GEORGIA CONSTRUCTION, BOND & LIEN LAW BLOG


Criminal Sanctions–A Warning to Georgia Contractors and Subcontractors!

Posted in Criminal Issues & Sanctions by Administrator on the May 29th, 2012

Did you know that it can be illegal for a contractor or subcontractor on a Georgia construction project to accept payment for work on the project if they do not, in turn, pay their suppliers and laborers?  That’s true, according to the Official Code of Georgia Annotated (O.C.G.A.);  in fact it’s a felony if the contractor or subcontractor intends to defraud its subcontractors and suppliers!

O.C.G.A. § 16-8-15 states as follows:

“Any architect, landscape architect, engineer, contractor, subcontractor, or other person who with intent to defraud shall use the proceeds of any payment made to him on account of improving certain real property for any other purpose than to pay for labor or service performed on or materials furnished by his order for this specific improvement while any amount for which he may be or become liable for such labor, services, or materials remains unpaid commits a felony and, upon conviction thereof, shall be punished by imprisonment for not less than one year nor more than five years or upon the recommendation of the jury or in the discretion of the trial judge, punished for a misdemeanor, provided that, in addition to the above sanctions, where a corporation’s agent acts within the scope of his office or employment and on behalf of the corporation and with intent to defraud uses such proceeds for purposes other than for property improvements or where a corporation’s board of directors or managerial official, the latter acting within the scope of his employment and on behalf of the corporation recklessly tolerates or, with intent to defraud, authorizes, requests, or commands the use of such proceeds for purposes other than for property improvements, the corporation commits a felony and, upon conviction thereof, shall be punished by a fine of not less than $1,000.00 nor more than $5,000.00.”

If you have any questions regarding this statute or construction law services offered by the Cobb Law Group, please contact us for further information.
This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.