Immigration and Customs Enforcement investigation shows how Hamilton County's neighborhoods are built

Juan Antonio Perez, the president of Aztec Framing, takes an oath at the beginning of a deposition in a Hamilton County Circuit Court case in August 2015.

Attorney Danny Ellis tried to size up the president of Aztec Framing.

"Who is your major competitor?" he asked in August 2015, during a deposition in a civil trial.

"I don't know," Juan Antonio Perez said.

"Give me three competitors that you have," Ellis said.

"I don't know," Perez told him.

"You don't know who else is in business trying to get the same jobs you're trying to get?" Ellis asked.

"No sir."

Perez, 46, was not acting coy. Before federal agents raided his offices last month, he had the deepest labor pool in the market, according to interviews with seven local developers. He also boasted strong relationships with some of Chattanooga's most prolific home builders, relationships that dated back more than a decade. His two strengths fed off each other.

Developers relied on Perez for three- and four-man crews at a moment's notice. Immigrant workers relied on Perez for steady work, an asset that can be hard to come by, especially for laborers who did not enter the United States legally.

Perez did not consider most of these workers employees. During the deposition, which surrounded a case in which an Aztec laborer ran a red light and crashed into a nursing home van, Perez told Ellis his crews consisted of independent contractors. He didn't give them health insurance, withhold Social Security, withhold income tax or offer them paid vacation time. (The civil case was not directly tied to the federal investigation, though a Homeland Security special agent referred to it throughout the affidavit for Perez's arrest last month.)

"It seems to me that you're just kind of like the middleman," Ellis observed, "between the general contractors and the different subcontractors that you're hiring."

"Like a broker," Perez agreed.

There's a lot of money in the middle, as it turns out. Perez had millions in the bank, dozens of classic cars and a 7,500-square-foot home in Rydall, Georgia. He had offices in Hixson, Rossville and Cartersville, Georgia. In August, he bought a commercial building on Cloud Springs Road with an $840,000 cashier's check.

But his business crumpled overnight.

On May 7, a federal grand jury indicted Perez, who immigrated to the United States from Mexico illegally as a teenager. Homeland Security investigators seized his business records, 14 guns, assets from 11 bank accounts and $700,000 in cash. He faces two charges in U.S. District Court: bringing in and harboring illegal aliens for financial gain and possession of a firearm by an illegal alien. The case is still pending.

Police arrested his wife, 45-year-old Eva Torres, on Thursday on a charge of making a false statement. She was booked into the Whitfield County Jail, where Immigration and Customs Enforcement officers were scheduled to pick her up and drive her to an unknown detention center.

A business like Perez's can be hard to track from the outside. Because he is a subcontractor working directly with builders, there is not much of a publicly available paper trail. Homeland Security, meanwhile, has not disclosed Aztec Framing's business records, which would provide a detailed ledger of who in Chattanooga benefited from Perez's labor force. But the investigation, as well as Hamilton County court records, provides some pieces of the puzzle.

Anecdotally, Michael Jonston at Junior's Building Materials in Ringgold noticed an instant impact.

"We had customers that were scrambling," he said. " There are several other framing crews and companies in town. But they were definitely the biggest and had a lot of larger builders."

Said Bobby Wilson of Boar Properties: "It's going to be a hit to the economy. Nobody could compete with him."

Wholesale framing

Though lacking a detailed list of Aztec Framing's work, the arrest affidavit supports local builders' assertion that Perez was a major player in the Chattanooga market. In one bank account, he deposited $3.4 million from Oct. 2 to Jan. 8. He cut about $2.1 million in checks during that same period. In another account, he wrote checks for about $112,000 during that time frame. A third account had a bank balance of $740,000 as of December.

The affidavit also cites a woman who claimed to be Perez's unofficial bookkeeper. In March 2014, she told the investigator Perez had about 200 employees. Perez himself said during his 2015 deposition that he had about six employees, with the other laborers serving as independent contractors. (And even among those he called employees, he said he did not withhold taxes or supply health insurance.)

General contractors Craig Gilbert and Reginald Jordan, who both said they did not work with Perez, told the Times Free Press that an operation as big as Aztec Framing only makes sense if the company has agreements in place with the most active builders in town.

"You're talking maybe 300 homes a year with those bigger developers," Jordan said. "It [would be] hard to take them away from those bigger developers. How can you compete with a guy who is doing 300 houses?"

While the bulk of Aztec Framing's business has not been revealed, court cases shed some light. In July 2012, Perez signed a contract with Rivermont Construction to frame a Hampton Inn in Cleveland over four weeks for $135,000. (The company then sued Aztec in Hamilton County Chancery Court upon learning it accidentally paid Perez about $155,000. A judge dismissed the case.)

