Construction Trust Fund Theft

Denver Construction Contractor Trust Fund Statute, Theft, C.R.S. 38-22-127

If you are in the construction or contractor business in the Denver area, you need to be aware of a crime which can unknowingly result in a felony conviction against you while you are paying your bills in Denver, Jefferson and Arapahoe County. Colorado's construction contractor theft statute, or The Colorado Trust Fund Statute, is written at C.R.S. 38-22-127, and provides, that if a contractor or builder gets paid for work on a project, they must use the proceeds of that payment to pay all the people or businesses who supplied materials and labor for that specific part of the project. If they don't follow this "trust" accounting and payment method, it is considered Theft.

Arapahoe and Jefferson County Contractor's Trust Fund Law - Lawyer's Definition

Here is the specific definition of this crime from the Colorado statute, C.R.S. 38-22-127: "All funds disbursed to any contractor or subcontractor under any building, construction, or remodeling contract or on any construction project shall be held in trust for the payment of the subcontractors, laborer or material suppliers, or laborers who have furnished laborers, materials, services, or labor, who have a lien, or may have a lien, against the property, or who claim, or may claim, against a principal and surety under the provisions of this article and for which such disbursement was made. . . . Every contractor or subcontractor shall maintain separate records of account for each project or contract, but nothing contained in this section shall be construed as requiring a contractor or subcontractor to deposit trust funds from a single project in a separate bank account solely for that project so long as trust funds are not expended in a manner prohibited by this section. . . . Any person who violates the provisions of subsections (1) and (2) of this section commits theft, as defined in section 18-4-401, C.R.S."

Douglas County Lawyer for Construction Trust Fund Theft Reminders

This statute does not have a requirement that the contractor being paid personally profits or intends to harm another. Mere ignorance of the law is sufficient. While most crimes have a mental requirement that you intend to do something or hurt someone, this law does not. And, many smaller contractors or remodelers in Adams, Douglas, Weld and Larimer County are unaware of this law. We normally see this statute charged as Theft when a business is not getting paid timely for job #1, and yet is timely paid for job #2. So, out of necessity, the contractor takes a portion of the money from job #2 to pay the suppliers and laborers from job #1, so they don't quit or file a lawsuit. If the business goes under or gets further behind before everyone on job #2 is fully paid, police or the district attorney are contacted to enforce this law, known as the Colorado Trust Fund Statute.

Adams County Felony Charges are Overkill for a Violation of the Colorado Trust Fund Statute

A violation of this statute results in felony charges of Theft in Adams, Broomfield and Boulder County, (or Forgery if lien papers are signed saying that the subcontractors and suppliers are paid when they were not). It is essential that smaller businesses be knowledgeable of this law and their duties. Many men and women who simply try to survive and pay their bills are being charged as felons for poor accounting practices.  Sadly, most do not even earn a profit by their poor accounting practices.  In many cases, it is not even their fault since they are forced to shift money around after a General Contractor did not pay on time.

If you have been contacted by police or are investigated for Theft or Forgery under the Colorado Trust Fund Statute, be smart, exercise your right to remain silent, and call the O'Malley Law Office, P.C., at 303-731-0719. Together, we can protect your future.

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