Theft by Contractor Defense Lawyer in Wisconsin

Charged with theft by contractor under Wis. Stat. § 779.02(5)? If you are facing one of these charges, contact us today for a free, confidential consultation.

(608) 250-3500

What the Law Says About Theft by Contractor in Wisconsin

Wis. Stat. § 779.02(5) creates a statutory trust fund over construction money paid for the “improvement of land.” When an owner (or lender via a construction mortgage) pays a prime contractor or subcontractor for labor, materials, or other improvements, those funds become a trust fund in the hands of the contractor. The money must be used only to pay claims for labor, services, materials, plans, and specifications on that project until all such claims are paid in full – or paid proportionally if there is not enough money to pay everyone.

If a contractor or subcontractor instead uses those trust funds for any other purpose—for example, paying unrelated debts, overhead, or themselves—before paying all valid, non-disputed claims, that use can be treated as Theft by Contractor, punishable as theft under Wis. Stat. § 943.20. When the contractor is a corporation, LLC, or other entity (rather than a sole proprietorship), officers, directors, members, partners, or agents responsible for the misappropriation can also be charged personally.

Chirafisi Anderson, S.C. defends individuals charged with felony property crime charges including theft by contractor across southern and Central Wisconsin.

Elements of Theft by Contractor in Wisconsin

To convict someone of Theft by Contractor under Wis. Stat. §§ 779.02(5) and 943.20(1)(b), the State must prove all of the following beyond a reasonable doubt:

Agreement for Improvement of Land – The defendant entered into an oral or written agreement for the improvement of land (for example, building, repairing, or altering a house, garage, or other structure).
Use of Funds for Non-Trust Purposes – The defendant intentionally used some of that money for a purpose other than paying claims due or to become due for labor, services, or materials used in the improvement before all such claims were paid—either in full or proportionally in cases where funds were insufficient.
Without Consent and Contrary to Authority – The use of the money was without the owner’s consent and contrary to the defendant’s authority as trustee of those funds.
Knowledge of Lack of Consent and Authority – The defendant knew the use of the money was without the owner’s consent and contrary to the defendant’s authority.

These elements are drawn from Wisconsin Jury Instruction – Criminal 1443: Theft by Contractor, which Wisconsin courts use to instruct juries in these cases, including how to handle bona fide disputes over claims and how value affects whether the case is charged as a misdemeanor or felony.

Theft by Contractor Defense Attorney in Wisconsin Free Consultations

REQUEST A FREE AND CONFIDENTIAL CONSULTATION

Penalties and Sentencing for Theft by Contractor in Wisconsin

Theft by Contractor is punished under Wisconsin’s general theft statute, Wis. Stat. § 943.20, which ties the penalty level to the value of the funds misused. The “value” is typically the amount of trust fund money used for non-project purposes before paying valid claims for labor and materials.

Value of Misused Trust Funds	Classification	Maximum Penalty*
$2,500 or less	Class A Misdemeanor	Up to 9 months jail and $10,000 fine
$2,500 – $5,000	Class I Felony	Up to 3.5 years imprisonment (1.5 years initial confinement + 2 years extended supervision) and $10,000 fine
$5,000 – $10,000	Class H Felony	Up to 6 years imprisonment (3 years initial confinement + 3 years extended supervision) and $10,000 fine
$10,000 – $100,000	Class G Felony	Up to 10 years imprisonment (5 years initial confinement + 5 years extended supervision) and $25,000 fine
> $100,000	Class F Felony	Up to 12.5 years imprisonment (7.5 years initial confinement + 5 years extended supervision) and $25,000 fine

*Maximum penalties; actual outcomes depend on criminal history, loss amount, restitution, and other factors.

Additional exposure can include:

Restitution: Courts can order restitution for unpaid subcontractors, suppliers, or owners, including interest and some out-of-pocket expenses.
Civil liability: Under § 779.02(5), shareholders, members, or partners who received misappropriated funds (even if not criminally responsible) may be sued civilly by “interested parties” to restore money to the trust fund.
Aggregation across payments: Under Wisconsin’s theft aggregation rules, multiple acts of misappropriation from the same owner and under a single intent and design can be combined to reach a higher felony value threshold, significantly increasing potential exposure.

Common Scenarios in Wisconsin Theft by Contractor Cases

Theft by Contractor charges frequently arise in the following types of situations:

Cash-flow juggling between jobs. Contractors receive owner funds on Project A, then use them to cover payroll, overhead, or costs on Project B before paying subcontractors or suppliers on Project A.
Owners alleging “double payment” or unpaid liens. An owner pays the general contractor in full, then receives lien notices or lawsuits from unpaid subs, suppliers, or trades and refers the matter to law enforcement.
Disputed change orders and extras. The contractor believes funds are owed for extras or change orders, withholds payment to certain subs or suppliers, and the State later characterizes this as “use for a non-trust purpose.”
Struggling or failing construction businesses. A contractor in financial distress uses trust funds to keep the business afloat, pay old debts, or service loans, leaving current project participants unpaid.
Multi-owner or entity-structure confusion. Officers, directors, or members of a corporation/LLC are accused of being the “responsible persons” for misappropriation based on their role in approving payments or controlling the checkbook.

