Freesoil Couple Sued Around Northern Michigan for Contractor Fraud

Local news media haven't been known for their investigative journalism skills, so whenever they exhibit this trait, we at the Ludington Torch will generally try to spotlight the effort by featuring them within our pages.  The Manistee News Advocate's Arielle Breen recently compiled a lot of information on some small-town area contractors who seemed to be swindling their unsuspecting victims of large sums of money.  She made a two-part series, the first about the problem and the second in order to help folks not to become a victim of such fraudulent enterprises.  

Unfortunately, she presented it in the pages of the MNA (the newspaper we affectionately call the City (or County) of Manistee Advocate (COMA) for its past parroting and advocacy of the local government even when it goes bad), which makes it difficult to read without the constant stream of ads and diversions cluttering up the memory of your computer, rather than the serene ad-free environment of the Ludington Torch, with only our soothing flames to warm your neurons.  We present it in full here as a community service, in order to help people not become victims of unscrupulous contractors.

Don Mandich stands where there had been a hole and dirt pile in his St. Mary's Parkway yard in Manistee. He had the hole filled in several weeks ago after a contracted project was never completed. 

EDITOR’S NOTE: The News Advocate was alerted to a growing number of people filing court cases against a former Free Soil couple and related contracting businesses earlier this year. After months of digging into court cases and interviewing northern Michigan residents, part one of this two-part series showcases the court orders and allegations. Part two shares what residents can look for when vetting potential ...

MANISTEE — A group of about eight concerned Michigan residents from more than four counties recently met in Manistee for dinner to talk about their court cases against a former Free Soil couple and their related contracting businesses. 

Now, the group is gaining members as more court cases continue to be filed against Daniel and Lydia Siefka. 

Making lemonade

The group of people with grievances against the Siefkas call themselves the Lemonade Group, and is largely led by Kelly Newell, of Gaylord. 

“I call us the Lemonade Group because we all got together and they’re just a wonderful group of people and we decided it’s one of those make lemonade out of lemons (situations),” Newell said. 

Newell, and others the News Advocate spoke with, mainly referenced having interacted with Daniel Siefka. Between he and his wife, he's also the one with more court cases lodged against him.

Newell said that everyone in the Lemonade Group considers themselves educated and experienced in life “and yet there was something about” Daniel Siefka that made them each fall for his promises.

Most of the Lemonade Group learned of the Siefkas' contracting services through social media and word of mouth.

Newell hired Daniel Siefka through Legacy Building Group, LLC to make a building for a wedding venue in Antrim County. She said she lost about $40,000 that she had prepaid for the project, which was not completed.

The Lemonade Group is shown gathered near a hole in Don Mandich's yard that had been intended to be a garage that was never built. The Lemonade Group consists of people around the region who have court cases against a former Free Soil couple.  Submitted Photo/Don Mandich

But before she hired him, she said she took steps to check that his builder’s license was active and verified that the business was legitimately listed in the Michigan’s Licensing and Regulatory Affairs business search tools

Newell said she had been “ripped off” by another contractor in the past, someone she had prepaid $10,000 for services that were not fulfilled. That made her gun shy, and she wanted to make sure it didn’t happen again. 

According to a copy of her construction contract dated May 6, 2021, the document's final page is signed by landowners Newell and her husband as well as "Daniel James Siefka Manager" on behalf of Legacy Building Group.

One of the businesses listed under the Siefkas' name had filed for bankruptcy in the U.S. Bankruptcy Court’s Western Dis... according to court documents. On Jan. 3, documents show a notice of Chapter 7 bankruptcy was filed for Beyond the Call Contracting, LLC. 

“Because of our experiences with this other contractor, I knew that the thing to do was to call the police,” Newell recalled. “So I called the police and filed a report right away.”

The police report Newell filed with the Michigan State Police is dated to Oct. 17 and alleges contractor fraud.

That report also shows that the investigating trooper came across similar contractor complaints dating back to 2018; one of those was made to the Michigan State Police Hart Post.

According to Antrim County's 86th District Court documents, a warrant was issued for Daniel Siefka's arrest. He is charged with felony false pretenses over $20,000 and felony contractor's fraudulent use of a building contract fund. 

Newell is leading the way in connecting others who feel they were wronged and adding them to the ranks of the Lemonade Group. 

“Everybody that I’ve met so far is kind of beating themselves up mentally because they’re like, ‘How can I be so stupid to let this guy dupe us?’” she said. “I hate that he did this to people. I hate it. I hate it.” 

Newell said since reaching out to others about their experiences, she has heard of people in Manistee, Antrim, Grand Traverse, Mason, Muskegon, Oceana, Otsego and Wexford counties who are reporting incidents with the Siefkas. She said most of those people specifically noted interactions with Daniel Siefka.

