Hello, Story is long, pls bare with me
We have been in construction nightmare for over 16 months.
We bought a very old home wanted to do minimal modification and move in, got bids from 3-4 contractors, choose one recommended by family, was going to sign a contract. But just in time my Realtor(I found the property to buy and she did the paper work and go us the house), whom we had know for 2 weeks, strongly recommended her construction guy. She also promised that she will manage the construction and will beat the lowest estimate by 10%.
I was tempted, but never made any commitment, my husband tried contacting this contractor and he was not returning our call, so we decided not to work with him.
We filed for permits with the county, and in weeks following, I got a call from my realtor that my house was being demo'd by her contractor (Armando Castro, who we had never met, signed a contract, or gave a go head to do this demo)and he will demolish the house and rebuild it for 150K. I asked her to stop it and mentioned that we don't know this contractor, neither do we have a contract or cost estimate and we do not have the money to do a complete rebuilt and I also like the structure as is and love the old building charm.
After the demo we became very nervous and met the contractor at the Realtor's office. He mentioned that he can do the work for much higher that 150k, we were shocked and didn't know what to do, after 6+ hours of discussion, we signed a contract (with his name and licence number on it, but later realized no way was it a CA recommended contract). we cut ties with the other contractor explaining the situation.
The permit process took ~4+ months, while this Armando Castro claimed he is ordering all the materials(hardwood, windows, doors, cabinets, marble, granite) and kept asking for money. We like FOOLS went along to few stores with him and he claimed he had a contractor's discount and we need to write the checks(100k) to him, which we did.
There were some foundation work done, but county always seemed very unhappy with his work. They would never pass inspections, Armando claimed that the county is increasing scope of work and so we need to increase bid by 50k for foundation and structural work. We naively agreed and gave him the additional. After 8 months into the project 5% of work was done and we had paid 77% of the money. That's when I woke up and started asking him questions about the stuff we have purchased and he claimed that they were at a storage, I demanded to have them put in a pod in property and them he stopped answering my calls for weeks. He threatened to stop work if we don't continue paying him and that he would file for bankruptcy and we would loose all our money.
Desperately tried to seek help from my realtor who did nothing but took 10% from my contractor and said she had nothing to do with this situation. I have 25+ emails from her claiming that she is working on my construction project, she witnessed the contract signing and emailed us a copy from her office and asked us to pay the contractor for purchase of raw materials, but once things started going south, she vanished too.
My neighbor recommended complaining to Contractor's licence board, we did this 6 months ago, they are investigating this case now. We currently have a new contractor who is finishing up the project(whom we originally picked to sign). The board had an interview with my structural engineer, new contractor, neighbor and me on what level of work was completed before our new contractor took on this work. They recommended 2 actions that they could take, one to suspend Armando's licence and another to file criminal charges on him and get him arrested for stealing our money.
MY QUESTION IS : Can I write off the 200k+ as theft loss in my tax write off?
Is there any way to recover any of my money? We have all checks/documents/pictures with dates of unfinished documents and the complaint file number. Is this sufficient?