A couple under investigation by the Missouri Attorney General's Office and scrutinized by the Better Business Bureau is no longer renting a city-owned building in Lebanon. Last year, the city council approved a building allowance to Homestead Contracting LLC also known as Insurexx as part of an economic development agreement.
The second floor of a building at 200 E. Commercial in Lebanon was supposed to be Insurexx’s new headquarters. When the company changed it’s name, the BBB sent an alert warning customers about the businesses' practices. “Apparently they are hiring sub contractors to take care of foreclosed properties and then failing to pay them,” Southwest Missouri Better Business Bureau President and CEO Judy Mills said.
The company's history with the BBB did not prevent the city of Lebanon from paying a building allowance of $82,000 dollars to improve the historic building. “It was an economic development project that went wrong,” Lebanon City Administrator Chris Heard said. He says the city expected the company to improve the building, then operate their business from the building and begin paying rent. The city reimbursed the company $82,000 for improvements made to the building. “Lebanon-REDI or Lebanon Economic Development Inc. and city council took a gamble and the gamble didn't pay off,” Heard said.
Heard was not working for the city when the council approved the deal with Homestead Contracting LLC. He says it’s unclear how much research occurred before the agreement. “In this particular example there was a local person involved with it,” Heard said. “Blind trust is never a good recipe. I don't know if that played a factor into it.”
Michelle Corey, St. Louis BBB president and CEO, said Jeffrey A. Wolfson and Gloria Diane Schoeller, who have ties to Homestead Contracting and Insurexx, “Have been thorns in the sides of consumers and businesses for more than a decade. Based on past experience, anyone dealing with this couple should not expect things to end well.” According to the St. Louis BBB, in 1999 a judge banned Wolfson from owning or having any supervisory role in a home remodeling business. In 2000, Wolfson was sentenced to five years in prison when he returned to contracting work and failed to make restitution payments. “He was not allowed to be a part of the businesses so all the assets are listed in the wife's name,” Mills said. “This is something we see commonly when someone is trying to hide or be deceptive.”
Heard says the couple had until the end of the day Wednesday to remove their items from the city owned building. The city wants to rent it again to another company. “They are out now,” Heard said. “With a little more work this could be call center ready.”
A spokesperson for the Missouri Attorney General’s Office would only say both companies, Wolfson and Schoeller are under investigation. The BBB received 10 complaints against Homestead Contracting LLC.
News Release from St. Louis BBB Sept. 19, 2011- A Missouri couple who have left a trail of frustrated consumers and businesses across the Midwest, have ties to a new contracting business that is attempting to expand its operations nationwide, the Better Business Bureau (BBB) warns.
The new company, Insurexx, is headquartered in Lebanon, Mo., and lists another address in Manchester, Mo., in West St. Louis County. Its website, www.insurexx.com, says it does work in Missouri, Illinois, Kansas and Oklahoma and expects to move into other states.
The president and owner of Insurexx is Gloria Diane Schoeller, who most recently operated Homestead Contracting. Homestead, which also had offices in Lebanon, faces numerous complaints from business operators who said the company did not pay them for tens of thousands of dollars in contracting work on foreclosed properties.
The Missouri attorney general’s office said in March it was investigating Schoeller and her husband, Jeffrey A. Wolfson, for their dealings with customers and contractors.
Jeffrey Wolfson has a long history of legal problems. In May 1999, a St. Louis County Circuit Judge barred him from ever “owning or having any supervisory role in a home remodeling business.” That ban came after numerous customer complaints registered with the BBB and an investigation by the attorney general’s office into allegations of consumer fraud. The court ordered Wolfson to pay $264,000 in restitution over five years. In August 2000, he was sentenced to five years in prison when he returned to contracting work and failed to make restitution payments.
In April 2009, the BBB reported that Wolfson and his company, Home Centers America, failed to complete a home addition in Overland, Mo. The project – at the home of a 76-year-old woman -- was completed by volunteers working with the American Subcontractors Association’s Midwest Council.
Michelle Corey, BBB president and CEO, said Wolfson and Schoeller “have been thorns in the sides of consumers and businesses for more than a decade. Based on past experience, anyone dealing with this couple should not expect things to end well.”
Schoeller, who also has used the name Gloria Diane Wolfson, registered Homestead Contracting with the Missouri secretary of state in December 2008. The company’s former website said its services included home inspections, insurance loss clean-up, property preservation, mold and hazardous material removal and re-build work.
Homestead used Craigslist ads to hire subcontractors in Missouri, Illinois, Arkansas and other states. By the end of 2010, Homestead was virtually out of business, leaving numerous contractors unpaid for projects across the Midwest, including dozens of projects in the St. Louis area.
Most of those contractors said they performed work on foreclosed properties that included grass mowing, boarding windows and doors, changing locks, roof repair and cleaning out the properties.
A couple from Washington, Ill., said Homestead has paid them about $800 of $10,000 they are owed. A woman from Topeka, Kan., said she lost more than $3,000 to Homestead after the company refused to pay her company for several home preservation projects in that area. A woman from Harrisburg, Mo., said she lost about $5,000 for unpaid work. “It was horrible,” said the Harrisburg woman, adding that the work and stress associated with it worsened already serious health issues.
A man from Redfield, Ark., said Homestead still owes him $18,000. “They haven’t paid me a nickel,” he said. A St. Louis area paralegal said Homestead never paid her for $4,500 in work. A man from Sunrise Beach, Mo., said he has received a single $500 check out of $5,000 he is owed. Several contractors said they dealt with both Schoeller and Jeffrey Wolfson over payment disputes.
Missouri records show that Schoeller registered Insurexx in late March, shortly after a TV station in Kansas City aired an investigative story on Homestead, Schoeller and Wolfson. In an interview with the TV reporter, Wolfson said he had no ownership in Homestead and was acting only as a consultant for the company.
Schoeller told the BBB that Wolfson was an independent contractor for Homestead “developing marketing and identifying companies that Homestead Contracting could contract with.”
Schoeller also said that Wolfson was involved with media and marketing for Insurexx, but did not represent Insurexx in any supervisory capacity and is no longer working for the company.
The BBB urges caution when dealing with Insurexx, Schoeller or Wolfson and warns businesses to be especially wary of paying any up-front membership fees to the company.
A YouTube video for Insurexx, which was removed from the site Monday, says contractors hoping to work for Insurexx must pay an initial membership fee of $200, a second fee of $400 after receiving their first job and then a $50 per month fee for continuing use of a job software package. In addition, “Insurexx will ask you to purchase hats, shirts and other company-identified materials including a picture ID badge” at an additional cost of about $50, the video says.
The BBB has the following tips for consumers hiring contractors:
BBB Business Review at www.bbb.org or by calling 314-645-3300.BBB Business Reviews.