Failure to pay a subcontractor, supplier or rental company can land the
offendee in jail and lighten their wallet. Penal Code Section 484(b)
provides that any person who diverts construction funds intended to pay
for labor, services, materials or equipment risks fines and jail time!
The Section
"484b. Any person who receives money for the purpose of obtaining or
paying for services, labor, materials or equipment and willfully
fails to apply such money for such purpose by either willfully
failing to complete the improvements for which funds were provided or
willfully failing to pay for services, labor, materials or equipment
provided incident to such construction, and wrongfully diverts the
funds to a use other than that for which the funds were received,
shall be guilty of a public offense and shall be punishable by a fine
not exceeding ten thousand dollars ($10,000), or by imprisonment in
a county jail not exceeding one year, or by imprisonment pursuant to
subdivision (h) of Section 1170, or by both that fine and that
imprisonment if the amount diverted is in excess of two thousand
three hundred fifty dollars ($2,350). If the amount diverted is less
than or equal to two thousand three hundred fifty dollars ($2,350),
the person shall be guilty of a misdemeanor."
To pursue relief under Penal Code Section 484(b), a criminal complaint
through the local police, sheriff or prosecutor resulting in a conviction
would be required. While this is not a statute with an independent right
of action or available civil penalty in favor of the victim, it is another
weapon to be aware of should you not be paid after the funds including
compensation intended to pay for labor, services, equipment or materials
supplied by you or your company are paid to the party who owes you, never
reach you or your company and typically, magically disappear.
Robert
