Criminal Defense for Construction Fraud in Virginia
What is the difference between construction fraud and breach of contract under Va. Code 18.2-200.1?
The Commonwealth must prove 5 things to convict a person of construction fraud, namely that the contractor (1) obtained an advance of money from another person; (2) had a fraudulent intent at the time the advance is obtained; (3) made a promise to perform construction or improvement involving real property; (4) failed to perform the promise; and (5) failed to return the advance within fifteen days of a request to do so by certified mail to the defendant’s last known address or his address listed in the contract.
The fraudulent intent must exist at the time that the contractor procured the advance. The contractor must fail or refuse to “perform” the promised work and to “substantially make good such advance.” The Commonwealth must present additional proof that the contractor “fail[ed] to return such advance within fifteen days of a request to do so.”
Now on a technical but essential note, the request for the return of the advance may not include something different than an unqualified demand to return all or part of the original advance. The Virginia Supreme Court explained the reason for such a strict reading of the statute, stating,
The construction fraud statute, Code § 18.2-200.1, was not meant simply to criminalize a contractor’s breach of contract. The statute instead criminalizes a species of fraud analogous to the crime of obtaining money under false pretenses….
The statute does not say that the notice can give the contractor other options — such as continued contractual performance at a reduced price, the return of something other than the advance, or the delivery of materials in lieu of a return of the advance. There are sound reasons for not overcomplicating the statute in such manner. If the contractor “fails to return such advance,” he “shall be deemed guilty of the larceny of such money” if the other requirements of the statute are also met. Id. The contractor, therefore, should not be misled into believing that anything other than a return of the advance would relieve him of the very real risk of criminal prosecution.
Bowman v. Commonwealth, 777 S.E.2d 851, 855-856 (2015)
The law firm of Thomas H. Roberts & Associates, PC represents clients in matters involving construction disputes and litigation. Hull Street Law, a division of Thomas H. Roberts & Associates, PC represents defendants charged with construction fraud.
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