Attorney General James and State Police Acting Superintendent Bruen Announce Felony Conviction in Million-Dollar Construction Fraud Scheme

Owner of Upstate Construction Companies Convicted of Multi-Year Money
Laundering Scheme That Defrauded Homebuyers Out of More Than $1 Million

 

NEW YORK – New York Attorney General Letitia James and New York State Police Acting Superintendent Kevin P. Bruen today announced the felony conviction of Shawn M. VanVeghten (39, of Saratoga Springs) for defrauding homebuyers, business owners, a financial lender, and the beneficiary of a special needs trust, between 2016 and 2020, out of more than $1 million to finance his own personal and business expenses. VanVeghten’s fraud not only left his victims in financial distress, but left many homebuyers across upstate New York without the ability to get into their homes when promised, if ever at all. Today, before the Honorable James A. Murphy, III in Saratoga County Court, VanVeghten entered a plea of guilty to Money Laundering in the Second Degree, a class C felony, and Scheme to Defraud in the First Degree, a class E felony. VanVeghten faces up to 3 to 9 years in state prison. 

 

“Shawn VanVeghten stole and defrauded more than a million dollars from New Yorkers and left homebuyers, workers, and other victims in the lurch,” said Attorney General James. “For years, his victims scraped and saved to afford their dream homes, but VanVeghten’s crimes left them locked out. This conviction should send a clear message that my office will not hesitate to fight for New Yorkers as we protect their wallets at every turn. Those who attempt to steal and profit off the backs of New Yorkers will be held accountable. I thank the New York State Police for its continued partnership in bringing accountability and justice to such duplicitous schemes.”

“Shawn VanVeghten defrauded homebuyers and other businesses in an illegal scheme that netted him hundreds of thousands of dollars in stolen funds, which he then used for his own benefit,” said Acting Superintendent Bruen. “We will not tolerate this type of reprehensible behavior, and I commend the outstanding work of our members and our partners in the Attorney General’s Office for obtaining a measure of justice for the victims.”

Today’s conviction was the result of a joint investigation between the Office of the Attorney General’s (OAG) and the New York State Police’s (NYSP) Financial Crimes Unit, with assistance from the Saratoga County Sheriff’s Department and both the Saratoga County and Warren County District Attorneys’ Offices. The joint investigation revealed that VanVeghten engaged in a money laundering scheme aimed at promoting his businesses at the expense of homebuyers, business owners, a financial lender, and the beneficiary of a special needs trust. According to the OAG’s felony complaint, VanVeghten laundered over $1 million through two construction companies he owned or operated — VanVeghten Construction, LLC and Union Modular Homes, LLC — both based in Wilton, New York. 

VanVeghten was arraigned in Wilton Town Court in September 2020 on a series of felony and misdemeanor complaints before the Honorable Matthew Coseo. Subsequently, on December 8, 2020, VanVeghten was arraigned on the charges of Money Laundering and Scheme to Defraud, covering the time period from July 2016 through May 2020, also before the Honorable Coseo in Wilton Town Court.

As part of his guilty plea today, VanVeghten admitted that, from at least July 2016 to May 2020, he engaged in a scheme to defraud homebuyers and others and laundered monies embezzled from these victims. During this time period, VanVeghten received monies from homebuyers that were intended to build their dream homes, as well as from a lender in connection with other property development projects.

However, instead of using these funds for designated projects, VanVeghten diverted the monies for personal use, as well as to pay off business expenses. VanVeghten also engaged subcontractors and suppliers for labor and materials for various construction projects, while failing to pay them. Additionally, over a three-year period, VanVeghten misappropriated almost $200,000 from a special needs trust established for the benefit of a disabled family member. VanVeghten used these stolen monies to replenish more than $1 million in funds that he had previously misappropriated from homebuyers in order to satisfy his outstanding business debts, to repay loans, and to pay his own personal expenses. In total, VanVeghen diverted over $400,000 for his own personal use, including to purchase and renovate an investment property in Schenectady County, pay for office space in the Town of Wilton, pay down his personal mortgage, and cover various other personal expenses including dining, entertainment, and clothing.

In one instance, a homebuyer paid over $500,000 for the construction of a modular home in the Town of Adirondack, New York. Following numerous delays, in late 2018, the manufacturer finally delivered the components to the homebuyer’s property and found there was not even a sufficient foundation upon which to build. As a result, the homebuyer had to hire a subsequent contractor and still has yet to have his home built. In reality, this homebuyer’s funds were misappropriated by VanVeghten to further other projects where funds had been previously stolen. A NYSP audit of VanVeghten’s bank accounts revealed he conducted hundreds of similar transactions on a near-continuous basis, utilizing new funds received from homebuyers, a lender, and the special needs trust in a Ponzi-like scheme to replace previously embezzled funds. As a result, homebuyers were unable to get into their homes when promised, if ever at all.

On April 14, 2021, VanVeghten is scheduled to be sentenced to up to 3 to 9 years in state prison, with restitution ordered for all his victims. The final sentence the court will impose will depend on a number of factors, including, but not limited to, how much up-front restitution will be paid to victims. The OAG asks any individual who may have been defrauded by VanVeghten and who has yet to be repaid in full to contact the NYSP’s Financial Crimes Unit by emailing FCU@troopers.ny.gov.

The OAG recommends practicing the following tips to protect against becoming a victim of a home improvement scam: 

• Shop around: Get at least three estimates from reputable contractors that include specific information about the materials and services to be provided for the job.
• Get it in writing: Insist on a written contract that includes the price and description of the work needed.
• Don't pay unreasonable advance sums: Negotiate a payment schedule tied to the completion of specific stages of the job. Never pay the full price up front.
• Get references: Check with the Better Business Bureau, banks, suppliers, and neighbors. Always contact references. Residents of New York City, or Westchester, Nassau, or Suffolk Counties can check their local consumer affairs office.
• Know your rights: Consumers have three days to cancel after signing a contract for home improvements. All cancellations must be made in writing.

Any New York resident who believes they have been scammed as part of a home improvement contract, should submit a complaint to the OAG immediately with as many details as possible.

The OAG wishes to thank the Financial Crimes Unit of the NYSP for their invaluable assistance and audit work throughout this case, as well as their help in the investigation. The OAG also wishes to thank the Wilton County and Saratoga County Sheriff’s Departments for their help in this investigation.

This case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (CUFFS) Initiative, led by Director Philip V. Apruzzese, an assistant attorney general in the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was implemented by Attorney General James in an effort to assist local law enforcement and district attorneys in the investigation and prosecution of complex financial crimes and money laundering cases.

Assistant Attorneys General Apruzzese and John R. Healy are prosecuting the case, with the assistance of Legal Support Analyst Jamirah Williams-Johnson, under the supervision of Supervising Analyst Paul Strocko. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo.

The OAG investigation was conducted by Detective Samuel Scotellaro, III, under the supervision of Supervising Detective Mark Spencer and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by Chief Oliver Pu-Folkes and Deputy Chief John Reidy. Both the Criminal Enforcement and Financial Crimes Bureau and the Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado.

Homeowner complaints were received by the OAG’s Consumer Frauds and Protection Bureau, under the supervision of Bureau Chief Jane Azia and Deputy Bureau Chief Laura J. Levine. The Consumer Frauds and Protection Bureau is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo.

Both the Division for Criminal Justice and the Division for Economic Justice are overseen by First Deputy Attorney General Jennifer Levy.