Ill. AG Charges Chicago Construction Company with Taking Money, Doing Shoddy Work

December 13, 2004

Alleging that consumers lost more than $350,000 to a team of home repair con artists, Illinois Attorney General Lisa Madigan has filed a lawsuit in Cook County Circuit Court against a Chicago construction company for consumer fraud violations.

Madigan’s office has reportedly received numerous consumer fraud complaints alleging the company signed contracts for renovation projects – including such large-scale projects as the conversion of a one-family home into two apartment units and accepted hundreds of thousands of dollars from its clients, then started the projects with shoddy workmanship and failed to complete the work.

Madigan’s lawsuit names as defendants KGC Construction Inc., an Illinois corporation, Elizabeth Hiero, a/k/a Elizabeth Hiero Mulinski, individually and as president of KGC Construction, and Mark Kowalkowski, an agent for the company. The defendants have two business addresses: one in the 1700 block of W. 35 th St. and the other in the 5100 block of S. Latrobe Ave., both in Chicago.

“KGC Construction posed as a legitimate construction company capable of undertaking large renovation projects,” Madigan said. “Only after paying large sums of money did the consumers realize the work they paid for was unacceptable and would likely never be completed.”

The defendants, who allegedly advertised their business in the “Bridgeport News,” are charged with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Home Repair and Remodeling Act.

Madigan’s lawsuit alleges the defendants failed to complete the home repair work for which they were contracted and refused to refund the consumers’ down payments when requested.

Three separate consumer complaints received by Madigan’s Consumer Protection Division allege KGC Construction was contracted to renovate and reconstruct residential buildings. The consumers allegedly paid amounts of $215,000, $108,000 and $37,000 for the projects, but KGC Construction failed to complete the renovations on any of the projects. The company allegedly failed to respond to requests from the consumers and letters sent by Madigan’s office requesting a refund. The consumers were forced to pay for different contractors to complete the renovations.

“The consumers defrauded by KGC Construction were undertaking a complete remodeling of their homes. This type of project is a huge investment and consumers cannot afford to pay for this fraud,” Madigan said.

In addition, Madigan’s lawsuit alleges the defendants did not provide the consumers with the legally-required “Home Repair: Know Your Consumer Rights” pamphlet nor, for those customers who entered into contracts at their home, notification of the consumer’s three-day right to cancel.

Madigan’s office served Hiero with a subpoena on Aug. 19, 2004, requiring her to appear and provide documents at the Attorney General’s Office on Aug. 30. Hiero reportedly did not appear and has not contacted Madigan’s office.

Madigan’s lawsuit asks the court to prohibit the defendants from engaging in the business of home repair and remodeling and from further violating Illinois’ consumer protection laws. In addition, the lawsuit asks the court to assess a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud.

Finally, Madigan’s lawsuit asks the court to order the defendants to pay restitution to the consumers.

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