Most of us understand fraud in the context of ponzi and pyramid schemes, insurance fraud, or even wire fraud. Unfortunately, fraud may also occur in the construction industry. Contractor fraud arises from illegal acts committed by an individual contractor or company.
Typically, contractor fraud is a very broad category that includes such things as offering services that cheat the client or substandard repairs. Construction fraud occurs when a contractor works with construction firms to commit fraud.
You can be significantly harmed by contractor fraud because shoddy repairs or fraudulent repairs can cause unnecessary expense as you try to fix the contractor’s substandard work. Also, contractor fraud can cause extensive damage to your property that may need more work to correct.
Often contractors who engage in fraudulent acts get away with their schemes because they target the uninformed who fall for the scam. However, if a contractor takes your money and doesn’t complete the job, you can report the matter to the police.
What Should You Do If You’re A Victim Of Contractor Fraud?
If the fraud has already happened, it’s in your best interest to speak with a contractor fraud lawyer as soon as possible. The legal options available to you may vary based on the unique circumstances of your case, and an experienced contractor fraud attorney in Virginia can advise you on what your best options are. You should inform the local law enforcement if you feel the contractor’s actions involve criminal activity.
The most common claim you can file after an instance of contractor fraud is a theft loss deduction with the Internal Revenue Service (IRS). However, it’s essential to note that this option isn’t available for every person.
The IRS has certain requirements and rules in order for you to file this claim; the theft must be illegal under Virginia’s state laws, for instance. Also, you can only claim a deduction if your financial damages exceed 10% of your adjusted gross income.
Click this link to learn more about suing my contractor for delays.
Can A Contractor Be Criminally Charged?
If talking through the matter directly with a contractor is getting you nowhere, you might need to sue the contractor to get their attention. However, in many states, including Virginia, small claims courts have limited power, so judges in these courts have limitations regarding what they can do for you. Typically, small claims courts only award financial damages; thus, the judge can’t order the contractor to complete incomplete work.
However, the judge can order the contractor to pay you the amount it’ll take for another contractor to fix the matter or for damages done to your property. The claims court is called “small” for a reason. That’s because this court has a limit on the amount you can seek in monetary damages. That amount is usually right around $5,000.
Plus going to the small claims court isn’t the most effective way to get a solution to your problem. That’s because the legal process is time-consuming and the work on your project will stop in the meantime.
However, if the amount that the contractor owes you is less than the limit for a small claims court, and you’d rather recover the money than get a court order compelling the contractor to complete the project, then it’s advisable to consider a small claims action.
What Are The Consequences And Criminal Penalties Of Contractor Fraud?
In Virginia, if the value of the contract or item is less than $200.00, then that’s petty larceny, a Class 1 misdemeanor offense. The contractor is subject to a 12 month jail sentence and a hefty fine of $2,500. If the contract or the item is worth more than $200, that’s grand larceny, which is a lower-level Class 6 misdemeanor offense.
The consequences of contractor fraud include loss of license after a conviction, inability to renew a business license, bad consumer reviews, and terrible publicity.
Do I Need A Contractor Fraud Attorney To Help With A Contractor Fraud Case?
Being charged with fraud can affect a contractor significantly and their ability to get a professional license in the future. First of all, the contractor will face immediate legal consequences for their crime since they can be found guilty of a Class 1 misdemeanor offense or grand larceny.
Second, there are long-term consequences of a conviction, including negative reviews on the internet and losing a business license. If you’re looking to sue a contractor for shoddy work or to get your money back, it’s essential to hire an experienced legal advocate with a thorough understanding of contractor fraud to represent you.
Call an experienced contractor fraud attorney today to learn more about Virginia contractor fraud actions.