[ clears throat ] ohh yea no, let's... [ male announcer ] introducing the beautifully different nokia lumia 900. only from at&t. rethink possible. contractors, you hire them and trust them to work on your homes. they seem experienced. >> you know you need a lot of work done out here. >> yeah, it's about 10,000 right now. >> they seem honest. >> it looks great. >> but do they always deliver on their promises? >> we are on the verge of financial ruin. >> do you really know who you're letting into your house? some are carrying more than just tools. >> in the past we've obtained knives, walking knives, daggers. >> but this time the bad guys get busted. >> what's going on? >> you're being arrested. >> and we go get some answers. >> you cost them $300,000. >> no. >> as msnbc goes undercover to catch home wreckers.

>> i'm meredith vieira. over the last decade millions of americans have spent billions of dollars paying contractors to repair or renovate their homes. we all know there are plenty of good contractors out there. but when we investigated, we found a lot of homeowners who were losing their life savings, contractors doing shoddy work, and regulators overwhelmed by the sheer number of predators out there. but what surprised us the most was the number of homeowners willing to open up their homes and their wallets to contractors they know almost nothing about. it's showtime in suburban sacramento. state investigators have set up a sting house complete with hidden cameras and monitors to catch the uninsured or untrained contractor bidding on jobs they have no business undertaking. 14 problem operators have been

invited to the sting house, including one this woman knows all too well. >> a simple task of having somebody fix two minor problems in my home turned into a complete nightmare. >> when her house needed minor repairs, single mom trish gann hired a handyman straight out of the yellow pages. after paying him a cash deposit the unlicensed contractor showed up five hours late and asked for more money. >> and i noticed as he was talking to me that a very strong scent of alcohol was coming from his breath. >> within 30 minutes gann regretted letting the contractor into her home after he cut himself while rehanging a door. >> my oldest daughter yelled out "mom, mom, there's blood all over my bedroom door." >> gann says she couldn't get him out of the home fast enough. >> one of my daughters looked at me straight in the face and said, "mom, he's on drugs." >> now this california task force is about to bust him for repeatedly taking on jobs he abandons. >> okay, thank you.

bye, now. that was mr. bradley rogers. mr. rogers was scheduled for 8:00 a.m. this morning. he said somebody took his truck, so this is normal. they make excuses for their problems. >> six hours later rogers still hasn't showed, but officers have already detained ten would-be contractors for bidding without any insurance, workers' compensation, or proper training. it's a full house. contractors snagged in the day's sting fill the bathroom. >> is that them? >> okay. let's go. this guy looks familiar to me. okay. they're coming in. >> rogers, if he manages to come, will have plenty of company. >> there you go. >> hi there. >> it's 4:00 p.m. and rogers finally arrives, even though he's been caught in two previous stings. >> and what i'll do is let me just check my price list and see if i can get you a decent price.

>> she's trying to get him in the house so we can take him into custody. we think he's not going to come in. he's probably going to run out the gate. so we've got the officers standing by to get him. >> come on in. it's hot out there. >> okay. >> come on in. >> all right. >> there you go. >> turn around and face that direction. >> sorry, dude. >> i knew that was you, but i ain't done nothing wrong. >> you think so? >> i haven't. >> villucci confronts bradley about complaints from angry homeowners who say that bradley has taken their money and not finished repair work. >> i haven't done anything, man. honestly. i ain't pissed anybody off. what do you mean? >> somebody keeps calling me, dude. >> i have no idea. >> despite three new consumer complaints since his last bust, rogers claims this job was on the up and up. and that despite his history of bait and switch he was really

only going to charge $500. >> what's illegal about pulling boards and putting them back on. it will take me like three, four hours. >> while rogers argues he's being held on a technicality, investigators say it's much more than that. it's about a history of consumer complaints, shoddy and incomplete work, and lowball bids that become budget busters. >> you have the right to remain silent. anything you say may be used against you in court. >> while being processed, rogers even pleads his case to our cameras. >> i'm not trying to hide from anybody, dude. you know? just offering a service. it's a handyman service. i'm a minor construction company. i do minor repairs. that's it. >> but that's not it. homeowners who hired rogers might be shocked by what officers found in his truck. >> while he was being detained, he gave us consent to search the vehicle. and he gave the standard answer of, well, it's not my vehicle, so anything in there isn't going to be mine, which is generally

