Stiffing Subs In Wisconsin Can Land Builders In Jail, State High Court Holds

In June of this year, the Office of the Wisconsin Attorney General announced the decision of the state Supreme Court in a case involving the state's "theft by contractor" law.

• State v. Angela and Matthew Keyes [2008 WI 54] involves the interpretation of Wisconsin’s theft by contractor law. Under the law, money paid to a prime contractor by an owner for work on a building contract is held “in trust” by the prime contractor until all “claims” by subcontractors have been paid. If the funds held in trust by the prime contractor are insufficient to satisfy the subcontractors’ claims, he must satisfy those claims proportionally. Any “use” of the trust fund by the prime contractor before all claims have been paid in full or proportionally in cases of deficiency is considered “theft” by the prime contractor under Wisconsin law.

• “The Keyes decision reiterates the basic principle that both owners and subcontractors are to be protected by the occasional self-dealing of unscrupulous prime contractors,” said Wisconsin Attorney General J.B. Van Hollen.

For the Wisconsin AG's press release, see Prime Contractor Commits Theft By Contractor If Payments Made By The Project Owner Not Used To Satisy Subcontractors First, Wisconsin Supreme Court Holds. StiffingContractorsZeta