“It’s one thing that he did it to me, but just to sit there at the table (at the Manistee group dinner) and look at the people that just wanted to spend the last bit of money that they had (as their) last chance, the last house I’m going to live in in that last phase of life and then they had a man take advantage of that," she said. "It was retirement money for everybody. You can’t go back and earn that again.”

The Siefkas

Daniel Siefka, 33, and Lydia Siefka, 32, are listed by Michigan’s Licensing and Regulatory Affairs in connection with 12 business ventures in the state, and they are involved in at least 18 court cases in at least six Michigan courts. 

They have or have had court cases in Antrim, Manistee, Mason, Oceana and Muskegon counties as well as in the U.S. District Court Western District of Michigan

Both are former Free Soil residents who lived in the Rifle, Colorado area, according to court records dated to May 3. 

Michigan’s Licensing and Regulatory Affairs shows that the two had been listed in leadership roles with a number of construction companies in the Free Soil area. The two had also owned West Wind Stables horse and dog boarding, located at 202 W. Hoague Road in Manistee, that opened in 2021.

In the businesses shown in the state's records, Daniel Siefka is listed as a director, president, resident agent, secretary and treasurer for six of the businesses. Lydia Siefka is listed as the resident agent for six of the entities. 

The two are listed by the state as being involved with the following entities:

 Beyond the Call Contracting, LLC;

 Corner Stones Storage, LLC;

 FreeSoil Office Plaza, LLC;

 Hotshot Builders, LLC;

 Hotshot Services, LLC;

 Legacy Building Group, LLC;

 Lesraa Holdings LLC;

 Promise Land Holdings, LLC;

 Spray Foam Solutions LLC;

 West Michigan Custom Exteriors, INC.;

 West Wind Stables, LLC; and

 West Shore Soccer League.

Cases against the Siefkas

The cases against the Siefkas vary; some are targeting them separately, on behalf of their businesses or with other codefendants in civil cases. 

Daniel Siefka has civil and criminal cases against him, while Lydia Siefka is solely involved in civil cases.

One case recently ended with a judgment against Daniel Siefka in favor of Manistee resident Don Mandich.

He noted that he just filled in a hole several weeks ago that had been left in his backyard.

A copy of Mandich's contract shows he wanted Legacy Building Group to build a garage. The complaint document said the project was not completed and Mandich was not reimbursed for upfront payments. 

Mandich noted that in 2021, he started looking for a contractor to work on his St. Mary’s Parkway house.

Eventually he found the Siefka family through Legacy Building Group and said he “couldn’t help but like the people.” Mandich hired them to start in February 2022.

“It’s kind of mentally over for me now,” Mandich said in an interview with the News Advocate. 

After signing a contract, Mandich said he gradually started experiencing delays and eventually work that was unfinished, well past what the contract stipulated. 

Mandich said he drove to the Free Soil business’ office and learned that Daniel Siefka had left for Colorado and that others involved at Legacy Building Group would take over. 

Mandich saw further delays in the project that was still unfinished and he reached out to an attorney to file a civil suit. In his case, Mandich alleges breach of contract, fraud, conversion and Consumer Protection Act violations.

In that case, Daniel and Lydia Siefka were served with the complaint and a summons ordered by Manistee County Judge David Thompson at their listed residence in Rifle, Colorado. 

Daniel Siefka was served on May 3 and Lydia Siefka on April 17, court records show. The notice of court proceedings was also printed in the Manistee News Advocate on April 3, April 10 and April 17.

In that case, after the Siefkas were served, they failed to respond and were therefore found in default. 

An Amended Default Request, Entry and Judgement was entered in Manistee County’s 19th Circuit Court on July 13. Court records show the default total judgment was $166,403.55. 

To sue or not to sue

The criminal cases against Daniel Siefka are in Antrim, Mason and Muskegon counties. 

In the open felony Mason County criminal case, a warrant was signed... on July 31. A warrant was signed in the Muskegon County case on May 31.

In Oceana County, James and Cindy Kapanowski filed a civil case along with their neighbors, against Daniel Siefka, two other people and three of the businesses that the Siefkas were involved with on Dec. 5, 2019. This came after the Kapanowskis had contracted Siefka to build a house and garage near Silver Lake in 2018. 

In an interview with the News Advocate, the Kapanowskis said they were hoping for justice for others in the Lemonade Group and the money to be recovered for all involved.

“We’re at the point where we understand that we may not get our money back,” Cindy Kapanowski said. “He still was doing it late last year to people in the area and there’s just got to be justice. We’re not doing it just for ourselves.”

In that case, records show that the court sided with the Kapanowskis and the other plaintiffs on March 18, 2022, and ordered that the plaintiffs be paid a grand total of about $882,506. 