an answer that we get from people that have either dope or guns inside of the vehicle. while searching the vehicle we did locate some orange pills. >> and on here it's got a puma symbol, which you'll see on ecstasy they have a variation of symbols that they stamp it with. when testing ecstasy you use a methamphetamine test. what you'll do is you'll take a knife and you'll shave off a little bit of the pill, pour it into here, and then you break the ampoules one at a time, agitating the entire time the test kit. and it should turn out a dark blue or purplish color. >> investigators say that every sting operation yields contractors caught with a variety of drugs. from crack to crystal meth. and drugs, investigators warn, are just the tip of the iceberg. >> we've got a gentleman up here out of the state of texas. he was on probation for attempted murder. >> investigator villucci says homeowners looking to save a buck by hiring the lowest bidder

should come and check out the state's wall of shame. >> sex offender here, sex offender here, sex offender here. state of nevada on the ten most wanted. this gentleman right here, we had a tip from him that he was doing cabinet installations in kitchens. the lady called and said hey, i found him on megan's list. he's been around my children. so we did a real quick sting operation on him. this guy's a registered sex offender. he's coming into your house and doing work. you don't know who you're hiring. licensed contractors go through a background investigation. they're checked for any, you know, crimes, sexual, violent crimes. you need to protect yourself. >> he was intentionally going out trying to take advantage of people. >> i'm not that type of guy. i've never done that, ever. an d♪

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california investigators

want consumers to know that hiring contractors who display license numbers on their trucks or ads doesn't guarantee smooth sailing. >> this gentleman believed you were a licensed contractor. that's a felony. >> the numbers may be expired, borrowed, or simply fake. >> pickering is a bad contractor. >> retired marine bob morgan says for some contracting is a business without honor. >> he's an insult to the very expression of the word contractor. >> sacramento retirees bob and elena morgan say nine years ago they hired roy pickering of above-all heating. >> my life and my husband's life was in danger. it was a fire hazard. >> after improperly installing the unit pickering took off and the morgans lived without heat for an entire winter. >> and we all huddled in the family room next to the fireplace. we had no heating anywhere in

the house. >> the couple says pickering knew that since they had already paid there was no way to make him fix the problem without spending thousands of dollars in legal fees. and over the years roy pickering just kept on working, collecting cash and compiling 45 complaints from irate homeowners. board investigators revoked pickering's license in 2002, but that doesn't seem to have slowed him down. >> took money, a down payment, did not come back. took money, started a job, did not complete it. took money, started a job, but didn't meet trade standards. >> in order to protect homeowners, like clockwork once a week, senior investigators rick villucci, karl vega, and jeff miller run undercover sting operations around the state. last year the squad ordered $44 million in restitution for consumers. when investigators set up this sting house, pickering is the first contractor to take the bait.

>> he's coming. >> he gives undercover investigator rick villucci his bid for a new heating unit. >> 4,895. >> 4,895 bucks? >> yeah. that's for a 14-foot ceiling. >> meanwhile, police are waiting in a back room listening. they hear the undercover investigators ask about pickering's license. remember, the state already revoked that license over five years ago. >> okay. what's your license number? >> 723695. >> it sounds good to me. >> yeah. no problem. what i do is -- >> this is an undercover sting operation. i'm with the contractor state licensing board. is this really your contractor's license number? >> can you just -- can you loosen that one a little? loosen both of them. thank you. >> does tim know you're using his license number? >> yes, he does. >> you know he could lose his license for that? >> can he? >> yes, he can. >> even with cameras rolling

pickering doesn't seem all that upset. >> you want to see tears on that camera, or what? >> investigators confiscated $1,500 in cash from pickering to use as evidence. because, they say, being an illegal contractor is his main source of income. >> 13, 14, 15. >> msnbc wondered if the arrest, his third in five years, would scare pickering straight. so we went to his house the day he was supposed to show up in court. instead we found pickering loading up his tools and heading off to a job. this doesn't surprise ernestine bibbs, who, like the morgans, paid pickering for a faulty heating system. >> it was intentional, and that's what bothers me. he was intentionally going out trying to take advantage of people. >> bibbs won a judgment against pickering in small claims court, but he never paid her a dime. >> he's still running around out there, and i'm really surprised that the state can't catch him. >> so why can't contractors like pickering be stopped? states view homeowner complaints as strictly a civil matter. in order to stop pickering board investigators must build a case by catching him in the act.

