Homebuilder accused of scamming South Sound customers, violating rules
The owner of a bankrupt home-building business has been accused of stealing more than $660,000 from South Sound customers.
Stephen Lee Ates, a 60-year-old Everett man, pleaded not guilty to nine counts of first-degree theft in Mason County Superior Court last month, according to court records. The alleged crimes stem from the handling of his business, Family Classic Homes Inc.
The Mason County business specialized in building “dream homes” for people who wanted to live in rural areas, according to a news release from the Washington state Department of Labor and Industries.
Ates allegedly did “little to no work” to finish homes for nine customers in Kitsap, Mason and Pierce counties between September 2019 and July 2021, the release says. He was reportedly paid $30,000 to $149,000 by each customer to complete the homes.
Steve Reinmuth, assistant director of field services and public safety at Labor and Industries, said Ates betrayed his customers and failed to follow business requirements.
“This contractor flat-out stole hard-earned money from people who trusted him,” Reinmuth said. “He also undermined Washington’s reputable contractors by choosing to ignore the requirements others follow, like purchasing insurance and providing other protections for their customers.”
Ates reportedly charged customers up to $50,000 in down payments for site preparations and then more he said was needed for construction. However, the news release says he failed to follow the terms of his agreements and did not file building permits on time.
Court records allege Ates subcontracted tasks but he did not pay the subcontractors with the money his customers provided. Instead, he pocketed the money for himself, and customers were forced to pay the subcontractors.
In a 2021 case, a Gig Harbor couple reportedly paid Ates $114,000 for their new home’s foundation, lumber, trusses and labor for framing. However, the release says Ates did not pay the framer, who installed the first floor and trusses.
The couple paid $76,000 to the company that supplied the materials and $10,000 to the framer, according to the release.
Labor and Industries suspended Ates’ registration in April 2021 because his bond was canceled and his insurance expired, according to the release.
Ates filed for Chapter 7 bankruptcy in June 2021, both for himself and for his company, the news release says. His company reportedly had 56 creditors. He previously filed for bankruptcy in 2009.
The department cited his business for a dozen civil, contractor-related infractions in 2020 and 2021. The release says he paid five tickets but still owes more than $17,000 for the remaining infractions.
He also owes the department $6,200 in unpaid workers’ compensation insurance premiums, according to the release. The state workers compensation insurance system supports injured workers until they can return to work.
Ates is being prosecuted by the Washington State Attorney General’s Office following an investigation by its office and Labor and Industries. Court records indicate a trial has been scheduled for Feb. 13.
