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David N. Kirkman
Task Force Alert
Asst Attorney General
Consumer Protection
NC Department of
P.O. Box 629
Raleigh, NC 27602

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North Carolina Division of Aging and Adult Services

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Senior Fraud Alert Update
Contractor Sentenced; Senior Fraud Video Available

******Alert #213 ******

In follow-up to a Senior Fraud Alert issued 17 months ago, yesterday an unlicensed building contractor, John Shearer of Franklin County, pled guilty to four felony charges and one misdemeanor charge in connection with a home remodeling transaction with Carol and George McPhaul, two disabled government retirees who live in Wake Forest, NC. Wake County Senior Resident Superior Court Judge Donald W. Stephens sentenced Shearer to a prison term of no less than 16 months and no more than 20 months. He also ordered Shearer to make restitution to the McPhaul’s in the amount of $124,000.

In the summer of 2006, Shearer agreed to remodel approximately one half of the McPhaul’s small three-bedroom home so that Mr. McPhaul could continue to live there. Mr. McPhaul recently had experienced a stroke, was partially paralyzed and required supplemental oxygen. Mrs. McPhaul has been blind most of her life. The agreed cost of the McPhauls’ project was to be approximately $65,000. Almost a year later, after the McPhaul’s had paid or lent more than $130,000, the portion of the house where the remodeling work was to be performed was stripped down to the sub-flooring and its walls and ceilings contained openings to the outside. Large holes existed in the sub-floor, electrical outlets were not covered, and live wires were dangling out into the rooms, even though the McPhauls continued to live in the house. A building permit for the work was never obtained. Much of the small amount of work that had been performed was substandard or failed to meet code. The kitchen had been dismantled and the McPhauls were forced to prepare their meals with a crock pot. In July 2007, the McPhauls reported to the Attorney General that Shearer was demanding even more money from them before he would complete the project, whereupon the Attorney General filed a deceptive trade practices action and obtained a restraining order putting Shearer out of the home construction and remodeling business in North Carolina. The Wake Forest Police Department launched a criminal investigation against Shearer which resulted in felony charges being filed against him by the Wake County District Attorney. WRAL-TV reported the McPhaul’s plight when the first legal action was filed against Shearer in July 2007. In response to those news reports, and within five weeks, legitimate contractors, suppliers, churches, banks, other businesses, individuals, a motorcycle club and other volunteer groups had undone the damage to the home, performed the remodeling work and added a handicapped accessible bedroom/bathroom suite to the home. They even furnished and decorated the remodeled portion of the home.

Carol McPhaul has become a spokesperson on the phenomenon of frauds and scams against seniors. She appears in a new video on that subject which is available to members of the NC Senior Consumer Fraud Task Force through the Attorney General’s Office. The video prominently features victims of senior fraud who describe their experiences. Please send an email to the undersigned if you would like to borrow a copy for your fraud awareness initiatives.

******End of Alert******

Date: December 9, 2008

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