Contractor pleads to scamming elderly NC homeowners for millions in unfinished work
A Chatham County man faces seven years in prison after bilking over 50 elderly Triangle homeowners out of millions of dollars for construction work he never completed and personal loans he never repaid.
Federal prosecutors said Jorge Alberto Garcia and his wife, Helen Smith-Flores, also have not filed personal or business federal income taxes since 2007, according to a news release issued by the U.S. Attorney for the Middle District of North Carolina.
The couple had a joint income of $3.2 million from 2014 to 2018, the release stated.
Garcia, who also is known as “Alberto Garcia” and “Roberto Garcia,” pleaded guilty Tuesday to conspiracy to commit wire fraud and failing to file income tax returns, the news release stated.
Smith-Flores also is charged with conspiracy to commit wire fraud and money laundering. She has pleaded not guilty, court records show.
Investigators found Garcia defrauded retired Chapel Hill and Chatham County homeowners out of nearly $3.26 million between 2015 and 2020 “by means of materially false and fraudulent pretenses, representations and promises, in a home repair scheme,” the release stated.
The FBI and the IRS Criminal Investigations Division worked with local law enforcement, including the Durham Police Department, Chatham County Sheriff’s Office, Chapel Hill Police Department, Carrboro Police Department and Cary Police Department, to bring charges against Garcia and Smith-Flores.
Matthew Martin, U.S. Attorney for the Middle District of North Carolina, called Garcia’s actions “despicable.”
“Jorge Garcia targeted and systematically ripped off more than a hundred elderly victims without a second thought,” said Robert R. Wells, Special Agent in Charge of the FBI in North Carolina. “These types of crimes will not be tolerated. Justice was served today, and the FBI hopes his federal prison sentence provides some comfort and a sense of security to the victims.”
Wake, Orange County charges
Garcia first came to the state’s attention in 2017 when he was accused of doing construction jobs valued at $30,000 or more without without a required state general contractor’s license.
A Wake County judge in June 2017 prohibited him from operating as a general contractor in North Carolina. N.C. Secretary of State records show Garcia incorporated his construction business, JH Home Improvements Inc., about a month after signing the court order.
In May 2018, Garcia pleaded guilty in Orange County to a felony worthless check charge and was sentenced to between six and 17 months in jail, followed by five years of probation. He also was ordered to pay restitution of $48,880, court records show.
He continued to take on home improvement jobs despite the Wake County order and the Orange County charges, court records show.
Investigators said Garcia visited the homes of elderly and retired Orange, Durham and Chatham residents seeking work from September 2015 to April 2020. He also operated under the business name J&J Home Improvement.
His victims, some of whom live with physical or mental challenges or on fixed incomes, paid Garcia before work was completed with personal checks, credit cards or by withdrawing money from investment accounts.
Homeowners who paid with a check told investigators that Garcia told them to leave the “to” line of the check blank or to issue the check to his wife, who investigators said would deposit the checks into her personal account or a business account for her Durham restaurant, La Cacerola Cafe and Restaurant.
Flores then would withdraw cash or issue a cashier’s check to her husband, the release stated. The couple also cashed some checks at their bank or the client’s bank, it said.
Garcia would form personal relationships with his victims, calling them “Momma” and “Poppa,” and encouraged them to tell their neighbors about his home improvement business. He also solicited personal loans from some of his clients, which he never repaid in full, investigators said.
“In at least one instance, he received a check from a victim for such a loan and returned to that victim’s home later that same day to request the loan again. The victim, not remembering that he had written the first check, issued yet another check for the same amount to Garcia,” the release noted.
The 89-year-old Chatham County victim in that case, who had a degenerative neurological disorder, has since died, court records show.
Some clients, relatives of clients and the police did contact Garcia about the unfinished projects and unpaid loans, the news release noted. In those cases, he would promise to send workers but not follow through, it stated, or he or Smith-Flores would return some of the money paid for the project. In other cases, Garcia or his wife would write a check to the client, which the issuing bank rejected as lacking sufficient funds.
“On more than one instance, Garcia urged the victim not to contact the authorities about the unfinished work,” the release said.
Jailhouse call to victim
Garcia was arrested in February 2020 for criminal contempt of the Wake County order. Many of his victims testified about the work Garcia had failed to do, and he was jailed for 90 days, court records show.
While in jail, Garcia was advised of the pending federal charges, records show, and in March 2020, his wife went to the home of one of their victims so that she could talk by phone with Garcia, who was still in the Wake County jail.
During the call, which was recorded by the inmate telephone system, Garcia repeatedly called the woman “Momma” and asked her to “have mercy” on him and his family and give him the chance to “fix it.”
The woman, who used a wheelchair because of polio, told Garcia he had “overcharged” her, which Garcia denied. He asked her not to “believe the detective” who wanted to “make you against me,” records state.
Garcia then told the woman that his wife could help her “make a credit card payment,” and before hanging up, said, “Remember, I didn’t do anything wrong to you,” records state.
The federal charges could bring Garcia up to 22 years in prison, three years of supervised probation and a fine of up to $300,000. He is scheduled for sentencing on June 15 in U.S. Middle District Court in Winston-Salem.
The judge still could reject his seven-year plea bargain, the release noted, which would send the case to trial.
The justice system will hold Garcia accountable for his actions, said Matthew Line, special agent in charge of the IRS’s Criminal Investigations division,
“Mr. Garcia, motivated by pure greed, not only preyed on the elderly and vulnerable, but also cheated the entire American public by failing to pay into the tax system; as a result, he now faces a prison sentence for his crimes,” Line said.
This story was originally published January 26, 2021 at 4:11 PM with the headline "Contractor pleads to scamming elderly NC homeowners for millions in unfinished work."
