Prosecutors say contractor fraud cases difficult to prove in criminal court

COLORADO SPRINGS, Colo. (KRDO) -- Law enforcement and prosecutors, including Colorado Attorney General Phil Wieser, provided tips on how to avoid contractor fraud amid an uptick in complaints.

Much of the advice was preventative measures — do your research, don’t pay money upfront, and request references from companies. However, there remain more questions than answers about how a person can receive justice once they become a victim of contractor fraud.

Last month, 13 Investigates uncovered a custom home contracting company, Craftsman Homes and Interiors, which was accused of stealing hundreds of thousands of dollars from customers across Colorado and leaving unfinished homes in their wake.

Roger and Sandra Ewer, from Monument, were one of the alleged victims. They said the owners of Craftsman Homes and Interiors, Dwight and Joni Mulberry, stole about $150,000, and their home remains incomplete three years later.

“I don't think that you can total what was lost in the dream,” Sandra Ewer said.

Now, preventative measures do little to help them. They said law enforcement referred them to civil court, so they filed a lawsuit. But all civil lawsuits are on hold after the Mulberrys filed for bankruptcy in March. They said they had no other options.

It’s projects like these that 4th Judicial District Attorney Michael Allen said is hard to criminally prosecute.

“If somebody does some of the work but doesn't complete it, that's not necessarily evidence of intent to permanently deprive that often is a bar to criminal prosecution,” Allen said.

According to Colorado’s law books, criminal theft is intentionally depriving another person of money by threat or deception. Allen said most contractor fraud cases aren’t criminal because proving theft is difficult. 

“Most contractor cases are not necessarily criminal in nature, because we have to be able to show theft, which requires evidence that they intended to permanently deprive someone of money or property,” he said. “That's often the disconnect between criminal charging and what the Attorney General's office can provide through the Consumer Protection Act.”

It’s why Colorado Attorney General Phil Wieser said the Consumer Protection Act is in place. He said the law has less of a threshold to prove a violation than criminal law. However, this also means lighter punishment than criminal prosecution.

“Colorado's Consumer Protection Act allows us not only to get the money back to consumers who were defrauded but allows for civil penalties as well,” Wieser said.

13 Investigates asked if the Consumer Protection Act was strict enough. Wieser said it was an important deterrent but his office needs more reporting from victims.

“The biggest hindrance we have right now is not enough people reporting,” he said. “We're not collecting enough information.”

When Craftsman Homes and Interiors filed for bankruptcy, victims told 13 Investigates they felt they were escaping culpability. Weiser said this is common among fraudulent companies.

“Those who declare bankruptcy are playing what we might call a short game,” he said. “They may well be finding ways to get their assets elsewhere and trying to avoid being held accountable.”

With few avenues for victims to receive financial resolution or even just a sense of justice, 13 Investigates asked if new laws would help to criminally prosecute fraudulent contractors. Weiser said he is focused on working within the state’s current laws.

“What I'm focused on right now is how we better administer our laws with the system we have, getting the information out there to consumers, getting information from those who've been scammed, and making sure we can take action,” Wieser said.

Allen said it’s unlikely criminal laws will change due to constitutional protections. Instead, he said preventative tips are the best way to protect consumers.

“The best way to protect people going forward is to know what the warning signs are,” he said. “Know how to protect yourself.”

Do you have a tip you want 13 Investigates to look into? Email us at 13investigates@krdo.com.