Contractor Fraud: Why Scammers Often Move From State-to-State

Contractor Fraud: Why Scammers Often Move From State-to-State

We have all heard stories of contractor fraud. Scammers take sizable down payments for home construction projects and then never deliver. Whether it is a new roof, a backyard swimming pool, or an entirely new edition put on the back of the house, homeowners are left holding the bag. Things are made even worse when the scammer moves out-of-state.

In the fraud game, it’s not uncommon for contractors to pick up and move when the local action starts heating up. Sometimes they will move to a neighboring county while other times they actually leave the state. In most cases, however, they do not move and then amend their ways. They pick right up where they left off, ripping off customers in their new hometowns.

So what’s the deal? Why do perpetrators of construction fraud move from state-to-state? Let us explore the reasons.

1. Avoiding Criminal Prosecution

Although most states don’t consider construction fraud a criminal offense, some do. It is a criminal offense in Florida. Under certain circumstances, a home contractor could be charged with a felony for taking payment but not delivering the work. Obviously, a contractor doesn’t want to be caught and arrested. Leaving the state seems reasonable.

The question is whether local police will go to a judge to get a warrant issued for a contractor’s arrest. With so many other crimes to follow up on, it is possible that some police agencies wouldn’t bother. Once a contractor has left the state, that’s it. But even in states where construction fraud does not rise to the level of criminal prosecution, there are other reasons for packing up and moving.

2. Civil Judgment Jurisdiction

Where construction fraud is a civil matter, scammers enjoy a limited amount of protection afforded by jurisdictional limits. Let’s say a homeowner files a civil lawsuit with the county court. She wins the lawsuit, and a monetary judgment is rendered on her behalf. The judgment is enforced through collection efforts. Here is the problem: the judgment is only valid in that county.

If the contractor leaves the county and has no valuable assets within its borders, there is little the homeowner can do to collect. Unless, of course, she finds out that the contractor has set up shop in a new county. But proceeding requires domesticating the original lawsuit in the new county.

Judgment Collectors is a Utah judgment collection agency based in Salt Lake City. They explain that domesticating a judgment is the process of getting it recorded in a new jurisdiction. Domestication is required before judgment collection can be pursued in a county other than the one where the suit was originally filed.

3. Making Things Harder on Collection Agencies

Speaking of Judgment Collectors, another reason scammers move from state-to-state is to make life harder on collection agencies. A skilled collection agent utilizes something known as skip tracing to find deadbeats. Without getting into any of the details, skip tracing is a highly sophisticated discipline that involves leveraging a long list of strategies for locating people trying their best to hide.

Professional con artists are fully aware of how skip tracing works. They also know they need to keep moving in order to avoid being found. A scammer might set up shop in a local area, get as much money out of it as he can, and then pack up and move. He moves repeatedly to keep the heat off.

Fortunately, most instances of contractor fraud do not involve scammers constantly moving from one state to another. But those who do move frequently make it awfully tough on creditors trying to collect.

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