There are growing calls for stricter requirements for businesses to protect their customers if they go under, after a single operator left a dozen businesses in the Illawarra hundreds of thousands of dollars out of pocket.
The Mercury can now reveal that Endre Horvath has allegedly defrauded a dozen businesses while operating under multiple business names, stretching back to 2018, and was never licensed to carry out the works he promised.
A Wollongong cafe engaged Mr Horvath - then operating as Insite Commercial Interiors - to complete the fitout for their new location in 2018.
The cafe paid $66,313 to Mr Horvath, but after a series of delays the operator contacted suppliers directly, only to find out money paid to them as a deposit by Mr Horvath had been taken back.
Mr Horvath then stopped responding to calls and emails.
On top of the $66,000 paid to Mr Horvath, the cafe then had to pay for another shopfitter to complete the job at a premium at the last minute. All in all, the cafe owner estimates the cost of the job was two or three times more than their original budget.
While some businesses allegedly defrauded by Mr Horvath have pursued the matter, others have accepted they will not see a cent.
Lawyer John Karacan is representing Saltwater Kiama cafe owner Gulcin Topel and a number of other businesses pro bono that have lost money after engaging Mr Horvath. While noting there are ways that businesses can pursue Mr Horvath for compensation, he said it is likely any result will be a "hollow victory".
"Each person who has lost money will easily get a judgement against [Mr Horvath]," he said. "This judgement will last at least 10 years, so they will have some sort of document in their hand, but if this fellow has no aspects, the only thing left is to punish him through the criminal [system]."
Earlier in the week a NSW Police spokesperson said officers from Lake Illawarra were investigating at least one incident of alleged fraud. This could result in a criminal sanction, but Mr Karacan said recovering the money the businesses had lost is another matter.
"Regarding compensation, or any recovery of monies, it's not going to be likely, in my opinion."
While accepting jobs from small businesses in the Illawarra, Mr Horvath was never licensed as a building and construction practitioner.
Searches of the NSW Design and Building Practitioners Register returned no results for Endre Horvath or business names that he operated under.
The only licence or registration held by Mr Horvath is a white card, a basic pass that allows a person to access a construction site, which can be granted on the same day after a six hour online course.
Kiama MP Gareth Ward said those that had ripped off small business people such as Gulcin Topel who paid nearly $90,000 for a cafe fit out from Mr Horvath's latest venture, Allspace Design, should be ashamed.
"The people involved in this rip-off are leaches who represent the worst of humanity. They are vile and disgusting."
While any builder conducting work on a residential structure must be licensed for work valued at more than $5000, there are no requirements for small commercial projects, the kinds of jobs that Mr Horvath was engaged for.
Up until last month, NSW was the only jurisdiction in Australia that did not require builders to be licensed for this kind of work; only specialist works such as plumbing and electrical must be carried out by a licensed contractor.
This loophole allowed businesses such as Mr Horvath's to operate in an unregulated grey area, something that too few customers are aware of, as licensed builder Shannon Elliffe - whose name and image was used without his permission by Mr Horvath as Allspace's "amazing site team" - points out.
"If they're not licensed, they're a liability for you," he said.
"They can damage your home and there's nothing you can recoup from it."
Mr Ward said it was shocking that honest operators could be taken for a ride.
"I believe that more needs to be done to protect small business owners in situations like this."
A lack of awareness on the part of customers, and the willingness of some operators to exploit this, meant that contractors being hired for work there were under qualified to complete, Mr Elliffe said.
"I genuinely believe that is what's wrong with the building industry as a whole. People in the market don't understand what their rights are, and what they should be doing and due diligence," he said.
"The unlicensed ones, which it turns out are the Endre's, that are out there, doing the work without the qualifications, that becomes the problem."
Mr Ward said he would be taking the matter to Macquarie Street.
"I will be requesting a meeting with the NSW Minister for Fair Trading and Better Regulation to discuss Gulcin's experience."
While recent changes to building legislation may close this loophole, there is another, greater loophole whereby businesses can operate without much more than a slip of paper.
Allspace Design is a business - not a company - which makes Mr Horvath personally liable for any debts. Anyone in Australia can set up a business after obtaining an ABN.
Mr Karacan said as Australia does not require a certain asset threshold for businesses, a business can operate with minimal assets, without any recourse for customers if a business goes under.
"Australia's is the most hopeless way of dealing with these sorts of people on the planet."
In the case of Allspace Design, if Mr Horvath has no assets, there is no way for those businesses that have a claim against him to recover what they have lost.
"I could have nothing in my name, I could start a business, borrow heaps of money, without doing work get a lot of money in and then go insolvent and the money is nowhere to be seen," Mr Karacan said.
To rectify this, Mr Karacan said, there needs to be minimum asset thresholds for businesses, or a beefed up corporate regulator with the resources to pursue criminal penalties, even when cases are below $1 million.
In the meantime, Mr Karacan said customers engaging a business to carry out any kind of work for them should check the business's bona fides.
"Doing a background search is the only way to protect yourself."