Report a Client for Fraud? 23

[casseopeia]

I have a Client (Developer) who used whiteout and pencil to significantly alter a printout of a detail design that I had issued. It was then scanned and issued to the Contractor in electronic format with my firm's letterhead and my initials still intact, as if it had come from us. I was not notified of the change until I happened to stop by the project site to get some unrelated information and saw what they were constructing. I asked the Superintendent why he was not following what I drew and he said it was what I issued. That's how I discovered the change. The Superintendent was disturbed by the unauthorized revisions and said that he had a similar experience with the HVAC consultant just the day before. The Client had taken whole sections of the mechanical specifications, changed the equipment, typed up the changes, and literally cut and pasted the paper right into the Project Manual without the knowledge of the Designer.

I find this behavior shocking. The Client is certainly free to ignore his Consultant's recommendations, but to change the Consultant's work product and issue under the stamp of another licensed professional seems like it would rise to the level of fraud, punishable by the loss of a business license. If this were my own company, I would have dumped this Client a long time ago when he started in making sweeping changes in my investigation report, but my boss decided to continue the work. Just looking for opinions.

"Gorgeous hair is the best revenge." Ivana Trump

 

[jmw]

Cass,
this isn't about the water ingress or how long this building will last, it is about fraud and the abuse of your license.
It is about a bunch of crooks getting up to things you probably know nothing about.

This job is "safe", maybe.
But that isn't the issue.
There is no such animal as a small fraud. Either it is fraud or it isn't.
Did you get any legal advice yet?

JMW

http://www.ViscoAnalyser.com

 

[lacajun]

I couldn't agree more with jmw.

Think you're getting caught up in forests and trees?

 

[berkshire]

Cass,
I have followed your posts on this forum for many years, I know that you are no stranger to testifying in court on forensic building issues.
I think right now you are demonstrating frog in the pot syndrome.
Get out of there before you get boiled.
B.E.

The good engineer does not need to memorize every formula; he just needs to know where he can find them when he needs them. Old professor

 

[jmw]

That's something I hadn't thought about, your qualification as a forensic expert.
Maybe someone without that has less to lose and may get treated less harshly if it all goes wrong, but is this at risk and might you get more harshly treated if it all goes wrong?

JMW

http://www.ViscoAnalyser.com

 

[MikeHalloran]

It all already went wrong.
It's about to get wrong-er.
First one to blow the whistle doesn't get screwed as badly as everyone else.



Mike Halloran
Pembroke Pines, FL, USA

 

[dik]

Can the letter of completion be used by the client to obtain finances for the project from his lending institution?

Dik

 

[casseopeia]

The letter of completion, which has not yet been issued, I believe is intended for the potential purchaser of the property. The entity looking to buy it is a large, publicly-traded real estate investment trust. They generally hold onto rental properties for 3-5 years as an investment then sell it. What they do with the letter is anyone's guess. It could be used to obtain financing, or to use against the author.

When I did due diligence reports for them in the past, I aways put in a clause that limited who could rely on the information. I never extended that to a third party and I am going to recommend that my boss do the same, just in case. My boss may be having second thoughts about issuing the letter. I expected to be asked to get one done by the end of the week, or Monday at the latest, but no such request has been issued.

If I could talk to anyone, it would not be the purchaser, it would be their due diligence team. This real estate investment company was a 'kill-the-messanger' sort of client in the past. Bringing problems to them did not usually go well.

"Gorgeous hair is the best revenge." Ivana Trump

 

[jmw]

Well, since we still seem to be hoping for a miracle cure, and worrying about the symptoms rather than the disease, the way round the "kill the messenger" syndrome is to pose to them how much money is at risk for remedial work and how much the message is going to save them.
They presumably have a team of lawyers frothing at the mouth for something or some one to go after with a blunt knife. They might rather welcome some bad news.

The whole purpose of the documentation is supposed to be an assurance that the work has been done well.
If that isn't the case, they won't be happy.
They may kill the messenger but they are likely to have an even more effective "sleeping with the fishes" approach for people who don't tell them things.

