Americas Watchdog Says Homebuilding Industry is a House of Cards and Could Face Billions in Un-Paid Federal Taxes and Construction Defects

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If Homebuilders & the Homebuilding Industry thought they had it bad with a real estate bubble going pop; a two year investigation by Americas Watchdog & its Corporate Whistleblower Center just made matters much worse for this vital sector of the US economy. The investigation revealed massive federal & state tax fraud on the part of national, regional & local homebuilders hiring undocumented workers who then get classified as 1099 "subcontractors". The investigation also begs the question if the workers do not read or write English, how do they build a home or abide by local or State building codes? Millions of US "new home" purchasers should now be asking this question.

/ middlemen often classify workers (undocumented workers) as

Americas Watchdog is an advocacy group focused on corporate responsibility & fair play. According to M.Thomas Martin, the founder of Americas Watchdog, "Our nation's homebuilders now face what could become the largest federal tax fraud cases in U.S. History." To mention nothing of the fact that individual states are owed as much or even more. Even worse, millions of US citizens now have to wonder -- who actually built their new home?

According to Martin, "national, regional and local homebuilders very frequently use US "subcontractors", who are little more than labor brokers/labor coyotes. These "subcontractors"/ middlemen often classify workers (undocumented workers) as "1099 sub-contractors" as a way to shield the actual national, regional or local homebuilder from state or federal tax liability, or allow the homebuilder to avoid over-time pay to employees. According to Martin; "these were not citizens,they had no real social security numbers, and more often than not, they were supervised by the actual homebuilder or their representatives."

So how is it that this has happened? According to Martin, "its all about greed, and exploiting people who do not complain out of fear of deportation".

How it works

1. Undocumented worker enters the United States in most cases with the help of a coyote/human trafficker for a price of $1200 to $2000 or for taking illegal drugs across the border.The undocumented construction workers will confirm the amounts required.

2. Undocumented worker goes to work for labor coyote-licensed US Contractor or Sub-Contractor in a housing sub-division.

3. Undocumented worker is put in a crew of sheet rock installers, carpenters, roofers, painters, etc. (Crews are typically 8 to 20 men)

4. Crew chiefs or individual crew members are classified as 1099 employees by the actual sub contractor/home builder as a way to avoid paying taxes on the employee. Employee's in many/most cases have no federal-state taxes taken out of their pay check. The actual homebuilder is directing these undocumented workers. Typically the undocumented worker is paid by the job---painting, framing, roofing,etc. Or they are blackmailed into working over 40 hours a week only to receive pay for 40 hours-again-using the Social Security number of an actual US Citizen.

5. At the end of the work week the actual sub-contractor pays the workers-typically with one check for the entire crew (no-over time, no medical, no workers comp- just a check) The workers go to a check cashing facility--cash the check---split the cash up & typically each crew member sends a portion back to Mexico. (billions of un-taxed US dollars each month)

So How Do National, Regional or Local Homebuilders Get Away With It?

Laws from Congress & the Senate have made it nearly impossible for class actions that would protect these undocumented and exploited workers, because the undocumented worker must actually "join in" (actually sign up). By joining a class action an undocumented worker could face deportation over poor working conditions, actual abuse, non-payment of over-time pay on the part of homebuilders, or their surrogates, the labor coyotes-sub-contractors. This is your basic perfect situation for the homebuilder because the workers have no ability to complain out of fear of deportation.

The Biggest Problem Of All-The House Of Cards

Aside from the possibility of the most massive tax fraud cases in US History, and or illegal working conditions for most undocumented workers, there is a third enormous problem. If the worker who built the house was not qualified, trained, or licensed; what about the integrity of a new home's construction? If the worker cannot read or write in English, how does he follow a set of blue prints or abide by local or state building codes? If you have purchased a new home in the last 10 years the average homeowner should be asking----Who really built my house? What were his qualifications? Why or how were millions of undocumented workers allowed to build millions of new residential homes in the United States? The answer is greed and a great deal of influence in Washington DC & State Capitals by the Homebuilding Industry.

So How Do We Fix This Problem?

1. Americas Watchdog wants to hear from current or former construction superintendents, accountants, construction executives to add to our growing level of proof. These individuals are welcome to email Americas Watchdog. Individuals with documentary proof may be able to participate in a federal reward program with participating federal agencies. Contact Americas Watchdog for more information

2. Law Enforcement is welcome to call upon Americas Watchdog in order to better educate field agents, managers or US Attorneys as to how the construction tax fraud-1099 scheme works.

3. Homeowners who have purchased a new home or condominium from a national or regional homebuilder are welcome to contact Americas Watchdog in order to find out more about construction defect issues.

4 Because we are talking about millions of undocumented construction workers, the only sensible solution we see to this enormous problem is a guest worker visa program, with organized labor unions protecting the workers rights. Its the only possible solution to this national disaster that has any chance of protecting the worker, the taxpayer and the homeowner/consumer all at the same time.

At the same time the United States needs a National Identification Card, with a actual picture, finger print on it and a valid social security number as the users ID.

5. National or Regional Homebuilders that are concerned that they might have a very serious problem are welcome to contact Americas Watchdog for a discussion about auditing your records and the records of your subcontractors. This problem is not going away.

Americas Watchdog is dedicated to Corporate fair play and consumer protection. To visit our web site simply Google Americas Watchdog or Http://AmericasWatchdog.Com and click the Corporate Whistleblower link.


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Thomas Martin
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