$217M in bad checks; now, a day of re...

$217M in bad checks; now, a day of reckoning

There are 84 comments on the The Indianapolis Star story from Apr 9, 2007, titled $217M in bad checks; now, a day of reckoning. In it, The Indianapolis Star reports that:

Eric Tauer built his last brick home more than five years ago, but the aftershocks from his shattered real estate empire are still rippling through the western suburbs of Indianapolis.

Join the discussion below, or Read more at The Indianapolis Star.

Owen

Indianapolis, IN

#26 Apr 10, 2007
john smith wrote:
"lien waivers", they are great things for the general contractor, the bank, the owner, etc. who gets a screwing with a lien waiver is the sub-contractor. he signs away a very important tool in litigation. what most people outside the construction industry don't realize is a little thing called retainage. it is an agreed upon amount between the sub and the general contractor, usually 10% of the contract value. that amount is paid at the end of the project, upon successful completion. on custom homes that can be up to 5 months or more. on commercial construction it can be much, much more longer than that. no lien contracts are tilted towards the folks with the money. the small guy is taking a chance of a screwing everytime he signs one. general contractors are notoriously slow payers. some account payable bills will go 180 days before they are paid. try that with your credit card company or phone company and see what it gets you. if the small subs in the indianapolis area would unite against them, the no-lien contracts would dry up and disappear. it's only fair that everyone gets paid in a timely manner for their efforts.
Subcontractors should never sign a lien waver until they are paid in full and they should reference the check number and the address/legal-lot number on the lien waver. If the builder claims he won't have the money till he is paid at closing...have the money escrowed at closing. Don't sign away your leverage until you have been paid in full.
Owen

Indianapolis, IN

#27 Apr 10, 2007
If you are in a trade that might perform work in stages (ie: electrician, plumber, etc.) you can put an effective date on the lien waver.

Example: Effective 4/10/2007 I ___ have been paid in full for the rough plumbing only. Finish plumbing to be completed at a future time and not included in this lien waver.
another mom

Indianapolis, IN

#28 Apr 10, 2007
The Star should have his picture in the paper along with this story....Let everyone see who he is...when he get's out of prison, people will know who to stay away from.
Owen

Indianapolis, IN

#29 Apr 10, 2007
bullet wrote:
<quoted text>Building in Indiana is the biggest consumer rip off because there is hardly any protection. EVERY builder should be REQUIRED to provide unconditional lien waivers but they don't have to. I"ve known folks who have built homes with major Indianapolis builders who tell them they CAN'T provide them even after the sales person tells them no problem. Construction defects are commonplace in Indiana and the attorneys have been living high on the hog. Indiana needs a consumer entity with teeth that will shut these con artists down. This will be forgotten and the consumers will continue to pay out oblivious to reality.
Lien waver provide ZERO protection against construction defects. Your best protection against construction defects is to have a reputable home inspection company (ASHI approved) inspect the home at stages during the construction process. I recall a few years back when Schnepp was inspecting a new construction home from a major tract builder, and he slid off the roof because the sheathing wasn't nailed down.
Hoosier mom

Bloomington, IN

#30 Apr 10, 2007
Fortunately for him, it's white collar crime and he'll be out in a couple of years. So,$217 million for two years of incarceration? It's probably worth it. He must have good friends. Why do you need a plea deal for something that's so clear cut?
HUH

United States

#31 Apr 10, 2007
Disgusted wrote:
This man can defraud the banks and all of those innocent people and get a slap on the wrist. If the average person writes several bad checks even the banks will close your account.
A good example that crime does pay if you know all of the right people.
A slap on the wrist, he is going to jail for 6.5 years!

Since: Mar 07

Indianapolis

#32 Apr 10, 2007
Owen wrote:
<quoted text>
Subcontractors should never sign a lien waver until they are paid in full and they should reference the check number and the address/legal-lot number on the lien waver. If the builder claims he won't have the money till he is paid at closing...have the money escrowed at closing. Don't sign away your leverage until you have been paid in full.
What happens to most of us if we don't pay our bills? I'd suspect eventually we would be homeless. Builders have figured out a way to get around paying their bills and getting others to pay them because the current real estate contracts provide that loophole. A builder should not be able to close on a house without proof all bills have been paid. It's fraudulant to sell something that isn't yours to sell. Subcontractors should NOT be able to put a lien on the house another person has purchased. The lien should be placed on the builder's property and keep the consumers out of the middle. So if a builder doesn't pay his subs and they put a lien on the property and force the new homeowners to pay, they continue to work for the builder because they got paid. I think builders should be able to purchase some sort of insurance property to enable a no lien contract. This would weed out a lot of the 'hammer in the truck' builders and ultimately reduce the amount of shoddy construction. I'm tired of schlock builders destroying limited resources and replacing it with unfinished and shoddy neighborhoods. Consumers should be able to purchase a home without inheriting problems from a dishonest builder. BTW: How long does the sub have to file a lien? If they file it after 90 days of closing--are they out of luck?
HUH

United States

#33 Apr 10, 2007
Jon wrote:
He needs to be sent to the electric chair for 30 days.
What are you talking about?? You sound like you are out of your mind, maybe you have been sitting on the electric chair!
TIM DUNN

Homer Glen, IL

#34 Apr 10, 2007
6 1/2 YEARS! THAT'S ALL! HOW MANY LIVES HAS THIS JERK SCREWED UP!
TVS

United States

#36 Apr 10, 2007
SUB CONTRACTORS: DON'T SIGN LIEN WAIVERS

The solution to this problem is not for the subcontractors (the guys who really do the work that built the house) to sign away their protection. The solution is to escrow the purchase price so that the general contractor doesn't get paid until all the subs are paid.