More than a decade ago, Perez united with developer Jay Bell, one of the most active local home builders. (Bell Developments ranked second in Hamilton County in 2015 with 56 home starts valued at $8.9 million.) Perez signed a "blanket agreement" with Bell Engineering Company, the family outfit that builds subdivisions, in December 2006.

The contract's opening paragraph says the agreement will remain active "from year to year, unless a change is agreed to in writing by both the Builder and the Subcontractor." It was in effect at least through 2013, when a lawyer for Bell Engineering blamed Aztec Framing for an allegedly faulty ladder in a Hamilton County Circuit Court case.

The contract describes a close relationship between Bell Engineering and Aztec Framing. Under a clause titled "Time," it reads: "The Subcontractor agrees to promptly begin work as soon as notified by the Builder."

The last section discusses immigration. It says Perez must make sure all of his laborers are legally allowed to work in the United States. It says Bell is not responsible. (During his 2015 deposition, Perez said he did not know what an I-9 Form was, a legal document to verify employees can work in the United States.)

It's not clear how many homes Aztec Framing and Bell Engineering worked on together. Bell did not return multiple calls or emails seeking comment last week.

'He came and changed a lot of things'

Perez has a familiar immigrant story, said his sister, Mónica. He grew up in Michoacán, a state in southern Mexico, and moved to the United States in the late 1980s when he was about 15. (During his deposition, Perez said he did not remember if he came through a legal port of entry.) After he crossed the border, he traveled to Georgia to join his father, a construction worker here.

In 2005, Perez formed Aztec Framing and came to the Chattanooga market. A former Aztec worker, who requested anonymity out of fear of retaliation from both ICE and Perez's loyalists, said Aztec built a reputation for quick work.

"It was beginning to boom," he said of the Chattanooga market. "There was nobody up here. People around there didn't know much about construction. He came and changed a lot of things."

Ron Lane, the owner of Ron's Classic Cars in Soddy-Daisy, estimated he sold 10 vehicles to Perez over more than a decade. Perez occasionally stopped by to talk shop, and he invited Lane to his daughter's quinceañera. Lane said Perez was a strict Catholic who attended mass every week.

Lane is an ardent President Donald Trump supporter, and a Facebook photo shows him sporting a shirt that reads, "BUILD THE WALL ENFORCE THE LAW." Nevertheless, he thinks Perez is being treated unfairly. He called him "The American Dream."

"Why does everyone want to be down on someone for making a good living?" he said. "Is it a sin to own things in America? Is it a sin to have three homes? It's a redistribution society. Everyone's down on someone if they work hard."

The Aztec worker who spoke with the Times Free Press said Perez's crews finished jobs twice as fast the competition. In part this was because Perez had a bigger labor supply, built through his connections on construction sites for more than a decade. But the team also simply out-worked the competition.

"I was working six days, sometimes seven days a week," the source said. "And I only got paid [for] five days. You tell me if that's fair. I never took a vacation. I was treated as an [independent contractor]. But I was really an employee."

(This echoes a statement from Juan Carlos Landaverde-Compean, an Aztec framer and crew boss, who told an investigator in March that he worked 81 hours a week.)

In the arrest affidavit, a Homeland Security special agent argued Perez undercut the market to build his fortune. But developers Jeff Leatherwood and Todd Duggan, who both subcontracted with Perez, said Aztec Framing actually charged more than other subcontractors. They worked with Perez because they knew he could supply labor quickly, his invoices were fair, and he didn't demand payment until the job was done.

Leatherwood also said Perez was as professional as anyone in the business. Once, Leatherwood smelled liquor on a worker's breath. He told Perez, and he never saw that framer again.

The former Aztec worker said the criminal case against Perez seems to rely on a contradiction. On one hand, Perez supposedly built an empire by underpaying immigrant labor for more than a decade. But at the same time, those laborers continued to do Aztec jobs. Construction gigs are not particularly hard to come by, the worker said. This reveals a difficult truth: as abusive as the federal government says Aztec Framing was, laborers saw worse options.

"He was always on time, paying them on time," the worker said, when asked why people stuck with Perez. "There was never a delay on getting paid. Never. And they were getting paid good, I can say that. Otherwise, they would not be working for him."

He added: "All the time, all year round. There was no stopping. There was not a gap, I'll tell you that. Other people say, 'Jeez, I don't have a job for the next two weeks.' No. No. It was always work."

Contact Tyler Jett at 423-757-6476 or Follow him on Twitter @LetsJett.