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District Attorney

Posted on: June 27, 2018

DA Hoovler Announces Guilty Pleas in Home Improvement Contractor Fraud Case

Neustadt, Charles

Orange County News
For Immediate Release                                     Contact: Christopher Borek
June 26, 2018                                              845.291.3276, 845.238.4245c

DA Hoovler Announces Guilty Pleas in Home Improvement 

Contractor Fraud Case

 

Contractor Admits Defrauding Property Owners

 

Defendant to Pay over $175,000 in Restitution to Defrauded Property Owners

 

 

Goshen, NY – Orange County District Attorney David M. Hoovler announced on Tuesday, June 26, 2018, that Charles Neustadt, 63, of Goshen, and his corporation, JC Builders, Inc., pleaded guilty to felonies for defrauding property owners who had hired him to construct homes on real property that they owned.  Neustadt pleaded guilty before Orange County Court Judge William DeProspo to Grand Larceny in the Third Degree and Theft of Services.  Neustadt’s business, JC Builders, Inc., pleaded guilty to felony charges of Grand Larceny in the Third Degree and Scheme to Defraud in the First Degree. Under the terms of a plea agreement placed on the record at the time that Neustadt pleaded guilty, Neustadt must pay a total of $175,000 to six property owners who had given him money to construct residences on real property that they owned, and who neither had their residences completed, nor received their money back.   Under the terms of the agreement if Neustadt pays all the money to the defrauded landowners by January 3, 2019, the District Attorney’s Office will recommend that he be sentenced to three years probation on his Theft of Services charge and that he be allowed to withdraw his guilty plea to the Grand Larceny charge.  If Neustadt fails to pay all the restitution by the time he is sentenced on January 3, 2019, the District Attorney can recommend that he be sentenced to two and one-third to seven years in state prison on the charge of Grand Larceny in the Third Degree. 


Neustadt and his corporation were initially charged on April 6, 2018, on felony complaints filed by Orange County District Attorney’s Office Criminal Investigators, which were the result of an investigation which commenced after the District Attorney’s Office received multiple complaints from property owners who stated that Neustadt had taken their money, but had not provided the promised construction.

 

New York State’s Lien Law provides that when a contractor receives money on a contract to improve real property, such as a house, the contractor holds that money “in trust” for the benefit of those who provide labor on the job, any subcontractors, those who supply the building materials, and, in the case of an improvement to a private residence, the home owner. If the contractor does not work on the project, does not properly pay the money he received to those who worked on the project or supplied materials, and does not return the money to the home owner, he is deemed under the law to have stolen the money. The Lien Law also provides that a contractor who receives money to improve a home owner’s residence may not use that money on other jobs.



The cases are being prosecuted by Assistant District Attorney Matthew Ross.



“The construction, buying, or improvement of a residence is generally the most expensive purchase most people will ever make, and they must be protected from fraud,” said District Attorney Hoovler. “It is of primary importance that victims whose lives have been disrupted receive full restitution.  I encourage all home owners to know their rights when dealing with home improvement contractors. Unscrupulous contractors give legitimate contractors an undeserved bad name. I look forward to continuing to work with all of our law enforcement partners in reducing contractor fraud.”


A criminal charge is merely an allegation that a defendant has committed a violation of the criminal law, and it is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the State of New York’s burden to prove guilt beyond a reasonable doubt.

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