Brothers Austin and Colton Paulhus, founders of the now-defunct company Anchored Tiny Homes, face 35 felony charges each following allegations that they defrauded customers out of more than $1 million for unfinished construction projects.
Prosecutors allege the pair collected substantial payments for 13 separate accessory dwelling unit (ADU) projects but performed no work or supplied no materials. An additional $653,000 is said to have been diverted from company accounts for unrelated expenses. The charges include conspiracy, diversion of construction funds, and employee wage theft, according to the Sacramento County District Attorney's Office.
The collapse of Anchored Tiny Homes has left numerous homeowners with empty plots and incomplete structures. Retired nurse Jan Truelock reportedly paid over $40,000 in January 2023 for a 450-square-foot ADU, with construction never starting. After facing delays and unanswered communications, her attempt to cancel the contract resulted in an offer of only $5,000, despite the company claiming $17,000 was spent on materials she never received. Truelock eventually negotiated a $25,000 settlement and hired another company to complete the project.
Katie Lucas paid $211,000 in 2022 for a backyard property intended for her mother-in-law and grandmother, only to be left with a "shell" after work stopped abruptly. She also alleged that contractors were not paid despite her prompt invoice settlements. Her experience, shared online, contributed to a Facebook group that grew to over 1,000 members comparing similar grievances.
Renee Kumamoto paid $168,000 for an ADU meant to house her father, but the company reportedly went out of business just two weeks after her final payment. The company's rapid expansion, with co-founder Colton Paulhus discussing franchise plans in 2023, contrasts sharply with its eventual shutdown. Anchored Tiny Homes announced its closure in July 2024, with Austin Paulhus citing rapid growth that outstripped the company's ability to sustain demand.
Following the company's collapse, the brothers filed for Chapter 7 bankruptcy. Contractors and franchisees have also claimed to be left unpaid. Between January 2023 and July 2024, prosecutors allege Colton withdrew $334,059 and Austin withdrew $319,700 from company accounts for non-project-related expenses and activities.
The California Contractors State License Board received more than 200 consumer complaints across 18 counties related to Anchored Tiny Homes, leading to the revocation of the company's contractor license in 2024. The brothers have appeared in court but have not yet entered pleas. They are scheduled to return to court in January 2027. The allegations have not been proven in court.