on this day, villucci makes nabbing pickering priority number one. >> we just drove by roy pickering's house. i did see his work truck in the driveway, so we're going to go get another look. set up a location so we can watch him. >> villucci and three investigators in separate cars have staked out both of pickering's houses. they hope to catch him working without a license. >> you see the blue truck leave, if it's a big blue truck, that's the one we want. it's going to have pickering in it. you know what he looks like, right? >> yep. we've put three investigators positioned around pickering's house to cover the exit. so when he leaves, we'll be able to tail him. >> got the truck rolling. he's rolling my way. >> right behind him. >> okay. hurry up, doug. >> you better catch up. >> after 30 minutes of high-speed u-turns and circular driving, officers suspect that pickering knows he's being tailed. >> he's screwing with you, rick. >> i've been screwed with before.

i'm going to have to give old pickering a call and tell him you know what, you're fun to play with. >> pickering has spotted villucci and our cameras and pulls over at a gas station, refusing to drive off. so villucci approaches the vehicle. >> just wondering what you have been up to, man. >> i've been hustling like everybody else. >> who do you have with you? >> a friend of mine. >> pickering denies being a bad contractor and tells us all of his customers have been happy with his work. >> i've never taken money from nobody -- in fact, when i do a job, legit job, when i do contracting, i never took no down -- you're allowed to take a down payment. i did the whole job. they trusted me. i've never been burned ever getting paid because i do the job and make sure they're happy. that's when i collect. if they're not happy, they tell me why. i've got to fix it to collect, you know. >> pickering's victims are outraged by his claims. >> i mean, i know $5,000 is not a lot of money, but to me it's a very -- i mean, it's a big deal. i don't take it lightly because

it takes me a long time to earn that amount of money. >> i wouldn't recommend him to my worst enemy. >> i'm not that type of guy. i've never done that, ever. but i -- like rick said, you know, went down and corrected, fixed it, you know. >> pickering won't say where he's headed, but promises rick he is not working or misrepresenting himself. since villucci didn't catch him at a job site he has no choice but to let him go. >> he's got a silver tongue. he'll tell you what you want to hear. he'll make you believe it. and then he'll laugh at you when he's driving off. >> as pickering drives away, villucci shocks us with a revelation. the man who was hiding his face is contractor tim kent, who just lost his license for being a sex offender. >> he was a prior licensed contractor. we found that mr. kent had outstanding felony warrants out of placer county. >> he had warrants for kidnapping, rape and other sexual crimes.

>> he was caught at an undercover sting operation in elk grove with mr. pickering where he allowed -- where he allowed pickering to use his license number. >> does tim kent know you're using his license number? >> yes, he does. >> here they are again, teamed up together. imagine that. they say birds of a feather, man. >> we've obtained knives, daggers. last week during an interview one of the employees picked up this machete and started walking towards our investigator with it. [ ping! ] [ ping! ping! ] that's why i use new tampax radiant. it helps keep my period invisible, combing tampax's best-ever leak protection with a revolutionary resealable wrapper so all they'll see is me. [ ping! ] ♪ hi. totally new, awesomely-invisible tampax radiant. check out the whole radiant collection.

investigators say homeowners get into trouble because they rarely ask contractors to prove they're qualified before they write big checks. >> people put more time into looking up tv listings to watch a program on tv than they do looking at the information on a contractor that they're going to turn thousands of dollars over to for work. they need to do their homework. >> that means checking a contractor's background. nationwide, building or remodeling homes is big business with very little oversight.

california is one of 19 states that actually requires electricians, plumbers, and painters to operate with a license. and california is also one of the only states to have an active enforcement squad. >> put your pants on and come to the door for me. >> we're not waiting for the complaints to come in anymore. we go out and do stings like this and we try to catch the unscrupulous, illegal operators. >> msnbc tagged along for sweeps and an undercover sting and found california's $60 billion underground economy flourishing with illegal home contractors. workers out for quick cash and answer to no one. >> what's the big deal? i'm not doing any harm. i'm just trying to make a living. >> there's no option here. you get a citation. you're either going to go to court or come down to the board or you're going to go to jail. what do you want to do? >> investigators say unlicensed contractors who operate without proper skills and insurance can devastate consumers. just ask san jose homeowner paul flores.

