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Hudson Valley Contractor Admits To Defrauding Customers Of $175,000

Charles Neustadt.
Charles Neustadt. Photo Credit: Orange County District Attorney

An area contractor is facing potential prison time and his corporation has agreed to pay back $175,000 for defrauding property owners who hired him to construct homes on their property.

Goshen resident Charles Neustadt, 63, and JC Builders, Inc. pleaded guilty to felonies this week in Orange County Court. Neustadt pleaded guilty to third-degree grand larceny and theft of services. His business pleaded guilty to felony charges of grand larceny and scheme to defraud.

As part of the plea agreement, Neustadt has agreed to pay back $175,000 and it has been recommended by the Orange County District Attorney’s Office that he receive three years probation. If he fails to pay the restitution by the time he is scheduled to be sentenced on Jan. 3 next year, the judge will recommend that he be sentenced to two and one-third to seven years in state prison for the grand larceny charge.

Neustadt and his corporation were initially charged on April 6, when felony complaints were filed by Orange County District Attorney’s Office Criminal Investigators, which were the result of an investigation that began after the DA received multiple complaints from property owners who reported that Neustadt had taken their money, but had not provided promised construction.

According to Orange County District Attorney David Hoovler, “New York State’s Lien Law provides that when a contractor receives money on a contract to improve real property, such as a house, the contractor holds that money ’in trust’ for the benefit of those who provide labor on the job, any subcontractors, those who supply the building materials, and, in the case of an improvement to a private residence, the homeowner.

“If the contractor does not work on the project, does not properly pay the money he received to those who worked on the project or supplied materials, and does not return the money to the homeowner, he is deemed under the law to have stolen the money. The Lien Law also provides that a contractor who receives money to improve a home owner’s residence may not use that money on other jobs.

“The construction, buying, or improvement of a residence is generally the most expensive purchase most people will ever make, and they must be protected from fraud,” Hoovler added. “It is of primary importance that victims whose lives have been disrupted receive full restitution. I encourage all homeowners to know their rights when dealing with home improvement contractors.

"Unscrupulous contractors give legitimate contractors an undeserved bad name. I look forward to continuing to work with all of our law enforcement partners in reducing contractor fraud.”

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