KINGWOOD, Texas -- A termite inspector has been issued a warning by the state and a lawsuit has been filed, accusing him of convincing a couple to buy a home that was ravaged by termites. The inspector is also facing a state investigation amid accusations of missing other termite damage in other homes that involved the same real estate firm, Local 2 Investigates reported on Wednesday.

"In our wildest dreams, we would have never thought that this was behind the walls that we purchased," said Shaun Holloway as he stood inside the torn apart home that he and his wife moved from only days after buying it.

In a lawsuit filed in Harris County District Court, the couple accuses their real estate agent of convincing them to use a particular termite inspector.  The couple's attorney, Adam Green, said there is a "revolving business relationship" between that inspector and Keller-Williams Northeast realty in Kingwood.

The termite inspector, Clint Simon of Sherlock Pest Termite and Pest Control of Kingwood, gave clean bills of health to several homes that were found to have termite damage only weeks after he had inspected them, Local 2 Investigates reported.

Green said, "It's at least given the appearance of impropriety.  You know, one of the concerns that you have is that inspection reports may be being rubber-stamped just so homes are summarily passed and deals can close, because that's when the realty firm makes its money."

Judy Hopkins, the broker in charge of Keller-Williams Northeast, did not respond to e-mail and phone requests for comment.

The Holloways said they relied on Keller-Williams' recommendation.

"We were trusting them solely," said Holloway. "When they said, hey we got a good inspector, hey, that sounds great."

They said they had no reason to be concerned, even though the owner of the home was also a Keller-Williams Northeast agent.

Simon inspected the home and documents included in the lawsuit show he indicated that there was no previous termite infestation in the home. His full report, including diagrams of the home, also listed no other damage or issues found on his inspection.

The couple then paid $194,900 for the 3,150-square foot home, where they had planned to start a family.

"With the stroke of a pen, when I signed the paperwork on this house, my life was taken away from me," said Holloway.

Local 2 Investigates cameras focused on massive destruction in walls throughout the home.  Walls have now been removed and many boards and beams throughout the entire structure are eaten away and paper-thin.

The couple discovered the damage shortly after moving in, when an entire corner of two walls actually moved as they were trying to replace a back door. Their contractor started removing wall boards and discovered the board that should attach the wall to the foundation was nearly entirely eaten away by a previous termite infestation.

Wife Stephanie Holloway was near tears as she stood in the room that was supposed to someday be a nursery.

"We had planned to get settled in this house and start a family," she said. "It's hard to walk into the house, it's hard to see our dreams, our financial stability, everything that we've worked hard for and to be financially responsible for to build this, we've lost it. And to walk up here and see that, not only have we lost our home, we've lost our family that we haven't even been able to start yet."

The Holloways hired another termite inspector, who videotaped parts of his inspection.  That tape shows the second inspector examining the devoured boards inside the walls. But it also shows him paying close attention to a termite tube of mud that was visible on the outside of the living room fireplace in the home. He also documented a wall that was bowing outward near the base board, which had never been removed or mentioned in the previous inspection.

Simon said he did nothing wrong, and he denied doing any favors to keep business rolling in from Keller-Williams Northeast.

"There was no active termites, okay?" said Simon.

One part of the inspection form asks whether there are active termites, and Simon had checked the "no" box on that question, in addition to the "no" box on the question of past infestation.

"If it's damage that's behind a wall section that I can't get to, absolutely, I can't see it," said Simon.

He said much of the damage was revealed only after the walls were removed.

"I don't have favors for nobody!  I work for the buyer, period," said Simon. "That's It!  I work for the buyer.  I have no ties anywhere else."

He insisted that the termite tube on the outside of the fire place must have been covered up when he conducted his inspection.

The Texas Department of Agriculture, which licenses pest control professionals, investigated the case and ruled that Simon "did not perform an … accurate inspection by not disclosing all evidence of wood destroying insects."

State investigators said plumbing access panels could have allowed Simon to discover some of the damage. In one bathroom, Shaun Holloway said the paint was still sealed around a plumbing grate.  Had it been removed during the first inspection, Holloway said chewed away boards would have been easy to spot.

Veronica Obregon with Texas Department of Agriculture said the reason that Simon was given a warning instead of a fine or a license suspension is due to a "penalty matrix" that spells out inspectors with no prior enforcement actions should only be warned when they are cited.

Local 2 Investigates found two other homes with similar questions.

Homeowner Faraz Ahmad said he was convinced to buy his home after his Keller-Williams Northeast realtor pointed him toward Sherlock Pest Control. In a May inspection, Simon noted "no" previous infestation by termites. One month later, another inspector found boards had been eaten away in several locations.

Again, a Keller-Williams Northeast agent was the owner of the home, so that agent and the overall firm benefitted from the clean inspection that led to the sale.

Ahmad said, "My question to that particular real estate company is, if they had some clue as to what this particular inspector has done with other properties, they should have told us. The state regulatory authority, the state legislature should look into these inspectors who do the termite inspection and pay close attention to the credentials of these individuals because they have messed up my property and a lot of other people in the Kingwood area, which are totally devastated."

A third Keller-Williams Northeast listing received a clean inspection by Simon during the same month, only to be refuted by a new inspection from a different company weeks later. In that case, both inspection reports were forwarded to state investigators, showing Simon listing "no" previous infestation, while the new inspector checked "yes." The inspector found chewed away boards and termite tubes in the garage.

On the Holloway's case, Green said, "Consumers in general put a tremendous amount of trust and respect and reliance in the findings of inspectors, and you cannot be worried about where your inspectors' loyalties lie."

Simon denied overlooking things intentionally, answering, "I am doing my job."

He said the reason he did not spot the two walls that moved, leading the Holloways to discover the damage to begin with, is because the door was locked when he performed his inspection.

He said, "We can't open a door on that property that we said couldn't open because it was keyed.  That's not my problem. If I can't get into something, I can't damage property."

The Holloways said their plans for a family have been derailed by the ordeal, as they pay a monthly mortgage payment and utility bills on a home they can't live in. They are staying with relatives while they search for an apartment.

"That's what I hired him to do is to find stuff like this," said Shaun Holloway.

His wife, Stephanie, said they were careful in choosing and relying on the inspector.

"If this could happen to us, this could happen to anybody," she said.

Obregon, with the TDA, said her agency has "open and active" investigations on both of the other home inspections in this Local 2 Investigates report.  She said if a pattern is proven, "we'll take action on it." She said that could include a fine, the license being revoked, or even legal action from the Texas Attorney General for violating the Texas Deceptive Trade Practices Act.

Obregon said her agency works for all Texans, and she added that, "Consumers are our best inspectors." She urged anyone who suspects a shoddy termite inspection to contact her agency. She said any time her agency receives information about potential wrongdoing, it takes action on them. In her words, "we take complaints very seriously."

Other real estate professionals reacted to these cases, suggesting that buyers should find their own inspectors when considering a home purchase. Some said they are always careful to advise potential buyers that they are merely suggesting names of pest control companies they have dealt with in the past. They suggested that potential buyers ask questions to spot and avoid potential conflicts of interest.