>> it's a nightmare. it's the worst nightmare that any homeowner can go through. >> flores made the mistake of hiring an unlicensed contractor in spring 2005. two years later flores is still trying to finish the house the contractor abandoned. after paying the contractor $89,000, the contractor simply stopped showing up for work. flores immediately drove to the contractor's home. >> i saw a black jaguar convertible and a harley-davidson. i thought, whoa, something's going on here where i think most of my money went for that. >> flores's biggest shock came when we told him his contractor was a convicted felon with 57 complaints on his record. >> 57 complaints? yes, i'm very shocked. my mistake was not checking his complaints. >> with homeowners like flores in mind, investigators run weekly stings. the operation begins with calls to contractors who use phony license numbers in their ads and on their trucks.

>> hi. i'm trying to get a hold of russell orr. hey, how are you doing, guy? my name's jack. >> i found your ad in the yellow pages. >> i just bought a new house in oak grove. >> i'm looking at a little advertisement says affordable concrete. >> come hook me up. sweet. you can do everything, man. all right. good deal. >> all right, eric. all right, buddy. thanks. bye. >> i just made a set from his illegal advertisement in the yellow pages. okay? he's going to come. i'm going to ask him to look at the property because the work he advertises for in here requires a contractor's license. >> you know you need a lot of work done out here. >> i'm going to show him some things that i know do require a license to do, and i'm going to ask him for a ballpark figure. >> i think you're between 8,000 and 10,000. >> 8,000 and 10,000? >> yeah.

>> okay. >> if he gives me any figure that exceeds $500 or more for the work i asked him to do, again, i'm going to let him know that he's been caught in a contractors board sting operation. >> hey, partner, my name is karl vega. i'm an officer with the state of california. do you have a contractor's license? >> nope. >> okay. you're under arrest. i need you to put that down. interlace your fingers. >> do you recognize that? >> yep. >> where's that come out of? >> the yellow pages. >> investigators set up shop in dummy houses. this contractor was caught in a sting bidding on a new job just days after abandoning an $11,000 landscaping project. >> the site looks like a bomb went off there. there's rocks, tools, a wheel barrow dumped over in one of the ditches he had dug. where do you stand with that lady, samantha as far as her job? were you going to finish the job? >> she didn't pay me for materials. i haven't even got nothing for me. you know, i got my kids, you

know, to -- they got to eat, you know? >> investigators warn that homeowners who pick the lowest bidder may end up paying double. >> the ladies said he wants more money above and beyond what he was paid. >> from unskilled workers to those who show up too intoxicated or high to work. >> you got pot on you? >> yeah, there's a pipe in my pocket. >> in a matter of seconds after busting this tree removal team, officers are overpowered by the smell of marijuana. >> did you smoke a bowl before you came here? >> no. >> do you smoke every day? >> no. >> whose stuff is that? >> what stuff? >> the weed. >> his. >> after officers confiscate the tree climber's pipe, he jokes that the officers just took his breakfast. >> what's with all the cameras? >> it's "american idol." >> sweet. i should have, you know, prepared for the audition. >> so what's the big deal about catching a pot-smoking tree climber? investigators say in a worst-case scenario if the unlicensed contractor doesn't

have insurance, homeowners are taking a huge risk. >> if somebody's out there working on your property, they're under the influence of any types of drugs, marijuana, alcohol, it's an unsafe situation. these people have no insurance. they can go out there, they can chop off a hand, fall down and hit their head. and they're going to sue you. >> illegal operators and petty crimes seem to go hand in hand. hiring guys on the cheap may cost you more than money. >> we have to be aware of certain safety items. in the past we've obtained knives, walking knives, daggers. last week during an interview one of the employees picked up this machete and started walking towards our investigator with it. this is something we found on an electrician. we weren't really sure what it was to begin with. but after further investigation, it looks like it's a pair of ninja knives or something of that sort there. i think it would be kind of

dangerous to use these for any type of electrical work. that's just the start of it. >> you bug me he says i'll come there and i'll kill you, i'm not messing around, you don't know who you're talking to. af's smals earns 2% cash back on every purchase, every day! >> they just took advantage of me. nice doin' business with you! [ garth ] why settle for less? great businesses deserve the most rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? until i show them this. the new oral-b pro-health clinical brush. its pro-flex sides adjust to teeth and gums for a better clean. the new pro-health clinical brush from oral-b.

