Industry members hope there are lessons to be learned from Karl Keene’s case.
The owner of Presidential Pools and Spas in San Antonio was sentenced last month to two years in state jail for failing to complete a pair of residential projects in 2008. He also was ordered to pay restitution, as well as $3,000 in fines.
While builders in Texas acknowledged the penalty was stiff, they also believed it could serve as a cautionary tale.
“There have to be consequences,” said Debra Smith, president of Pulliam Pools, a Pool & Spa News Top Builder based in Fort Worth, Texas. “If you commit fraudulent acts on a customer, you should pay for it. Those situations just make things worse for everybody else.”
Keene is actually the second pool contractor in recent months to receive time behind bars for leaving customers high and dry.
In late July, Greg Wolfe was sentenced to two years in prison for diverting $223,000 in payments he had collected from 11 customers. When Sacramento, Calif.-based Aquarius Pools closed its doors in 2006, Wolfe, the company’s general manager, had accumulated approximately $1.2 million in outstanding debt and unfinished work.
Keene’s defense attorney, however, said that his own client’s actions did not warrant the sentence he received. Charles Bunk noted striking differences between the Presidential case and Aquarius, namely, the disparities in the numbers of affected parties, as well as the damages involved.
“I thought it was excessive,” said San Antonio-based Bunk. “I argued the whole time that this was not a criminal case. I didn’t feel it was worthy of criminal charges.”
Whereas Wolfe was convicted of diverting hundreds of thousands of dollars and owing subcontractors and others much more, Keene was found guilty of misapplication of fiduciary property between $1,500 and $20,000, a lesser charge than the theft prosecutors initially accused him of perpetrating.
What’s more, Bunk said, Keene had in fact completed much of the work on the two pools in question, including the excavation, plumbing and rebar.
“In this situation, I think it’s a bad precedent. There was an intent to finish,” the attorney said, adding that Presidential Pools and Spas likely would close as a result. “[Keene] is just not a con artist. He’s a terrible businessman and a bad bookkeeper, but he’s not a criminal.
“But, in the end, it was hard to convince a jury that he didn’t do anything wrong.”
Nonetheless, pool builders in Texas expressed little sympathy for Keene. In fact, one said he felt that while harsh, such penalties could help illustrate to homeowners the importance of paying close attention to the contractors they employ.
“There have been enough scams and situations where people are finally realizing that they can’t just hire anybody to build a pool for them,” said Robert Morgan, director of operations at Sunbelt Pools in Dallas. “Rather than a black eye for the industry, I think it raises awareness among consumers that they’ve got to have reputable people out there who know what they’re doing.”