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School board votes behind closed doors

By JOE SOUTHERN
news@journal-spectator.com

 

When the Wharton ISD Board of Trustees did its annual reorganization after canvassing the votes from the May 6 election, it did so behind closed doors in apparent violation of open meetings laws.

According to Sherrell Speer, who is the longest tenured member of the board and who was voted board president, the trustees voted for officers in secret at their May 15 special meeting.

Speer provided the Wharton Journal-Spectator with a copy of the minutes from the meeting – which have not been approved yet by the board – backing his claim that the votes to select the board president, vice president, and secretary were held during executive session and announced in open session.

The special meeting was held May 15 to canvass the votes, swear in the winners, and to reorganize the board. According to Speer and the minutes he provided, the board opened the meeting and then-President Curtis Evans read the election results, and the winners – Speer, Evans, and Marie Ward – were sworn in by Susie Ballejo, the secretary to the superintendent.

The board then went into a closed meeting at 6:41 p.m. for the purpose of “Personnel Matters and Duties and responsibilities of the Board” and “Personnel Matters.”

When the board reconvened at 7:19 p.m. in open session, “The Board announced Sherrell Speer as the Board President, Miguel Santes as the Vice President and Phillip Henderson Sr. as the Board Secretary.” Superintendent Michael O’Guin “introduced Mr. Tony Runnels as the new Assistant Superintendent of Secondary Schools.”

The meeting was concluded with the reading of the social contract, public comments (none were recorded in the minutes), and a budget workshop with Lisa Makenna.

Santes, who was selected vice president, said he was surprised that he was chosen, but confirmed the vote was during executive session.

“Closed session, that’s where those are done,” he said.

In an email exchange with the Journal-Spectator, O’Guin, who is on vacation, said he thought the vote was held in open session but could not say for sure and deferred to Speer for comment.

Speer said he does not believe the vote was conducted properly and is looking into it.

A review of the Texas open meeting laws on the state attorney general’s website does not show that board reorganization is a reason allowed for a board to go into executive session. The law also prohibits votes behind closed doors. Boards may deliberate certain things in secret, but any actions must be taken in open session.

Trustee Ann Witt said she does not recall if the vote was in open or closed session and said she is not well versed in open meeting law.

“Transparency is key and we don’t have it,” she said.

The Wharton Journal-Spectator is seeking comment from the Texas Press Association, and has also reached out to each trustee with no other response by press time.

Smugglers run: Human smuggling increasing on Highway 59

By JOE SOUTHERN
news@journal-spectator.com

 

Anyone who doesn’t believe there is an illegal immigration crisis at the border need only look at the rising number of interdiction stops being made on Highway 59 through Wharton County.

“It’s become a serious issue within the last couple years,” Wharton County Sheriff Shannon Srubar said. “I wouldn’t say every day, but nearly every day, as long as an officer is out there on the highway, these types of cases are coming up.”

Srubar didn’t have numbers of arrests readily available, but said they have risen sharply since he became sheriff in 2017.

“What’s interesting, when I first came into office … we had a pursuit bailout maybe once every quarter. I mean, it was it was kind of rare,” he said.

In addition to the rising number of stops and arrests are the complications that go with them. That includes manhunts for fleeing suspects, determining immigration status, making arrests, contacting the U.S. Border Patrol, and transportation of those suspected of being in the country illegally.

“So, most recently, we’re noticing some trends, that now it may not be a load of 10, or 12, or 15, it can be one or two illegal aliens in the vehicle,” Srubar said.

Invariably, whenever a vehicle is pulled over – or crashes after a pursuit – the occupants make a run for it.

“You can imagine when dealing with these traffic stops, that it’s all-hands-on-deck,” Srubar said. “And when you have people running from us, you’re gonna have investigators out there helping locate these individuals. You’ll have even administration, myself, of course, sometimes a DPS (Department of Public Safety) chopper, sometimes it may be a drone … every tool possible that’s available to help solve the issue to make sure we locate these individuals that decide to run.”