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i'm alex witt. boston university plans to hold a candlelight vigil for three students killed in new zealand. five other students were hurt when their minivan rolled off the road. mitt romney told a crowd at the university of virginia marriage is between one man and one woman. the vice president and president held a ceremony to honor the top police officers. now back to msnbc "undercover." if homeowners think that all one has to do to avoid disaster is hire a contractor with a license, think again.

consumers are not out of danger, not when there are questionable contractors like the one that brian scher hired. >> if i wanted to make money, if i was a criminal, i would do this and i guarantee you, i could make millions of dollars. and i mean, this is what these people get away with because there's nothing to protect consumers like us. >> scher says his home remodeling nightmare began after hiring this man, contractor richard martinez. >> he said he caught you posting $300,000. >> no. >> before hiring contractor martinez to build his dream home in orange county, california, scher says he did everything right. he checked martinez's license on the state website and called all his references. >> everyone was very, very complimentary. >> for the first few weeks the schers couldn't have been more pleased. >> the day he started it was fantastic. he came here with a crew of about ten people and everything. he started doing a lot of stuff. it looked like it was going fantastic. and i thought, well, this looks great. >> but those big crews disappeared, and so did martinez after scher made a significant payment to the contractor.

with the project way behind schedule, his architect came to evaluate the work and gave scher some distressing news. >> most of this house has to be torn down that he's built over here because of the floors. you know, it just drops down from there. how it just drops down all the way. you can see it drops down more than like 2.5 inches. that's why this whole thing has to be torn down and redone. >> and how did richard martinez deal with scher's increasing concerns over the quality of his work? >> one day i came back in the evening to have a look. i see all the tools are gone, all his equipment is gone. and i phoned him up and i said what's happened? he says he's not coming back, he's going broke. i said you're going broke? i've paid you just about the whole contract, you haven't even done less than a third of it. >> brian scher was about to lose more than just the $85,000 he had paid for shoddy work. just days after that phone call scher received this $27,000 bill from the local lumber company,

lumber that scher had already paid martinez for. the company immediately put a lien on scher's house. what brian scher didn't appreciate at the time is the financial power of that contractor's license. the same license that is supposed to protect the consumer. because in california, like many states, homeowners are on the hook if their contractors buy materials or hire subcontractors and don't pay them. that's right. even if you can prove that you've paid your contractor, angry vendors can hold the homeowner responsible. in one last ditch effort to try to reason with martinez, scher phoned and asked him to return items he had taken from the house. >> i said, well, are you going to give me back -- are you bringing back all the windows at least and all the lumber and everything? he says, "hell, no. i'm bringing back nothing." he said to me, listen, if you bug me, i'll come there and i'll kill you, so don't just mess around with me, you don't know who you're talking to. >> richard martinez is a deceiving, conniving crook.

>> chris jackson says he's also a victim of contractor richard martinez. >> he's a congenital liar. >> moved by the same sob story that martinez had given brian scher, the jacksons hired martinez to pour a foundation and build a frame for a house. >> he'd been in an accident where he had broken his neck and he's in a full halo bolted to his skull. and you know, your heart goes out to him. and you're thinking, boy, this guy could really use the work. >> fortunately, jackson says, he realized that the work martinez had done didn't look right. he had an inspector come to assess the project and learned the foundation martinez dug wasn't level at all. the $20,000 he had given martinez had been a complete waste of money. >> what a mess. and we were just fortunate enough that i told him that i was going to have everything he'd done before he'd poured the concrete checked. and then the following monday he

didn't show up. >> you're chris jackson. how are you? nice to meet you. >> good. how are you? >> i'm brian. >> when we introduced the two men for the first time -- >> i'm so sorry, man. >> -- they discovered just how much they had in common. >> so that's why he disappeared from my project, because he started your project. >> yeah. collecting another 20,000-plus dollars in the meantime. >> oh, my goodness. and he told me because of me he lost his crew, and he was working with you. this is unbelievable. >> he's so rotten that he acts as though -- >> we were the ones responsible. >> -- he's the victim. >> right. >> msnbc learned that after abandoning both the scher and jackson projects martinez was hired to build a restaurant by a construction company. that firm told us that martinez's work was a disaster and he was fired from the job after threatening violence. the licensing board suspended martinez's license. and what about brian scher?

