updated 10/9/2006 3:09:43 PM ET 2006-10-09T19:09:43

Hurricane Katrina battered Raquel Romero’s home, but she figures the house took a worse beating from the contractor she hired to repair the damage.

The contractor tore off her damaged roof and left her Long Beach home exposed to the elements for several days. Rainwater caked her kitchen and laundry room in sludge and destroyed belongings that survived Katrina.

The contractor built Romero a new roof, but Romero says it was so poorly done she had to hire someone else to replace it. And the first contractor refused to refund any of the $20,000 she paid him.

“The contractor caused more damage than the storm did,” she says.

Finding an honest, readily available contractor is a challenge these days on the Gulf Coast, where last year’s epic storm demolished tens of thousands of homes. With most reputable contractors booked for months, con artists are filling the void and preying on desperate homeowners, law enforcement officials say.

To date, home-repair rip-offs have accounted for only a modest share of the hundreds of millions of dollars in fraud that followed in Katrina’s wake. But authorities expect the problem to grow worse as billions in federal grant money starts to flow to homeowners in Mississippi and Louisiana.

“I think we’ll see an unprecedented congregation of some of the best con men in the world to converge on our Gulf Coast and New Orleans when this taxpayer money hits the ground,” Mississippi Attorney General Jim Hood said.

‘These are terrorists, too’
Hunting unscrupulous contractors is Ron Werby’s job. He went to work in July as an investigator for the sheriff’s department in Harrison County, Mississippi’s most populous coastal county, weeks after retiring from the FBI’s joint terrorism task force.

“These are terrorists, too,” Werby said of scammers posing as legitimate contractors. “They’re terrorizing old people. A lot of them are vulnerable people who are desperate and will take anybody to do the work.”

One of the first cases Werby investigated was Romero’s. She filed a complaint against the contractor, and a judge later issued an arrest warrant charging him with home-repair fraud. The contractor is one of dozens charged with defrauding homeowners since Katrina struck Aug. 29, 2005.

Werby’s growing stack of case files also includes that of Lore and Carroll Allen, who have been living in a government-issue trailer since Katrina destroyed their home in Pass Christian.

Lore Allen, 82, told Werby that in March the couple paid a contractor $30,799 to erect a steel-reinforced cottage on their old property. Workers built the foundation, frame and siding, but more than $10,000 worth of work was left to be done when they stopped showing up in July, she said.

A month later, the contractor sent a letter notifying the couple that it is no longer doing business in Mississippi. No reason was given, Lore Allen said, fighting back tears.

“Is it possible we’re going to get some money back?” her husband asked.

Werby explained he cannot intervene in civil disputes, but in a criminal case a judge can order restitution.

“Well, we could sure use it,” said Carroll Allen, 87, a decorated World War II veteran.

Blurry line for enforcement
The line between a crime and a mere contract dispute can be blurry. Mississippi law says it is home-repair fraud if a contractor who misrepresents the terms of a contract or “promises performance which he does not intend to perform or knows will not be performed.”

Some contractors are brazen con artists; others are well-intentioned business owners who promise more than they can deliver, Werby said. “They might have been able to do small jobs,” he said, “but then they come down here and get greedy and get in over their heads.”

In March, Mississippi Gov. Haley Barbour signed into law a measure elevating home-repair fraud from a misdemeanor to a felony punishable by up to 10 years in prison.

Since Katrina, the Mississippi attorney general’s office has opened more than 350 home-repair fraud investigations, and at least 10 have led to arrests. The Louisiana attorney general has investigated more than 190 cases, with at least 30 resulting in arrests.

Investigators urge homeowners to hire only licensed and insured contractors, check references and insist on paying in installments instead of handing over the money for an entire job upfront.

Easier said than done, said Romero, 37. “These contractors know they have you,” she said. “We’re trusting people here, and that’s what gets us in trouble.”

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