Quite often they are caught, but not always.

“What’s happening is it’s very organized in that there’s communication when these people run from us,” Srubar said. “I would say within a few hours they’re being picked up by a second or third car coming down the road to continue their journey.”

 

Cartels

Srubar said the human smuggling is being conducted by cartels, which have become more sophisticated in their operation and cooperation.

“They’re very organized,” Srubar said. “I was hearing stories, and this was probably a year ago, cartels were actually putting armbands on the immigrants to know which cartel they owed when they got to Houston… It’s unbelievable the amount of organization that’s going on with this with this issue.”

 

Heading for Houston

Nearly every local case involves smugglers northbound on Highway 59 heading from the Mexican border to Houston.

Interdiction Sgt. Alex Rivera said a typical stop begins when he or another officer notices certain driving patterns or a traffic violation.

“Usually we conduct the interview with the driver,” Rivera said. “After that we check for travel itinerary. And then we make contact with the passengers. And usually when we make contact with passengers, we find they’ve entered the U.S. illegally. You notice scratches in their arms and face, dirty clothing. You can smell – it’s like they haven’t bathed in days, months. You know, so you see all these trends and that’s when we contact Border Patrol so they interview them at the time.”

Srubar said that a lot of times the stories of the driver and the passenger don’t match.

“When you start interviewing those people individually, sometimes the driver won’t even know the other individuals’ names, where they’re from,” he said. “I mean, anytime you would basically have somebody in your vehicle you’re gonna know those things. You’re gonna know what the person’s name is, you’re gonna know where they’re from, whether it’s your cousin, whether it’s your friend. When you’re interviewing these guys, they don’t even know each other.”

“So basically you’re asking, ‘who’s with you today?’ ‘That’s my cousin.’ ‘Cousin who?’ ‘Cousin Mike.’ ‘What’s Mike’s last name?’ ‘Well, I don’t know.’ Just small stuff like that,” Rivera added.

 

Get the driver

Srubar said when a stop is made, the focus is on the driver, the one doing the smuggling. The driver will be processed into the Wharton County Jail and go through the normal procedures in a criminal case. The Border Patrol will be alerted about each person caught who was being smuggled. The Border Patrol determines which ones it will take.

“Border Patrol takes the immigrants and processes them on their end,” said Chief Deputy Jason Mican.

So far, the Border Patrol has taken all of them.

“They’ve taken every one of them that we’ve contacted them on,” Mican said. “Sometimes we have to drive a distance to get them to them.”

 

Financial impact

Srubar said that is where his department feels it in the wallet. On top of the cost of housing inmates, higher fuel costs make transporting immigrants expensive.

“It used to be the Border Patrol would come to Wharton County and pick those individuals up,” Srubar said. “And due to them being as busy as they are … They can’t come to Wharton County anymore. So we’re now driving individuals. Sometimes we go all the way to Victoria, even most recently, sometimes going all the way to Corpus Christi. When Border Patrol wants to take custody these individuals I’ll be the first to tell you, we’re going to work with our federal partners. We’re going to work hand-in-hand to keep our community safe.”

Wharton Police Chief Terry Lynch agreed.

“Every department along the major traffic corridors have been affected by human trafficking,” Lynch said. “Traffic interactions and investigations have and will cause a strain on our department resources, but the alternative of not doing so is unthinkable. Our duty is to protect the victims and our communities.”

 

Grants

“At the sheriff’s office we have increased staffing out on the highways, but that’s due to grant funds,” Mican said.

Srubar said his department has received state and federal grants to help pay for additional resources, but fuel is not one of them. To help with fuel expenses, Srubar recently appeared before the Wharton County Commissioners Court to seek an increase in his budget to accommodate the expense.

The grants received are from Operation Lone Star, which is state funded, and Operation Stonegarden, which is federally funded.

 

Prosecution

Srubar said when an alleged smuggler is arrested, the case is turned over to the district attorney’s office.