the entire frame martinez built had to be torn down and rebuilt from scratch. scher estimates that correcting martinez's shoddy work has cost him two years and over $300,000. in serious debt and deep distress, scher is suing martinez but doesn't know if he can hang on to the house. we caught up with contractor richard martinez to try to get some answers. >> hi, richard martinez? i'm grace kwan from msnbc. do you remember we spoke on the phone and you wanted to sit down for an interview to tell us what happened with the brian scher and chris jackson? you told us you had a side of the story you wanted to tell us. do you want to explain your side of the story? >> he's a thief. >> who's a thief? >> brian scher is. you know he is. >> really? what about chris jackson? >> they both took advantage of me. you see the situation i'm in now. >> i want to hear. please, tell me. they took advantage of you how? >> because they saw me in my situation wearing a cervical

collar and they took advantage of me. >> okay. >> not only did they take advantage of me, they took advantage of my crew and everybody else, and they know they did. i have plans that prove that brian scher's project was wrong. i could take them to the city and show them. i am a certified building official. i'm not a crook. brian scher is. thank you. >> he says that you cost him $300,000, 18 months and did you shoddy work. >> nope. nope! >> will you sit down with us for an interview? >> chris jackson isn't surprised by martinez's denials. >> a burglar has a sense of shame about what he does. he sneaks into your home, he steals from you, and he runs away. he doesn't want to be seen. richard martinez will walk up to you, steal from you after you build a relationship with him, and then try to turn it on you like he's the victim and then threaten to kill you.

he has probably never taken responsibility for anything in his life. his work speaks for itself. >> we checked with all cities in orange county, and none have martinez registered as a building official. >> now, had they gone into the tub and had a shower in there and completed the circuit, they would be dead. >> it would be an electrocution. : ♪ their training depends on technology. [ beeping, ticks ] and when their devices are powered by a battery, there are athletes everywhere who trust duracell so whether they're headed for london or the journey has just begun... they rely on copper to go for the gold. duracell. trusted everywhere.

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to being a different kind of communications company. ♪ we link people and fortune 500 companies nationwide and around the world. and we will continue to free you to do more and focus on what matters. msnbc found no shortage of families who say bad contractors have turned their lives upside down. >> we are on the verge of financial ruin. we could be looking at homelessness. >> instead of dreaming about their golden years, software engineer mark decoursey and his

wife, carol, spend sleepless nights worrying about their future. >> it has been an absolute nightmare. the person that we blame for it is the real estate agent who swore to us repeatedly that this contracting company was the best that he's seen. >> that agent is this man, paul stickney, who they blame for what has become a three-year nightmare. >> i wanted to talk to you about a story we're doing about the decourseys. >> yes. >> and about the fact that you were financially involved with the contractor that they hired. >> the decourseys say their problems began in october 2004. like millions of americans who relocate each year, they placed their trust in a real estate agent, who helped them find this house in redmond, washington. this time the home wrecker was a fully licensed professional, a long-standing member of the local real estate community. the house the decourseys bought was in desperate need of upgrading, something mark and carol say they were not prepared to do, but were convinced by

this man, agent paul stickney, who introduced them to local contractor richard birgh. >> he said they had superb finish work, they had a unique pricing system, they were just absolutely fabulous. he brought the contractor in to evaluate the house before we purchased the house. we would not have purchased the house had we not thought that the work could be done for the price we'd wanted to pay. >> this was the original bid they gave us. >> they say the contractor assured them that the total cost of his renovations would be no more than $90,000. >> it was represented to us that the prices would not go over this amount and it would not go under this amount. so we were fooled for quite a long time into thinking they could do what they said they could do for the price they said they could do it. >> the decourseys say within six months the contractor fell behind schedule, over budget, and the renovation rendered the house unsafe. >> we really panicked because we could see they didn't know what they were doing.

