With a typical San Diego house costing around $1 million, tiny homes in backyards have become a solution to the affordable housing crisis.
Sometimes called granny flats, their official name is accessory dwelling units or ADUs.
California lawmakers in 2020 passed a law to encourage the creation of these affordable, small homes.
That same year the company Multitaskr was formed in Chula Vista, and it promoted itself as a “one-stop-shop for ADU solutions.”
MULTITASKR CEO OWES $60K IRS BILL
Its chief executive was Joe Frausto, an entrepreneur who for several years prior racked up a $60,000 bill with the IRS for unpaid taxes, IRS records obtained by Team 10 show.
Multitaskr in fall 2024 abruptly shut its doors after taking at least $15 million -- and possibly tens of millions more -- from more than 100 customers.
They say they paid for a tiny home that in nearly all cases was never completed, a Team 10 investigation found.
Those customers included the elderly, immigrants, servicemen, and those in the LBGTQ+ community.
In court records, Multitaskr and Frausto denied allegations of wrongdoing and blamed unnamed third parties.
COMPLAINTS WITH FBI, ATTORNEY GENERAL
One of the customers was San Diego State University Professor Victoria Krivogorsky, who withdrew $100,000 from her retirement savings to help pay for a duplex she says Multitaskr never built.
“Right now, I don’t know what I’m going to do. See, I ruined what I had. I didn’t have much, but even what I had, I don’t have anymore,” said Krivogorsky, who has two doctoral degrees and was a Fulbright Scholar. “It is very embarrassing that with all my education when it comes to judging people, I failed.”
She’s not alone.
A rash of complaints were filed against Multitaskr in October with the California Department of Consumer Affairs for not finishing the jobs and taking more money for work that wasn’t completed.
That resulted in the state suspending the company’s contractor’s license that month and “investigations are ongoing and any legal action will be noted if filed,” said Katherine White, the agency’s spokeswoman.
Customers also have filed complaints with the FBI, California Attorney General, and San Diego County District Attorney, Team 10 has learned.
Those law enforcement agencies say they could not confirm or comment on the existence of an investigation into Multitaskr.
However, the attorney general’s office encouraged individuals to file complaints with that agency, and the FBI told Team 10 it was aware of allegations against Multitaskr.
In a court filing, the company and Frausto, the CEO, denied any wrongdoing.
Team 10’s efforts to contact the company and Frausto through his cell phone, a registered letter and by knocking on his door at his Chula Vista home were unsuccessful.
Calls and emails to six former high-level employees also were not returned.
HOW IT WORKED
Multitaskr promised customers 100 percent financing, and it had a group of lenders to make the personal loans.
Several customers told Team 10 there were no payments for a year while Multitaskr was supposed to build their ADUs.
“Multitaskr really put on a great presentation,” said James Diefenbach, a lawyer representing 87 people who allege they lost millions. “They had all kinds of charts and graphics on how much money you could generate and balancing that out against the loan and made it seem like this was a good investment.”
Diefenbach added “they looked the part” with a large office and numerous employees.
Katherine Peoples, who runs a non-profit organization that is helping Multitaskr customers for free, is stunned as to why the company just didn’t finish the jobs.
“I was intrigued with the sophistication with Multitaskr. Multitaskr’s website of all the ADU companies out there had to be the best website,” she said.
Peoples added that Multitaskr, which has taken down its website, had “figured out the financing issue” with ADUs, which she said was the biggest challenge.
“It seemed like their process was perfect. It was spot on. I asked the same question: Why did they just not build the ADUs? They had everything,” she said.
‘IT’S REALLY, REALLY GOOD’
Multitaskr’s chief executive was Frausto, who also goes by Jose.
The handsome entrepreneur also was fluent in Spanish, which appealed to Hispanic buyers, those involved with Multitaskr told Team 10.
He also was charismatic on camera and made several online videos in English and Spanish.
In one roughly 48-minute video from about three years ago that can be seen on YouTube, he talks about his business background, helping customers, and how building ADUs would be money-makers for his clients.
“Right now, one of the biggest hot buttons is the ADUs,” he says. “The return on investment on it. What’s the cost and how much you can lease them for, it’s really, really good.”
Multitaskr also had savvy salespeople in their corporate office in an upscale Chula Vista business park.
What could go wrong?
MILLIONS IN LOSSES
Plenty, according to more than 100 people who claim in 10 separate civil lawsuits that Multitaskr failed to build or complete their tiny homes.
The civil lawsuits allege the company and 10 separate lenders engaged in numerous unfair business practices including fraud, conspiracy, negligence, intentional misrepresentation, and elder abuse.
No one so far has been charged with a crime.
The lawsuits claim Multitaskr most often took money from personal loans disbursed to them from the lenders or upfront cash payments from the buyers.
But, the company didn’t complete the ADUs.
Total losses: At least $15 million, according to civil lawsuits filed in federal and San Diego County Superior courts.
However, that figure could hit $48 million when dozens more individuals not in the lawsuits are included, according to HPP CARES, a non-profit organization assisting those who lost money with Multitaskr.
Some lenders have canceled a few of the loans after being sued and complaints were filed with law enforcement, according to Diefenbach and Peoples.
