Contractor’s failure to provide project accounting leads to criminal conviction under Va. Code § 43-13

Posted on June 11, 2015
Posted in Updates

Financial background. Closeup of one dollar notes near calculator

Violation of Va. Code § 43-13 leads to criminal, not civil, liability. Under § 43-13, when a contractor receives money from an owner to pay subcontractors, he cannot use the money for any other purpose. In Holloway v. Commonwealth, owners paid a contractor $422,000 towards a new home, but after five suppliers and subcontractors went unpaid, the owners filed a complaint with the Department of Professional and Occupational Regulation. DPOR found that the contractor incurred only $286,000 in direct costs, after which the contractor was prosecuted. At trial he contested the $286,000 figure, but was unable to provide an accounting to show the nature of his expenditures and payments. That failure, the court said, created a presumption that the money was used improperly. Because the contractor could not rebut the presumption, he was convicted of larceny and the conviction was upheld on appeal.

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