Homeowners Allege Fraud by Contractors

Homeowners Allege Fraud by Negligent Contractors for 2017 Wildfire

To make matters even worse for many California homeowners who are dealing with recovering from the aftermath of the historic 2017 and 2018 wildfire seasons, unscrupulous contractors reportedly have been taking advantage of California homeowners in need of assistance after their homes were destroyed. These negligent contracts contractors were performing unnecessary work in the wake of the 2017 Santa Rosa fire in California’s Wine Country.  According to a report from the Pueblo Chieftain, there appears to have been possible fraud in connection with the contracts awarded by the Army Corp of Engineers (the Corps) to three companies to assist in the recovery from the wildfires in California’s Wine Country centered in Santa Rosa in Sonoma County that were the most devastating of the historic 2017 wildfire season.  The Santa Rosa fire alone destroyed more than 10 percent of the homes in that town. This is a huge disappointment for California homeowners whose homes or businesses were destroyed in the spate of wildfires that have struck the Golden State in the past several years. It also is unfortunately indicative of the type of shady business and fraud that can take place after a major disaster like the recent historic wildfires, which can encourage all sorts of unlicensed and/or nonreputable companies and contractors to crawl out of the woodwork in an attempt to obtain some of the massive amounts of money that are spent on reconstruction after such a major event.

The Army Corps of Engineers’ Role in the Recovery from the 2017 Santa Rosa Fire

The Corps plays a role in both preventing and then responding to and rebuilding after natural disasters like the California wildfires.  Anyone familiar with major disasters like Hurricane Katrina in New Orleans in 2005 is familiar with the Corps, who were responsible for the maintenance of the levees surrounding New Orleans and much of Louisiana that failed spectacularly in Hurricane Katrina.  The Corps is technically a part of the federal Department of Defense and has over 37,000 employees who work to build and maintain the nation’s infrastructure, reduce the risk of hurricane and storm damage, and assist in responding to natural and environmental disasters across the country.  In the case of the October 2017 wildfires, the Corps was called in by local and state officials who were overwhelmed in dealing with the aftermath of those historic events and who were tasked with directing rebuilding efforts after the Wine Country fires that swept through Napa, Lake, Sonoma and other counties in northern California, including the Santa Rosa fire.

Hiring Negligent Contractors

Unfortunately, despite having experience in responding to other natural disasters, the Corps had no previous experience in dealing with recovery after giant wildfires like the 2017 Santa Rosa fire.  Despite this inexperience, the Corps were charged with $1.3 billion in cleanup contracts. These were pursued by three contractors to assist in the removal of toxic debris from the Santa Rosa fire. The Corps hired three contractors to oversee the process of removing the, in some cases, still-smoldering and often toxic debris from the Santa Rosa fire, which in turn hired dozens of smaller companies as subcontractors to haul away the debris and dispose of it in landfills. The hauling negligent contractors were paid by the ton, so the more debris they hauled away, the more they earned under these contracts.

The Alleged Fraud with Negligent Contractors

Almost immediately after the companies began work hauling away the debris, complaints started pouring in from affected homeowners.  Homeowners complained to the Corps and to state officials that workers from the debris removal companies had dug too deep and unnecessarily took too much dirt from their lots. Driveways, retaining walls and sidewalks that were not damaged in the wildfire ended up either being damaged or removed completely as a result of the companies’ efforts according to reports from hundreds of area homeowners.  By this past summer, nearly 1,000 homeowners had flooded the Corps and California state and local officials with complaints regarding the performance and behavior of the debris removal companies. After contractors had hauled away more than 2 million tons of debris, the Corps cavalierly claimed that its mission had been accomplished and left without responding to homeowners’ complaints, according to state and local officials.  A Corps spokesman said it had found no evidence of any fraud after its own investigation, but California state officials, including the Director of the state’s Office of Emergency Services, advised that the state was forced to spend millions of dollars repairing the property the contractors had damaged as a result of their activities. Some of the sub-contractors hired by the three companies selected by the Corps were even cited by California authorities for worker safety violations, including the death of one of the subcontractors’ employees when he was run over by a company truck.

The Impact on California Homeowners of This Type Of Fraud

Insurance premiums are determined by the damages paid out by property insurers to homeowners in a given market over the past several years.  Although the contracts at issue in these recently reported potentially fraudulent charges to the Corps are paid by the federal government rather than by private insurers, the state was forced to expend millions of dollars rectifying the damage done by these subcontractors, costs that eventually will be passed back on to taxpayers through some sort of means.  Therefore, this is not a victimless crime.

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