In many of these situations, the line between a civil payment dispute and a criminal allegation depends on how prosecutors interpret accounting records, intent, and whether there was a bona fide dispute over the validity or amount of certain claims.

Defenses and Legal Strategies in Theft by Contractor Cases

Defending Theft by Contractor charges requires a deep dive into contract documents, bank records, lien notices, and the entire flow of funds. Effective defense strategies often include:

Challenging the “trust fund” nature of the funds – The State must show payments were made for an improvement of land and that the defendant was a prime contractor or subcontractor within the meaning of § 779.02(5). Disputes over the scope of work, timing, or the identity of the contracting entity can be critical.
Bona fide dispute over claims – The statute carves out claims that are the subject of a bona fide dispute. If there was a reasonable disagreement about whether a subcontractor, supplier, or professional was owed money—or about the amount owed—failure to pay those disputed amounts does not automatically equal theft.
Proportional payment in cases of deficiency – When there is not enough money to pay every claim, the law allows proportional payment. Showing that the contractor made good-faith, proportional distributions (instead of favoring non-trust purposes) can undercut the allegation of misappropriation.
Lack of knowledge or criminal intent – The State must prove the defendant knew they were using trust funds for a non-trust purpose without the owner’s consent and contrary to their authority. Delegation to bookkeepers, accountants, or other owners; misunderstanding of accounting practices; or reliance on professional advice can be central to challenging this element.
Entity and individual-liability challenges – When officers, directors, members, or partners are charged personally, the defense can focus on whether they were actually “responsible for the misappropriation” or merely associated with the company without controlling trust fund decisions.
Value and aggregation disputes – Because the classification (misdemeanor vs. felony and class of felony) turns on the value of misused funds, carefully reconstructing payments, offsets, and legitimate uses can reduce the alleged loss amount—or show that multiple acts were not committed under a “single intent and design,” limiting aggregation.
Constitutional and procedural issues – Illegal searches of business records, defective warrants, improper subpoenas to banks, or overbroad seizure of financial information can create grounds to suppress key evidence and weaken the prosecution’s case.

View some of the results the attorneys at Chirafisi Anderson, S.C. have obtained in felony theft cases across Southern and Central Wisconsin: Criminal Defense Case Results

Why Hiring a Theft by Contractor Lawyer Matters

Theft by Contractor is not a simple “bad check” or minor business dispute—it is a serious theft allegation that can expose contractors, business owners, and even non-managing shareholders to criminal charges, restitution, and long-term civil consequences. These cases typically involve detailed construction contracts, lien law, and complex bank records, and they can quickly escalate if not handled carefully from the outset. The attorneys at Chirafisi Anderson, S.C. have the experience and proven results to protect your rights, challenge inflated or inaccurate loss calculations, and work to keep a business dispute from destroying your reputation and livelihood.

Local Experience Matters. We represent clients facing Theft by Contractor and related theft charges throughout Southern and Central Wisconsin, including Dane, Rock, Iowa, Green, Columbia, Dodge, Jefferson, and Sauk Counties. We understand how local prosecutors, investigators, and judges treat contractor trust fund cases and what types of documentation and explanations can make a difference in charging decisions, plea negotiations, and sentencing.

Proven Track Record of Results. Our attorneys have obtained dismissals, charge reductions, and favorable plea agreements in complex financial and property crime cases by dissecting payment histories, demonstrating bona fide disputes, and showing that funds were applied in good-faith to project obligations. We know how to work with accountants, experts, and industry witnesses to build a comprehensive defense and to position our clients for the best possible outcome.

Recognized Legal Excellence. Chirafisi Anderson, S.C. attorneys are regularly recognized by Super Lawyers® and remain active in state and national criminal defense organizations. Our reputation as experienced trial lawyers and negotiators helps us advocate effectively in high-stakes cases, including those where a contractor’s freedom, business, and professional reputation are all on the line.

Contact Chirafisi Anderson, S.C.

If you are under investigation or have been charged with Theft by Contractor under Wis. Stat. §§ 779.02(5) and 943.20, early legal representation is critical. How your financial records are presented, how disputes with subcontractors and suppliers are framed, and how quickly you respond to law enforcement and owners can significantly affect whether a case is charged as a felony and how it is ultimately resolved.
Contact Chirafisi Anderson, S.C. today to discuss your situation and your options.

(608) 250-3500 Schedule a Free Consultation

Frequently asked questions – Theft by Contractor in Wisconsin

No. Not every unpaid invoice is a crime. Theft by Contractor requires proof that the contractor received trust funds for an improvement and intentionally used them for non-trust purposes before paying valid, non-disputed claims.

A bona fide dispute is a genuine, good-faith disagreement about whether a claim is owed or how much is owed. If a claim is legitimately disputed, nonpayment of that disputed amount alone does not automatically equal theft.

Yes. Individuals responsible for how trust funds were used can be charged criminally, and even non-responsible shareholders or members who received misappropriated funds may face civil liability to restore money to the trust.

The charging level depends on the value of trust funds allegedly misused. The State can also aggregate multiple misuses from the same owner under a single intent and design to reach a higher felony threshold.

Business failure alone is not a crime. The risk of prosecution comes when owner or mortgage funds are used for non-project purposes before paying valid, non-disputed project claims, which is why careful documentation and legal advice are critical.