Committee advances theft‑by‑contractor bill after victims and investigators describe frequent advance‑payment fraud

The House Business Affairs and Labor Committee voted to advance a bill aimed at giving law enforcement clearer criminal tools to prosecute contractors who take large advance payments and then abandon or substantially abandon work.

Representative Kelty, who sponsored HB 26 12 45, said the measure was brought by law enforcement and is aimed at protecting vulnerable homeowners — particularly seniors and low‑income families — from “scammers posing as trusted contractors.” Kelty said the proposal would strengthen penalties and add statutory standards to help prosecutors and investigators distinguish between ordinary contract disputes and intentional theft.

Multiple witnesses described the problem in detail. Sergeant Vincent Sapp and Detective Marissa Williams of the El Paso County Sheriff’s Office said contractor‑fraud investigations are frequent and difficult to prosecute under current law because proving criminal intent can be hard; those witnesses described cumulative losses they have documented in the millions of dollars in a single county. ‘‘This legislation provides clearer standards to distinguish a civil contractor dispute from intentional fraud,’’ Sapp told the committee.

Victims and advocates offered personal accounts. Dr. Carolyn A. Brent urged protections for older adults, and Ashton Gamblin, who identified herself as a victim, described years living with uncompleted and unsafe renovations after paying a contractor in full. Shannon Johnson told the committee she had to threaten civil suit to recover a $2,262 payment and described widespread complaints to the Colorado Attorney General.

Law‑enforcement witnesses described the bill’s core tool: a required advance‑payment disclosure and a statutory marker that diversion of funds for purposes unrelated to the written disclosure may be evidence of intent. Investigators said that disclosure would help distinguish legitimate business practices from intentional diversion of client funds and make it easier to collect bank statements, messages and other documentary evidence to establish intent.

Representative Kelty moved the bill to the Committee of the Whole; Representative Richardson seconded. After debate and additional member questions about potential overlap with fraud and bankruptcy law, the committee approved the measure by a 10–3 vote and sent it to the Committee of the Whole for further consideration.