A Georgia sheriff's office is planning to file criminal charges against the operators of a company alleged to have bilked homeowners — including at least 80 in Sedgwick County — out of insurance money to fix hail- and wind-damaged roofs.
A Wichita lawmaker who serves on the Kansas House Judiciary Committee said the state may need to change its laws to be more like Georgia's to protect homeowners from unscrupulous operators who might try to take advantage of victims of damaging weather.
At issue is the case of American Shingle, a now-closed company that specialized in door-to-door sales of new roofs in areas where homes were damaged by bad weather.
The company had maintained offices in Wichita and Lenexa, which are now closed.
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The District Attorney's Office in Sedgwick County is investigating whether American Shingle may have violated a Kansas law that makes it a crime to accept payments from consumers if officers know a company is on the brink of bankruptcy.
Authorities in Bibb County, Ga., expect to file charges early this week against the operators of the Atlanta-based company, said sheriff's Capt. Mike Smallwood.
That state is able to move quickly because it has a law against "theft by conversion of payment for property improvement," he said.
"If you get the money, but don't show up (to do the work), you fall under that law," Smallwood said.
Kansas does have civil and criminal laws against consumer fraud, but state Rep. Jim Ward, D-Wichita, said he's not aware of any state law as clear-cut as Georgia's when it comes to home repair.
Ward, a lawyer and former prosecutor, said American Shingle's actions appear to be "pretty heinous" and the Legislature may need to take action.
"I'm absolutely open to making sure we have the tools we need to protect people in these kinds of situations," he said.
People like Bob and Karen McQuiston of Park City.
Bob McQuiston signed up with the company after a representative came to his door July 17 and offered to take care of getting the family a new roof.
McQuiston said he trusted the man because he knew he lived in Park City, and he prefers to do business with local companies.
He said his first clue something might be amiss came right after he signed a paper authorizing American Shingle to represent the family in its claim to their insurance company. He said the salesman told him "if you decide not to go with us, we'll probably have to take you to court."
But despite that start, things seemed to go well initially. The company filed the claim with the McQuistons' insurance company and the insurer sent them a check.
A week after first contact, a woman from American Shingle came to their house, they signed a contract and turned over the check.
Bob McQuiston said he had checked the company's record with the Better Business Bureau and gotten a clean report. Local government agencies confirmed the company's licenses were in order.
But American Shingle employees became increasingly vague about when the roof work would take place, eventually trying to push the construction date into October.
The McQuistons tried to get their money back, but the check had already cleared, Karen McQuiston said.
Now, they're waiting to see if someone in authority can get them their money back.
They came forward to talk about the situation, wanting to warn others not to fall into a similar trap.
"Pride is an ugly thing, but I'm swallowing mine, because we're dumb enough to give those people money," Bob McQuiston said. "The only thing to buy door-to-door is Girl Scout cookies or Boy Scout popcorn."
Acting as middleman
In the Wichita area, American Shingle did not actually install roofs, but acted as a middleman to file insurance paperwork and hire subcontractors to do the work, according to Sedgwick County District Attorney Nola Foulston.
That business model appears to be the same in about 10 states where the company did business, said Janet Hart, vice president of the Better Business Bureau in Charlotte, N.C., which has taken a leadership role on the issue.
As of last week, Better Business Bureaus across the country have received about 600 complaints against the firm, Hart said.
Officials with American Shingle could not be reached for comment. The company's local offices are closed and the headquarters phone in Atlanta is answered by an automated message.
The company's CEO, Carlton Dunko, told a Georgia television station he doesn't think he committed any criminal offenses.
But he also told WMAZ-TV that the firm, established in 2008, owes about $1 million each to employees and vendors.
In addition, about 3,500 customers have not received their new roofs.
"We installed 10,200 roofs and the last 50-70 or so checks that we collected we never cashed," Dunko said in the interview with station WMAZ. "Does that sound like a con artist to you?"
Dunko also said he didn't want to minimize the issues, but that "it wasn't the hard-earned paycheck that I took, it was the check that their insurance company provided."
Replacing insurance money
Tell that to the McQuistons.
In their mid-50s, they're raising three adopted grandchildren — girls 13 and 10 and a boy, 12.
To get their roof fixed, they'll have to replace almost $3,500 that American Shingle took before the insurance company will release the rest of the money for the approximately $7,000 job.
Karen McQuiston said it will take the family until at least next spring to save up that much money.
Her husband, a garage-door installer, took a pay cut last year and she works from home as a medical record transcriptionist.
Complicating matters is that one of the children is scheduled for $1,500 in emergency dental work.
But the McQuistons are determined to recover.
"I don't want people to feel sorry for us. We're not after pity," Karen McQuiston said.
"I guess we'd just like to say, be careful," said her husband. "Be careful of who you put your trust in."
"And that's sad," added his wife.