Business Coach Cited in Attorney General Lawsuit Against Contractor

A New Hampshire-based contractor faces a civil suit from the state Attorney General for allegedly operating a business “akin to a Ponzi scheme.” The complaint says this resulted in part from the company’s rapid growth, seemingly spurred by a business model that encourages “contractor fraud,” and exacerbated through financial mismanagement.

New Hampshire Attorney General John M. Formella says that Ricky Southers, owner of Southers Construction, which operates in New Hampshire, Maine, and Massachusetts, allegedly signed contracts with homeowners but misled clients and performed little to no work. In the 49-page complaint, the plaintiff outlines the significant impact of a business coaching relationship with George “Lee” Haight, who describes himself on his website as “The Blue Collar Millionaire Maker.”

The suit includes 17 different clients complaints, and seeks to ban Southers from owning or operating any construction business in the state.

Southers Construction and Lee Haight

Southers Construction, which opened in 2012, offers roofing, siding, windows, decks, and doors, according to its website.

According to the complaint, business went as usual until 2020 when Southers became involved with Haight of Roofing & Reconstruction Contractors of America (RRCA), Blue Collar American Dream Conference, and Sky Diamonds University. Southers wanted to scale the business, so he looked to Haight for assistance.

Though not unusual for contractors to seek out consulting or education, the complaint alleges that the RRCA’s strategy, an all-too-common model in the roofing industry, “works as a scheme."

The model relies on a large team of “storm chasers”—door-to-door salespeople offering roof inspections, with a focus on canvassing after hurricanes or tropical storms. President Haight refers to roof-damaging hail, rain, and wind as “sky diamonds.”

The complaint then outlines the RRCA salesperson’s promise: that the homeowner doesn’t need to pay out of pocket for the project, and insurance will cover the cost. The complaint then alleges that RRCA often claims more severe damage than the insurance provider.

The insurer will then lower the claim payout, and RRCA will file suit against them seeking to be paid in accordance with its original quote. Insurers are then faced with either litigating the claim or paying the original quote. 

“RRCA is not alone in perpetrating this scheme,” reads the complaint. “It, along with other storm chasers, have contributed to the near-collapse of Florida’s homeowner’s insurance market, resulting in skyrocketing premiums for Florida residents and a dearth of insurers willing to provide coverage to one of the most disaster-prone states in the country.”

Unsustainable Growth for a Contractor

Southers Construction grew nine times as large in just two years after joining the Sky Diamonds program, according to social postings by Haight.

Haight would feature Southers and share this success story, most notably at Haight’s Blue Collar American Dream Conference where Southers presented a talk titled, “Small Contractor to Blue Collar MILLIONAIRE,” outlining his personal journey to $18 million in revenue working with Haight. 

Southers scaled his business through the RRCA model, yet what makes the RRCA model successful for some—operating in disaster-prone areas with cheap labor and legislative loopholes—didn’t work as well for Southers, says the complaint.

To augment his growth, Southers’ hired salespeople who were “incentivized to close deals quickly and frequently,” according to the suit. “...As a result, salespersons routinely misrepresented to customers what was going on with their jobs, what their deposits had been used for, and the company’s ability to perform under their contracts.”

Southers Construction quickly found itself with an overwhelming number of contracts. And due to the lack of proper financial management, business suppliers cut the contractor off, making it impossible to complete work.

Financial Mismanagement 

Haight may have provided Southers with an untenable business model but, according to the complaint, Southers exacerbated his issues through consistent financial mismanagement and the lack of an accountant.

The complaint alleges that Southers was warned about financial mismanagement by his leadership team, but he often overspent, paying himself one-third of the company’s payroll, and using funds for “trivial” purchases including “approximately $7000 on a golf simulator.”

To Southers, the solution was to hire another coach, Eric Spofford, who cost thousands and guaranteed “insane cash flow.” RRCA allegedly supplied Southers with loans to pay off his debts. “The company opted instead to use RRCA’s funds to perpetuate its Ponzi-style scheme,” alleges the complaint.

The complaint was filed on April 18, and on April 20, Southers Construction continued to work, according to a video Southers posted to the company’s Facebook page showcasing a siding project. The company also posted several job openings on April 8 for a Sales Lead Generator and an Area Sales Manager position.