they didn't have a grip on anything. >> their fears were confirmed by a local inspector who came to assess the house. >> first thing he came in the door, he said uh-oh, i smell gas. i said really? oh, yes, he says, and he came over to the stove and he says here's where it's coming out of, here's the strongest smell. and the repairman discovered that there was a flexible pipe joining up the gas pipe to the stove had been crushed in the process of installing the stove and it was leaking gas into the house. >> it turns out that leaky gas was only one of their problems. >> for a while we were lying in bed and we could hear it creaking or cracking every 20 seconds, you'd hear -- just as though the timbers are sliding past each other and settling like an old house. and it shouldn't have been like that. >> the inspector also explained that the addition that birgh had built lacked significant structural support. >> so instead of supporting the house, the house is supporting it and it's gradually sinking downward. so we now have cracks in the

plaster, the roof has a dip in it, the floor is cracking, the counter is out of alignment, and so on. >> within weeks of moving in mark learned just how hazardous the contractor's work proved to be. >> i was washing the dog in the bathtub, and i put my hand in the water. the electricity from the electrified metal drain came up through the water and into my hand and down through my body, and i got a shock. >> now, had they gone into the tub and had a shower in there and completed the circuit, they would be dead. >> it would be an electrocution. >> the decourseys called an emergency electrician who rushed over. >> they really couldn't believe it. they were up and down and all over the house and found out that it was running 110 volts ac. and there was a dedicated circuit, a 20-amp circuit, right to the main circuit panel. they couldn't understand why anybody would electrify a bathtub. >> and who was the vp at the company that did the original electrical work? dick birgh's son, stefan.

the decourseys haven't used the bathroom since. the final insult according to the decourseys was the bill that the contractor delivered. >> the work from this contractor was to be $90,000 plus change. when he was finished he gave us a bill for $211,000. >> not only that, but much of the work was done without permits. it was -- much of the work was done by unlicensed people who were doing the electricity and the plumbing, and much of the work will have to be demolished and redone. >> like many homeowners who discover problems in the middle of a remodel, they say they were trapped. >> the problem with a contractor like this is you can't stop in the middle and say, okay, that's enough, i'm going to bring in somebody else. there is no somebody else. no other contractor wants to come in on a botched job and repair it.

>> we are in a position now being virtually on the edge of financial ruin. for example, i've lost my i.r.a. we had to borrow against life insurance policies. we had to cash in one-time irreplaceable investments. we had to run up credit cards. >> with no financial resources and nowhere to turn, the middle-aged couple has taken to trying to make the repairs themselves. >> we used to enjoy going to theater or opera. forget anything like that. forget it. it's just work, work, work, work, work. >> for two years this mild-mannered homemaker has taken to city hall, protesting and warning other homeowners of the pitfalls of home repair. >> ma'am, would you like a pamphlet? >> the biggest shock, they say, is not that dick birgh was a bad contractor. it was learning that this man, their trusted real estate agent, paul stickney, was a corporate officer in contractor dick birgh's company, hih. >> we found out that paul stickney is actually the vice

president of home improvement help, as well as being a real estate agent. >> in fact, birgh wasn't even licensed at the time he started work on the decourseys' house. >> we've found other people who have also been through this, and it's -- we can understand that it's a pattern. that he shows houses that need work, brings in his contractor, the contractor gives a favorable number on the repairs, the house is sold, he makes his commission, the contractor gets work for something he would probably not be given personal recommendation for. >> we decided to try to get some answers. we found the agent still selling homes like this one, a million-dollar estate just minutes from the decourseys. a house that also has a connection to the decourseys' contractor. >> we did no harm to that man. we liked him. we didn't deserve what we got. >> you had a financial