Tell us you have had some legal advice.
Please.
Please tell us you really are not focussed on the trees and have due regard for the wood, nay jungle, that surrounds you.
Please tell us you aren't just hoping this will go away by itself.
Not opening the banks letters doesn't make you any less in debt or any less liable to lose everything.
The same is true here. In fact, the worse thing would be to be cuaught out dithering and someone else drops a dime. That dime puts you on the wrong side of the black hat/white hat divide.

Mike got a star for his very terse and accurate advice:

First one to blow the whistle doesn't get screwed as badly as everyone else.

And you need an explanation for the time lapse between discovery and action. A good explanation.

Tell us you have this in hand and we can stop worrying.

The more you tell us the more evident it is you should be dropping dimes on half the state and just as fast as you can.
This is no time to be phaffing around worrying about minor details.




JMW

http://www.ViscoAnalyser.com

 

[dik]

Even as a rookie, some 40 years ago, I never had a boss... only an employer <G>.

If you have presented your employer with your spreadsheet showing the deficiencies, he would be very foolish to provide the letter... I think Bossman's in way over his head... should have had a 'chitchat' with the client a long time ago...

For remedial stuff, the letter of completion is often used to advance funding if the work has been financed.

At very least, if your client is presenting the work to a third party as being repaired, it may be best to know nothing about this, but, your employer could be in for a pile of heartburn... these actions would likely void any insurance coverage... and, for added measure, may be criminal... The fact that the potential purchasor is a third party may not void your disclaimer; have your employer check with his lawyer on that...

jmw: it's difficult to estimate punitive damages...

Dik

 

[jmw]

And the news is....?
Legal advise is....?

JMW

http://www.ViscoAnalyser.com

 

[Xera]

Does anyone know what happened with Cass?

 

[looslib]

She logged on today.


"Wildfires are dangerous, hard to control, and economically catastrophic."

Ben Loosli

 

[jmw]

She has other excitements at the moment.

JMW

http://www.ViscoAnalyser.com

 

[casseopeia]

I wrote up a nice little letter report where I grouped items in 4 different categories; repaired, tested, passed; repaired, tested, failed; incomplete; removed from repair scope. But even that was too revealing for the Client and my boss had me rework an asinine memo produced by the Client so that he could close escrow. This memo was accompanied by a cover letter signed by my boss.

I figure after the dust settles, my boss will go knocking on the new owner's door asking if they need a few leaks fixed.

"Gorgeous hair is the best revenge." Ivana Trump

 

[jmw]

And are you happy with this?


JMW

http://www.ViscoAnalyser.com

 

[dik]

I hope you're happy with the re-draft of the memo... the potential for this to 'blow up' is high. And it may be the new owner's lawyer that is knocking on your boss/employer's door.

Dik

 

[casseopeia]

I'm not happy with it. Think the Client is a con artist in a suit. I've done as much as my authority allows. One interesting thing, the Client attempted to have a restriction put on our contact with the new owners. I took that out because he cannot legally do that

"Gorgeous hair is the best revenge." Ivana Trump

 

[dik]

Has your employer been paid in full? Can you file liens in your jurisdiction?

Taking on the new purchasor as a client may be fraught with problems... tread carefully...

All the best and good luck...

Dik

 

[lacajun]

Since I just renewed two licenses, this is fresh on my mind.

[blue]From Colorado's rules of conduct:

3.1.1 Primary Obligation of Licensees. Licensees shall at all times recognize that their primary obligation is to protect the safety, health, property, and welfare of the public. If their professional judgment is overruled under circumstances where the safety, health, property, or welfare of the public is endangered, they shall notify their employer or client and/or such other authority as may be appropriate.

3.1.2 Ethical Conduct. Licensees shall conduct the practice of architecture, engineering, and land surveying in an ethical manner.

3.1.3 Responsibility for Seal. Licensees shall be the only individuals authorized to use their own seals and shall be personally and professionally responsible and accountable for the care, custody, control, and use of their seals.

3.1.4 Work Product Must Be Safe and Meet Generally Accepted Standards. Licensees shall approve and seal only those design documents and surveys that are prepared with applied technical knowledge and skills that provide safety for public health, property, and welfare in conformity with generally accepted architectural, engineering, and surveying standards.

3.1.6 Caliber of Association. Licensees shall not permit the use of their name or firm name nor associate in business ventures with any person or firm that they have reason or should have reason to believe is engaged in fraudulent or dishonest business or professional practices.