“It’s up to the district attorney’s office to prosecute or not,” he said.

Assistant District Attorney Mark Racer said so far none of the alleged smugglers has made it to trial.

“I don’t think we’ve had a trial on a smuggling case yet,” he said. “The majority of them do plead. We have had a few that the federal government picked up out of the Southern District of Texas.”

Racer said human smuggling is a third-degree felony.

“We have filed 20 felony smuggling cases since February of this year … The majority of cases that I see involve at least three to four illegal aliens being smuggled here,” he said.

Racer said some cases could get bumped up to a higher degree felony depending on circumstances.

“It depends on what their criminal history is,” he said. “So you know, every case is different. If they’ve been in prison before, then we’re looking at two years to 10 years. If they’ve not been in trouble before, you know, they might likely get probation for it.”

 

Drugs

Srubar said the big issue with the cartels used to be drug smuggling. While that is still going on, smuggling humans has become much more lucrative.

“The cartels are making millions off everything,” he said.

 

Border crisis

Srubar and his officers are no strangers to the crisis on the border. They’ve seen it first-hand.

“We’ve recently sent these guys down for training down on the border,” Mican said. “They attended a smuggling course, which deals with different forms of smuggling, human smuggling, smuggling narcotics and so forth. The whole interdiction team went down there and trained on the border.”

“I went to McAllen several times,” Srubar said. “But one of the most interesting places that I’ve gone that really stands out in my opinion … is Brooks County. It’s a very small county in population and it’s mostly farmland, ranchland.”

Those fields, however, have been producing dead bodies as the crisis deepens.

“I want to say it was like 120 bodies they located in one year last year on ranches,” Srubar said.

He said there is a checkpoint just south of the county seat of Falfurrias. The smugglers will let their passengers out a couple miles before the checkpoint and have them walk around and be picked up a couple miles past it. Not all of them make it.

“What’s happening is with the heat, with snakebite, with cold in the winter, whatever, they’re having to endure,” Srubar said. “Some have no shoes, some have barely any clothes on. I mean, these people are dying, trying to make their trek around this this border station.”

 

Human trafficking

Not everyone being smuggled into the country is doing so of their own volition.

“Another thing that we have run into is trafficking cases as well,” Mican said. “It’s different than smuggling. Trafficking is where the individual is going to be used for slave labor, prostitution, and so forth. And in a couple of their recent cases, it was obvious that had they not stopped these individuals and taken them into custody and turned them over to Border Patrol, these individuals were going to be trafficked … It’s pretty obvious that they we’re going to be used for prostitution. So that kind of saved them by turning them over the Border Patrol, because it was evident that they were they were going to be used for trafficking.”

 

Cooperation

Srubar said it takes a team of law enforcement agencies to tackle the problem.

“I really appreciate the work with DPS, the troopers that are stationed here, and our guys that communicate, even with the PDs (police departments), the communication and working together is unbelievably good,” he said. “I’ve heard nightmare stories where maybe sometimes some jurisdictions don’t work together, maybe don’t want to share info or whatever. But I will tell you, we are fortunate here because the DPS guys, the PDs, they work together, and ultimately, when things like this happen, they all come together to try to help.

“I mean to call DPS chopper out and it be here within 20 minutes. I mean, that’s unbelievable. That’s remarkable. So the relationships that these guys have been able to establish, I’m extremely proud. It’s been on them. It ain’t me, it’s them doing it. They’ve established those relationships, and it’s important. We can’t do it ourselves. We got to work together, there’s not enough of us.”

 

Homebuilder files bankruptcy

By JOE SOUTHERN
news@journal-spectator.com

 

The East Bernard-based homebuilder who suddenly closed his business and left several homeowners with incomplete homes and liens from subcontractors has field chapter 7 bankruptcy.