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we decided to try to get some answers. so we visited paul stickney at an open house he was holding for a million-dollar property in redmond, washington. >> i'm grace kwong from msnbc. >> yes. >> and i wanted to talk to you about a story we're doing about the decourseys. >> yes. >> and about the fact you were financially involved with the contractor that they hired. >> i was not involved with the contractor. >> you weren't the vice president of home improvement help? >> i don't mind chatting with you guys. but can i just open the door and get my open house set up real quick? >> yeah. do you mind sitting down for an interview? they'd like to know if there was any -- if you profited at all by being vice president of the corporation of the company with richard birgh the contractor. >> no. i was not a, you know, vp. happy to explain that, but let

me get set up for just a sec. >> you have a financial partnership with richard birgh, the contractor? >> i do co-own some land with dick, yes. that was something that we've done for years. >> uh-huh. >> it's something we've done for years. >> but in regards to that, it was a innocent and unfortunate, non-intentional issue. according to dick -- and you could, you know, call him and chat with him. >> yeah, we are. >> he said that he called me in 2001 and he said that he was at the secretary of state when he was incorporating home improvement help and he needed a third name according to the secretary of state. >> okay. >> and he said it was no big deal, he just needed a name. he -- >> but you didn't benefit financially at all from this partnership with richard birgh? >> zero. >> but you had a financial relationship and were vice president of the corporation that did the work on the house. >> but i didn't know i was vp.

>> oh, the insanity defense. >> mark decoursey doesn't buy stickney's explanation. >> not only was he on paper the vice president of hih, he operated like the vice president of hih. he gave us a list of jobs. he had actually gone out and sold those jobs for hih. >> paul stickney admits that it looks bad but insists he didn't do anything improper. >> we took no action. the intention of that statement is what happened. looks bad, wasn't bad. there was no actions taken. >> so you never profited at all? >> zero. >> from -- >> nor any intention to profit. wasn't aware of it. was helping out a friend. dumb? yes. unintentional disclosure? no way. i disclose everything to everybody. in fact, i'm one of the best disclosures of the stuff i know of anybody in the business. ask around. >> stickney does admit he didn't

disclose to the decourseys that he and contractor birgh had a land investment deal. he insists there was no conflict of interest saying one had nothing to do with the other, and what about those assurances he gave the decourseys about the superior quality of dick birgh's contracting work? >> i said for the type of work which i was, you know, recommending, which was cosmetic upgrades, maintenance items, that i felt he provided more value for the finished product than other contractors i had dealt with. >> even though he wasn't licensed? >> i didn't pay attention to licensing for any of my subs, and dick told me that he disclosed that to carol and martin well before they ever hired him. >> that he was unlicensed? >> correct. >> halfway through our interview stickney tries to redefine dick birgh's business. >> using the word contractor. whether dick was a contractor or not, he's a handyman. dick birgh's company was a help homeowners upgrade and maintain

their house with what i call little stuff. doors and trim is little stuff. >> but these documents show that paul stickney recommended home improvement help to do much more than just the little stuff. in fact, he recommended hih to six other real estate clients. there was another revelation about the home stickney was selling that day. >> whose house is this that we're at right now? who owns this house? >> stefan birgh. >> it's the contractor's son. >> it's his son. >> you get a commission. >> if i do a good job selling a house, that's what i do. >> what about the man, dick birgh, who was paid $164,000 by the decourseys to remodel their home. he says his company didn't exist before their remodel. >> there was no company. the company was formed for the benefit of them.

that's how it happened. they were told up front long before this happened, because it was their choice. if you want me to help you, i need to have a company license. they said, yes. that's how it happened. >> they knew that you were not licensed? >> definitely. >> i'd say he's a flippin' liar. we would have never agreed to use an unlicensed person or an unregistered person. why would somebody do that? we had just come to this state. we didn't know any of the rules. we relied on paul stickney to keep us wholly and straight. >> despite his claims, this state document shows that birgh founded his company in 2001, three full years before the job. birgh insists the work he did for the decourseys was good, quality construction and he had nothing to do with the electrified bathtub. when we asked contractor birgh about stickney's official

position in his company, he, too, claimed a lapse in memory. >> you didn't remember paul stickney was the vice president of the company? >> no, it never occurred to me. i had never looked at the piece of paper. >> you didn't remember at that point that paul stickney was listed as vice president. >> right. >> i'd say he's a liar. you're a liar, dick. >> they have sued paul and the real estate company he works for. since they don't have enough money, they're representing themselves in court. carol decoursey says she is on a mission. >> we are going to keep it up and keep it up and keep it up and keep it up. >> investigators say to prevent trouble always do your home repair homework before you hire a contractor or hand over a dollar. and never hire a contractor who isn't licensed, insured or bonded.