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Bucks County Contractor Sentenced to Jail for Fraud

9/20/2016 | Construction Blog

A plethora of laws have been passed in recent years attempting to put more strict regulation on the construction industry – particularly residential construction – as it relates to payment and fraud. While there are voices on both sides of the debate as it relates to whether the laws are necessary and reasonable, there should be little doubt that the repercussions for failing to heed the recent trend are potentially serious.

As reported in the Bucks County Courier Times, Judge Clyde Waite of the Bucks County Court of Common Pleas sentenced unlicensed contractor John Michael New to 8-16 years in prison and imposed restitution in the amount of $163,000 earlier this week for taking payments on home improvement contracts and failing to do the work. Mr. New pled guilty in June to 8 counts of receiving advanced payments for services he failed to perform, one count of theft, and one count of insurance fraud. These charges relate to 8 jobs Mr. New took from 2010 to 2015.

The improper conduct for which he was charged related to taking deposits and failing to perform the work, relaying to customers that he was not using subcontractors when he in fact was doing so, submitting a false certification to get insurance coverage, and failing to register as a licensed contractor. Despite pleading guilty, Mr. New did very little between taking his plea and sentencing to repay the victims of his actions. In addition to his already poor conduct, Judge Waite and the prosecutor noted this in issuing the sentence.

Contractors should be aware of this situation and understand that the Court was trying to send a clear message in how it was handled. In the event there is any doubt, consider Judge Waite’s comments at sentencing: “That should send every message that is necessary about what will be tolerated”.