In the second of three creditor hearings held by teleconference in the last two months, David Pfuntner, owner/operator of Pfuntner Custom Homes, said he regrets the harm his company’s failure caused his clients, suppliers, and contractors, but claims he didn’t have a choice.

“Okay, and so you do understand that you left all of these homeowners high and dry with uncompleted homes and owing suppliers significant amounts of money?” one of his creditors asked him.

“I do understand that, yes. And I feel horrible about it,” he said.

The hearing was conducted Oct. 19 by bankruptcy trustee Ronald J. Sommers. Throughout the more than 90-minute hearing, Pfuntner reiterated that he fought hard to keep his company afloat but floundered under massive debt and rapidly rising costs.

“I truly believed all the way to the end that I was gonna get out of it,” Pfuntner said. “I mean, I ran my company successfully for six and a half, seven years. I thought, ‘hey, I’m gonna get out of it,’ and it just didn’t work.”

Sommers began the hearing by having Pfuntner verify debts he owes to merchant cash advance loan lenders Global Merchant Cash, CFG Merchant Solutions, Pearl Finance, ByzFunder, and Cobalt Finance totaling over $590,000.

The loans were taken out in December 2021 and in April, May, and June of this year. Pfuntner said the lenders charged about 35% of the loan and took withdrawals from his account daily.

Among the people that Pfuntner listed as creditors were his brother, father, father-in-law, and himself. He said he loaned the company about $15,000, even though his personal and business credit cards were comingled. He said he often used his personal card to buy things for the company and the company card to buy personal things, making reimbursements later. Sometimes he would dine out or make special purchases on the company card, listing them as “bonuses.”

One of the big questions several of his creditors had was when did he know he was going under, as he took payments from clients in the weeks and days before issuing his July 25 letter announcing his closing. He said he did not realize he was in financial trouble until March of this year and even then felt he could recover until a day or two before he sent his letter.

“Once I sent that text, I did not take any more money after that point … I was not going to take money knowing that I’m going to shut down, that doesn’t make any sense,” he said.

Pfuntner openly admitted that he took money clients paid for specific projects and used it to pay whatever bills were most pressing rather than apply it toward its intended purpose.

“Like I’ve stated before, multiple times, I’m just trying to keep the doors open. I thought it would only take me a couple more projects, and I could get out of this. So yes, it was used for other things, unfortunately,” he said.

An attorney for one of Pfuntner’s customers asked what happened to the money paid for cabinets.

“Did the cabinets actually get installed? … Do you know what happened to the money that the (client) is paying for the cabinet?” the attorney asked.

“I mean, unfortunately, I got eaten up with, you know, the bills, trying to keep the doors open,” Pfuntner said.

He was questioned about payments he made, vehicles he purchased, a vacation he pre-paid but has not taken, and other financial transactions. Pfuntner explained that his company had one bank account, so everything came in and went out of one account.

Pfuntner was asked if he was going to file for personal bankruptcy, and he said he was.

“Are you going to be using any of the company’s funds for your personal bankruptcy to pay for yours?” he was asked.

“No, there’s nothing left,” he said.

According to the docket with the Texas Southern Bankruptcy Court, the creditors hearing continued on Nov. 4 and is scheduled to continue on Nov. 16. The case is before Judge Christopher M. Lopez and attorney Kenneth A. Keeling represents Pfuntner.

For some of the homeowners who have incomplete work, the bankruptcy is of little solace.

“I have not been able to move forward with my home,” Stephanie Kyles said in an email. “We have had to request several exceptions from the bank primarily because of how much more money it’s going to take to finish the home compared to our current financial standards. We have invested close to $100k of our personal funds which has drained our liquid reserves.

“PCH (Pfuntner Custom Homes) also placed a lien on our home so we cannot move forward until that is resolved through the bankruptcy courts,” she said.

She said she has filed a complaint with the attorney general’s office and that it is under investigation.

“I have filed a police report with Fort Bend County,” she said. “It’s currently still under investigation.” 

Amy Kulcak said she was surprised to see how poorly the company was managed.

