A Spring Hill home builder who authorities say bilked customers and subcontractors out of $350,000 over two years has been arrested and charged with organized fraud. Law enforcement officials said Gary Mark, the owner of Marque Homes, had taken money from his customers' down payments and used it to build his own home and to draw a personal salary.
Mark, 39, was charged with one count of organized fraud, 15 counts of grand theft and 15 counts of failing to put residential home deposits in separate escrow accounts. Documents say the incidents took place between January 1988 and January 1990. The Sheriff's Office and State Attorney's Office began investigating Mark 18 months ago.
Mark was taken to the Hernando County Jail on Wednesday, where bond was set at $68,000. He was released Thursday evening on his own recognizance. Reached at home Thursday night, his wife, Marie, refused to comment and said that her husband had nothing to say, either.
"He was a very reputable builder, very well-known," said Hernando County sheriff's Detective Mike Owens, who works with the office's white-collar crimes unit.
According to court documents, Mark used money "entrusted to Marque Homes to construct his personal residence, draw a salary . . . (and) . . . to construct the resident of Leland Mann, another corporate officer."
The 51-page affidavit shows that Mark spent $175,000 for each house, for a total of $350,000.
To keep the original homeowners happy, Mark would then take money for new houses being constructed and use that money to pay subcontractors for houses that were already built, Owens said.
Owens said that as long as the economy was booming, and new money continued to flow into the company, the scheme worked.
But as soon as the economy began to nosedive and the county went into a severe building slump last year, the plan caught up with Mark.
"He got into the hole in the first place when business was good, and it caught up with him when it got bad," Owens said.
Twenty-four homeowners who had to pay subcontractor claims that Marque Homes should have paid itself and 19 subcontractors who are still owed money were named in the affidavit.
The building industry has been especially hard-hit during the current economic slump.
In February, Andres Home, once the county's largest builder, filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code.
Owens said that in the past two years, five builders have been arrested in Hernando County for bilking clients out of money and that four to five others are now under investigation.
"Two of the ongoing investigations are definitely bigger than this one," Owens said.
Mark's troubles began at least as far back as December 1989, when the company was put on 60 days of probation by the county's Construction Licensing Board for violations of building codes and failure to pay for subcontracted work.
After receiving more complaints, the licensing board suspended his license for six months in February 1990. In August, it was permanently revoked.
"My husband trusted him thoroughly," said Pat Heller, who moved to Hernando County nearly two years ago. Mrs. Heller said she and her husband had to pay a surveyor's bill that Marque Homes had failed to pay. She estimates that they paid Marque Homes as much as $14,000 to $15,000, and lost it all.
"We have four children, and it's been a real disappointment."
Two weeks after Fred Faller moved into his new Marque home, he started getting "all kinds of registered letters" from subcontractors who had never been paid by Marque.
"We had to pay several thousand dollars in liens," Faller said.
Hernando Builders Association president Philip Dobson said "working on the come," or using money that is coming in to pay for projects already under way, happens quite often in the construction business.
"It's part of the nature of the business. . . . But you can't divert funds from one job to another; that's illegal."