CONSUMER PROTECTION DIVISION ISSUES CEASE AND DESIST ORDER AGAINST EASTERN SHORE HOME BUILDER

Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has issued a cease and desist order against a home builder that has filed for bankruptcy, leaving many customers' custom homes on the Eastern Shore uncompleted. Nanticoke Homes, Inc., of Greenwood, Delaware, and its principals, John H. Mervine, Sr., John H. Mervine, Jr., Peggy Mervine, William H. Mervine and Gregory Mervine, were charged with violating Maryland's Consumer Protection Act and Custom Home Protection Act.

An immediate cease and desist order has been issued requiring Nanticoke Homes to post a bond to cover any future deposits or payments it receives from consumers for building homes in Maryland, and to disclose information to the Division. At a hearing scheduled before the Office of Administrative Hearings on September 27, 2002, the Division will also seek restitution for at least 20 Maryland consumers whose homes were not built as promised, as well as civil penalties and costs.

Nanticoke Homes shut down its offices on the Eastern Shore of Maryland in January 2002, and then filed for Chapter 11 bankruptcy on March 1, 2002 in Delaware. The Division charges that the builder accepted deposits and other monies from consumers in the months before its bankruptcy filing, when it knew it was in financial difficulty and knew, or should have known, that it could not complete construction as promised. Nanticoke Homes did not protect the customers' advance payments by placing them in an escrow account or securing them through a bond or letter of credit, as required by Maryland law. The builder did not finish construction of some of the homes. Some consumers paid to have other contractors complete the construction of their homes. Other homes remain uncompleted, or were never begun. In addition, Nanticoke Homes did not pay its subcontractors, who have threatened to bring mechanics' liens proceedings against the consumers.

The public hearing on the charges will be held at the Maryland Office of Administrative Hearings, 11101 Gilroy Road, Hunt Valley, Md., on September 27, 2002. Any consumer who entered into a contract with Nanticoke Homes, Inc., on or after January 1, 2001 and whose home was not completed should contact the Consumer Protection Division's Home Builder Registration Unit at (410) 576-6573.

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