Homeowners feel stung yet again

SARASOTA COUNTY - Joseph Pufta was charged with embezzlement after his building company collapsed two years ago, leaving dozens of former customers raiding retirement funds, running up credit card debt and selling other possessions to get their homes finished.

Now the homeowners say the state attorney's office has burned them, too, by allowing a plea deal that gives Pufta 90 days of jail time and only forces him to pay back a fraction of their money.

His former clients say they never agreed to the terms of the plea and prosecutors did not work with them to build the strongest case.

"The prosecuting attorney had snuck around and they made a deal with this guy to pay restitution," said Darrin Morehouse, who says he lost at least $40,000. "She just let this thing roll, she just wanted it off her books."

Morehouse, who was left with a shell of a house with eight subcontractor liens on it, stands to receive $9,616 back from Pufta.

Prosecutor Kate Wallace dropped 18 of the 47 charges Pufta faced for the plea agreement that requires Pufta to pay victims $132,000 from the proceeds of a house he was planning to sell in his divorce.

"There was no proof he set up this construction business to rip people off," Wallace said. "I wish we could have done more for them, but the law is what it is."

A boom and a crash

Pufta, 63, was a carpenter who started his Avalon Homes company during the housing boom, sometimes building 20 homes at a time.

His business took off and he completed more than 120 homes, but he remained more of a builder than a businessman, said his attorney, Henry Lee. An investigation would show his record-keeping was atrocious.

"All of a sudden the sales dried up," Lee said. "Suddenly his cash flow stopped and he was in a position where he couldn't finish all these homes."

Plenty of other builders were in the same predicament, especially in the North Port area. At least three home building companies in 2006 went belly-up and left houses unbuilt.

But Pufta had been commingling the construction funds, taking a draw from one construction account to pay a subcontractor on another project. That is a crime, but would probably have gone unnoticed if the subcontractors were paid.

Lee said other home builders did the same thing, but the difference for Pufta was that the victims went to police.

When subcontractors on Pufta's projects did not get paid, they put liens on properties that homeowners had to pay or risk foreclosure. So essentially, they were forced to pay for the same work twice.

"This is any homeowner's worst nightmare," Lee said.

Paying twice

Josephine and Zenon Guran of Polk City say they spent an extra $180,000 and extra time finishing the house they hired Pufta to build.

Almost all the work that had been completed had to be redone because it had been abandoned for so long. By the time they finished it, the housing market downturn left them stuck.

"It's just sitting empty now because we can't sell ours that we're living in," Josephine Guran said. "Every time we go to the house to dust and cut the grass, we cuss a little bit."

Under the plea agreement, the Gurans stand to receive $17,041 in restitution from Pufta.

And in a way, the Gurans consider themselves lucky.

Frank and Sharon Vera had to sell a brand-new boat and car to get enough cash to finish their home. Others planning to retire have had to go back to work.

The prosecuting attorney, Wallace, told the Gurans that they could try to recover money through the civil courts, something the Gurans had already tried.

"The attorney said, 'You know, we could go through that action. Frankly you'd be throwing good money after bad money,'" Zenon Guran said.

Zenon Guran asked Wallace about the $40,000 they paid Pufta to install a pool. The Gurans say they never got the pool and had to pay again.

"They apparently didn't go after things we gave him money for and he didn't produce," Zenon Guran said.

Building a case

Sheila Schaller knew something was wrong when subcontractors started putting liens on her property. She says she went to police with her story three times before a detective agreed to sit down with her.

"I probably lost more like $70,000," Schaller said.

Other families started coming forward in 2007, all telling a similar story.

Police reports say Avalon Homes took "several withdrawals" of money from Schaller's construction loans "and failed to complete the work that these withdrawals were designed to pay for."

The language was repeated in each charge. Pufta was arrested on 21 felonies, and more charges were added later as more victims came forward.

A grand theft charge accused Pufta of cashing a New Jersey woman's $42,180 check, yet 18 months later her lot had not even been cleared.

The charges were reviewed at the state attorney's office.

Deal sparks outrage

Prosecutor Wallace said the only criminal charge she could prove was when bank records showed Pufta took draws from construction accounts for certain work but never paid subcontractors who did it.

Wallace said that she could not prove a criminal act in some of the cases where there were liens on the property from unpaid contractors, since records did not show Pufta taking draws from construction funds directly for that.

The case was destined for a plea deal. Pufta wanted to make restitution, his attorney said.

The first plea deal included no jail time for Pufta, and outraged one of his ex-customers.

The victims say they Wallace never contacted them for further information about the cases, and they were not advised about the plea deal.

While the state attorney's office works closely with victims in serious crimes and those who will testify at trials, crime victims do not always get contacted about plea deals.

Darrin Morehouse said he heard about the deal and wrote a letter to the Circuit Judge Rick De Furia asking for some jail time for Pufta.

Because of the letter, De Furia rejected that first plea agreement and eventually sentenced Pufta to 90 days in jail, followed by 20 years of probation with the condition that Pufta will have to pay the victims back.

The restitution is supposed to come from Pufta's share in the sale of his former residence as part of his divorce. Pufta also has to put the victims in his will in case he dies before the sale.

Civil court

But Pufta's ex-customers say the state attorney's office only pressed charges in the cases that were easiest to prove, a strategy that left out cases in which Pufta took their money and failed to do the work.

Frank Vero said he asked Wallace about $5,000 he paid to Pufta but never got any work for. Wallace told him it was not on the bank records so she could not prove it.

"She tells me I can't collect this $5,000 because it's not on the draw schedule," said Vero, who had to sell his boat and his wife's Lexus for the cash to finish the house. "Are you kidding me?"

Wallace said the records from Pufta clearly showed he had misapplied construction funds, so those were the charges she pursued. To prove theft, she would have to prove Pufta intended to steal that money from the beginning.

"What could be treated as a criminal offense is narrow in this case," Wallace said.

Morehouse said he wrote a $1,000 check to Pufta for appliances and never got them.

He said Wallace told him that if he wanted to pursue that, he would have to file another police report.

"I'm totally disappointed in her," Morehouse said. "And she let him weasel his way out of a lot of valid debts that were on there."

Schaller, who said she lost $70,000 trying to finish her home, thinks the jail sentence was light. And she does not think a long sentence would make it harder for her to get her restitution money.

"Let him sit in jail until the house sells," Schaller said. "My retirement money is gone and it's not fair."

Wallace says the victims in the Pufta case can pursue any of those damages through the civil courts.

But attorneys will not touch the case for less than $10,000, and Pufta's clients have been told they are unlikely to collect.

"People figure our suffering is way more than what Pufta is going through," Schaller said. "People want back what they lost. They want their lifestyle back."