Whistleblower: Catching up with 2012's stories

Customer wins judgment, seeks state compensationIn May, just days after Cindy Erickson of Savage handed over a down payment of $5,925 to Brown Brothers Remodeling LLC for a bathroom remodel, the business abruptly closed. Erickson's attempts to contact company President David A. Brown and Vice President John R. Brown failed.

In the weeks that followed, eight customers filed complaints against the Bloomington business with the Minnesota Department of Labor and Industry. After receiving no response from the Browns, the department revoked the business's license and fined it $68,533, the largest penalty meted out to a contractor since 2010.

Whistleblower reported in June about the vanishing remodeler and how Erickson had won a default judgment of $5,995 after suing Brown Brothers Remodeling.

Seven more homeowners and a supplier successfully sued the company since it went out of business. Those judgments, totaling $24,651, have gone unpaid.

This month, Erickson applied for compensation from the state's Contractor Recovery Fund, which reimburses customers for losses as a result of a licensed contractor's actions.

David Brown filed for bankruptcy in July. He is claiming $80,000 more in liabilities than he has in assets. Erickson is listed as an "unsecured nonpriority" creditor, which she said puts her at the back of the line for reimbursement.

Meanwhile, Erickson and her husband have decided to act as their own general contractor, she said. "We are just embarking on our bathroom [remodel] now. We just put the window in, and we are installing the vanity. So we're just taking it slow."

Barone has since enlisted official help.

In September, Attorney General Lori Swanson's office contacted the seller's agent, Edina Realty, who suggested Barone file a claim with his title company. Barone tried that in 2006, but the company denied the claim, saying he should have had a survey done.

Freddie Mac also suggested to the attorney general's office that it was a matter between Barone and his title company. Barone wrote to his title company in early October asking it to review his situation. He received an acknowledgement of the request but nothing further, Barone said.

U.S. Sen. Amy Klobuchar's office contacted Freddie Mac in early October. Barone is waiting for the lender's response.

He said that he and Rick Jurek, the owner of the property on which his mobile home sits, are hoping for a resolution that harms neither of them.

Ritter said company employees later told her the bulk of the jewelry had been melted down shortly after it was purchased.

While state law requires a 14-day holding period for precious metal transactions, Bloomington city ordinances waive the holding period for any business that puts up a $50,000 bond and agrees to take photos and videos of sellers and merchandise.

Bloomington Police Chief Jeff Potts told Whistleblower in September that "the bond is just there to ensure that a potential victim, there's some recourse there." Since then Ritter has been attempting to get some recourse, but the city has refused to compensate her.

In an affidavit filed in Hennepin County District Court in November, Bloomington City Attorney Sandra Johnson defended the holding-period waiver and said that a victim may make a claim against the bond only "if a dealer fails to comply with [photo and documentation requirements]."

In Ritter's case, the Gold Guys complied with the ordinance, but her situation is not unique. Two lawsuits were filed in conciliation court in February against the company.