UPDATE: CSLB, Catching Illegal Contracting in the Act with “Eyes on Site” (Apr. 2, 2014)
California’s Contractors State License Board (CSLB) Statewide Investigative Fraud Team (SWIFT) team has reported that 121 individuals have been arrested in connection with simultaneous undercover sting operations conducted March 25-27, 2014, in 9California locations. SWIFT investigators partnered with a variety of local law enforcement agencies to conduct the stings, including law enforcement agencies in Bass Lake (Madera County), Clovis (Fresno County), Dana Point (Orange County), Hanford (Kings County), Palos Verdes Estates (Los Angeles County), Sacramento (Sacramento County), San Jose (Santa Clara County), Vista (San Diego County), and Woodland (Yolo County).
Of the 121 individuals arrested, 115 now may face misdemeanor charges for contracting without a license, which is prohibited by Bus. & Prof. Code § 7028. The penalty for a conviction is up to 6 months in jail and/or a fine of up to $5,000. Of those arrested, 94 may also be charged with illegal advertising in violation of Bus. & Prof. Code § 7027.1. Among other things, California law requires contractors to place their license number in all print, broadcast, and online advertisements. Those without a license are permitted to advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. The penalty for illegal advertising is a fine of $700 to $1,000. Other charges may include requesting an excessive down payment in violation of Bus. & Prof. Code § 7159.5. In California, unless exempt, a home improvement project down payment cannot exceed 10% of the contract total or $1,000, whichever is less. This misdemeanor charge carries a maximum penalty of 6 months in jail and/or up to a $5,000 fine. The CSLB further reported that the blitz totals may increase as some suspects are expected to provide their bids to undercover investigators via text, email or fax at a later date.