Brothers Face 35 Felony Charges for Construction Fraud

Sacramento County officials charged the owners of Anchored Tiny Homes with diversion of funds and wage theft.

Updated on Oct. 20, 2026 in Financial Crime

Bold flat-color editorial illustration of an unfinished wooden wall frame on a concrete slab, representing systemic construction fraud and abandoned project investment. — Sacramento County prosecutors have charged brothers Colton and Austin Paulhus with 35 felony counts for construction fraud and diversion of consumer funds. AI Illustration. Upload story photo >

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Sacramento County prosecutors have charged brothers Colton and Austin Paulhus with 35 felony counts following widespread consumer complaints. The charges involve allegations that they misused construction funds and abandoned projects across 18 California counties.

Why it matters

The case highlights the risks consumers face when contractors collect large advance payments for unfinished work. Authorities are pursuing these charges after an investigation into hundreds of complaints regarding the operations of Anchored Tiny Homes.

The brothers face 33 counts of diversion of construction funds, one count of conspiracy, and one count of employee wage theft. The Contractors State License Board revoked the business license of Anchored Tiny Homes in November 2024.

The players

Colton Paulhus

He is a defendant facing 35 felony counts related to the operations of his construction business.

Austin Paulhus

He is a defendant facing 35 felony counts related to the operations of his construction business.

Sacramento County District Attorney's Office

This local government agency is responsible for prosecuting criminal cases and investigating consumer fraud complaints.

Contractors State License Board

This state regulatory body is responsible for licensing, regulating, and disciplining construction contractors in California.

Anchored Tiny Homes

This is a construction company that had its business license revoked in 2024 following numerous consumer complaints.

The details

Prosecutors allege the company routinely collected payments for work that was never performed or left projects abandoned. Under California law, contractors are generally restricted to a maximum down payment of $1,000 or 10% of the total project cost, whichever is less.

November 2024: The Contractors State License Board revoked the business license of Anchored Tiny Homes.
October 20, 2026: The Sacramento County District Attorney filed felony charges against the brothers.
January 12, 2027: A settlement conference hearing is scheduled for the defendants.

Legal Context

This case reflects broader legal efforts in California to enforce strict limits on how construction companies handle advance payments. By prosecuting these specific financial crimes, the state aims to deter industry practices that frequently bypass consumer protection regulations.

Residents across the state who have interacted with similar construction firms should remain vigilant regarding payment schedules. Authorities encourage consumers to verify contractor licenses and adhere to legal down payment limits to prevent potential financial loss.

The takeaway

Homeowners should never pay more than the legal limit for a down payment regardless of contractor pressure. Thoroughly researching a company's licensing history before signing any contract is a vital step in protecting personal finances.