The owner of a defunct roofing company was arrested last week at a Gainesville bankruptcy court in front of 15-20 irate homeowners and has seen the inside of four jails since then.
“He seemed to think that nothing would happen to him,” said a Ball Ground homeowner who witnessed the surprise arrest at the federal courthouse Aug. 25.
“I don’t quite know why. As soon as he showed up, these people who had been trying to get him, they were on the phone, and they picked him up.”
The courthouse call was made to the Auburn Police Department, which then asked the Hall County Sheriff’s Office to arrest 42-year-old John Steven Ervin, formerly of Gainesville. Hall County deputies arrested him at the end of the bankruptcy proceeding and held him in the Hall County Detention Center for one night on outstanding warrants from Auburn, Barrow County and Roswell.
Ervin was transferred to the Barrow County Detention Center on Aug. 26, and then to the Roswell Jail on Aug. 28 and six hours later to the Fulton County Jail, where he remained in custody as of Monday.
11 FELONY COUNTS — SO FAR
He was charged with nine felonies: Eight counts of Theft by Conversion of Payments for Real Property Improvements in Barrow County and one count of Theft by Taking in Roswell.
Those charges are on top of two earlier counts of Theft by Conversion in Forsyth County, where Ervin turned himself in on June 23.
“Both are felonies,” said Capt. Frank Huggins of the Forsyth County Sheriff’s Office. “He bonded out the same day. The amount of his bond was $11,220.”
Two other local police departments in Gwinnett County and Lawrenceville said they too are investigating outstanding complaints against Ervin.
And the Governor’s Office of Consumer Affairs is investigating similar complaints against the company, with further civil or criminal sanctions possible, according to a spokesman.
“I can confirm that the Office of Consumer Affairs has an open investigation involving Southeastern Roofing & Restoration,” said Shawn Conroy. “That means that our investigators are actively reviewing complaints from citizens regarding allegations that they paid deposits for work, and that work has not taken place.”
ALLEGED VICTIMS IN 18 COMMUNITIES
Documents filed in the U.S. Bankruptcy Court for the Northern District of Georgia list 29 North Georgia homeowners and a Roswell neighborhood association as creditors of the company.
The homeowners’ mailing addresses are in 18 communities: Alpharetta, Athens, Auburn (3 creditors), Ball Ground, Bethlehem, Bogart, Buford (2), Cumming (3), Dacula (2), Dawsonville, Gainesville, Jefferson, Lawrenceville (4), Milton, Powder Springs, Sugar Hill, Suwanee (3), and Winder (3).
All together, the homeowners are out $124,000, with individual amounts ranging from $1,000 to more than $8,500.
The Roswell HOA lost $13,420, but the homeowner with the largest single loss has a house on Woodmont Lane in Jefferson. She paid the company $8,534.
The Barrow community was hit the hardest, with more than a fourth of the region’s cases located in Auburn, Bethlehem and Winder. Their collective losses total about $30,000.
While bankruptcy typically protects business owners, Georgia law makes it a felony to take money for a contracted home improvement and not to use the money for the work, according to Barrow County sheriff’s investigator Matt Guthas.
HOSCHTON COMPANY ALSO HURT
Barrow County’s alleged victims were asked by company representatives to write personal checks or to sign over insurance proceeds at the time their contracts were signed. The company reps promised quick services, but the jobs were never started.
Most of the local contracts were signed in February and March, which was months after the company had begun experiencing financial problems and at least six months after the first local homeowner began encountering some irregular business practices.
According to an owner of a Hoschton company that provided dumpsters for discarded shingles where work was performed, Southeastern initially paid its invoices on time.
However, that changed late last year.
“They got slow paying in November and December,” the owner said, asking that her name and company’s identity not be disclosed.
“Then it was one of those things where ‘we’ll pay you, but hold the check for me’ or they weren’t paying all of their invoice. After the first of the year was when we were really having trouble with them. Some of the oldest invoices we have open go back to December.”
Her family-owned business has lost $28,000, which has been a tough blow especially in the recession.
FIRST SIGN OF TROUBLE IN BARROW
The first sign of trouble in Barrow County, however, turned up a year ago.
In July 2009, a sales rep for Southeastern Roofing & Restoration offered an Evergreen Road homeowner a “free” hail damage evaluation of her roof.
A few weeks later, after an adjuster confirmed the need for the repair, the homeowner’s insurance company issued a check for $2,425.86, which was for about half of the estimated repair cost.
As many others would later do, the Winder resident signed over the insurance company’s downpayment check to the roofing company when the contract was signed.
But company representatives then delayed the start date for the work, and the homeowner eventually took out a warrant for Ervin’s arrest.
However, the warrant was never served, because the homeowner didn’t have any information about Ervin other than his name and business address.
Sheriff’s investigator Guthas said this week that the homeowner contacted him after reading a news story about the ongoing investigation. Her charge, in fact, became the eighth for which Ervin was booked last Thursday into the Barrow County jail.
The additional Winder victim, however, is not listed in the bankruptcy records as one of the company’s creditors, raising a question of whether all of the company’s alleged victims have been accounted for.
In fact, another Lawrenceville victim, also not listed in the bankruptcy financial statement, came forward this week, according to an incident report filed Aug. 30.
She told police that she gave both an $8,784.89 insurance company check and a $1,000 personal check to a sales rep last November, “and that was the last she has heard from Southeastern Roofing.”
ATTORNEY: ERVIN WILL BE VINDICATED
Nonetheless, Ervin’s bankruptcy attorney, Evan M. Altman of Atlanta, said in an Aug. 28 letter to bankruptcy Judge Robert Brizendine that he believes his client “will be vindicated from all charges stemming from the warrants.”
Contacted Tuesday by the Barrow Journal,
Altman declined to comment further.
Bruce Riley, the Ball Ground homeowner who witnessed Ervin’s arrest, said he and the 15-20 other homeowners in the federal courtroom hadn’t expected him to show up that day but were glad he did.
“We had gone once before and he didn’t show up,” Riley said. “But we are retired, so we just went anyway. We didn’t anticipate anything happening. It was a pretty good lick.”
Riley noted the irony of Ervin winding up in a cell at the Fulton County Jail this past weekend, because the retiree said he was once responsible for all of that jail’s mechanical systems.
“I wouldn’t wish a dog in there,” he said. “It’s a terrible place.”
