Sting operations uncover growing number of unlicensed contractors

By Buck Wargo

Saturday, May 15, 2010 | 2:01 a.m.

They arrive at the tract house unsuspecting, lured by the chance to land another job painting a Las Vegas home.

Only this time these unlicensed contractors don’t know they are about to be ensnared.

The man they have an appointment with to submit their painting bids is Kenny Peppley, a criminal investigator for the Nevada State Contractors Board. And his response will be a ticket and an Aug. 10 date in Justice Court, where they face a fine of up to $1,000.

Such stings are conducted regularly by the Contractors Board to crack down on unlicensed contracting when work is scarce and licensed contractors are losing out on the limited number of jobs available.

The Contractors Board opened 1,345 complaints in 2008 and 1,343 complaints in 2009, up from 1,195 in 2007.

“The economy is driving more people into small contractors jobs, and they are not doing it properly and legally and are leaving the public in some peril,” said Bruce King of Pete King Drywall and a member of the Contractors Board. “I am surprised there are not greater numbers of people working without a license out there.”

Some are laid-off construction workers trying to start their own repair and handyman services.

“If I was trying to feed my family and the only resource I had to keep from starving, I would probably try that,” said Bob Potter, owner of Affordable Concepts, a general contractor.

State investigators are nabbing a broad sweep of unlicensed contractors, including plumbers and electricians — who must be licensed no matter how small a job they take — and such tradesmen as painters, landscapers and concrete workers, who must be licensed if they bill more than $1,000 in labor and material.

The use of unlicensed contractors seems most prevalent in residential jobs because financially struggling homeowners are looking for the cheapest repairs and will accept the risk of hiring someone who is not licensed, Potter said.

“In many cases they are doing shoddy work and it’s not up to code and the homeowners are allowing it,” Potter said.

In one case, an unlicensed contractor remodeled the top floor by running a wood beam through the chimney as support, Contractors Board spokesman Art Nadler said.

Clients who use licensed contractors have up to four years after the work is completed to file a complaint for substandard work. There is no recourse for the property owner who hires an unlicensed contractor.

The use of unlicensed contractors is less likely for commercial projects because tenant improvements and other work are subject to permits and inspections.

Contracting without a license is a misdemeanor for the first offense, a gross misdemeanor for the second offense and a felony for the third offense that can net some jail time. Homeowners who use unlicensed contractors are not eligible for the board’s residential recovery fund that reimburses homeowners for damages, and by law their contracts are null and void.

Mariana Bridges learned that hiring someone with a reputable-sounding business name, a website, an 800 telephone number and a city business license does not ensure that a contractor is licensed. That was the case when she hired Star Home Service to put in a patio floor and roof at her Las Vegas home and paid Scott Hileman most of the $1,500 in advance. For his part, Hileman, who was not licensed, removed some dirt, and she never saw him again, Bridges said.

The Contractors Board has a felony warrant out for Hileman.

The one-day stings have proven in cracking down on unlicensed contractors.

Investigators ask contractors they know are not licensed to meet them at the sting house just as any other homeowner would call and ask for bids. The investigator who sets up the meeting poses as the homeowner while other investigators pose as relatives.

While one investigator takes the contractor through the home to discuss the scope of work, another investigator notes the contractor’s license plate number.

Once a bid is made, the investigators reveal themselves.

Some contractors appear to look stunned and puzzled. Many say they thought their business license sufficed.

That was the case with Sandoval Gonzalez, owner of Gonzalez Services, who had the bad luck of painting and remodeling next door to the sting house. Gonzalez had seen Peppley at the house and told him if he needed any work to be done, he would submit a bid.

Gonzalez said he has worked as a carpenter in the past but there was no work and he recently decided to start his own business. He said he had no idea he needed a state license and was upset about what happened to him.

“I don’t feel very good and don’t know what’s going on,” said Gonzalez, who was caught in the sting. “I am going to try as soon as possible to get a license, but I have no money.”

The situations aren’t tense or adversarial. Investigators explain to the contractors that they can do the work if they get a license, which requires testing and proof of sufficient financial wherewithal to finish the job.

Some end up getting licenses, but many don’t because they don’t have the knowledge to pass the tests or credit worthiness that are required, Peppley said.

“I am not saying all are bad,” Peppley said. “There are some honest guys out there who do quality work, but they are still unlicensed. There are a lot of guys playing by the rules, and the unlicensed ones are taking work away from those guys.”