SUBS: If they demand a lien waiver, they're planning to screw you. There's no other reason, unless they have escrowed enough money to pay everyone's charges.
BAFFLED

Circleville, OH

#37 Apr 10, 2007
Interesting wrote:
I am curious how he is the only one to get in trouble, no way one person was the entire cause of this. Does the bank have no responsibility? Maybe the bank just wanted the $29.95 for each bounced check. Ridiculous reporting by the IndyStar once again.
We were outraged by the fact that Bryan Kain the loan officer from Monroe Bank was aquitted! How could Tauer do all this alone, IMPOSSIBLE! Then there was the title company, Abstact & Title in Danville, owned by Lee Comer, nothing about him either. The list goes on and on, I'm sure.
The banks and the title companies have enough money to make it go away, and Tauer is left with all the blame. It's a scary world when you can't even trust the banks.
BAFFLED

Circleville, OH

#38 Apr 10, 2007
6 1/2 years is a LONG time! I'm not saying his sentence should be longer or shorter, but I just looked at the Indiana website last week for sex offenders in our neighborhood, there are a ton. Check those sentences out, then think about the little girls or boys lives that were really RUINED, and then come back to this story.....

6 1/2 years is forever.
Avon citizen

Indianapolis, IN

#39 Apr 10, 2007
EVERYONE STAY AWAY FROM HOME ONE BUILDERS ---- SAME PEOPLE, DIFFERENT NAME!!!! BUYER BEWARE!!!
James

Indianapolis, IN

#40 Apr 10, 2007
There is nothing they can do to him that is sever enough short of the death penelty.He has ruined hundres of lives by his greed.
TMD

Lafayette, IN

#41 Apr 10, 2007
BAFFLED wrote:
6 1/2 years is a LONG time! I'm not saying his sentence should be longer or shorter, but I just looked at the Indiana website last week for sex offenders in our neighborhood, there are a ton. Check those sentences out, then think about the little girls or boys lives that were really RUINED, and then come back to this story.....
6 1/2 years is forever.
In September 2003, federal prosecutors and the SEC charged executive officers of Tyco International Ltd., former CEO, Dennis Kozlowski; CFO, Mark Swartz; and Chief Corporate Counsel, Mark Belnick, with various counts of fraud and violations of federal securities laws. In its investigation, the SEC found that Kozlowski and Swartz had managed to swindle over $170 million in corporate loans without proper disclosures, approvals, and notifications, and had pocketed approximately $430 million by misstating Tyco's finances and manipulating the company's stock price.

People employed by Tyco International Ltd. when it was run by corrupt executives have won class action status for their lawsuit charging deception by the conglomerate's retirement savings plan.

Now, what Tauer did pales in comparison to the Tyco coverup, and these two cases are in completely different markets. However, there are a significant number of other interested parties that were adversely affected by his deception and fraud, and the loan dollar amounts we're talking about are in the same ballpark - 170 million in Tyco loans to 217 million (or 271 million depending on which figure the Star has correct) in loans secured by Tauer.

Kozlowski and Swartz were convicted last year in a New York state court on multiple counts of grand larceny, conspiracy, securities fraud and falsifying business records. They were sentenced in September to up to 25 years in prison.

This is why the six and a half year sentence received by Tauer may be viewed as a slap on the wrist.
annon

Fishers, IN

#42 Apr 10, 2007
Usefull Timeline wrote:
I was always under the impression December 1997 came before February 1988.
and that would make you dumb, dont you hate when you try to call someone out and it gets thrown right back at you
Avon citizen

Indianapolis, IN

#43 Apr 10, 2007
They took the post off about Home One Builders --- I guess Home One doesn't want anyone to know they're associated with him, either!!
Outraged

Indianapolis, IN

#44 Apr 10, 2007
Yeah--- that's because they are all crooks, too! Stay away from Home One!!
MyHome

Fishers, IN

#45 Apr 10, 2007
So if it's my yard don't I still have a freedom of speech??? What happened to that???? If it's there home I can understand why they wouldn't want those homes built to take away the vaule of the home they have bought....
Word to the wise

United States

#46 Apr 10, 2007
Avon citizen wrote:
EVERYONE STAY AWAY FROM HOME ONE BUILDERS ---- SAME PEOPLE, DIFFERENT NAME!!!! BUYER BEWARE!!!
ABSOLUTELY TRUE.

SAME CROOK, DIFFERENT FINANCIAL BACKERS.

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