A statewide crackdown on unlicensed general contractors in California last week led to nearly 80 people taken into custody for operating without a license, including those who claimed to be pool contractors. The news was welcomed by legitimate, licensed contractors in the state who operate at a financial disadvantage to contractors working in California's large "underground economy."
The Statewide Investigative Fraud Team (SWIFT), part of The California Contractors State License Board, partnered with police for stings in Orange, Lawndale, San Bernardino, Chico, Oakdale and Bakersfield. Undercover agents posed as homeowners seeking bids on contract work like painting, electrical work, landscaping, masonry and swimming pool maintenance; most of those caught in the sting advertised their services on Craigslist.
According to California law, a person must hold a license to work on jobs valued at $500 or more, labor and materials included. As one source reported, one man told investigators he would replace pool equipment for $7,500.
As another source reports, of the 78 facing misdemeanor charges for contracting without a licence, 57 may also be charged with illegal advertising and 24 others may be charged with requesting an excessive down payment. Seventeen were issued stop orders. Those convicted of misdemeanor contracting without a license face up to six months in jail and a $5,000 fine.
However, some of the suspects already have criminal backgrounds. Among those taken into custody included a registered sex offender, a man with a prior conviction of statutory rape and a third on federal probation for bribery.
Late last month, the CSLB caught eight unlicensed contractors in the San Jose neighborhood. “Front-loading,” or asking for an excessive down payment, was one of the violations found during the sting operation conducted by the SWIFT team. One of the eight unlicensed individuals caught during the sting bid on a patio project asked for a down payment of $7,000, or more than 30 percent of the project, when the legal limit is 10 percent or $1,000, whichever is less.
All eight suspects face misdemeanor charges of contracting without a license, again meaning they face up to six months in jail and/or up to $5,000 in fines. Seven face an additional misdemeanor charge of illegal advertising; state law requires that contractors include their license number in all print, broadcast and online advertisements. Those without a license can advertise as long as the ad states that they are not a state-licensed contractor and the combined total of a project’s labor and materials costs is under $500.
In 2012, CSLB investigations resulted in 3,454 legal actions, with a record 1,188 referred to local prosecutors.