L.A. Charges 14 With Gouging Quake Victims : Consumers: Merchants and contractors are targeted. More than 1,500 complaints were filed, but few cases could be prosecuted.


The Los Angeles city attorney's office charged 14 merchants and contractors Thursday with gouging victims of the Northridge earthquake nearly a year ago.

The charges end a lengthy investigation into more than 1,500 complaints about quake-related rip-offs that allegedly occurred in the weeks after the Jan. 17 temblor.

At that time, law enforcement officials launched a highly publicized campaign, vowing stern action against businesses found to be taking advantage of quake victims who--left without water or electricity--were desperate for everyday necessities.

Also at that time, Southland Corp., owner of the 7-Eleven convenience store chain, promised to dump franchisees caught gouging customers.

Deputy City Atty. Ruth Kwan said the majority of cases could not be prosecuted for various reasons, ranging from lack of evidence to shortage of staff. And the attorney for the 7-Eleven franchisees said that as of Thursday, he believed no franchises had been dropped.

Kwan said she believes the city's ordinance is effective despite the small number of prosecutions.

"The fact that we had something like this on the books meant that many people who may have gouged in the first day or two following the quake stopped immediately," she said.

The city attorney's complaint charges the 14 businesses with violating an existing city ordinance prohibiting them from raising prices more than 10% during a state of emergency. The law applies to consumer food items, emergency or medical supplies, repair services and gasoline. Violators face a fine of $1,000 and up to six months in jail if convicted.

Among those charged were Tampa Glass of Reseda, with six counts of price gouging; Rapid Plumbing of Torrance, three counts of gouging, and several contractors and convenience store and gas station operators in the San Fernando Valley.

Chimney Charm of Glendale was charged with seven counts of operating as an unlicensed contractor. If found guilty, its owner could face up to a year in jail and a $1,000 fine for each count.

The Northridge quake marked the first time the city had enforced the law, and a special toll-free hot line was established to take consumer complaints.

In a further effort to crack down on illegal activity, unlicensed contractors were warned that they could face felony charges for soliciting or performing work in quake-damaged areas. Usually, contracting without a license is a misdemeanor.

Few contractors had the book thrown at them. The Los Angeles district attorney's office prosecuted only two felony cases, both involving unlicensed contractors, neither of whom received jail time.

"Most of these guys were out there just trying to make a living and sincerely wanted to get their license," said Dennis Bishop, supervising deputy with the Contractors State Licensing Board, explaining the low number of felony charges.

Bishop said 148 unlicensed contractors were issued citations, which carry fines ranging from $750 to $1,500. He said 201 licensed contractors were cited for operating without workers' compensation insurance and were fined an average of $400 each.

Kwan, who oversaw the gouging investigation, said many of the accusations were "very problematic."

She said several hundred complaints did not involve Los Angeles residents or did not concern items covered by the city's anti-gouging ordinance.

In other cases, Kwan said, consumers who believed they had been overcharged for water, batteries and other supplies lacked the receipts to prove it.

In addition, she said, prosecutors chose not to pursue most complaints about inflated repair estimates, because no money had changed hands.

Community activists who rallied against price gouging last year called the law effective.

Diane Wildhaber, co-chairwoman of Valley Organizing in Community Efforts, said the law was the "big stick" nudging merchants accused of overcharging to sign anti-gouging pacts with her organization.

"Our goal wasn't retribution, but dialogue," Wildhaber said. "And having the law on the books helped."


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