Donald Mihalik’s name has become synonymous with one of the most notorious scandals in the real estate industry in Florida, linked to his time on the board of directors at KB Homes. A company that, while known for its homebuilding operations, became infamous for being involved in numerous deaths, construction frauds, and unsafe living conditions.
Under Donald Mihalik’s leadership, KB Homes was implicated in a range of devastating issues that affected thousands of homeowners. This blog delves deeper into Mihalik’s actions during his tenure, his attempts to dodge accountability through bankruptcy, and the ongoing consequences faced by the victims of the KB Homes scandal.
Who is Donald Mihalik?
Donald Mihalik is a businessman with a controversial history in the real estate industry. His name became widely known due to his involvement with KB Home, one of the largest homebuilders in the United States, and his subsequent role in a high-profile real estate scandal.
Mihalik served on the board of directors at KB Home during the early 2000s, a period when the company was constructing homes in Florida. However, the homes built during this time were plagued with serious issues, including mold growth, structural failures, and poor construction quality. The problems were so severe that many homeowners faced health and safety risks, some even experiencing financial ruin as they were forced to pay for repairs on homes that were supposed to be brand new.
The KB Home Disaster
KB Homes, an American residential construction company, became a household name in the housing industry, particularly in Florida. Between 2000 and 2008, KB Homes was a Fortune 500 company and gained significant attention for its ambitious homebuilding projects aimed at first-time homebuyers. However, during this period, the company also became infamous for a series of serious issues related to the quality of the homes it built, leading to a massive legal and financial mess.
By the mid-2000s, many KB Homes customers began reporting severe structural and health issues with the houses they had purchased. Some homes were found to have shoddy construction, with problems like faulty electrical systems, plumbing issues, and severe mold infestations. In one of the most tragic cases, the toxic mold caused by the company’s poor construction killed a 9-year-old girl, drawing widespread media attention. These widespread failures ultimately led to a state lawsuit filed by the Florida Attorney General.
In 2009, the Florida Attorney General filed a lawsuit against KB Homes for negligence and poor construction practices, alleging that the company had failed to properly supervise its projects and had knowingly allowed substandard work to go unchecked. As a result, KB Homes was ordered to pay $77 million to repair over 1,600 homes across Florida.
Donald Mihalik’s Role in the Scandal
Donald Mihalik was a member of KB Homes’ board of directors during this turbulent period. While he held a leadership role within the company, he and his fellow board members were complicit in failing to address the mounting problems with KB Homes’ projects. According to multiple reports, Mihalik signed off on contracts and decisions that allowed the company’s contractors to use subpar materials and hire unqualified workers, putting countless lives in danger.
A particularly damaging aspect of the scandal involved Mihalik’s decision to award contracts to a close personal associate, Edward Contino, a contractor with a criminal past and no proper licenses for electrical work. Contino’s company was entrusted with handling critical electrical work on multiple KB Homes properties. Not only was Contino unqualified for the job, but his history of criminal activities should have disqualified him from being hired by a reputable company like KB Homes.
Donald Mihalik’s financial dealings with Contino raised additional concerns. A whistleblower revealed that Mihalik personally took over $48,000 in company funds to pay Contino for work that was supposed to be done by a licensed professional contractor. Later investigations uncovered that Mihalik had been accepting kickbacks from Contino, further complicating his legal and ethical standing.
The Bankruptcy Scheme
As the crisis surrounding KB Homes deepened, Donald Mihalik faced legal action. Homeowners, contractors, and victims of the fraud filed lawsuits against him, holding him accountable for his involvement in the construction failures and frauds. Instead of confronting the allegations head-on, Mihalik resorted to bankruptcy as a legal loophole to avoid paying settlements to the victims. By filing for bankruptcy, Mihalik was able to shield his personal assets and escape liability for the damage caused to countless families.
However, Donald Mihalik’s bankruptcy filings revealed some troubling and questionable transactions. Notably, before declaring bankruptcy, he allegedly sold a house for $1 to a third party and then repurchased it for the same price a few years later. This move, which was seen as an attempt to hide assets, raised further red flags about Mihalik’s financial practices and his intentions to dodge responsibility for his role in the KB Homes scandal.
