Contractor fraud

While contractor fraud is not new, I have had more clients charged with contractor fraud since the pandemic ended. I believe this stems from more homeowners having more work done during this time and some using the legal system to resolve disputes. I have several clients who properly completed all work, but the homeowner wanted more, without paying more, then used the legal system to get something for nothing. I have also met with severe clients who were performing their duties within the contract and, when they refused or could not perform more, terminated the working relationship. The customer did not want to pay for services rendered. Unfortunately, we are in a world where you must protect yourself. 

What is contractor fraud?

Louisiana law defines contractor fraud with a wide net. It is taking anything of value via a misappropriation or fraud by someone contracted to perform home improvements or residential construction and any subcontractors. 

Misappropriation is:

* Failing to perform any work during 45 days after receiving payment, unless the contract specifies otherwise;

* Using deception or fake promises to cause a person to enter into a contract for home improvement or residential construction;

* Damaging the property of another with the intent to get that person to contract for home improvement or residential construction work;

* Knowingly making material misrepresentation of facts in a building permit application;

* Knowingly making a material misrepresentation of facts in placing a lien on a property;

* Failing to possess proper licensing;

* Employing a subcontractor without the proper licensing.

How to protect yourself

The more documentation you keep from every job enables us to build an effective defense. Keep records. The more records I can produce, the less leeway the complaint has. When operating a contracting business, remember it is a business. Keep business records. Some things that enable me to build a winning defense include:

* Written contracts;

* Copies of receipts for all materials;

* Proof of payments to subcontractors;

* Photos of the before and after;

* Copies of all correspondence between you and the complainant;

* A list of all witnesses involved in the process, from office workers who witnessed the negotiating to on-the-job workers.

While I understand many people work via a gentleman’s agreement, a handshake, and hand over the keys, those scenarios are more challenging to defend should things go south. So please don’t put yourself in a situation where it is your word against someone else. 

Penalties for contractor fraud

Contractor fraud can be a felony or a misdemeanor. The penalties change depending on the value allegedly taken. 

* If the value is less than $1,000, the penalty is up to six months in jail and up to $1,000. This can increase after a first offense.

* If the value is between $1,000 and $5,000, the penalty is up to five years in jail and up to a $3,000 fine.

* If the value is between $5,000 and $25,000, the penalty is up to ten years in jail and up to a $10,000 fine.

* If the value is $25,000 or more, the penalty is up to 20 years in jail and up to a $50,000 fine.

As you can tell, the amount of value plays a significant role in the charge and the sentencing range. Therefore, it is essential to understand the value and charges. 

And remember, laws and interpretations are continually changing. For example, the above references laws in effect as of 2022, according to LSA R.S. 14:202.1. As rulings come down from different courts and jurisdictions, these rules are apt to change. 

If you or someone you know has a question about a residential contractor fraud charge and wants to discuss the process, do not hesitate to contact the law office of Larrion L. Hillman at 318-549-9810. Remember, items published in my Blog or Vlog are not intended to be formal legal advice or the formation of an attorney-client relationship. Larrion Hillman practices criminal defense in Caddo Parish, Webster Parish, Bossier Parish, Shreveport, and Bossier City, Louisiana. And remember, keep calm and let Hillman handle it.