Contractors State License Board Catches One Hundred and Sixty-Nine Suspects in Series of Statewide Contractor Stings and Sweeps

Source: CSLB

SACRAMENTO – One hundred and sixty-nine legal actions were taken against both licensed and unlicensed contractors after the Contractors State License Board (CSLB) conducted three undercover sting operations and 46 sweep operations around California. 

The enforcement actions, which took place between June 3 and June 25, 2019, were part of a nationwide effort coordinated by the National Association of State Contractors Licensing Agencies (NASCLA).  These efforts were implemented to heighten consumer awareness about the importance of hiring licensed contractors and the risks of using those who are not, and ensuring that contractors follow all relevant laws related to workers’ compensation and down payments.

“Nationwide enforcement operations like this are critical to educating consumers about the risks they take if they hire someone who’s not licensed to work in and around their home and family,” said David Fogt, Registrar of California’s Contractors State License Board. “It also helps keep the playing field level for the over 285,000 licensed contractors here in California by working to limit unfair competition.”

In California, investigators from CSLB’s Statewide Investigative Fraud Team (SWIFT) partnered with several local law enforcement agencies to conduct three sting operations at homes in Rancho Cordova (Sacramento County), Paso Robles (San Luis Obispo County), and Campbell (Santa Clara County). Forty-six sweep operations were conducted in Alameda, Butte, Contra Costa, Fresno, Los Angeles, Mendocino, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, Santa Clara, and Sonoma counties.

For the stings, SWIFT investigators contacted suspects in several ways, including through their business profiles on social media and advertisements on craigslist.org.  The suspected unlicensed operators came to the sting locations to place bids on projects like painting, concrete, ceramic and mosaic tile, flooring and floor covering, siding and decking, masonry, electrical, warm-air heating, ventilating, and air-conditioning, and tree services.  Sweeps were conducted based on tips from consumers, and through coordinated efforts with partner agencies.

Of the suspects caught in the stings and sweeps, 37 individual cases were referred to a prosecutor after a thorough investigation was made by CSLB. Additionally, 44 licensees were issued administrative citations. Also, 36 of the individuals were issued a fine for contracting without a license (Business and Professions Code (BPC) section 7028).In addition, 52 individuals, received a “Notice to Appear in Court” (NTA) and may face misdemeanor criminal charges after being caught for breaking state contracting laws.

Of those issued an NTA, 51 suspects were found to be contracting without a license ((BPC) § 7028). In California, a state-issued license is required to perform any contracting work that costs $500 or more in labor and materials combined. The penalty for a first conviction is up to six months in jail and/or a fine of up to $5,000.

Thirteen may also be charged with requesting an excessive down payment (BPC §7159.5). In California, a home improvement project down payment cannot exceed 10 percent of the contract total or $1,000, whichever is less. This misdemeanor charge carries a maximum penalty of six months in jail and/or up to a $5,000 fine.

Also, 12 of the suspects issued a court date did not have workers’ compensation insurance for their workers ((LC) §3700.5). Some of these cases resulted in 63 “stop orders” (BPC §7127). CSLB investigators can halt jobsite activity when any person, with or without a contractor license, does not have workers’ compensation insurance coverage for employees. Failure to comply with a stop order can result in misdemeanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines.    

Additionally, 45 of the individuals may also be charged with a misdemeanor count of illegal advertising (BPC §7027.1). California law requires licensed contractors to place their CSLB license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. The penalty is a fine of $700 to $1,000.

Lastly, one suspect could be charged with being an unregistered salesperson (BPC §7153). All salespeople working for a contractor must be registered with CSLB.         

“There’s no telling if someone who is unlicensed has the skills, insurance, or knows the trade well enough to do the work and to do it right, which is why nationwide enforcement operations are critical to reminding consumers about the importance of doing their homework before hiring people to work on their homes,” said David Fogt, California’s Registrar of Contractors. “Also, this month’s enforcement actions show that there’s no shortage of people ready, willing, and able to take advantage of unsuspecting consumers,” added Registrar Fogt.

Consumers can get license info by running an “Instant License Check” on CSLB’s website. They can also get a list of licensed contractors in their area by using the “Find My Licensed Contractor” feature to search for licensed contractors by city or ZIP code. CSLB also recommends that consumers get at least three bids before hiring someone for the job.
CSLB operates under the umbrella of the Department of Consumer Affairs by licensing and regulating California’s over 285,000 contractors. In fiscal year 2017-18, CSLB helped recover more than $50 million in ordered restitution for consumers, making it one of the leading consumer protection agencies in the United States.