OTHERS BLAMED FOR DAMAGES
Multitaskr and Frausto have denied the allegations in court records.
They blame unnamed third parties if there were damages. And in one case, they ask the lawsuit to be dismissed.
A person who answered Frausto’s cell phone said he was not available.
A woman who answered the door at his 4,300-square-foot Chula Vista home told a reporter to leave and shut the door.
Team 10 found the IRS had placed tax liens of more than $60,000 on that home for unpaid taxes during the five prior years to the launch of Multitaskr.
Team 10 also contacted all 10 lenders involved with Multitaskr.
Eight did not respond or comment.
Solar Mosaic and Dividend said they may cancel loans they gave for Multitaskr ADUs.
They sent Team 10 statements.
Mosaic's read, in part:
“If there are conditions arising from the contractor’s completion of the home improvement project that warrant consideration for cancellation of the loan, we will and have processed loan cancellations for Mosaic borrowers.”
Dividend said:
"We have been assisting customers impacted by Multitaskr and are canceling loans where we deem it appropriate. If any impacted customers have not heard from us, they can reach out to our Project Resolutions team for support, at 844-805-7100, or via email to homeowners@dividendfinance.com.
Four lenders – Solar Mosaic, Goodleap, Sunlight Financial and Dividend – came under fire in Minnesota in March 2024.
That state’s attorney general sued them for allegedly deceiving consumers into taking out loans for solar panels.
The case is ongoing.
A Goodleap spokesman said the company's loans are federally regulated and Goodleap will demonstrate compliance in court.
A Dividend spokeswoman said the Minnesota claims against the company are wrong, and Dividend will vigorously defend itself in court.
GOLD MINE FOR GOLDEN YEARS
One of the borrowers is Victoria Krivogorsky.
She came to America more than 30 years ago for a better life and to flee the mob.
She came with two children in hand and $147 in her pocket.
Her only relics from Ukraine, where she earned her first doctoral degree in economics, are two Christmas ornaments and an embroidered napkin.
She later earned a second doctoral degree in accounting after moving to the U.S.
The professor said she never made much money despite her academic success.
So her retirement plan started in her booming front yard with a robust orchard in La Mesa.
“Back in October 2022, I was introduced to the construction company, Multitaskr, and I was looking for a company that would build an ADU on my property,” she said “I do need to substitute my income when I retire.”
Her big plans were to build a duplex to give her extra income from renters.
And the company seemed willing to help.
She said Multitaskr got her construction loans from several lenders.
FOUR EXPENSIVE PURPLE FLAGS
At first, she wasn’t too concerned even though several trees from her beloved orchard were cleared.
Multitaskr planted small purple flags in the ground, marking the duplex’s four corners.
But that was the only work she ever would see.
With the proposed duplex costing more than $300,000, she wryly notes that “one flag would cost about more than $80,000.”
After 12 months, she had to start paying on the loans – even though the ADU never was built.
“I realized in February of ‘24 that I’m just about to start paying $3,000 a month, and I knew that I cannot afford it. I’m not a rich person,” she said. “I decided to take money from my retirement account, and I took $100,000 and I paid the loan.”
That took care of one loan.
She said another lender canceled its loan.
Now, she’s paying $1,000 a month for a third loan.
“Right now, I don’t know what I’m going to do. See, I ruined what I had. I didn’t have much, but even what I had, I don’t have anymore,” she said. “It is very embarrassing that with all my education when it comes to judging people, I failed.
‘LEARN FROM OUR MISTAKE’
Others say they too made a mistake in trusting Multitaskr.
Stephanie Bongiorno and Betsy Leary hired the company in June 2023 to build their retirement home in Bonita.
They gave the company nearly $80,000 upfront for an ADU to be built on their son and daughter-in-law’s side yard.
They came from the East Coast to spend more time with their granddaughter.
But that home remains a dream, as they have lived more than a year in the guest room.
“It’s a hard journey. It’s been a very difficult lesson to learn,” Leary said.
The couple said they can’t afford a lawyer to join the lawsuits against Multitaskr.
HAVING NUMBERS
Team 10 found a non-profit organization that is helping people like the couple.
That organization is HPP Cares, based in Long Beach.
Katherine Peoples is founder of the organization devoted to helping people with housing issues, which includes getting ADU grant money from the state.
She said HPP Cares got involved after Multitaskr didn’t build homes for two of its clients with grants.
Her organization now is helping people file complaints with regulators and law enforcement and trying to get loans forgiven.
“You have to have numbers in scenarios like this,” she said. “If people file and file their complaints then it begins to raise lights and red flags.”
HOW TO BUILD AN ADU
She added that people who want to build an ADU should work with non-profit groups like hers.
That’s because services such as a feasibility study are free.
She also advises ADU buyers to first visit their local city hall and meet with the building and safety department.
Next, go to a local credit union, which Peoples says typically offers the lowest interest rates for loans and avoid multiple loans from numerous lenders.
Then use a managed escrow company that will make sure a tiny home gets built and completed before disbursing money to the builder, she added.
That didn’t happen with Multitaskr.
“That was the biggest problem. It went directly into the business account,” she said. “And then went, wherever it went.”