3.1.7 Cooperation with Board Investigations. Licensees having knowledge of, and/or involvement in, any alleged violation of any of Title 12, Article 25, Parts 1, 2, and 3, C.R.S., or the Board's rules, shall cooperate with any investigation initiated by the Board and furnish such information or assistance as may be requested.

3.1.8 Compliance with Applicable Laws, Regulations, and Codes. Licensees shall exercise appropriate skill, care, and judgment in the application of federal, state, and local laws, regulations, and codes in the rendering of professional services and in the performance of their professional duties. It will be deemed a violation of these rules if a licensee violates local, state or federal laws or statutes that relate to the practice of architecture, engineering, or land surveying.

3.4.1 Conduct that Discredits the Profession. Licensees shall not engage in any conduct that discredits or tends to discredit another architect, engineer or land surveyor and/or the profession of architecture, engineering or land surveying.

3.4.2 Appearance of Impropriety. Licensees shall avoid the appearance of impropriety in the course of representing or rendering services of an employer or client.

3.4.3 Undue Influence. When representing a client or employer, a licensee shall not exert or attempt to exert undue influence over other professionals, contractors, or public officials. Undue influence means any improper or wrongful exercise of persuasion or control by a licensee in an effort to cause another to do what he or she would not otherwise do if left to act freely.

3.6.1 Exercise of Judgment. Licensees shall not permit a client, employer, another person, or organization to direct, control, or otherwise affect the licensee's exercise of independent professional judgment in rendering professional services for the client.

3.6.2 Impartial Decisions. Licensees shall render impartial decisions when acting as the interpreter of documents or when acting as the judge of contract performance.[/blue]

[red]From Colorado Law:

12-25-108. Disciplinary actions - grounds for discipline.

(1) The board has the power to deny, suspend, revoke, or refuse to renew the license and certificate of licensure or enrollment of, limit the scope of practice of, or place on probation, any professional engineer or engineer-intern who is found guilty of:

(b) Failing to meet the generally accepted standards of engineering practice whether through act or omission;

(e) Violating, or aiding or abetting in the violation of, the provisions of this part 1, any rule or regulation adopted by the board in conformance with the provisions of this part 1, or any order of the board issued in conformance with the provisions of this part 1;

(h) Failing to report to the board any professional engineer known to have violated any provision of this part 1 or any board order or rule;[/red]

These would apply for any engineer in your position in Colorado and many other states based upon my experiences. From my contact with state boards, they will draw a hard line on you for failure to exercise your responsibilities as a professional but will not tell you how to resolve your issues.

[purple]This is from the state of Louisiana,

2) Professional Judgment Overruled
If their professional judgment is overruled by non-technical authority, licensees must clearly point out the consequences, notifying the proper authority of any observed conditions which endanger public safety, health, property and welfare. [Rule §2503(B)] at this link

http://www.lapels.com/docs/Applications/Prof_Ethics_Quiz.pdf.

[/purple]

Some non-licensed engineers think this is all very funny and unimportant. For registrants, it is not. Being a professional is a privilege not a right just as having a driver's license is a privilege not a right. Each violation can reap fines up to $5000, which is not insignificant. But, in exchange for being a professional, you have a right to your professional opinion, which non-registrants do not.

With all of the poor building in my neighborhood, it's high time professionals began sticking up for their profession and protect the public. My neighbors are fed up and getting angry about their issues. Water intrusion in a basement is an abnormal condition just as rusted out window wells that are 5 years old, improperly vented dryers, improperly installed floor joists, flooding window wells, etc. are. Many of my neighbors are young couples expecting their homes to last 40 years but wondering if they'll last 20 years.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC

 

[brandonbw]

I am surprised that the Harmon project in Vegas hasn't been brought up. That project was messed up kind of like this, and everyone got blamed for the steel missing from the concrete.

Doesn't someone in your office have to sign off once the building is completed? How does that work if you won't sign them because the documents were changed? I know we won't sign grading certification letters if we didn't get full payment which kind of causes an issue if someone wants to get their COO and live on the property.

B+W Engineering and Design
Los Angeles Civil and Structural Engineering

http://bwengr.com