Although the company's auctioneering license was revoked last year after it was found guilty of 24 state violations, Laws auction house--now operating with a new corporate name--is under investigation again by a Virginia regulatory board that is looking into six new complaints about the company's business practices.
Investigators from the Virginia Department of Professional and Occupational Regulation are pursuing a series of complaints alleging that Laws auction house--now operating under the corporate name of Laws Auctioneering Inc.--is continuing to have "professional conduct" problems, including writing bad checks and making untimely payments to consignors. The six cases, all filed this year, came after Laws Auction and Antiques Inc. was stripped of its license late last year for similar infractions.
Dave Dorner, an investigator for the department, said none of the recent cases has yet been presented to the Virginia Auctioneers Board, a state licensing agency that oversees auctioneers and auction houses. The board, which revoked Laws' license last year, is in the process of reviewing the cases.
A hearing on one of the complaints was scheduled for Sept. 10. But it never took place because the man who filed the complaint, David Earl Hawn, was arrested three days before the hearing on charges of extorting $1,000 from the owner of the auction house.
Laws Auctioneering, owned by Harry L. "Sonny" Laws Jr. and located on Route 28 at the edge of Prince William County, is one of the best-known auction houses in the Washington area. With the name change, the company is allowed to operate under a new license because it is an entirely new entity under state law, although it conducts the same business at the same location.
Mark Courtney, assistant director of the Professional and Occupational Regulation Department, said that Laws has been operating its business under a new corporate license since October 1998, and that the new company is exempt from any claims against the now-defunct Laws Auction and Antiques. Theoretically, businesses can change their names and reincorporate as often as they like.
By creating a new corporation, Laws effectively skirted the license revocation and put the company out of reach of any disciplinary measures relating to past practices. Dorner said a few of the new cases, which either use the old corporate name by mistake or are outright allegations against the former company, might have to be dropped.
"Our hands are tied," Dorner said. "We have to refer those complaints to the civil justice system or to the police. But any contracts entered into after that date under the new license, we would have authority."
According to state records, there have been 34 official complaints filed against Laws Auction--under more than one name--in the past nine years. Courtney said that the volume of complaints against Laws is "out of the norm" when compared with similar companies, and that Laws has gotten more complaints than any other auction house in the state since 1993.
Merle Fallon, an attorney who represents the auction house, said four of the recent complaints refer directly to actions taken by the old company, which he has said had a brief period of "technical" problems and errors that led to a series of violations in 1997. According to state records, Laws Auction bounced more than 75 checks from October 1996 to March 1997.
"The errors have been substantially cleaned up," Fallon said yesterday. "There hasn't been a bounced check over there in six months."
In the Hawn case, Laws allegedly wrote a bad check to Hawn, of Gainesville, four days after Hawn filed a complaint with the Virginia Auctioneers Board in June, according to records filed in Prince William County Circuit Court. The check, for $650, bounced and wasn't made good for two weeks, records say.
But in a bizarre twist, Hawn was arrested in September on extortion charges just three days before he was to testify against Laws at an Auctioneers Board hearing. Police detectives, summoned by Sonny Laws and his attorney, listened in on a meeting between Hawn and Laws in which Hawn allegedly said that he would withdraw his complaint to the state board if Laws gave him $1,000.
According to court documents submitted by the commonwealth's attorney's office, Hawn told police that Laws had been "begging me to drop the complaint" and that company officials were worried that Hawn would "put [them] out of business" by testifying in Richmond.
Hawn's attorney, John Partridge, said his client in no way extorted money from Laws and instead was meeting with Laws "to make things right and work things out." Partridge said he thinks Laws "set up" Hawn to be arrested just prior to the state board hearing.
"This guy was set up by Mr. Laws, and we're going to have our day in court, where the facts will come out," Partridge said yesterday. "I believe it was intended to prevent him from testifying."
The Auctioneers Board hearing scheduled for Sept. 10 never took place, because Hawn wasn't available to testify. Samuel K. Updike Jr., a member of the board, said that the complaint is active and ongoing and that he could not comment on specifics.
Partridge said that Hawn plans to fight the charges at a trial in March, and that he intends to follow through on his complaint to the Auctioneers Board.