A Pulaski County Circuit judge on Tuesday ordered the owner of a defunct Fayetteville roofing company, already on probation for cheating customers, to pay $137,281 in fines and costs for accepting money for repairs his company never performed.
Judge Jay Moody found Shawn Lawrence Redmond, 58, of Fayetteville and his Razorfast Roofing company committed 21 violations of the Arkansas Deceptive Trade Act - one count for every defrauded customer - in response to a December 2012 lawsuit brought by the attorney general’s office.
At the request of Assistant Attorney General Bart Calhoun, Moody imposed a $105,000 fine at $5,000 per violation, plus ordered $28,137 in restitution for seven of those customers.
The judge also ordered Redmond and his company to reimburse the attorney general’s $4,144 costs inbringing the litigation.
Redmond is already under a Washington County Circuit Court order to pay $87,037 to the rest of the victims as a condition of his May conviction on 19 counts of theft by deception. He pleaded guilty in exchange for a sentence of 10 years on probation with a $1,000 fine.
Moody awarded summary judgment to the state Tuesday after neither Redmond nor the company responded to the attorney general’s office requests for discovery, despite an order from the judge to comply. Neither answered the state’s motion for summary judgment.
Redmond represented himself at the 15-minute hearing, saying he had been under “duress” because of the criminal case and bankruptcy proceedings.
He’s already repaid $36,000, he told the judge.
Redmond also denied any deliberate wrongdoing, saying he only funded Razorfast because it looked like a good investment.
“I’m not a roofer. I’m in marketing,” he said. “They opened the company with my funds. I’m the guy who was writing the checks. I just ran out of money.”
Razorfast installed almost 150 roofs during its year of operation, he told the judge.He blamed the company’s failings on Jon Lawrence, his former business partner, saying Lawrence supplied the roofing expertise but backed out of Razorfast after weatherrelated setbacks.
“I felt I was defrauded in this thing,” Redmond said. “He hired everybody.”
But in court filings, state lawyers contended that Redmond acted deliberately through a company he started after Lawrence split with him. Razorfast would collect deposits up front from customers then never perform the work, they claim in court files.
Razorfast typically advertised itself as working for whatever the customer’s insurance would pay, not the actual cost of the work, the attorney general’s office stated.
The men’s partnership began as “Razorback Roofing” in April 2010 and started out making a “very good profit” while developing a reputable name, state filings show.
According to the state filings, based on testimony from Lawrence and operations manager Tyler Lilley, the company went into decline because of Redmond’s “erratic” behavior, which included misplacing customer payments.
State f ilings describe Lawrence as protecting customers from Redmond’s deceptions, stating thatLawrence dissolved the company in July 2010 after becoming “tired of fighting and babysitting Redmond.”
Lawrence left when the University of Arkansas at Fayetteville demanded the company drop its the Razorback name, according to the state. Redmond then formed Razorfast on his own, according to court filings.
Redmond used payments from his new customers to cover the costs of roof repairs paid for by previous customers, state lawyers contended.
The attorney general’s office described Redmond’s business model in court filings as a “Ponzi scheme” and “robbing Peter to pay Paul,” estimating that he bilked victims out of $95,626 between May 2011 and July 2011.
The civil proceedings were delayed somewhat when Redmond filed for bankruptcy in January 2012, naming the victims among his creditors. Court records show the case was thrown out in May after he failed to file delinquent state income tax returns forthe years 2007, 2008 and 2010, despite an order from the bankruptcy court. He had also not filed federal income tax returns for the years 2006-11, another requirement to complete bankruptcy.
Victims with their restitution requests are: Marilyn Stevenson, Springdale, $5,000; Dick Roso, Springdale, $2,500; Tonya Pierson, Rogers, 2,197; Cheryl Peterson, Green Forest, $3,000; Jim Parsons, Bella Vista, $3,629; Sue Parks, Springdale, $9,595; Lisa Moulton, Fayetteville, $2,300; Buck Morse, Farmington, $5,300; Viola Miller, Fayetteville, $3,970; Osgood Jones, Bella Vista, $5,864; Karen Hollon, Springdale, $6,619; Michael Hester, Bentonville, $5,844; Dan Gilman, Bella Vista, $4,000; Annetta Elgie, Siloam Springs, $4,511; Linda Duck, Fayetteville, $1,561; Theresa Delaplain, Fayetteville, $2,830; James Conner, Fayetteville,$5,843; Marie Carlson, Bella Vista, $2,093; Eva Barker, Farmington, $4,561; Adrian Cummings, Lowell, $8,126; Dustin Seaton, Fayetteville, $6,290.
Northwest Arkansas, Pages 8 on 02/20/2013