Modular-Home Builder Faces Accusations Of Fraud

In 2007, Carlos Ayestas entered into a contract to build his dream home. So why is he still living with his in-laws? “It’s turned into a mess,” he …

In 2007, Carlos Ayestas entered into a contract to build his dream home. So why is he still living with his in-laws?

“It’s turned into a mess,” he says. “I’ve been paying on a mortgage for three years on a house that I don’t even have.”

Ayestas, a resident of the New Orleans suburb of Metairie, lost his home in Hurricane Katrina. While attending a home and garden show, he and his wife met Paul Lewakowski, a principal at modular-home firm Lionheart Development.

“We had been looking at modular homes because of the quick pace we could build them,” Ayestas says. “The reason we chose him was because many of the other modular homes we were looking at were cookie-cutter houses; he was touting custom modular homes.”

Ayestas signed a contract with Lewakowski for a custom-built modular home at a cost of $330,000. “By no means was it going to be a cheap little house,” he says. “It was going to be almost 3000 square feet, so it was going to be a nice house. We were planning on living in it the rest of our lives. We were going to do it right.”

In September 2007, the couple closed on a $300,000 construction loan through Iberia Mortgage and received a $95,865 check for an initial builder’s deposit, which was paid directly to Lionheart. As changes were made to their initial floor plan, another $10,000 in loan funding was paid to Lionheart. The couple hoped to cover the construction loan with funds from the Small Business Administration, since they had been awarded an SBA disaster loan to rebuild after Katrina.

“To date, I have injected a large amount of personal funds to the tune of approximately $50,000, for a total investment to date of $155,865,” Ayestas wrote to NuWire Investor in a letter earlier this year.

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Legal Battle

He claims Lewakowski assured him the home would be completed no later than December of 2007. However, problems arose as that date grew closer; the owner of Pennsylvania-based Apex Homes, a manufacturing plant with which Lionheart was working, died of a heart attack. Apex suspended operations and ultimately closed up shop.

“When he died, the estate made the decision … to not give Lionheart what they owed them,” Lewakowski says. “They didn’t return any of the deposit money, they didn’t deliver any of the houses, nor did they pay their invoices.”

According to an injunction filed in May with the Orleans Parish Civil District Court, Lewakowski and his brother Ken Lewakowski operated without a valid contractor’s license and were the subject of complaints received by the state Attorney General’s office.

“The defendants have failed consistently to perform contracts and/or have failed to complete contracts with no good cause and/or have engaged in fraud or bad faith with respect to such contracts,” the injunction reads. “(They) have not completed the modular homes nor returned any portion of the deposited funds received from them.”

The injunction names New Orleans-area residents Karina Gentinetta, Denise Anderson, and Jarzel and Dedra Williams as Lionheart customers who, like Ayestas, produced hefty builder deposits and never saw anything in return. In April, Lewakowski was arrested by the New Orleans District Attorney’s Office as a result of Gentinetta’s lawsuit; she had hired Lewakowski to complete a modular home in five months for $290,000. The home was never completed and Lewakowski was arrested on charges of felony theft, conspiracy to commit felony theft, money laundering, misapplication of funds, and operating without a contractor’s license.

He was released on bail the following weekend, but was subsequently rearrested in connection with charges by another former client. He is once again out on bail and his current city of residence is unknown, though Ayestas says he believes Lewakowski has moved to Denver. Lewakowski would not discuss his whereabouts with NuWire Investor.

“I can’t really say too much because there’s a court thing going on,” he says. “I have to be real careful, of course, because it’s legal (issues).”

‘We Have No Home’

In late June, Ayestas filed suit against Lewakowski individually as well as against Lionheart as a company. “The company, I am assuming, is either insolvent or getting ready to be insolvent,” he says. “Initially when he got arrested his bail was $40,000, but (the second time he was arrested) they raised it to $180,000, and he pulls out cash to get himself out of jail. He claims he doesn’t have money, but apparently he’s got money when he needs it.”

Lewakowski says that’s not the case: “Legal fees are outrageous,” he says. “I’m suing (Apex) in federal court, but right now I have to pick up another lawyer,” he says, adding that he is pursuing restitution from Apex so that he can reimburse his former clients.

Though Ayestas says he has been hunting for current contact information for Lewakowski, Lewakowski says the two have been in touch. “He’s got my email address,” he says.

As a result of the injunction, Lionheart is prohibited from contracting, advertising, or operating in the state of Louisiana. The District Attorney’s Office is also seeking jail time for Lewakowski, though a trial date has yet to be arranged.

On July 22, the District Attorney of New Orleans announced that that an Orleans Parish Special Grand Jury indicted Lewakowski on five counts of felony theft and five counts of misapplication of contractor payments in excess of $10,000. Bond has been set at $1 million for Lewakowski, who is accused of depriving victims of a collective $427,000.

In the meantime, Carlos Ayestas, his wife, and their two children are trying to pick up the pieces. Ayestas is paying rent to his in-laws as well as making payment son the Iberia construction loan and the SBA disaster loan – a total of $2200 per month.

“As you can imagine, this whole situation has begun to take an emotional, mental and financial toll on my family and put my marriage in jeopardy as we try and keep our heads above water in working through this mess,” he wrote to NuWire Investor. “At this point, we have no home. … We are no better than where we were after Katrina.”

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