State Revokes Licenses of 4 Contractors Over Inquiry

The Contractors State License Board said Friday it has revoked the licenses of four contracting companies accused of duping elderly homeowners into taking out loans against their homes to pay for unnecessary remodeling work.

The state agency alleged the contractors canvassed neighborhoods to find elderly residents who had paid off their homes. They then offered home improvement services and persuaded the homeowners to pay for improvements by securing deeds of trust against their homes, the agency said.

“They were blatantly targeting seniors who had a lot of equity in their homes. We absolutely had to put a stop to this in any way possible,” Lynette Blumhardt, a spokeswoman for the board, said.

The panel revoked the licenses of Goldstar Home Improvement Inc., Mid-West Remodeling Inc. and Save-On Construction, all based in Van Nuys, and U-Save Remodeling Inc. of Los Angeles.

The four companies were jointly operated by Ofer Farkash and Avi Haviv Gozlan, who could not be reached for comment Friday. Dan Glaser, a lawyer for the companies, declined to comment on the decision.

Farkash and Gozlan will not be available to reapply for a contractor’s license under any company name for five years, Blumhardt said. A new license will only be granted if they settle any losses they have caused, post a disciplinary bond and pay all the investigatory costs incurred by the agency, she said.

This case involved six alleged victims in Burbank, Mission Hills, Los Angeles and Compton.

Margaret Culver, an 88-year-old Burbank woman who says she was victimized, said revoking licenses for five years was “hardly enough” of a penalty.

“They shouldn’t be able to operate in California for 20 years,” Culver said.

Culver says she was tricked into signing a $65,000 loan secured against her home in 1998.

“I had told them I didn’t want a loan, that I didn’t need a loan,” Culver said.

Initially, all Culver wanted was a new carpet. Eventually U-Save Remodeling contractors persuaded her to put in new wiring, paint the interior and to have plumbing work done, she said.

“I got led into all these other things,” Culver said.

Culver turned to Bet Tzedek, a nonprofit legal services group, which helped notify state regulators. The California attorney general’s office requested and received an interim suspension order against the companies in December. In July an administrative law judge ordered the permanent revocation of the licenses. The revocation was signed this week by the Contractors State License Board.

The contractors were specifically accused of fraud, misrepresentation, poor workmanship and beginning work before lender approval.

Robert A. Heron, a supervising deputy attorney general, said the state may also take action against the finance companies that worked with these contractors to finance the remodeling work.

The board referred the cases to the Los Angeles County district attorney’s office for possible criminal prosecution. The D.A.’s office, however, rejected the case, Blumhardt said.

“They didn’t feel there was enough evidence,” Blumhardt said.

There are about 278,000 licensed contractors in California. In the 1999-2000 fiscal year, the board revoked 700 licenses, Blumhardt said.