In several civil cases where Daniel Siefka or the business being sued was ordered to pay, defendants ended up filing for Chapter 7 bankruptcy for the business and Chapter 13 bankruptcy for Daniel Siefka as an individual.

In a U.S. Western District bankruptcy case, Daniel Siefka filed for Chapter 13 bankruptcy after being ordered to pay the plaintiffs in the Oceana County case. That case is still ongoing

According to U.S. Courts bankruptcy information, “Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.”

“A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts,” the U.S. Courts governmental website states in part. 

When Daniel Siefka and the businesses involved filed for bankruptcy, it made several members of the Lemonade Group uneasy. Some said they have decided not to pursue legal action because they feel they are unlikely to be compensated.

Daniel and Lydia Siefka could not be reached for comment prior to publication. 

By the numbers

The following are highlights from at least 18 cases filed against the Siefkas individually and the entities they did business as:

• Manistee County's 19th Circuit Court ruled against Daniel Siefka and Legacy Building Group in one case. The default total judgment was $166,403.55. 

• There were at least 10 cases filed in Mason County: One is a felony criminal case, nine are homeowners, a land contract case and others were vendors who sued in civil cases.

• Daniel Siefka has three open felony criminal cases alleging fraudulent use of a building contract fund. One of those cases also alleges false pretenses over $20,000.

• Daniel Siefka has criminal cases in three counties: Antrim, Mason and Muskegon.

• There are at least three bankruptcy cases involving Daniel Siefka in Western Michigan District’s bankruptcy court. 

This series

Part one: Free Soil couple sued around northern Michigan for contractor fraud...

Part two: Home Builders Association: How to spot contractor fraud and avoid r...  It follows:

After at least 18 court cases were filed against two Free Soil residents ... doing contracting work in northwest Michigan, the News Advocate wanted to learn steps residents can take to protect themselves from contractor fraud. 

Daniel and Lydia Siefka have had cases lodged against them in six court systems in the region spanning Manistee to Muskegon County. Daniel Siefka has criminal and civil cases while Lydia Siefka solely has been sued in civil cases.

Some of the cases deal with issues like fraudulent use of a building contract fund and breach of contract after the Siefkas and the entities they were involved with had been contracted for a variety of building jobs in the region.

According to court records dated to May 16, they had a Colorado residence as their home address. Currently, several of their cases are still making their way through Michigan courts while residents are recovering from lost money from prepaying for projects that did not happen and the costs of filing lawsuits.

Lauren Tucker, Grand Traverse Area Home Builders Association executive officer, said activity like what the Siefkas have been sued for is not considered normal in the contractor field. 

Tucker said often in cases like the ones involving the Siefkas, people are out the money from attempting to have a project done and then might need to pay to have the project redone or pay legal costs as well.

What to do

Tucker shared tips on what to be aware of when looking for contractors.

“Under Michigan law, all contractors offering to do work which totals $600 or more in labor and materials must be licensed by the (Michigan) Department of Licensing and Regulatory Affairs,” she said.  

She recommended anyone looking into contractors in the state to reference the department’s michigan.gov/lara website as it answers a number of related questions people may have about contractors. 

The Grand Traverse Area Home Builders Association is based in Traverse City but it recently started overseeing the Manistee County area as well. 

She noted that the Home Builders Association is also a tool for people seeking contractors.

“HBA members are always a safe bet because we hold our members to a very high standard. So if I get a call or a complaint, then I investigate it and …. I have no authority, but in order to stay an HBA member, you have to be in good standing," she said.

Home Builders Association members need to be trained in their career field, tested and approved. 

The association also performs credit checks on its members, gets verification from the Michigan Department of Licensing and Regulatory Affairs, and guarantees a business is insured for liability for injuries on the job. 

She said members are always sharpening their skills and learning current practices in their trade. 

Tucker said the association can get involved if there is a dispute with a contractor who is a member. She said the association can offer information, answer questions and help vet a contractor. 

5 red flags

A Home Builders Association member contractor might not always be available or in the budget for residents and those seeking contractors may need to widen their search. 

Tucker provided a list of the top five red flags to avoid and be wary of when working with a contractor.

1. Asking others to pull permits

If a contractor asks a homeowner to request permits, this is a red flag, Tucker said. 

She said another iteration of this could be if the contractor says no permits are necessary. 

Each municipality will have its own stipulations and zoning requirements, but generally, permits are required for projects like construction of new buildings or additions to existing buildings.

Most contractors would not want to risk their license by having others request the permits. 

“If there is no permit pulled, there will be no inspection to ensure the quality of the work,” she said. “And if you’ve pulled the permit, then you’ll be required to ensure that the work is done, and not the contractor you hired.”

2. Won’t show proof of license/insurance

One of the most important steps, according to Tucker, is to ask to see a contractor’s license. 

