Bankrupt Spring Hill home builder accused of fraud
Eric J. Ludwig closed his office in August and left town, leaving behind unpaid bills and more than a dozen would-be homeowners.
By DUANE BOURNE
Published March 3, 2004
BROOKSVILLE - A bankrupt home builder, who reneged on contracts to build custom homes, was charged with defrauding 10 customers of more than $160,000.
Hernando County detectives issued an arrest warrant for Eric J. Ludwig on Feb. 23. On Monday afternoon, Ludwig, 31, of Wernersville, Pa., turned himself in at Hernando County Jail, a sheriff's report said.
He was charged with one count of organized scheme to defraud and five counts of making false statements, felonies punishable by up to 35 years in prison.
Ludwig was later released after posting $20,000 bail.
In August, Ludwig abruptly closed his Ludwig Designs, Inc. office on Forest Oaks Boulevard, Spring Hill, and left town, leaving behind unpaid employees, delinquent credit card bills and more than a dozen would-be homeowners, who had forked over thousands of dollars on the promise of new homes.
His disappearance prompted subcontractors to place liens on his clients' property because they, too, had not been paid, records show.
Shortly afterward, Raymond Miller and his wife, Annette, contacted the Sheriff's Office looking for answers. Detective Curt Turney said on Tuesday that the Millers, who were the first to come forward, were concerned because work had stopped on their home on Warm Wind Way, north of Weeki Wachee, and Ludwig was not around to answer their questions.
In the ensuing months, other homeowners began filing similar reports with the sheriff's economic crimes unit, which began to investigate Ludwig's business practices. Some of the prospective homeowners were not named as victims in the investigation, but Turney added that additional charges could be filed against Ludwig in the future.
Ludwig's residential contractor license expired in August, according to the state Department of Business and Professional Regulation. Under state law, prosecutors could provide a copy of the indictment to the Department of Business and Professional Regulation so that agency can launch its own investigation.
During their six-month inquiry, Hernando sheriff's detectives heard from homeowners who, impressed with Ludwig's salesmanship, invested thousands of dollars in deposits and mortgage draws on homes in Spring Hill, Brooksville and Hudson.
Customer Raymond Miller of Warren County, N.J., told the Times in October that Ludwig was so cunning and deliberate in his presentation that he could have sold someone the Brooklyn Bridge.
Only three clients received completed houses, according to the report. The remaining 10 customers would have to file civil lawsuits against Ludwig to get their money back.
But creditors may find it difficult to recoup their losses. Ludwig's company filed for bankruptcy in September, claiming he owed clients about $125,000. One creditor, Terry Tobin, may never see the 1926 Model T automobile and 1975 Chevrolet Corvette he used as a down payment for construction that never began.
Because Ludwig filed for bankruptcy, the cars became the property of the U.S. Bankruptcy Court and will be auctioned off, Turney added.
During the investigation, detectives subpoenaed bank records for Ludwig Designs, Inc., as well as Ludwig's personal bank accounts and found that between July 2002 and August 2003, he received deposits and mortgage draws from 10 prospective homeowners. The total: $174,591.
Investigators learned Ludwig faxed documents to CTX Mortgage, claiming all of the bills were paid so that his company could draw money from the clients' mortgages.
According to the seven-page report, Ludwig used $14,205 of that money to satisfy construction-related expenses, such as completing blueprints, securing building permits, paying outstanding bills from previous clients.
Ludwig misappropriated a large portion of the difference, about $34,740, to pay off his own personal bills and expenses, the report said.
An analysis of his bank records indicated that Ludwig deposited a number of checks into his bank account and made several ATM and cash withdrawals, the report said.
How the money was used is not clear. What is clear, Turney said, is that the money taken from his clients was not used to build their houses.
"It got to a point that some contractors walked off the job because they were not being paid," Turney said.
In addition, there was no indication that Ludwig used any of the money to pay his employees, the report stated.
- Duane Bourne can be reached at 352 754-6114. Send e-mail to dbourne@sptimes.com Information from the Times files was used in this report.
