Shelton home contractor accused of fraud

Shelton contractor Stephen Ates, who operated Family Class Homes, pleaded not guilty Nov. 28 in Mason County Superior Court to charges he stole almost 1 million dollars from clients who paid him to build their dream homes.

Attorney General Bob Ferguson’s office charged Ates with nine counts of theft in the first degree and eight counts of filing a false tax return.

Ates ran his contracting business out of Tahuya from 2012 until 2021, when he declared Chapter 7 bankruptcy, according to charging documents.

Family Class Homes specialized in “building dream homes for persons wanting to live in the rural areas of Kitsap, Mason and Pierce Counties, often on a lake,” Attorney General Senior Investigator Kimberly Triplett-Kolerich wrote.

Ates charged clients a large down payment, sometimes as high as $50,000, for initial lot preparation and permits, according to the state’s investigation report.

“Those funds were to be held in trust for the specific purpose of developing the client’s lots. Ates required the clients to use his architect for the plans and use his corporate and personal bank, Timberland Bank. Ates commingled his personal finances with his business finances,” according to the report.

Investigators interviewed 11 clients who made substantial payments to Ates and saw little, if any, work and received no refunds.

Katherine Corten purchased 5 acres in Mason County and hired Ates to build her “old lady retirement home,” according to the charging document.

Corten paid $125,000 to Ates for well testing, building plans and permits.

“On June 3, 2021, Ates called and left Corten a five-second voice mail that stated he ‘was taking a break’ and would call her later that evening. Corten never heard from him again. Corten emailed and texted Ates numerous times attempting to get her money back. Corten paid a total of $125,014 to Ates, but no work was reportedly done,” Triplett-Kolerich wrote.

Bushba and Tim Moore, of Port Orchard, lost $149,000 to Ates, the most of any of his clients, according to the charging document.

The couple purchased the home below theirs “to make certain they maintained their view of the water,” according to the document.

Ates took the couple’s money, demolished the house and left a large pile of debris that cost them another $4,000 to remove, the investigation found.

Tim and Donovan Heavener “saved for years” to purchase land and have their dream home built in Lilliwaup, according to the charging document.

Their story ended like Ates’ other clients when they wired $100,000 for alleged permits and plans, Triplett-Kolerich said.

“Ates also left the Heavener’s with a lien filed on their property by Arcadia Drilling for the drilling of their well even though this was supposed to have been paid for out of their first $50,000 fee,” according to the charging documents.

Ates is accused of stealing a total of $772,987.84 from clients.

“Family Classic Homes, Inc. and its sole owner, Stephen L. Ates took monies from clients when he had no intention of building the home he was contracted to build. Ates also unlawfully kept the sales tax paid by the clients and owed to the state for himself. He falsified CETRs to conceal this theft. The total income Family Classic Homes, Inc. earned from January 1, 2019 ,to December 31, 2021, was $2,472,025.39. The amount of sales tax collected by Ates Construction, and kept for himself is $357,646.88,” according to the charging document.

Ates was released without bond. His trial date is set for Feb. 13.