KRQE News 13 investigates eastern New Mexico fraud scheme

Fugitive sex offender and popular elected official involved

Larry Barker
Larry Barker

LOGAN, N.M. (KRQE) –  Ask anyone in eastern New Mexico about the devious fraud scheme that impacted scores of victims in places like Logan, San Jon or Tucumcari and folks will give you an earful. At the center of this underhanded swindle is a fugitive sex offender and, behind the scenes, a popular elected official.

“It’s outrageous. It’s one of the most egregious cases that I’ve been made aware of,” Regulation and Licensing Superintendent Mike Unthank said.

The individual losses are staggering.

“I worked hard all my life for what I’ve got. He just took about $2,500 from me,” said Logan retiree Randy Hargrove.

Logan businessman Barry Phillips lost $4,200.

Roswell retirees John and Beverly Burson lost more than $5,000.

Marlin Terry in San Jon is out almost $20,000.

The mastermind behind this clever con game is a local handyman named John Harley.

Harley showed up in the Logan area of eastern New Mexico a few years back. He was friendly, well-liked and often hung out at nearby Ute Lake. Harley was a handyman by trade. In Quay and Union county John Harley was known as the go-to-guy for heating and air conditioning problems.

John Harley peddled more than 50 furnace and air conditioning units in small communities throughout eastern New Mexico. He installed expensive equipment in residential properties, businesses, churches, government buildings as well as fraternal and civic organizations.

However, according to RLD Superintendent Unthank not one of Harley’s installations was proper and, Unthank added, Harley had “absolutely no qualifications whatsoever” to do furnace installations.

Retired banker John Burson and his wife Beverly hired John Harley to install a furnace in their Logan summer house which is a mobile home.

“It was actually sucking carbon monoxide into the bedroom which was pretty scary,” said Beverly Burson.

Months after Harley had completed the work, the Bursons discovered their $5,000 furnace installation was not only shoddy and illegal, it was downright dangerous.

Besides being improperly vented, the gas furnace Harley installed was not designed to be used in a mobile home. Last year, a State Gas Inspector took one look at the Burson’s newly installed furnace and red tagged it.

“He said it was the worst installation he had ever seen,” John said. “He said we’re lucky to be alive.”

“He said if we would have been up there in the wintertime we would not be alive,” Beverly added.

The Bursons had to remove the $5,000 furnace and buy a new one. By this time, however, John Harley had disappeared.

“I’m real mad for the loss of the money but more than that he put our lives in danger. He has no respect for human life,” John said.

Logan businessman Barry Phillips also feels cheated. On the recommendation of a friend, Phillips hired John Harley to install a $4,200 electrical heating and air conditioning unit at his wife’s accounting business. The installation was a disaster.

“My building could have burned down. Somebody could have gotten electrocuted. The wiring was absolutely a mess. The Freon leaks were a mess. It was totally inadequate,” Phillips said.

Contact the LP Gas Bureau: 

LP Gas Bureau
Regulation and Licensing Department
5500 San Antonio Dr, NE Suite F
Albuquerque, New Mexico 87109

Phone: (505) 222-9808

Email: cid.lpgas@state.nm.us

Source: Regulation & Licensing Department

Logan retiree Randy Hargrove lost some $2,500 after John Harley illegally installed a full-size gas furnace in Hargrove’s mobile home. The furnace installation violated the state’s building code.

“He had it vented completely wrong. The drain line wasn’t hooked up underneath. The water in the air conditioner was running under my trailer instead of out. And, there was no place to put a filter,” Hargrove said.

By the time Randy discovered the problems John Harley had already skipped town. Randy had to remove the faulty installation and buy a new furnace.

San Jon businessman Marlin Terry’s loss was close to $20,000 after he hired John Harley to install four furnaces in several area properties.

“When the L P gas people (inspected) they said the heater was improperly installed. It was sucking carbon monoxide back into the home instead of going on out through the roof,” Terry said.

Today, the four furnace units Marlin bought from John Harley sit in storage.

After a state investigation, RLD Superintendent Unthank commented on John Harley’s heating and air conditioning expertise.

“Totally incompetent and the incompetency is based upon the fact that our inspection team has looked at a number of these installations and the errors that have been made in those installations lead us absolutely to believe (John Harley) had no idea what (he was) doing,” Unthank said.

In fact, New Mexico’s ‘flim-flam furnace man’ is not only a fraud, he’s also a fugitive. A KRQE News 13 investigation finds John Harley doesn’t have a contractor’s license. He doesn’t even have a driver’s license. What he does have however is a 1990 felony conviction for sexual battery in Tennessee. After failing to register as a sex offender in Tennessee, Harley disappeared years ago. He has been on the run ever since. Lately, he’s been hiding out in Quay County.

Besides bilking dozens upon dozens of area homeowners, John Harley cheated the Amistad Church in Amistad, New Mexico, the House Baptist Church in House, New Mexico, the San Jon Assembly of God in San Jon, New Mexico, the Logan Church of Christ in Logan, New Mexico, even the American Legion Hall in Logan.

And John Harley did not act alone. He had an accomplice: Logan Mayor David Babb. That’s right, one of Logan’s most respected citizens was John Harley’s silent business partner.

“Our citizens have been put at significant risk by unethical activity both on the part of, I hate to say it, Mayor Babb and an unlicensed person, (John Harley),” Unthank said.

According to a state investigation, Babb, who is a licensed electrical contractor purchased some 50 gas furnaces directly from the manufacturer and then handed them to Harley for installation.

“That’s clearly a violation of the Construction Industries Licensing Act. In my opinion, also a form of fraud because he’s leading unsuspecting citizens to think he’s qualified to do those purchases,” Unthank said.

When Mayor Babb bungled the installation of a gas furnace at the Nixon Ranch outside Nara Visa, New Mexico, he cheated the owners out of $1,700. And, when Logan’s City Hall, Fire Department, Senior Center and Medical Clinic ended up with illegal furnace installations, the Mayor now admits he was involved.

RLD Superintendent Unthank calls Harley and Babb’s scheme involving the illegal installation of furnaces, “Outrageous.”

Mayor David Babb says John Harley was a “fishing buddy.” The Mayor says he was duped and admits he used poor judgment. But he says, he’s not a crook.

Babb told KRQE News 13 John Harley was an ‘acquaintance’ he met at the lake. Babb says he did not know Harley’s background but admits he knew Harley was not licensed to do gas installations.

Babb told KRQE News 13, “I’ve been here 30 years. It was not a deliberate act. It wasn’t intended to hurt anybody.”

Last week, the New Mexico Construction Industries Commission initiated formal proceedings seeking to revoke David Babb’s electrical contractor’s license for alleged violations of the Construction Industries Licensing Act.

Last summer, John Harley disappeared again to avoid a one-year jail sentence. Harley was convicted in a Union County Court for contracting without a license.

An arrest warrant has been issued for Harley who is believed to be hiding somewhere in the Midwest.

The Construction Industries Division has now referred the case to the New Mexico State Police for a criminal investigation.

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