Two brothers in California, Austin and Colton Paulhus, who co-founded Anchored Tiny Homes, have been charged with 35 felony counts each. Prosecutors allege they collected over $1 million from customers for backyard homes that were never completed, or in some cases, never started.
The Sacramento County District Attorney's Office claims the brothers diverted more than $653,000 from company accounts to expenses unrelated to the construction projects. The charges include 33 counts of diversion of construction funds, one count of conspiracy, and one count of employee wage theft.
Customers, including elderly residents and families seeking to build homes for relatives, have reported significant financial losses. Renee Kumamoto reportedly paid $168,000 for a backyard home for her father, only for the company to shut down before construction began. Mariah Dorn stated that her elderly parents lost $266,000 for an unfinished structure.
The allegations prompted an investigation by the California Contractors State License Board, which received over 200 consumer complaints from 18 counties. The board revoked Anchored Tiny Homes' contractor license in November 2024.
Colton Paulhus, in a social media post, attributed the company's failure to rapid expansion and insufficient funding, denying any illegal activity. His attorney, Blair Goss, stated that a business failure does not necessarily prove a crime. The brothers are also seeking bankruptcy protection.
Both brothers appeared virtually in court on October 14 and have yet to enter pleas. The case is scheduled to return to court on January 12.