“Honestly, I’ve never seen a man run a business so bad as David has,” she said. “He and (his wife) Tori used a lot of company funds to pay for personal things.”

 

Homebuilder closes doors, leaves unfinished projects

By JOE SOUTHERN
news@journal-spectator.com

Nearly two dozen families in a six-county area have been left with incomplete homes, unexpected liens, stacks of bills, and shattered dreams after an East Bernard homebuilder abruptly closed his business last month.

David Pfuntner of Pfuntner Custom Homes sent a letter on July 25 to customers, subcontractors, creditors, and others announcing the closure, leaving each of them in a lurch.

“The management of Pfuntner Custom Homes, LLC (“Company”) has determined the Company can no longer financially sustain ongoing business operations. Accordingly, the Company has determined to cease business operations as of this date,” he letter says.

Pfuntner has reportedly put his own homes in East Bernard and Conroe up for sale and left town.

Steve Kyles of Rosenberg, one of those affected by the closure, said he approved escrow draw requests and Pfuntner Custom Homes received money for certain materials, but he later learned that Pfuntner did not pay many of the material suppliers after receiving the money. Now, some of those suppliers have sent notices saying liens have or will be filed against his home.

In a Zoom call with several impacted property owners, variations of the same story played repeatedly – unfinished homes, unpaid subcontractors, property liens, etc. People affected by the closure are in Wharton, Fort Bend, Austin, Brazoria, Colorado, and Fayette counties. Unaccounted funds reach well past $1 million.

“We signed a contract with them on July 14. July 15 was the last time we have spoken with them,” said Matthew Dye, who, with his wife Kristin sold their home so they could build in Colorado County. Some work was done July 18-19, but then the project was abandoned on their home. They reported it to the sheriff’s office.

“Right now we’re trying to find a different builder,” Dye said.

Wesley and Tina Sumner signed a $300,000 contract and put $41,000 down for a barndominium they wanted built in East Bernard. They said three draws have been made on the escrow account totaling $67,000 and all they have to show for it is a concrete slab. They also paid Pfuntner $7,000 cash for appliance upgrades. 

“We’re living in a camper on the property, three of us, two dogs and a cat,” Tina Sumner said.

Amy and Chris Kulcak of East Bernard contracted with Pfuntner Custom Homes for some remodeling work that remains unfinished.

“Pfuntner Homes left many of us homeowners high and dry. We didn’t see it coming,” Amy Kulcak said.

Katlyn Rodriguez was more fortunate than her peers in that her home was mostly finished. She closed on it, but then the problems started.

“I started getting bills from subcontractors,” she said.

Rodriguez claims Pfuntner never paid the subcontractors. To date she has been billed $40,000, “and they’re still coming in.”

“He didn’t finish the punch list (small repairs and cosmetic fixes) and we’ve lost the warranty,” she said.

Megan McClay contracted with Pfuntner Custom Homes to build a modest house in Needville. She said he asked for $2,500 upfront “in good faith” to start the project.

“He took $2,500 and never used it for anything,” McClay said.

What she does have is architectural designs for her home and an unpaid bill for that.

Hector and Jessica Medrano of Houston were having a home built in Angleton.

“The house is 80% complete,” Hector Medrano said.

In addition to $540,000 for their home, they added $70,000 each for a pool and a barn. The barn was never started and the pool, which went up in cost to $88,450, is just a hole in the ground with rusty rebar in it.

“I kept pestering him to pay the pool guy … but he never paid,” Hector Medrano said.

The disappointment and frustration weigh heavy on the homeowners.

“That was supposed to be our forever home,” Jessica Medrano said. “It was supposed to be done by September.”

The Medranos, like many others, went to seek help from law enforcement in their proper jurisdictions. The Medranos were told it was a civil matter and were sent back and forth between the sheriff’s office and district attorney.

In Wharton County, a case was opened with the sheriff’s office.

“I can only comment to that we are investigating,” Sheriff Shannon Srubar said in an email.

