O.C. Builder May Still Be Operating Despite Suspension of License : Consumers: State investigating practices of Gotech, whose unhappy customers led to review of state contractors license system.
An Orange County custom home builder whose practices helped spark a legislative review of the state’s contractor licensing system is under investigation by state authorities, The Times has learned.
According to deputy state Atty. Gen. Anne Mendoza, agents from the Contractors State License Board and her office in Los Angeles are reviewing the business practices and financial activities of Gotech Builders Inc. of Orange and several of its officers.
The company’s contractors license was suspended Oct. 13. Since then, however, Gotech apparently has continued operating as a builder, in violation of terms of its indefinite suspension.
Several Gotech clients in Los Angeles County, where the company does most of its business, said company officials have never told them of the license suspension and have continued trying to collect money--an activity specifically prohibited by the license board.
Company owner Jeffrey C. Weiner, in an interview Wednesday, said that he was not aware of the state investigation but denied any wrongdoing and said he is operating in accordance with license board orders that enable him to assign existing contracts to other builders to ensure completion of those jobs.
“We have not attempted to do any ongoing business,” he said. “This company has done nothing wrong. We have built a great number of high-quality custom homes, and now we are attempting in good faith to get the homes (under contract but not completed) built by licensed contractors so that our customers get the homes for which they contracted.”
Gotech and a predecessor company owned by Weiner have a history of breach of contract lawsuits, bitter customers, uncompleted homes and sizable arbitration awards for shoddy construction.
Yet until earlier this year the contractors license board was unaware of the companies’ repeated legal problems and told prospective clients--those who called the board’s hot line to check on the firms--that that their licenses were unblemished.
Weiner allowed his first company’s license to lapse earlier this year. Gotech’s license was suspended after The Times Orange County Edition published an article detailing the history of the two companies.
The article examined how loopholes in the licensing system enabled Weiner’s companies to avoid regulatory scrutiny--even when the companies failed to follow state rules requiring them to report arbitration judgments they’d been ordered to pay to clients.
Within weeks, the state Assembly’s Consumer Protection and Government Affairs Committee completed its own investigation and criticized the agency for abandoning its consumer protection role. The committee has also held two public hearings to examine the license board’s effectiveness.
The state investigation of Gotech began more than a month ago and recently went into high gear as the state attorney general’s office--the license board’s judicial arm--began a parallel probe.
License board officials have declined to comment on the investigation, but Mendoza said investigators are focusing on Gotech’s apparent ongoing business activity despite its license suspension, and on its relationship with a Santa Fe Springs financing company, Sunset Credit Services.
Many Gotech customers have been referred to Sunset for construction loans. Several claim that Gotech effectively has forced them to use Sunset--which charges as much as 14.5% interest--by refusing to supply required financial documents about itself to other potential lenders.
Sunset owner Melvin Rabow said Wednesday that he severed all relationships with Gotech “as soon as I was informed” of the Oct. 13 license suspension.
But Charles Coleman, a vice president with Bank of America, said that on Nov. 15 he filed a loan application with Sunset for “what was clearly labeled a Gotech project,” and that Sunset verified receipt of the application on Nov. 18--more than a month after Gotech’s license suspension.
Another Gotech-Sunset client, Burbank actor Charles Klausmeyer, said he and his wife angrily confronted Rabow’s son, Joe--a Sunset officer--”about Nov. 14 or 15 and asked why they hadn’t told us that Gotech’s license was suspended. Joe said they knew about it but didn’t tell us because they were afraid of libel or slander.”
Coleman and his wife, who signed their contract with Gotech before the license was suspended, said company officials have never told them that the license was lifted. “Ilene Gayron (Gotech sales director) even told us on Nov. 18 that Gotech was going to continue building our home,” he said.
Paula Watkins, the contractor license board’s Southern California regional director, said such continuing activity violates the suspension order.
Weiner said he could not comment on Coleman’s conversations with Gayron “because I wasn’t party to any conversation he might have had.”
He said Gayron--his ex-wife and longtime sales director--could not discuss the matter because she “is not affiliated with the company at this time.”
Gayron recently had been trying to start a new company--one that didn’t require contractors licenses--and was using the Gotech offices. The phone number for that start-up company, which advertised itself as Custom Homes and Custom Home Builders Group, was being answered by Gotech’s receptionist last week. It has since been disconnected and Gayron has not responded to several requests for an interview.
