MCLEAN, Va. (WRIC) — A Northern Virginia builder pleaded guilty Tuesday to defrauding his clients after he agreed to build them new homes, but instead simply demolished their existing homes and left them in the lurch.
Pedro Felipe Valdes, 57, was the head of ARTIFACT, LLC, a construction and contracting company, which did work both for his brother’s real estate investment company and for private clients.
But according to a statement of facts, agreed to by Valdes as part of his guilty plea, at least two of those private clients paid him over $250,000 each for homes that were never built — though the projects got far enough for their old homes to be demolished.
Another client lent Valdes $250,000 after he told them he would need the money to complete a new home for them, since ARTIFACT was undergoing “cash-flow problems.”
Court records detail how one couple paid a $113,000 deposit for a home in Falls Church. Valdes — as he did on many projects, unbeknownst to his clients — used much of that money to pay for work on other projects that had fallen behind.
Ultimately, Valdes spent $110,000 of the clients’ deposit on other projects unrelated to the home, including those he was building for his brother. Still, the clients continued paying him for the project, ultimately sending another $278,000.
Some work was done on the project — namely demolishing the couple’s old home and clearing away the rubble — but in the end Valdes spent no more than $49,000 on what was supposed to be their new home. He also, according to court documents, failed to pay the workers who poured the foundation — the last part of the home ever completed.
Valdes pleaded guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, though he is likely to serve a much shorter sentence. He will also be required to make restitution to the victims he defrauded.