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Home builders close after alleged embezzlement scheme

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Two prominent home builders have ceased operations after the owner filed suit against two longtime executives, alleging they've been stealing from the companies for years.

J. Greg Allen, who also operates a commercial division that developed downtown's Allen Plaza, said in an interview that trusted employees at Greenwood-based J. Greg Allen Builder and Princeton Homes stole nearly $1 million, "over a long period of time, cleverly, and in small amounts."

He said the thefts surfaced only after the residential construction market slowed and creditors began to complain that the home-building companies weren't paying their bills, even though the financial statements Allen received showed they were up-to-date.

"They couldn't really come to me and say 'this is where we are' because a deeper look into things would have revealed there was a lot of money missing," Allen explained. "When Pandora's Box opened, there was no way to hide what they'd been doing for years."

J. Greg Allen Builders and Princeton Homes are plaintiffs in the case against Jeff West, the builders' former president, and Kim Hutchinson, the former treasurer. The suit, filed in Johnson County Superior Court in February, claims West and Hutchinson co-mingled company funds and concealed unauthorized payments to themselves by claiming they were going to vendors.

In court papers, West denies having any role in "his subordinate's purported scheme to embezzle funds." In a counterclaim filed in April, West asked a judge to enforce a verbal settlement agreement he claims he reached with Allen in 2010 after leaving the company to start his own home-building business.

West repaid more than $164,000 to the companies as part of the agreement. The figure includes the repayment of a long-overdue loan from the company for West's own home, along with $55,000 the company lost on construction of a home for West's son.

Allen said he didn't realize the extent of the fraud until he began reviewing financial records and realized the company's bank statements were missing dozens of photocopies of canceled checks. He ordered up reprints from the bank, and the missing checks had been hand-written and paid either to West or Hutchinson, and in some cases were forged with Allen's signature.

West's counterclaim argues the company still owes him an unspecified sum for unused vacation time, and more than $8,000 for a bill from a supplier he had to cover personally. He also is seeking compensation from Allen for making "false defamatory statements with malice and solely for the purpose of injuring West, both professionally and privately."

"A number of persons now suspect West of having embezzled or stolen money and refuse to have any further business dealings with West," the court filing says.

Allen also accuses West of stealing committed customers of J. Greg Allen Builder by telling them Allen planned to exit the custom-home business.

Hutchinson's attorney, Matthew Solomon of Franklin, did not return a phone message.

Allen in January wrote in a letter to subcontractors and suppliers promising any funds recovered from West and Hutchinson will be used to cover unpaid obligations.

"I am personally and professionally disappointed about the situation Jeff and Kim have caused," he wrote. "They were trusted completely and have grossly violated the good faith placed in them to carry out their responsibilities honestly."

Unpaid subcontractors aren't the only ones eager for some resolution to the dispute between Allen and his former employees. The biggest concern for recent buyers is that their new-home warranties apparently are worthless.

Kyle Young, who owns a Princeton home in Bargersville, said he and other neighbors seeking fixes that should be covered under their warranties have been told they're out of luck. There's no one to respond to service requests, and subcontractors aren't much help, either, since many of them haven't been paid.

Young's house is only six months old and he figures the minor fixes would cost a few thousand dollars. He said others in the neighborhood have more serious issues, such as plumbing problems and an unfinished fireplace.

"It's just a shame they can just go operate under another name the next month," Young said.

Allen said most of the homes his companies built are past their warranty term, and he said he was not aware of any outstanding warranty claims.

J. Greg Allen Builder, founded in 1986, ranked ninth among Indianapolis-area custom home builders in IBJ's most recent Book of Lists with $5.7 million in revenue in 2009. It closed on 12 homes that year with an average sale price of $525,000.

Princeton Homes was the area's 10th largest home builder in 2009 with 30 permits filed.

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  • All read
    It's a difficult time for everyone Involved. As i have read all the comments above. I have been in the building industry for 28 years. As a builder , contractor we hold responsibility to our buyers, employees and to ourselves. We live in a society that we are afraid to let someone know we have failed, and/ or willing to place the blame on someone that works for us. All of my employees , subs , suppliers , buyers and above all , my wife of 23 years knows that if there is a problem, it is my fault. I own it. We can place all the lawsuits and documents in place and throw all the correspondence out to the attorneys though it will do no good. A person either has integrity or he does not . It Is difficult for a builder when this happens. It makes us all not trusted in our profession. To be a good builder , you must be a good business man first. For someone to say that a person had no idea that the dollars they have are not there , it doesn't work that way. Builders/ managers keep there money close and watch it daily. You either have the funds or you don't. There is no in between. I am at a loss with the warranty call backs??? They call, we take care of it . I can only say that there are good builders out there that you can have your dream home built with and they don't have to wear a suit and tie.... Blessings to all
  • Owner of Co is Responsible
    Ultimately, the owner of the company is responsible for paying their creditors, vendors, etc. and NOT past employees. Mr Allen should step up to the plate and cover his companies debts. Its sad that these two people stole from him, but life goes on and if Mr Allen wants to continue to have the respect of his piers, then he'd better ante up. After all, with his 'average home price of $525K', surely he can afford it. Come on Grego, how about it?
  • Really
    In response to your comment. It's easy for you to make your comment as you are not the one having issues. I have letter and emails on behalf of Princeton, all of which was just a smoke screen to ignore the homeowners that bought his homes. You say that he wasn't out in the field, really? We know that we are not idiots. We are hard working people who have put our hard earned money to purchase our homes from a so called reputable company. So put yourself in shoes, who would you hold accountable? In our case we had been trying to get our issues resolved since the beginning of the year. Oh, here is one more thing for you to read. I have personally left messages with Mr. Allen and guess what? We never received a phone call back. So again, who should we hold accountable? Oh, that's right Princeton no longer exists, but we do. You talk about how Mr. Allen trusted his people, well, we trusted him. We are the ones left to foot the bill. Princeton are the ones who, in our case defaulted on the home warranty not us. So please, unless you are sitting in our shoes you have no idea of the mess we are left with. As far as common sense goes right back you!
  • Allen
    I first started off in the home building industry and Greg and his team where someone I always looked up to as my career blossomed as a building project manager. I had the chance to personally meet Greg and he was a good person and provided a lot of people nice place to work and stable income that was above average to support their families. He was a nice man and did a lot of good for the communitty. I attended church where he did a lot and gave a lot of time. I beleive he is the easy person to pin this on and is just a victim of not having time to baby sit someone he trusted for over a decade and helped through large trials and tribulations. The man was successful and was nothing more than a large target due to the fact he was ambitious and did want to succeed. I am sure a lot of other builders on the south side of Center Grove who could not accomplish what he did just cheer but sincerley they obviously could not due what he did. For this he is crucified. Makes no sense. Unless greg was actually out in the feild building your home, common sense would tell you he was working on ways to carry his company so the people who took advantage of him could find new ways to prosper from dishonest actions. I hope a little common sense is applied to this when people read this.
    • Practice what you preach
      So here are Mr. Allen's words from the article above. Let's take out the name of "Jeff and Kim" and replace it with "Mr Allen". Change a few other words like, THEY to HE, I to WE, WERE to WAS, THEM to HIM, and THEIR to HIS. SURPRISE, SURPRISE! Really Mr. Allen, how do you sleep at night?

