Earlier this year, Vermont Superior Court Judge Michael J. Harris of the Washington Unit (Criminal) dismissed three counts of home-improvement fraud under 13 V.S.A. § 2029(b)(1) against James Martin of Barre, president of Northern Build Pros Inc., after ruling the statute’s 2015 rewrite unconstitutional under the Thirteenth Amendment. The ruling addresses the statute’s design; it does not decide whether any contractor committed fraud. Here’s how Vermont can still pursue deposit-and-ghost cases—and how to fix the law without tripping the Thirteenth.

The opinion matters — and so does what it doesn’t mean. It explains why the 2015 “shortcut” can’t stand, but it doesn’t leave homeowners helpless. Vermont already has conventional tools — false pretenses, embezzlement of diverted construction trust funds, and criminal restitution — that fit deposit-and-ghost schemes without running afoul of the Constitution.

The order cites 2015, Act 153; legislative records show the operative change to § 2029 came via 2015, Act 13 (H.483).

What the judge actually struck down

The court summarized the law this way: if a contractor fails to perform and, after the owner demands action, fails to refund or “make and comply with a definite plan for completion … agreed to by the owner,” that’s a crime. The State charged three separate incidents; after briefing and a hearing, the court granted the motion to dismiss.

Here’s the constitutional problem. By tying criminal liability to whether the contractor works under an owner-approved plan when a refund isn’t forthcoming, the statute functions as work-or-be-charged. The court traced this straight to the U.S. Supreme Court’s Bailey/Taylor/Pollock line: a state “may not make failure to labor in discharge of a debt any part of a crime … [or] command involuntary servitude, even if it was voluntarily contracted for.”

Just as important, the court contrasted the post-2015 statute with the pre-2015 version. Before 2015, the crime centered on intent at contract formation — promising performance the contractor didn’t intend to provide. That mens rea was deleted in 2015, shifting liability to post-contract nonperformance and an owner-approved plan.

No, this doesn’t mean “it’s all civil-suits now”

The opinion is narrow: it strikes a particular mechanism that punished nonperformance by threatening criminal charges unless the contractor worked under an owner-approved plan. It does not say you can’t prosecute a contractor who lies to get a deposit or diverts an owner’s money off-project.

Vermont already has three clean paths that avoid the constitutional landmines:

1. Plain fraud (false pretenses).
   If the State can show the contractor designedly, by false pretenses and with intent to defraud, obtained money, that’s a felony when the amount exceeds $900. Elements and penalties are in 13 V.S.A. § 2002. This fits schemes built on misrepresentation at intake: overlapping deposits the contractor can’t possibly fulfill, fake licensure or permits, “lulling” communications while the money disappears, and a pattern of identical complaints.
2. Diversion of owner payments (trust-fund theory → embezzlement).
   Under 9 V.S.A. § 4005a, payments an owner makes for a project are held by the contractor in an express trust for project “claims” (labor and materials with lien rights). When those funds are willfully diverted to non-project uses, prosecutors can charge embezzlement under 13 V.S.A. § 2531 (fraudulent conversion by an “agent” or similar). This is accounting-driven: deposits in; no materials purchased; cash pulls or unrelated spending out.
3. Criminal restitution after conviction.
   Vermont courts must consider restitution in every case with a material loss, and the Restitution Unit can enforce payment. See 13 V.S.A. § 7043. That is the right place to make victims whole — after a lawful conviction for fraud or embezzlement — without coercing labor to work off a private debt.

🍁 Make a One-Time Contribution — Stand Up for Accountability in Vermont 🍁

If Montpelier insists on keeping a “home-improvement fraud” law

Vermont doesn’t need a special statute to nail “take the deposit and ghost” scams—plain false pretenses (prove the lie at intake) and embezzlement of diverted construction trust funds already cover the conduct, with criminal restitution after conviction. But if lawmakers want a contractor-specific law for clarity and deterrence, write it to punish the lie or the diversion, not refusal to labor.

Keep it surgical: (1) Deception route — the contractor knowingly makes a material misrepresentation (licensure, permits, capacity/timeline) to obtain a deposit, the owner relies, money changes hands, and loss meets a threshold. (2) Diversion route — owner payments are deemed trust funds for that job’s labor/materials; knowing off-project use within a set window is the offense. Prove it with books, banks, permits, invoices, and pattern evidence. No “agree to and comply with a plan” language—ever.

Guardrails: don’t criminalize mere nonperformance or inability to refund without deceit/diversion; use permissive (not mandatory) inferences; spell out safe harbors (force majeure, owner breach, documented job costs). Pair it with escrow/bonding for big deposits and a one-page disclosure (start/finish window, permit responsibility, refund terms). Then, upon conviction, order restitution and let the Restitution Unit collect.

For homeowners (and prosecutors), here’s the thread to pull

• Document the intake lies. Save the texts, emails, proposals, license claims, and promised start/finish dates. That’s § 2002 territory when the promises were knowingly false.
• Follow the money. Deposits are project trust funds under § 4005a; if they’re spent off-project, you’re looking at § 2531 embezzlement — proved through bank records, not guesswork.
• Ask for restitution. Courts must consider it at sentencing; the Restitution Unit can collect over time.

Bottom line

The court was right to kill Vermont’s 2015 “work-or-be-charged” shortcut. But Vermont doesn’t need it. If a contractor lies to get the money, charge false pretenses. If the owner’s funds get diverted off-project, charge embezzlement. Then seek restitution. That approach respects the Constitution, protects homeowners, and gives prosecutors a cleaner, stronger case than the 2015 statute ever did.

If you found this information valuable and want to support independent journalism in Vermont, become a supporter for just $5/month today!

Dave Soulia | FYIVT

You can find FYIVT on YouTube | X | Facebook | Instagram

#fyivt #Vermont #ContractorFraud #Restitution

Support Us for as Little as $5 – Get In The Fight!!

Make a Big Impact with $25/month—Become a Premium Supporter!

Join the Top Tier of Supporters with $50/month—Become a SUPER Supporter!