[Not a valid template]The state Attorney General’s office has secured a 101-count criminal indictment charging several Sussex County residents, including a father and son, with being part of a heating and air-conditioning scam that dated back to 2009.
“After receiving complaint of contractor fraud from a Sussex County homeowner, our office responded quickly to initiative a thorough investigation in partnership with the Delaware State Police which revealed multiple victims and led this week to a significant number of criminal charges,” Attorney General Beau Biden said.
The indictment, handed down Monday by the Sussex County Grand Jury folloiwng three-month investigation by the Attorney General’s Fraud and Consumer Protection Division and Delaware State Police.
According to a statement from the Attorney General’s Office, The indictment charges seven men who were associated with John Walsh, 51. Walsh has operated heating and air conditioning services companies from the Millsboro area under various names for the past 10 years, including MidAtlantic Heating and Air, Eastern Shore Heating and Air, and AOC/Mid Atlantic Heating and Air. The indictment charges the defendants associated with these companies with a pattern of theft and fraud over a four-year period beginning in July, 2009.
The investigation got under way in February, 2013 after Biden’s office received a complaint that a homeowner had paid Walsh for work that his company never performed. Investigators began working with the State Police a short time later after learning that troopers had arrested Walsh in January for insurance and check cashing fraud. By mid-February, the investigation expanded with proactive efforts that that led to the identification of many of the victims represented in the indictment.
During this time, Special Investigators arrested Walsh on February 25 on a fugitive warrant from Pennsylvania and brought him in for questioning. The very next day it was alleged that Walsh was back out in the community soliciting payments from homeowners for work he promised to complete.
In response, Walsh was arrested again – his third arrest this year – on March 4 and was charged him with home improvement fraud and theft. As a condition of his release he was prohibited from engaging in any contractual work.
The indictment charges a variety of crimes, including Racketeering, Conspiracy to Commit Racketeering, Home Improvement and Insurance Fraud, Theft, Forgery, Unlawful Use of a Credit Card, and check cashing fraud. It charges Walsh and his associates with more than two dozen separate frauds against Sussex County homeowners, including:
· Collecting payments for new heating and cooling systems, but never performing the work.
· Securing payments for new heating and cooling systems, but instead replacing the old systems with other used systems that were repainted to look new.
· Frequently claiming that heating and cooling systems required unnecessary maintenance, new duct work, or pipe replacement, and charging homeowners for parts and labor that prosecutors allege were never provided.
· Selling maintenance contracts to homeowners, and in multiple instances either not responding to service calls or charging homeowners for parts the companies claimed were not covered by the plan but for which the company received reimbursement by the manufacturer.
· Committing insurance fraud in one instance where a homeowner received more than $18,000 from their insurance company for work by the companies that was never actually performed.
Last fall, in the wake of Hurricane Sandy, the indictment says Walsh solicited multiple homeowners in the Swann Keys manufactured home community which had sustained flooding damage and he collected advance payment from at least two homeowners. Walsh never contacted one homeowner with storm-related damage to the underside of the home after cashing the payment check.
For a second homeowner, Walsh installed a replacement heating unit upside down. He also claimed the home had been rendered unsafe by dangerous mold growth. Walsh indicated that he was one of only two persons in Sussex County who was permitted to remove mold and he threatened to have the home condemned unless the homeowner paid $10,000 for a special protective suit to remove the mold.
Other alleged cases of fraud include:
· Making two unauthorized charges to the credit card accounts of two homeowners.
· Forging a check by a homeowner who paid Mid Atlantic for work allegedly performed by changing the “$46” to “$460” before cashing the check.
· Depositing counterfeit checks with two Sussex County bank branches on three occasions over the past year.
· Securing the services of a Sussex County check cashing company to allegedly cover payroll while Walsh claimed to await payments for completed work. The investigation, however, revealed that Walsh and his associates submitted checks to cover $40,000 in these payments on closed accounts or accounts with insufficient funds.
