Elgin firm paying price for allegations against former owner
By Dave Gathman email@example.com September 12, 2012 7:12PM
Singles Construction Company employee Jose Lira rolls out a roof patch on the roof of a local business Wednesday morning in Elgin. September 12, 2012 | Michael Smart~Sun-Times Media
Updated: October 15, 2012 9:21AM
ELGIN — “A good name and a good price for over 50 years,” says the business card for Singles Construction Co.
But after working on some of the best-known buildings in the Fox Valley since 1958, the 15 employees at what used to be known as “Singles Roofing” are struggling to clear their name. They fear customers will stop coming their way after the company’s owner — who no longer controls the firm or is involved in its day-to-day management — was charged last week with defrauding a New Jersey-based materials supplier to the tune of $1.8 million in 2009 by forging bank statements, misstating his financial condition and juggling money from one account to another.
Now controlled by a bankruptcy court receivership, Singles is being managed on a day-to-day basis by former co-owner Chuck Karmalita. The company’s official owner and president, 56-year-old Robert Durchslag of Aurora, was indicted Aug. 16 by a federal grand jury on three counts of wire fraud. He was arrested in Chicago on Aug. 29 after being on the lam for two weeks, authorities said.
“It’s pretty clear to us that Durchslag was acting on his own and that he left a lot of good people here in the lurch,” said Robert Handler, managing partner of Chicago-based Commercial Recovery Associates. That firm was appointed by a federal bankruptcy court judge on Aug. 23 to take over Singles temporarily because of Durchslag’s indictment.
“Our assignment now is to protect this company from the prior bad acts of its owner,” Handler said.
“We want people to know (Durchslag) is no longer involved in the business in any way,” said Jim Brindis, who now manages the company’s field operations.
A long history
Karmalita said Singles Roofing was founded in 1958 by a construction-industry veteran named Arnie Singles. At first operating it out of his home in the countryside east of Elgin, Singles later opened an office and materials base at 345 Willard Ave. When employees showed up for work one Saturday morning five years ago and found that headquarters covered by 6 feet of Poplar Creek floodwater, they moved to the company’s current home base along East Chicago Street.
“Arnie eventually wanted to retire and move to Wisconsin. So on Jan. 1, 1981, Irving Durchslag and I took over as co-owners,” said Karmalita, a 65-year-old Algonquin resident known in the Elgin community for decades of involvement with groups such as the Elgin Kiwanis Club.
When Irv Durchslag grew old and wanted to retire several years ago (he would die in 2008 at age 91), he handed over his half of the ownership to his son, Bob. Karmalita said he then sold his half back to the Durchslags, “because I could kind of see what could happen. I had known Bob going back to 1972, when he was just a teenager, and I had seen that he had gotten into trouble through the years.”
But Karmalita kept working at the firm, and as far as the business was concerned, all went well for years, he said.
The company roofed or reroofed such landmarks as the West Dundee Public Safety Center; the East Dundee Village Hall; the barn on West Dundee’s Haeger estate; the Bethlehem Lutheran churches in both Elgin and St. Charles; Alexander’s and Chili’s restaurants; Villa Olivia Country Cub; Congregation Kneseth Israel; Jaeger Funeral Home in Bartlett; and the Hoffer Plastics and Sparkle glass cleaner factories, plus numerous private houses.
“After Bob took over, he even began taking on jobs all over the country,” Karmalita said. “We did all the Lifetime Fitness Centers, in places like St. Louis and Colorado and North Carolina. I traveled on jobs to Michigan, Texas, Wisconsin.”
When Durchslag later assured his unpaid roofing supplier, GAF, that he had landed a $2 billion contract to do work for NASA, according to the indictment, that must have sounded somewhat believable. But the contract was a total fabrication, prosecutors say. So was a forged letter from a bank investigator Durchslag gave to GAF, claiming that someone had embezzled $17.8 million out of Durchslag’s bank account.
Karmalita said the company’s fortunes reached a zenith in 2007, the height of the housing construction boom. Singles then had 40 or 50 employees and 100 trucks. In addition to roofs, the firm started doing jobs such as window replacement and siding. It changed its name from “Singles Roofing” to “Singles Construction.”
But about four years ago, things began to turn sour. New construction froze to a halt nationwide. Karmalita believes Durchslag also was losing money on all those long-range projects around the country. It was in 2009 when, the indictment charges, Durchslag turned to illegal shenanigans to keep his supply of building materials coming without paying for it and conned GAF out of $1.8 million.
In 2010, the original corporation filed for bankruptcy. But Durchslag set up a new corporation named Singles Construction LLC, and that went on operating.
Karmalita said this post-bankruptcy corporation has had no problem getting a continuous supply of materials, and every customer’s contract has been fulfilled.
“The level of business hasn’t been affected much yet. But when our customers started reading these things in the paper, we started getting a lot of calls asking what’s going on,” Brindis said.
Out the back
Brindis said he and other employees were working with Durchslag in the office on Friday, Aug. 17, when the front door buzzer sounded. The employees answered the door and found FBI agents who said they had a warrant for Durchslag’s arrest. But going back into the building, they realized their boss had suddenly disappeared.
According to Randall Samborn, spokesman for the U.S. Attorney’s Office in Chicago, the agents believe Durchslag saw them waiting outside by looking at a video surveillance camera monitor. He figured out what was going on and high-tailed it out the back door, the agents believe.
That was the last time anyone from Singles saw Bob Durchslag. It would be almost two weeks before the FBI found evidence that he might be staying in a hotel on Chicago’s Michigan Avenue. Agents went to the hotel and arrested him without incident.
“We don’t know if Bob is guilty or not, because we don’t know everything that went on behind closed doors,” Brindis said. “But our work was never affected.”
He noted that even the fraud indictment claims only that Durchslag defrauded a company that supplied materials, not that he defrauded any customers who hired Singles.
If Durchslag is ever released from jail on bail, by court order he won’t even be allowed to enter the company offices, Karmalita said.
But that won’t happen for at least a month. When Durchslag was due in U.S. District Court last Wednesday for a “detention hearing” to determine whether his arrest was justified and to set a bail amount, he waived his right to appear there, according to Samborn. Durchslag remains in custody at the federal Metropolitan Correctional Center in Chicago, with his next court hearing set for Oct. 17.