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Home buyers wonder, when?

Customers are facing long waits to recover the money they paid to troubled Coral Bay .

By DAN DEWITT
Published October 30, 2006

SPRING HILL - On March 26, Conrad Filipiak wrote five checks totaling $126,000 to Coral Bay Construction Inc.

The first was a $25,000 deposit for the house Filipiak and his wife, Arnilyn, hired the company to build for them in Royal Highlands. The company was to cash the four other checks when it completed various stages of construction, such as pouring the concrete foundation and erecting the block walls.

Instead, Coral Bay president Steven Bartlett cashed all five checks on March 30, four days after they were written, according to Filipiak's bank statement. The company hadn't completed any of the contracted work at the time. Seven months later, it still hasn't.

"This is theft," said Filipiak, 57.

Unfortunately, it isn't that simple, said Phil Hanson, the assistant state attorney investigating Coral Bay. To prove that Bartlett defrauded customers, Hanson must prove Bartlett used company money for his own purposes.

"Just proving that he was paid for work he didn't do isn't enough," Hanson said.

More than five months have passed since Bartlett's business began to publicly disintegrate.

On May 11, sheriff's deputies seized several boxes of records from the company's offices in Spring Hill, and the next day the company filed for Chapter 11 bankruptcy protection.

By then, more than a dozen Coral Bay customers had filed criminal complaints against the company. That number has since climbed to 147, said Deputy Donna Black, spokeswoman for the Hernando Sheriff's Office.

Some of these customers remain frustrated that Bartlett has faced no consequences.

He still holds a valid contractor's license with the state, and none of the recent complaints filed against him have been made public by the Florida Department of Business and Professional Regulation.

He still has the right to pull permits in Hernando, though county development director Grant Tolbert said Bartlett has recently been shedding jobs rather than adding them. Coral Bay sent a letter to the department on Oct. 6 saying it had voided 26 contracts for houses and garages; at the time, that left it with only nine active permits with the county, eight of them for detached garages, down from 170 in May.

And, Bartlett has not been charged with any crimes.

"He's still walking the streets," Philipiak said.

Moving on

Some of the anger has faded.

Many customers have accepted that they've lost thousands of dollars and have hired other builders to complete their homes. Though they still hope Bartlett will be prosecuted - partly because it improves their chances of receiving compensation from the state's Homeowners' Construction Recovery Fund - they realize it may take months.

"I know the wheels turn slowly," said Scott Stewart, a retired detective from Northern California. He and his wife, Carole, spent $19,000 on a deposit and closing costs for a Coral Bay house in Royal Highlands and have nothing to show for it. They have since put the lot up for sale and hired a national builder, Ryland Homes, to build a house in Silver Ridge, in southern Hernando.

"The hard part is proving criminal intent," Stewart said. "Did he squander the money on himself or was he just a bad money manager and the victim of the hurricanes?"

Those words echoed the words of both Hanson and Bartlett. Though Bartlett did not respond to a request to be interviewed for this story, he has previously said he got behind in his work and lost money as material and labor costs soared after the hurricane season of 2004.

Hanson said the thrust of his investigation is proving Bartlett took money that was intended for homes for his own use.

Digging continues

Doing so is a complicated and time-consuming process. The Sheriff's Office has assigned one detective, Harold Varvel Jr., to work on the case full time since May, Black said.

"That's a momentous event in itself," she said.

Of the complaints filed with the Sheriff's Office, 136 were potential criminal violations, she said. Hanson said he has interviewed all of the complainants, as well as suppliers and others involved in the case.

"I've probably talked to 200 people. ... It's been a very comprehensive investigation. We've had to subpoena a lot of bank records," Hanson said.

He added that he hoped to reach a decision about whether to file charges against Bartlett before the end of November.

Tolbert said Bartlett may have insulated himself from other possible criminal charges.

State law says that a builder who receives at least 10 percent of the house price up front is guilty of theft if he fails to apply for permits within 30 days or begin work within 90 days after the permit has been issued.

The contracts on file in federal bankruptcy court in Tampa, however, give Coral Bay as much time as the "builder deems necessary" to apply for the permits and begin work.

State law also gives buyers the right to require that the money they spend on their house be placed in an escrow account so it can be spent only on their job. Coral Bay customers waived that right in another section of their contracts.

Good advice

In the past two years, as several builders in the county have left buyers with incomplete or substandard houses, Tolbert has emphasized that buyers must protect themselves.

Filipiak, for one, said he regrets paying Bartlett so much money up front. But he did so, he said, because he planned to live in the Philippines, his wife's native country, while their house was being built. He also didn't think an established builder such as Coral Bay would flagrantly violate the terms of its contract.

When he and his wife returned to Florida in September - when Bartlett had told them the house would be completed - they found that it had not yet been started.

"I will not let this issue rest until I get my money back," said Filipiak, who has been forced to rent an apartment in southern Hernando for $800 per month.

Jon and Anna Scott, meanwhile, hired Coral Bay two years ago, and paid the company $60,000, much of it for work that was not completed.

They know they many never see the money they are owed, Jon Scott said, but are now pleased to see work progressing under a new contractor.

EPAC Custom Builders Inc., of Spring Hill, had heard about the Scotts' ordeal with Coral Bay, and that it came as the couple was trying to recover from the death of Anna Scott's 12-year-old son, Christopher Sanford, in a house fire, Jon Scott said.

Because of the circumstances, EPAC offered to complete the home at a reduced rate and persuaded several subcontractors and suppliers to do the same. The new builder is not only cheaper than Coral Bay, Scott said, but much faster.

"They've been rocking and rolling," he said. "... I got a roof on the house for crying out loud. That's amazing."

Times researcher Caryn Baird contributed to this report. Dan DeWitt can be reached at dewitt@sptimes.com or 352 754-6116.

[Last modified October 30, 2006, 00:13:20]