A reputable builder will have no issue showing these credentials; all licensed contractors carry a pocket license card, she said.

Tucker noted that it would be difficult to create a fake license and that people should verify the license number through Michigan’s Department of Licensing and Regulatory Affairs.

Each license type allows different work to be conducted. Each license type will show what type of work a contractor is allowed to do, Tucker said. 

A residential builders license allows the contractor to build a complete structure, and perform restoration and remodeling work. 

A maintenance and alteration license allows the person to do activities such as waterproofing, carpentry, concrete, demolition and excavation. 

3. Asking for cash, or full upfront payment

Anyone asking for a cash payment or for the full cost of the project upfront should give people pause, Tucker said. 

“There’s a huge chance you’ll never see this person again after giving him or her your hard-earned cash,” she said. 

It is typical for contractors to ask for half of the total cost upfront or material costs upfront. But each of the general costs and payment schedules should be laid out in the scope of work plan. 

4. Leftover material for special pricing

Tucker said that if contractors offer a special low price or say they have materials leftover from another job, that is a red flag. 

She said most builders make an effort to plan well and do not overbuy materials. If they do have leftovers, Tucker said they would usually return those materials for credit and get new materials for each job so that the materials are not compromising quality.

Builders might use smaller items like a box of nails, but not loads of lumber.

5. No contract/specific written agreement

Tucker emphasized that having a contract and scope of work detailing the project is important. 

The project should be detailed in the contract and include a scope of the work with estimated costs, timeline and payment schedule. 

She said without the contract and scope of work, the person hiring a contractor does not have the ability to hold the contractor accountable. 

“Having the written agreement means everyone knows what they are supposed to be doing and when. And it helps to avoid those disagreements or to bring those conversations if they’re necessary,” she said. “So, if they refuse to sign a contract or offer a scope of work and have you both sign off on it, that’s a huge red flag.”

Tucker said anyone contracting services has a year from the completion of the project to make requests such as asking for items to be repaired. After one year, “your recourse is much less.”

The contract should keep all parties informed on what needs to be done and when. 

Tucker said delays are a common occurrence in building projects. 

Often the crews are unable to have workers available from the region to complete projects. That adds costs to projects as well when project leaders have to feed and house workers from outside the area. 

She said on top of a labor shortage, there are a number of factors that impact costs of projects like the Canadian wildfires that are likely to impact material costs for lumber.

A new program

There has been a significant increase in unlicensed builders reported since 2020, according to a news release from Michigan Attorney General Dana Nessel’s office. 

In 2022, the Criminal Trials and Appeals division of the attorney general office handled more than 200 misdemeanor unlicensed builder cases.   

Nessel’s office shared information on the state’s new unlicensed builders pretrial diversion program that started earlier this year. 

In February, the attorney general office launched the pretrial diversion program to promote licensing compliance, ensure restitution to victims and efficiently resolve cases of Michigan consumer complaints of harm caused by unlicensed builders in the state. 

The Unlicensed Builders Pretrial Diversion Program aims to give mediation and restitution to victims while avoiding criminal prosecutions against unlicensed contractors should they quickly come into compliance with state licensing requirements and fully reimburse the complainant. 

The program has secured at least $72,500 in restitution to Michigan residents so far.  

“This program has proven to be effective in tackling the uptick in unlicensed builder cases we have seen in recent years and is working to resolve these issues without criminal trials in the courts requiring further resources of the state,” Nessel said in part, in the news release.

Cases against unlicensed builders are initiated by consumer complaints to the Department of Licensing and Regulatory Affairs that typically allege a builder failed to perform or executed substandard work agreed to in a contract and are later found to be unlicensed in their profession. 

These instances are usually related to residential renovation projects and financially harm the customer left with little recourse to recoup their payment. 

“Unlicensed builders are incentivized to participate in the program by the offer of avoiding a criminal prosecution should they tender full restitution to their victim and quickly come into licensure compliance,” the release states. “To be eligible for the pretrial diversion the accused builder must not have any prior violations of the unlicensed builder statute and the restitution owed must be less than $10,000.” 

For an accepted participant in the program, the attorney general will close the criminal complaint against the builder — without pursuing criminal charges — when full restitution has been paid to the victim and the builder either proves they are no longer working in the field requiring licensure or they are considered in compliance with licensing requirements.

“Since the launch of the program six months ago, the department has cleared its backlog of criminal cases of unlicensed builders,” the release states.   

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It's hard to believe that so many people were duped by that contractor. One cannot be all trusting when large sums of money are involved. This is a classic tale of "buyer beware" which seemed to be in short supply by all of those people who hired that con over the hundreds of other honest builders doing business all over West Michigan. Not only are those people keeping shysters in business they are also doing their part in supplying and enriching the local attorneys with retainers, legal fees and other expenses. Thanks for the post X.

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