BALTIMORE — A Harford County home builder has been ordered to pay more than $1 million in fines over alleged violations of Maryland's Consumer Protection Act.
On Monday the Maryland Attorney General's Office announced its findings that Korey Homes Building Group, LLC improperly took and used customer money, despite failing to complete work they'd promised.
In some cases when the company did its job, they often delivered homes with significant defects.
The State said Korey Homes "misappropriated consumer money through a Ponzi-like scheme."
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Maryland law requires home builders to hold customer deposits and other advance payments in an escrow account, separate from their own operating account, to insure consumer protection.
Kenneth W. Smith and his son, Korey Wayne Smith, jointly owned the Forest Hill based business until Kenneth left.
Now the defunct company must not only pay back the money they allegedly took from customers, but the State also tacked on $300,000 in civil penalties plus $115,000 in other related costs.
Before conducting business in the State again, Korey Homes will be forced to put up a $500,000 surety bond, although they can appeal to a court.
“Home builders have a responsibility to protect the money Marylanders trust them with – not run a Ponzi scheme that leaves people without homes or their life savings,” said Attorney General Anthony Brown. “This costly outcome sends a clear message: if you cheat Maryland homebuyers out of what is likely the biggest purchase of their lives, my Office will hold you accountable and fight to get their money back.”
Anyone who feels they were a victim can call the Maryland Attorney General's Mediation Unit at (410) 528-8662 in or toll free at (888) 743-0023.
To confirm whether your new home builder is registered in Maryland, click here.