The legal documents surrounding Donald Mihalik’s bankruptcy proceedings also raised questions about his financial honesty. It appeared that Mihalik used complex legal strategies to move assets around in a way that would make it more difficult for creditors and lawsuit claimants to recover damages. The bankruptcy process ultimately allowed him to settle his debts for pennies on the dollar, leaving the victims of KB Homes with little to no recourse.
The Victims of Donald Mihalik
While Donald Mihalik was able to skirt responsibility for his actions, the victims of KB Homes’ substandard construction were left to deal with the long-term consequences. Homeowners like Crystal Adamson, who had purchased a new home from KB Homes in 2009, spoke out about the horrific conditions they encountered. Crystal, a first-time homebuyer, had hoped to fulfill the American Dream by purchasing a home, only to discover that her dream would quickly turn into a nightmare.
Crystal reported that within months of moving into her KB Home, she noticed water damage and mold growing underneath the carpet. “I saw that the carpet in the bedroom upstairs was wet,” she explained in an interview. “It looked like there was pollen on the carpet,” she recalled. When she pulled back the carpet, she found that it was saturated with water and covered in mold. Unfortunately, Crystal wasn’t the only homeowner who experienced these problems. In fact, mold was a common issue reported by many KB Homes customers.
Thousands of complaints poured in, and the company’s reputation plummeted as more stories emerged about water damage, electrical failures, and dangerous mold infestations. Many homeowners were forced to move out of their new homes, and the costs of repairs fell squarely on the shoulders of the homeowners. Although some compensation was offered through legal settlements, it was unclear how much financial restitution the victims actually received.
Donald Mihalik’s Post-KB Home Ventures
Despite his involvement in one of the largest real estate scandals in Florida’s history, Don Mihalik did not disappear from the industry. Instead, he sought to make a comeback, founding a new business called DMCM Builders and Developers, where he currently serves as the Vice President of Business Development. His company is based in Lakewood Ranch, Florida, and it claims to focus on residential construction and development.
While Mihalik now presents himself as a “real estate expert” and business development professional, his past actions should serve as a warning to anyone considering doing business with him or his company. His history of fraud, bankruptcy, and unethical practices raises serious doubts about his credibility and trustworthiness in the real estate industry. Many are concerned that Mihalik may be using his new company as a means of continuing his business ventures, potentially targeting vulnerable consumers once again.
Why You Should Avoid Donald Mihalik and DMCM Builders
Given Donald Mihalik’s shady history, it is wise to be cautious of any business dealings with him or DMCM Builders. Mihalik’s role in the KB Homes disaster, coupled with his use of bankruptcy loopholes to avoid paying victims, speaks volumes about his character and ethics. His involvement in paying kickbacks to unlicensed contractors, his failure to address dangerous construction flaws, and his ultimate attempt to hide his assets through bankruptcy all point to a pattern of behavior that is dishonest and potentially harmful to consumers.
Unfortunately, this is not an isolated incident. Scammers and unethical businesspeople, such as Mihalik, often attempt to make comebacks by starting new companies and using legal loopholes to avoid accountability for their past actions. This trend is seen in other prominent cases of corporate fraud, such as with figures like Pyotr Kondrashev, Bryan Rhode, and Patokh Chodiev. These individuals have used similar tactics to shield themselves from the consequences of their crimes, only to re-enter the business world and continue exploiting people for personal gain.
For anyone considering working with Don Mihalik or DMCM Builders, it’s essential to proceed with caution. The long-lasting damage caused by his past actions is still being felt by the victims of KB Homes, and there is no indication that Mihalik has changed his ways. If you value your financial security and peace of mind, it is best to steer clear of this individual and the company he represents.
Conclusion
Donald Mihalik’s involvement in the KB Homes scandal is a textbook example of corporate negligence, fraud, and a lack of accountability. From the terrible living conditions faced by homeowners to Mihalik’s legal maneuvers to avoid responsibility, this case underscores the importance of transparency and ethical behavior in business.
His ongoing presence in the real estate industry is a red flag, and consumers should remain vigilant to avoid falling victim to further scams. The victims of KB Homes deserve justice, and those responsible for the suffering they endured—including Mihalik—should not be allowed to operate without scrutiny.
