Jerome Kendall arrested again on charges of defaulting on a custom house

December 24, 1994|By Larry Carson | Larry Carson,Sun Staff Writer

It has been more than 10 years since builder Jerome J. Kendall declared personal bankruptcy and began leaving a string of unfinished houses, unpaid debts and angry customers and suppliers throughout Maryland.

From custom homes begun in northern Baltimore County to tiny saltboxes on the Eastern Shore, Mr. Kendall's unfinished projects aroused so much outrage that Maryland enacted a state law to help govern custom home construction.

Now, after a 1992 federal bank fraud conviction and 10 months in prison, Mr. Kendall (formerly known as Jerome J. Knoedler) has been indicted and arrested again -- this time in southern Delaware -- on charges of defaulting on another custom house project on Maryland soil, in Cecil County.

His angry customers, Evan and Barbara Al-Chokhachy, say that Maryland's law proved inadequate to help them because of a loophole.

The indictments came in Delaware because the contracts were all signed in that state.

"You can walk into a 7-Eleven and steal $200 and get more time than this guy has," said a frustrated and bitter Mr. Al-Chokhachy, a senior computer analyst for Du Pont who said he lost $60,000 and his hopes for a dream house in Maryland. He said his three-year ordeal was "like taking on another job to get even minimal justice."

The Al-Chokhachys and their three children spent two years in a cramped apartment instead of in the large luxury home they planned, and they have filed a civil suit against Mr. Kendall that is scheduled for trial in February.

Mr. Kendall was indicted Monday by a New Castle, Del., grand jury on six counts of felony theft, five counts of improper use of contractors' funds and one count of perjury. He was arrested Thursday by Delaware State Police in the offices of his federal probation agent in Dover and released on $13,500 bond that night, Delaware authorities said.

Attempts to reach Mr. Kendall and his attorney were unsuccessful.

All the charges stem from Mr. Kendall's dealings with Mr. Al-Chokhachy over a custom home left partially built in Cecil County. Maryland's Custom Home Protection Act did not apply to the project because it only covers custom homes built on land the buyers already own.

Although home improvement contractors are licensed and bonded in Maryland, there are no licensing criteria for builders of new homes, except in Montgomery County. The state's building lobby has vigorously opposed licensing measures before the General Assembly.

Baltimore County Del. A. Wade Kach, who worked to pass the Maryland law in 1986 and has been in touch with Mr. Kendall's Delaware customers, said yesterday that he will introduce legislation next month to plug some of the loopholes.

"The state of Delaware has done what the state of Maryland should have done years ago," he said of Kendall's prosecution.

And, although the charges involve only one contract for a new home, Mr. Al-Chokhachy and Deputy Delaware Attorney General William J. Rhodunda Jr. said officials are investigating 10 more Delaware transactions involving customers who say they lost money to Mr. Kendall.

The charges in the Delaware case reflect a pattern familiar to those who have dealt with Mr. Kendall since he first came to public attention in Baltimore County in early 1984. They say the builder makes a good first impression and gets thousands of dollars in deposits and bank construction loan draws. He quickly starts a new house, runs up huge bills with lumber suppliers and subcontractors, then walks off the job -- with the money -- when customers begin noticing major errors or omissions.

Left with an unfinished homes riddled with expensive mistakes, as well as angry subcontractors and suppliers who slap liens on the properties, his customers have had to spend even more money on lawyers in an attempt to defend themselves

tTC against the liens and recover what they've paid.

That's what Dave and Cathleen Tyner did in 1984 when Mr. Kendall, who was then known by the surname Knoedler, walked off their custom home project near Reisterstown. They eventually won a $41,000 judgment against the builder in May 1984 but have never collected a penny. His company went out of business and he disappeared for several months.

In fact, he had declared personal bankruptcy in 1983 and had no personal assets. He was located in Philadelphia months later by a bank repossession man searching for his truck.

In Philadelphia, he took deposits on a fast food franchise from three different immigrants, then sold the business to a fourth person and left town with all the money, records show. He was later forced to pay $12,475 in restitution.

In 1988, he legally changed his name to Kendall and resurfaced in the Cambridge area, where he built a 22-home development of small salt-box homes in the tiny community of Secretary. He obtained loans from local banks for the project, which was later stopped by town officials who discovered major construction flaws and shoddy workmanship.

Four years later, in March 1992, he was indicted by a federal grand jury in Baltimore on three counts of bank fraud.

He pleaded guilty to one count of defrauding Peninsula Bank in Salisbury by submitting a false financial statement to obtain a $112,000 loan. He was sentenced to 10 months in prison.

By that time, he had already taken a $12,520 deposit from Mr. Al-Chokhachy, who said the builder suddenly disappeared for several months of "vacation."

The vacation turned out to be at a federal prison in Pennsylvania. Mr. Al-Chokhachy said Mr. Kendall explained the sentence away as a "misunderstanding" and resumed work on the the family's Cecil County home after being paid more money later that year.

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