Attorney General's News Release

April 25, 2012

Attorney General Koster files criminal charges against three people for asphalt scams against elderly -- warns Missourians about expected spring rise in contractor scams --

Jefferson City, Mo. – Attorney General Chris Koster today filed criminal charges against three men for allegedly defrauding elderly consumers into overpaying for substandard asphalt and paving work.  The three defendants, Terry Wayne Phelps, Michael David Rickey and Peter Jason Morgan, offer asphalting and paving services under names such as “Road Maintenance Construction” and “Premier Paving.”

The charges include allegations that the defendants:

• Failed to disclose to consumers the total price for the asphalting work
• Made false promises to consumers about the extent of the work that would be performed;
• Misrepresented the quality of the work that was performed; and
• Misrepresented material terms relating to the contracts with the consumers. 

Koster filed the following charges:

Against Phelps in Boone County -- five counts of financial exploitation of the elderly and three counts of unlawful merchandising practices fraud in connection with the sale of asphalt and paving services to five elderly Boone County consumers.  In Phelps County – one count of financial exploitation of the elderly and unlawful merchandising practices fraud in connection with the sale of asphalt and paving services to one Phelps County consumer.  The charges also allege that Terry Phelps is a prior offender as a result of convictions for burglary during 1992 and 1993.  If convicted, and because of his status as a prior and persistent felon, Terry Phelps could face a term of up to life in prison.

Against Rickey in Boone County -- two counts of financial exploitation of the elderly and two counts of unlawful merchandising practices fraud in connection with the sale of asphalt and paving services to two elderly Boone County consumers.

Against Morgan in Phelps County -- one count of financial exploitation of the elderly and unlawful merchandising practices fraud in connection with the sale of asphalt and paving services to one Phelps County consumer.

Koster previously filed criminal charges against Phelps and Morgan in September 2011 for theft/stealing, financial exploitation of the elderly, and deceptive business practices.  That case is scheduled for a jury trial in June.

Financial exploitation of the elderly is a Class B felony under Missouri law, punishable upon conviction by up to fifteen years in prison per count.  Unlawful merchandising practices is a Class D felony under Missouri law, punishable upon conviction by up to four years in prison and a fine of $5,000 per count.  The pending charges against the defendants are merely accusations.  As in all criminal cases, the defendants are presumed innocent unless or until proven guilty.

Koster is warning Missourians to be on the alert for “asphalt companies” that go door-to-door, claiming they have leftover asphalt.

Scam artists posing as legitimate asphalt companies target individuals in rural areas as well as elderly individuals, and use high-pressure sales tactics to get them to agree to work.  Koster warned that these scammers will increase the prices significantly after the work is done and will immediately cash the check at the victim’s bank.  Oftentimes these individuals are unable to produce local references and may have out-of-state licenses or plates.  They also often have no proof of workers’ compensation insurance. After performing shoddy work, they will skip town, leaving the homeowner with little or no recourse.

Koster offered the following tips for consumers to avoid being scammed:

• Get at least two estimates in writing before choosing a contractor;
• Never enter into or sign a contract after reviewing it quickly.  Always review the contract thoroughly, and then check with the Attorney General’s Office and the Better Business Bureau for complaints and information regarding the company and the individuals representing the company;
• Ask how long the company has been in business and their physical location;
• Know the source of the asphalt and supplies, and request invoices for all purchases;
• Ask the company for insurance and licensing information, and make sure they have the proper work permits before work begins;
• Never pay cash up front, or before the job is completed;
• A check is the best payment method.  However, be cautious if the company asks you to write a check to an individual rather than a company;
• On all door-to-door sales, obtain identification, such as driver’s license numbers, on the individuals performing the work;
• Know the price and how you are being charged, and keep an eye on possible price gouging;
• Don’t pay full price for services you have yet to receive.  Make full payment only when the terms of your agreement have been fully met;
• Always get a phone number and address for the company represented, and then check it out before signing a contract;
• Ask for local references and check with the references about the work provided;
• If you notice out-of-state plates, logos on vehicles, etc., make note of the information; and
• Immediately call your local police if you feel intimidated, if the individuals demand more money, or if they refuse to leave the premises.

To report these types of scams to the Attorney General’s Office, submit a complaint form online at ago.mo.gov or call the Consumer Protection Hotline at 1-800-392-8222.