimized these people again.”

“The Division has made it a priority to find and confront those contractors who have committed fraud and have done substandard work following Superstorm Sandy,” said Sharon M. Joyce, Acting Director of the Division of Consumer Affairs. “We will continue to seek the return of federal money spent as well as restitution for consumers in these cases.”

The consumers identified in the Complaint received money from the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program and the Low-to-Moderate Income (LMI) Program, administered by the New Jersey Department of Community Affairs, to pay for construction work on Sandy-damaged homes. The RREM Program is the state’s largest rebuilding initiative.

“We thank the Division of Consumer Affairs for diligently investigating Sandy contractor fraud claims and taking legal action against contractors when warranted. This important work shows the State is rooting out deceptive contractors and helping Sandy survivors get their rebuilding projects back on track,” said Department of Community Affairs Commissioner Charles A. Richman.

The Complaint alleges that the defendants were paid more than $1.6 million in RREM and LMI funds for home elevation, demolition and renovation projects. Four of those homeowners claim the defendants took deposit money and did no work. The Complaint states that at varying times, the company did substandard work, failed to make necessary corrective repairs and caused damage to homes and failed to fix their errors or compensate homeowners for the damage.

The Complaint, among other things, also alleges that:

• The defendants failed to include in its contracts start and completion dates or provided information that was so vague and complex that consumers could not determine when work was to start or be completed.

• The defendants told consumers that construction was delayed because they were waiting for permit approval, but when consumers checked with building permit offices, they found that permit applications had not been filed, permits had not been issued because of defects in the application, or that permits had been issued, but not picked up.

• One consumer had to appear in court to pay a fine because the defendants had failed to maintain dumpster permits.

• The defendants failed to pay subcontractors and other third-party vendors, such as demolition companies, dumpster companies and architects, when consumers had already paid the defendants for the applicable work.

• The defendants asked consumers for more money, stating that the company did not have money to finish the jobs, and threatening to walk off the jobs unless more money was provided. In some cases, the defendants stopped work until the consumers paid more money.

The Division is seeking restitution for any party affected by the defendants’ alleged conduct, a return of the federal funds acquired by the defendants and civil penalties for the alleged violations of the Consumer Fraud Act. The Division also is seeking to permanently enjoin the defendants from doing construction work in New Jersey.

Investigators Joseph Iasso and Jared O’Cone of the Division’s Office of Consumer Protection conducted the investigations.

Deputy Attorney General Cathleen O’Donnell of the Consumer Fraud Prosecution Section within the Division of Law, is representing the State in the action against McAllister Building Group.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.

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