In 2007, CCI Homes owner Jesse Battle III didn’t pay subcontractors or material suppliers for nearly 600 contracted homes in the region.
Court records show he drew $66 million from his clients’ loans while hundreds of thousands in liens poured in. His clients were left with those liens. And, ultimately after he filed for bankruptcy, it prevented some of his victims from finishing their homes.
About 150 customers pooled their resources and hired Sarasota attorney Alan Tannenbaum. He represented them in court, and navigated through the state Homeowners Construction Industry Recovery Fund.
Tannenbaum also argued some of the mortgages issued to CCI Homes were fraudulent. He found conflicts of interest with banks that favored CCI Homes. Tannenbaum, who handled these type of cases for 40 years, helped victims recover some of their money. What he couldn’t do was assure anyone that Battle was held accountable for his actions in fraudulently building 300 homes a year.
“Jesse Battle III defaulted on 600 home construction contracts and didn’t serve a day in jail,” Tannenbaum said in an interview with the Sun. “The subcontractors and material contractors were owed $7 million by the time CCI Homes went bankrupt. Somehow the state attorneys weren’t too aggressive with doing anything about it. Jesse never went to jail.”
In the past few weeks, Tannenbaum has been hearing similar complaints from customers of HD Custom Homes in Charlotte County. More than 55 customers from Port Charlotte, Englewood, North Port and Arcadia are communicating on a Facebook page called HD Owners United!, which was launched by customer Erich Richey. Richey says he still doesn’t have all the contracted items he paid HD Homes for two years ago when he started his home. Members of his Facebook group share stories and documents they say show how HD Custom Homes collected thousands for their homes, but left many incomplete.
This week, members of the Facebook group began posting photos of what they say are HD Custom Homes model homes being cleaned out this week. Many customers say HD Custom Homes owners Stephen Dukes and Matt Harden aren’t answering their phone calls. Instead, a handful of customers received a text message from Dukes that read “I’m truly sorry.” However, HD Custom Homes still has an active website soliciting to build dream homes in the area.
Members of the Facebook group want answers, saying they’ve lost thousands and are left with hundreds more in liens for unfinished homes.
Tannenbaum says there is help available if the builder does not respond.
“We handled about 150 recovery fund claims,” Tannenbaum said. “I’m very familiar with the process. Every time someone wants a building permit, a small portion of the fee goes into the Florida Homeowner Recovery Fund. There is a state licensing board that approves if someone wants a state plumbing or contractor’s license. They are the ones who can take the license away. That board also administers decisions from the homeowner’s recovery fund.”
According to Florida statute, the board allocates $500,000 in recovery funds per builder with up to $50,000 paid to each individual impacted by that builder.
“Even if your loss was $200,000, once the $500,000 limit is reached per builder, everyone else is out of luck,” Tannenbaum said. “In the case of CCI Homes, I was able to get the state to add to the fund and make it a $1 million cap because there were so many victims.”
Tannenbaum said there’s a specific criteria for victims before the board determines eligibility for recovery funds. Victims must certify they will live in the home six months of the year. They cannot be investors.
Victims must have a court judgment against the builder showing an effort to collect the money. Even if it’s unsuccessful, the judgment shows the victim tried to recover their money, Tannenbalm said.
“That process takes about two months,” he said adding it takes several more months to give the builder time to pay. “The other route for clients is if the builder files for bankruptcy, the state will accept it as a judgment. Bankruptcy is actually the quickest way the builder could help these people.”
Tannenbaum said he’s willing to meet with a group of alleged victims of HD Custom Homes.
“When CCI went bankrupt, the bankruptcy court disallowed all of the claims,” Tannenbaum said. “That allowed the homeowners to petition the state licensing board for the recovery fund. I was able to represent about 150 of those victims at once. What happens is this state licensing board meets in a different location throughout Florida. So they could be in Miami one month and Pensacola the next month and Jacksonville the next month. They give the homeowners a seven- to 10-day notice of the hearing at whatever location they are going to meet. Instead, our law firm will represent the group and the individuals aren’t required to be at the hearing. We present the evidence.”
Tannenbaum said homeowners can pool their money to hire an attorney. When money is recovered from the state, it goes to a lawyer trust account and prorated for everyone in the group.
“This way there’s no rush to the recovery fund,” he said. “In our cases, we’ve made arrangements with clients and they are all paid something from the recovery fund. The state recognizes that process. We’ve done that on two occasions. We had to do it for a group of 30 or 40 homeowners who had similar issues with Paradise Homes. The group shared the proceeds of what was recovered by the fund.”
Meanwhile, complaints against HD Custom Homes are mounting.
CCSO starts blog
As of Tuesday, North Port Police Department received one fraud complaint from a customer for an incomplete home on Carmella Street.
On Tuesday, the Charlotte County Sheriff’s Office launched a blog about the 25 complaints it received from HD Custom Homes customers.
Cpl. Paul Guyton, certified fraud examiner and certified anti-money laundering specialist for the Charlotte County Sheriff’s Office, is examining HD Custom Homes, its officers and the company’s legal status to do business.
“Cpl. Guyton and his team are amassing contractual, financial and other specific documentation from those who contracted with HD Custom Homes and suffered consumer harm,” the Sheriff’s Office said in a statement. “CCSO encourages those who suffered losses with HD Custom Homes to follow the process as prescribed by Florida State Statute 489.126 which addresses ‘moneys received by contractors’ as there are certain requirements that must be completed prior to charges being applicable against a contractor for theft.”
Documentation or communication regarding this topic can be sent to the Economic Crimes Unit by email to email@example.com.
Tonight, Erin Mullen-Travis, Charlotte County licensing manager, is expected to bring two charges against HD Custom Homes to the county’s Construction Industry Licensing Board for financial mismanagement and fraud. If the board approves, those charges will be sent to the state licensing board which could revoke HD Custom Homes’ state license. Charlotte County can also revoke HD Custom Homes’ ability to pull permits in the county as well.
Mullen-Travis said anyone with a complaint can speak for five minutes during the licensing board’s meeting, set for 6 p.m. at the Murdock Administration Center, 18500 Murdock Circle, Commission Chambers Room 119, Port Charlotte.