Seven Sussex County residents are facing a slew of charges in connection to a home improvement scam that reportedly began in January 2009.
A 101-count criminal indictment secured by Delaware Attorney General Beau Biden on May 6 alleges the residents defrauded dozens of victims, including homeowners, companies and the federal government.
The indictment is the result of a three-month investigation and the charges include racketeering, home improvement and insurance fraud, theft, forgery, unlawful use of a credit card, and check cashing fraud, among others.
All of the defendants – John Walsh, 51; his son Jonathan Walsh, 19; Vernon Speece, 36; Raymond Smith, 66; Randi Sherman, 25; Tony Anthony Miller, 56; and Robert Morrison, 36, of Lewes – have been arrested. All suspects but Morrison are from Millsboro.
John and Jonathan Walsh were committed to Sussex Correctional Institute in lieu of $101,000 and $40,000 secured bail, respectively. Vernon Speece was already incarcerated at SCI on previous theft charges. His bail was set at $40,000 unsecured, and he remains at SCI. Robert Morrison and Raymond Smith were arraigned and released on $22,000 and $2,000 unsecured bail, respectively. Miller and Sherman were both arraigned and released on $3,000 unsecured bail.
According to the AG's office, all the defendants are connected to John Walsh, who has operated heating and air conditioning services companies from the Millsboro area under various names for the past 10 years, including Mid Atlantic Heating and Air, Eastern Shore Heating and Air, and AOC/Mid Atlantic Heating and Air.
Walsh and his associates are accused of defrauding nearly 30 Sussex County homeowners. Among the allegations against them are that they collected payments for new heating and cooling systems, but never performed the work; secured payments for new heating and cooling systems, but instead replaced the old systems with other used systems that were repainted to look new; and committed insurance fraud in one instance where a homeowner received more than $18,000 from their insurance company for work that was never actually performed.
The AG's office alleges that last fall, in the wake of Superstorm Sandy, John Walsh solicited homeowners in the Swann Keys manufactured home community in Selbyville. It is alleged that Walsh collected advance payment from at least two homeowners. Walsh allegedly never contacted one homeowner after cashing the advance payment check. In the other home, Walsh allegedly installed a replacement heating unit upside down, and then claimed the home had been rendered unsafe due to dangerous mold growth. The AG's office alleges that Walsh told the homeowner he was one of only two people in Sussex County who was permitted to remove the mold and he reportedly threatened to have the home condemned unless the homeowner paid $10,000 for a special protective suit to remove the mold.
Other fraud-related allegations include making unauthorized charges to the credit card accounts of two homeowners; forging a homeowner's check from the amount of $46 to $460; and depositing counterfeit checks at two Sussex County bank branches, among others.
Page 2 of 2 - The final allegation made by the AG's office is that Walsh had been receiving full monthly Social Security Disability payments from the federal government, receiving $35,000 in benefits from January 2011 through December 2012.
The AG's office says Walsh claimed in advertising that all workers were fully licensed and certified. However, no employee at any time maintained the professional regulation license required to work in the HVAC field.
It's estimated that in total, more than $135,000 was scammed from the homeowners, the banks, the insurance company and the federal government.
The AG's office said Mid Atlantic Heating and Air has liquidated all of its equipment and does not answer its phone.
Biden made it a point to clarify that there is a legitimate heating and cooling services company also by the name of Mid Atlantic Heating and Air Conditioning based in Salisbury, Md. This company is in no way connected to Walsh.
The AG's office says other victims may be unknown and have not yet come forward, and additional thefts could be uncovered as homeowners who are seasonal residents arrive at their properties this summer. Anyone who suspects they've been victimized by the defendants should call the police or the AG's Consumer Protection Unit at (800) 220-5424.