Many of the property owners have hired a lawyer or are in the process of doing so.

Among them are the Kyles family in Rosenberg. According to legal action filed by the Kyles, they paid Pfuntner more than 90% of the agreed upon contract price, but Pfuntner left their home less than 50% complete. To add insult to injury, Pfuntner filed a lien against the Kyles’ home, then sued them, claiming even more money was due.

“It was supposed to be a remodel and it ended up being a reconstruction,” Steve Kyles said.

He said Pfuntner tore down so much more of the home than he was supposed to that it became a rebuild and drove the cost up over the contracted price of $650,000.

In their response to Pfuntner’s lawsuit, the Kyles have countersued the company, and have sued both of its owners, David and Victoria Pfuntner. The allegations in their countersuit include breach of contract, fraud, and the allegation that the Pfuntners took money paid by the Kyles but failed to pay that money to the companies which supplied labor and materials for the construction of the home.

The Pfuntners

Multiple attempts to contact Pfuntner and his wife and business partner Victoria “Tori” Pfuntner have been unsuccessful. Their phone numbers have been disconnected, emails have been unanswered, their website and social media pages have been taken down, and emails to an attorney and another business partner have been unanswered as of press time.

In his letter to his creditors, David Pfuntner expressed regret.

“We sincerely regret the effect this cessation will have on the Company’s customers, vendors, suppliers and other creditors,” he wrote.

In the letter he says, “We have engaged legal counsel in relation to the path forward. Unfortunately, it appears that liquidation of the Company will likely be necessary.”

That liquidation is reportedly a Chapter 7 bankruptcy filing, which has not happened as of press time.

A website for BSR Properties Holdings, LLC had a page about Pfuntner Custom Homes. (It has since been removed. They ended their relationship with Pfuntner in May.)

It said the Pfuntners “have actively been in the industry for over 15 years and have built over 40 homes in East Bernard alone. Since its inception, the company has grown tremendously and continues to exceed the expectations of clients. Pfuntner Custom Homes was built on the notion that quality craftsmanship and superior customer care is what sets you apart.”

It sayid that David’s brother Jeremy Pfuntner is the lead project manager and that their father, Dennis Pfuntner, works with them.

“The couple has strong family roots in the East Bernard area and enjoy spending time with their loved ones. Pfuntner Custom Homes does not consider this a job, but more so a way of life,” the website said.

Pfuntner, 32, was born in Bryan. He played baseball at Houston Baptist University where he earned a bachelor’s degree in kinesiology and exercise science. Pfuntner Custom Homes was incorporated in 2017.

A history and legal troubles

Initially, each person involved thought they were alone, but as word got out on social media a loose coalition of alleged victims formed. In addition to the lawsuits filed by the homeowners who contracted with Pfuntner Custom Homes, a search of lawsuit records found that Pfuntner Custom Homes and its owners have been sued by several lenders from the East Coast. According to those records, New York based lender ByzFunder issued a summons notice of default seeking a judgment of $240,355. On May 18 Pearl Delta Funding filed for a judgment of $312,057. Two days later Global Merchant Credit filed for $43,838.40. On July 27, Colbalt Funding filed a summons and complaint seeking $147,075.

At it again?

Also included in records kept by the families and verified online are indications that the Pfuntners may have had plans for new business ventures prior to closing Pfuntner Custom Homes. On Jan. 1, 2022, the couple formed a new company, Pfuntner Properties, LLC with a registered address of 9900 Spectrum Drive, Austin. Thirty days later they went on a ski trip to Angel Fire Resort in New Mexico. On June 6, David Pfuntner and Siddharth Bahl formed S&D New Age Builders, LLC based out of Houston.

The involved homeowners are concerned that the same things that happened to them could potentially happen to other unsuspecting clients unless something is done. Steve Kyles said David Pfuntner is outgoing and can be very persuasive.

“He just kept saying ‘trust me,’” he said.