Contractor pleads guilty to building renovation fraud
Rockland — A 44-year-old building contractor has pleaded guilty to defrauding his client for renovations to his office and residential building on Main Street in downtown Rockland.
Defendant David Healey, owner of Healey Construction Co., appeared Oct. 12 in Knox County Superior Court on a motion to compel production of discovery. He appeared before Justice Jeffrey Hjelm.
Healey entered a so-called Alford plea to the felony theft. Under an Alford agreement, the defendant does not admit to a charge but agrees that the prosecutor has enough evidence to convict in a trial.
A trial had been scheduled in superior court for Oct. 22 until Healey changed his plea.
District Attorney Geoffrey Rushlau, prosecutor for the case, said Friday that early in 2008, Healey entered into an agreement with James Watson of Owls Head and Upper Grandview, N.Y., to renovate his building at 453 Main St.
The nature of the work was general contractor, Rushlau said.
From the beginning of 2008 until the middle of 2009, Healey committed theft by obtaining property valued at more than $10,000, making the case a felony.
Healey received a series of payments from Watson. In the latter part of 2008, Healey and Watson broke the project into three components of phase 1, phase 2 and phase 3. Phases 2 and 3 would consist of the individual apartments in the building. By the end of 2008, Watson was satisfied that phase 1 was completed, Rushlau said.
"Mr. Healey was supposed to pay subcontractors for work done," said Rushlau. "An account was set up in Camden National Bank from which Healey could draw to pay subcontractors."
In 2009, Watson discovered that several subcontractors had not been paid even though they had done the work, but that Healey had signed eight lien waivers when he withdrew money for the project. When Watson looked into it, he discovered that $100,000 was outstanding for work already done for which the subcontractors had not been paid.
Watson at that point discharged Healey and went ahead and completed the project on his own, the district attorney said.
Healey was arrested in April 2010 after Watson went to the Rockland Police Department, which investigated the account and found that Healey had taken money from the business account to pay on his own mortgage.
Police Officer Anthony Camporiale determined that the account was used as a private account, which Healey used to pay his own mortgage with payment made from Healey Construction Co. during the first half of 2009.
"More significantly, he paid a number of gambling debts to establishments in Dubai and Cyprus and to Native American accounts in excess of $50,000 from his business account," Rushlau said.
"He was recklessly involved with using that money as if it was his own money," Rushlau said.
Watson got a civil judgment against Healey, Rushlau said.
Although Healey was allowed to collect up to 12.5 percent of the total contract for his personal income, the police investigation could prove that Healey had taken $30,000 to which he was not entitled, Rushlau added.
Under Friday's plea agreement, if Healey can pay $15,000 restitution in the next six months, the state will recommend a six-year prison term, all suspended, and three-years probation.
If he does not pay the restitution, he faces six months in prison followed by the prospect of the full six years and three-years probation.
"A good outcome would be a $15,000 payment of restitution and three-years probation," said Hjelm.
The case will be set for a hearing in six months, in about April 2013. He will have that period to produce $15,000 of the restitution, Hjelm said.
Rushlau said he has been unable to find a contract between Watson and Healey.
By accepting the plea, Healey is admitting that he is a convicted felon.
Speaking in his client's behalf, attorney Jonathan Handelman of Brunswick said Healey had accepted his responsibility in the matter, and that he was in over his head as far as bookkeeping goes.
Watson said he understood the agreement, Rushlau said. A condition of the agreement is that Healey have no contact with Watson.
Courier Publications reporter George Chappell can be reached by phone at 207-594-4401 ext. 117 or by email at email@example.com.