Finally, investigators said Walsh had been receiving full monthly Social Security Disability payments from the Federal Government, receiving $35,000 in benefits from January, 2011 to December, 2012 alone. Although individuals receiving these payments are prohibited by law from doing any work or making any money, Walsh conducted business and collected tens of thousands of dollars from clients while he received those benefits.
Walsh claimed in advertising that all workers were fully licensed and certified. However, the investigation found that no employee at any time maintained the professional regulation license required to work in the HVAC field, and that employees at no time worked under the licenses of outside contractors who were occasionally subcontracted for work by the company.
Total amounts lost by each victim ranged from a few hundred dollars to $36,000. In total, more than $135,000, including two banks, the federal government, and more than thirty individual homeowners.
The following defendants were also charged:
– Walsh (age 51), of Millsboro – Charged with 101 offenses, including: Racketeering, Conspiracy to Commit Racketeering, Home Improvement Fraud (23 counts), Theft (39 counts), Unlawful Use of a Credit Card (2 counts), Insurance Fraud, Forgery (4 counts), and Issuing a Bad Check (30 counts)
Jonathan Walsh, 19, of Millsboro – Charged with 40 offenses, including: Racketeering, Conspiracy to Commit Racketeering, Home Improvement Fraud (14 counts), Theft (19 counts), Insurance Fraud, and Forgery (4 counts)
Vernon Speece, 36, of Millsboro – Charged with 40 offenses, including: Racketeering, Conspiracy to Commit Racketeering, Theft (2 counts), Home Improvement Fraud (11 counts), Theft (12 counts), Insurance Fraud, Forgery, and Issuing a Bad Check (11 counts),
Robert Morrison, 36, of Lewes – Charged with 22 offenses, including: Racketeering, Conspiracy to Commit Racketeering, Home Improvement Fraud (8 counts), Theft (10 counts), Insurance Fraud, and Issuing a Bad Check.
Raymond Smith, 66, of Millsboro – Charged with 2 offenses, including: Issuing a Bad Check and Theft
Randi Sherman, 25, of Millsboro – Charged with 3 offenses, including Issuing a Bad Check (2 counts) and Theft
Tony Anthony Miller, 56, of Millsboro – Charged with 5 offenses, including: Issuing a Bad Check (4 counts) and Theft
On Wednesday, special Investigators arrested John and Jonathan Walsh at their home; after arraignment in Sussex County Superior Court both were committed to Sussex Correction Institution – John Walsh in lieu of $101,000 secured bail and Jonathan Walsh in lieu of $40,000 secured bail. Vernon Speece, who was already at Sussex Correctional Institution on previous theft charges, was arraigned on the indicted charges in Sussex County Superior Court and bail was set at $40,000 unsecured. In addition, Robert Morrison and Raymond Smith were arrested by Special Investigators Wednesday, following arraignment in Sussex County Superior Court Morrison was released on $22,000 unsecured bail and Smith was release on $2,000 unsecured bail. Warrants are pending for the arrests of the other defendants.
Walsh’s company is no longer in operation. Since his latest arrest in March investigators learned that the company liquidated its equipment and is not answering its phone. Other victims may be unknown and have not yet come forward, and additional thefts could be uncovered as homeowners who are seasonal residents arrive at their properties as summer approaches. Those who may have been affected by these defendants, are asked to call the police or contact the Attorney General’s Consumer Protection Unit at 800-220-5424.
The defendants charged in this indictment continue to be charged with additional crimes. Since March, Walsh’s son Jonathan has been arrested on more than three dozen charges involving theft of heating and cooling units from manufactured homes, including in the Pot Nets community. Defendant Vernon Speece was charged as a co-defendant on at least one of these cases.
Biden made a special note that there is a separate heating and cooling services company by the name of Mid-Atlantic Heating and Air Conditioning that is based in Salisbury, Maryland. That company has no connection to any of the companies owned and operated by John Walsh.
