Ill. AG Hammers Contractor with Lawsuit

January 25, 2005

Following a small blizzard of consumer complaints filed with her office in the past two months regarding a Cook County home repair and construction company, the office of Illinois Attorney General Lisa Madigan has filed a lawsuit against the company and its president alleging Chicago-area consumers have been bilked out of nearly half a million dollars.

Since Dec. 10, 2004, Madigan’s Consumer Fraud Division has received 11 consumer complaints against MoMax Inc., and company president Fred Resnick, of Northbrook. In total, Madigan’s office has received 18 complaints against the company since 2003. Fifteen of the 18 defrauded consumers reside in Cook County; three others reside in Will, DuPage and Lake Counties.

“MoMax’s Web site boasts that the company is in the business of ‘Making Dreams Happen.’ From what we have been told by victimized consumers, MoMax is in the business of creating living nightmares,” Madigan said. “This case is unusual in the amount of money involved and the fact that many allegedly defrauded consumers connected over the Internet to share their horror stories of holes in backyards where kitchen additions should have been and bathrooms that look like they belong in an abandoned building.”

Using a flashy, colorful Web site to entice consumers, MoMax reportedly solicits business online and then sends a representative to visit consumers in their homes to negotiate and sign contracts for home repair and construction projects. According to the complaints, the salespersons promised that large-scale construction projects could be finished in a few months and that MoMax’s own qualified construction experts would be used to complete the jobs.

Instead, one complainant alleges MoMax and Resnick hired an unlicensed plumber who left a gas pressure regulator off of the homeowner’s cook top, which, according to the manufacturer, could have caused a natural gas explosion. The same consumer alleges, among many instances of shoddy workmanship and unprofessional behavior, that a subcontractor stole alcohol from his home and drank on the job.

One Mt. Prospect couple filed a complaint with Madigan’s office alleging a detailed saga of a contract with MoMax for a kitchen addition. The couple, who contracted with MoMax in June 2004, made down payments totaling more than $39,000 and spent months wrangling with MoMax and Resnick after the consumers’ gazebo and patio were removed, leaving a large hole in the backyard and huge mounds of dirt covering the landscape. Intermittent work has taken place, but as of today, the gaping hole is still there and little to no work on any kitchen addition has been completed. The victims also received a “stop work” order on construction at their home because the builder’s check to the village for a building permit reportedly bounced – more than once.

A Hoffman Estates couple contracted with MoMax in March 2004 for a sunroom addition and paid the total cost of the job, which amounted to more than $55,000. While the job was completed, unlike other cases, MoMax reportedly forged two waivers of lien, which resulted in liens against the couple’s home because MoMax allegedly never paid vendors for the sunroom windows.

All told, Resnick allegedly has raked in $470,000 in down payments from the 18 consumers that filed complaints with Madigan’s office for projects estimated to cost $698,000. But once the large down payments were paid by the homeowners, construction delays mounted up, little or no construction work was ever completed and MoMax and Resnick reportedly became difficult or impossible to contact.

MoMax Inc., which also does business as MoMax Builders Inc., is an Illinois corporation currently not in good standing for its reported failure to file annual reports with the Illinois Secretary of State. Resnick and MoMax have been engaged in the practice of home repair and construction and have advertised their services since at least 1992.

Resnick and MoMax are charged with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act. Resnick and MoMax allegedly accepted money and then failed to either begin work on the consumers’ homes or finish projects they did start, failed to refund homeowners’ down payments after the homeowners had canceled their contracts, provided consumers with invalid certificates of insurance and waivers of liens, and accepted money for the home repair projects and then deposited it into personal accounts or used it for personal expenses.

In addition, the defendants are charged with failing to obtain proper permits before beginning work on the consumers’ homes, failing to provide consumers with the legally-required notice of consumers’ three-day right to cancel and failing to provide homeowners with copies of the home repair consumer’s rights pamphlets.

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.

The lawsuit also seeks 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 consumers.

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