      "WE are personally and professionally disappointed about the situation MR ALLEN have caused," he wrote. "HE WAS trusted completely and have grossly violated the good faith placed in HIM to carry out HIS responsibilities honestly."

      I choke every time I read his article.
    • listen up
      We need to talk to our goverment about protection of the victims here. Legislation must protect these homeowners, Greg is the only one protected here, scott free. Spread the word we can warn future victims....hurt his livelyhood.
    • princeton
      Princeton homes were just thrown together by unskilled laborers.
    • Step on the little guy
      I work for one of the companies Greg Allen owes money to, and the impact on my ability to make a living has been severely impacted by the wrong doings of one person. Kim. The responsibility ultimately lies with Mr. Allen himself however. But as a business man, he has taken the low road, and saddled the majority of the burden on these homeowners, suppliers, and contractors. He knows he will never recover this money. But has passed the buck to the little guy. While your sitting in your luxurious office Mr. Allen...your hurting the people that got you where you are. American families. Don't forget where you came from...with this economy you might end up back where you started...but without any ones respect.
    • Short memory
      Greg either has a short memory or is a straight-up liar. My spoke with him personally a month ago at which time he told her to send him all of our warranty issues and that he would work to resolve them. I sent him the email and heard nothing! We moved in October of 2010 and have had warranty issues since day one! We have concrete that is cracked and offset by 2", front porch posts that the trim is cracked and separated, warped cabinet doors, UPGRADED carpet that looks 10 years old, carpet padding that is separated at every seam leaving a 4-5" gap. These are just the highlights! All of these were sent to the warranty department as required by our warranty agreement!!! We worked too hard and paid too much money for the home that we wanted to be saddled with these issues! We did everything right, we paid for our home! It's time for Greg Allen to make this right with ALL of us who trusted him to build NEW homes for our families.
    • We're in the same boat
      Your not alone. We have outstanding complaints with Princeton as well. For them to state that they are unaware is ridiculous! We have also filed complaints with the BBB and of course have had no response. Don't really know what to do at this point. We have been in our house 18 months but reported a major problem after only living here a few weeks and it never got resolved. The hardest part was getting anyone to even return our calls! I honestly don't care about embezzelment problems for Mr. Allen because in my point of view he has done the same thing to us by sticking us with a house with major problems!!! What goes around comes around!
    • Unfair
      It's clear that Mr. Allen is a man of questionable integrity and it is downright tragic that he would try to destroy West's reputation on his way down. His allegations are manufacturered and represent just one of many lawsuits he is involved in. It is a shame that he is not accepting personal responsibility for his own misteps as a business owner and a bigger shame that homeowners are left to pay the price. This gossip piece from the IBJ does not represent the other side of the story and only tells of the allegations of a desperate man.
    • Hmmmmm2
      I totally agree with Jay's comment and the comment of Mr. Young's comment in the article. We have been trying for almost 5 months to have our home looked at by Princeton homes only to receive a letter dated June 9th 2011 stating similar events that are in the article. We took our complaint to the BBB and the Attorney General department to which Princeton just prolonged their responses. Now we know why. We gave them every opportunity to come to our home and look, fix or even give us an explanation to our issues. We even asked them (one of their employees) if they were having financial difficulties. The answer to that was that they were just "DOWN sizing". Mr Allen should be ashamed of himself. He felt it was OK to take buyers money and then ignore the complaints of "we" the homeowners. I could go on and on with the way I/we feel about the Princeton Group and Mr. Allen it would take too long. We have been unfairly treated and only wanted what we were entitled to. We had no hidden agenda as we told Princeton in many correspondence. We also had the same response from Princeton stating they were not aware of any outstanding warranty "claims". WOW! We can say that in our case they were aware and we still didn't get our problems resolved. So now what do we do? They had no intentions of helping us and we feel they knew this from the very beginning.
      • Hmmm.....
        Why would J. Greg Allen not cover the responsibilities of his copmanies? Isn't the owner ultimatley responsible? It's not the suppliers and home owners faults that he hired bad employees. I would think he would honor debts and warranties of companies for which he is reponsible.

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