“Contractor License Fraud” – Business & Professions Code 7027.3 BP

California Business and Professions Code 7027.3 BPC makes it a crime to use a contractor’s license number in a fraudulent manner. This offense is a wobbler, which means that it can be prosecuted as a misdemeanor or a felony.

The language of the code section states that:

7027.3. Any person, licensed or unlicensed, who willfully and intentionally uses, with intent to defraud, a contractor’s license number that does not correspond to the number on a currently valid contractor’s license held by that person, is punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in state prison, or in county jail for not more than one year, or by both that fine and imprisonment. The penalty provided by this section is cumulative to the penalties available under all other laws of this state. If, upon investigation, the registrar has probable cause to believe that an unlicensed individual is in violation of this section, the registrar may issue a citation pursuant to Section 7028.7.

Examples

• John’s wealthy neighbor wants a new garage, so John uses his friend’s contractor’s number to bid on the home improvement construction project and to apply for building permits.
• Shirly operates She Can Build, Inc., and actively enters into building contracts for new homes, all while using another person’s contractor number.
• While verifying a contractor’s license number, Lamar later uses the number when he agrees to serve as the general contractor for construction work on a neighborhood recreation center.

Luckily, there are several legal defenses that a person can assert. These include showing that an accused party:

• did not act willfully;
• did not act with an intent to defraud; and/or,
• acted under duress.

Penalties

Contractor fraud in violation of 7027.3 BPC is a wobbler offense under California law. This means it can be charged as either a misdemeanor or a felony depending on the facts of a case.

Either charge is punishable by:

• imprisonment in the county jail; and/or,
• a significant fine.

Our California criminal defense attorneys will explain the following in this article:

• 1. Is it a crime to use a contractor’s license number fraudulently?
• 2. How can I fight the charges?
  • 2.1 No willful act
  • 2.2 No intent to defraud
  • 2.3 Duress
• 3. What are the consequences of a conviction in court?
• 4. Related offenses
  • 4.1 Contracting without a license – BPC 7028
  • 4.2 Forging, counterfeiting, or possessing a fraudulent public seal – PC 472
  • 4.3 False advertising – BPC 17500

1. Is it a crime to use a contractor’s license number fraudulently?

Business and Professions Code 7027.3 BP is the California statute that makes it a crime when a person:

1. willfully and intentionally uses,
2. with the intent to defraud,
3. a contractor’s license number.¹

Under California Penal Code 7 PC, “willfully” means that a person commits an act with purpose or willingness.²

Further, a person has an “intent to defraud” if he intends to deceive another person out of money or other property.

2. How can I fight the charges?

A person can challenge the accusation by raising a legal defense.

Three common defenses are:

1. no willful act;
2. no intent to defraud; and/or,
3. duress.

The charge should be dropped as long as the district attorney or attorney general cannot prove guilt beyond a reasonable doubt.

2.1. No willful act

Recall that a violation of BP 7027.3 must be done willfully. Therefore, it is a valid legal defense for a defendant to show that he is not guilty because his actions were not willful.

2.2. No intent to defraud

Please also recall that a prosecutor must prove that an accused used a contractor’s license with the specific intent to defraud another. This means a solid legal defense is for an accused to show that while he may have used a contractor’s license number, he did so without any intent to defraud.

2.3. Duress

Duress is a legal defense in which an accused basically says: “He made me do it.” The defense applies to the very limited situation in which a person commits a crime (here, fraudulently using a contractor’s license number), because somebody threatened to kill him if the crime was not committed.

3. What are the consequences of a conviction in court?

Under California law, a violation of Business and Professions Code 7027.3 is a wobbler offense. This means it can be charged as either a misdemeanor or a felony, depending on the facts of the case.

If charged as a misdemeanor, the crime is punishable by:

• imprisonment in the county jail for up to one year; and/or,
• a maximum fine of $1,000.³

If a violation is charged as a felony, the offense is punishable by:

• imprisonment in the California state prison for up to three years; and/or,
• a maximum fine of $10,000.⁴

4. Related Offenses

There are three crimes related to the fraudulent use of a contractor’s license number. These are:

1. contracting without a license – BPC 7028;
2. forging, counterfeiting, or possessing a fraudulent public seal – PC 472; and,
3. false advertising – BPC 17500

4.1. Contracting without a license – BPC 7028

Per Business and Professions Code 7028 it is a crime for a contractor to do business without a contractor’s license or with a suspended license.

Under BP 7028, being an unlicensed contractor is a misdemeanor offense.⁵

A first conviction for the offense is punishable by:

• imprisonment in the county jail for up to six months; and/or,
• a fine of up to $5,000.⁶

Repeat unlicensed contracting offenders are subject to greater fines and longer prison terms.⁷

4.2. Forging, counterfeiting, or possessing a fraudulent public seal – PC 472

California Penal Code 472 PC is the California statute that makes it a crime to forge a public seal.

Per PC 472, forging a public seal means to forge or counterfeit a design or emblem – such as the California state seal on a driver’s license or state identification card.

A violation of this code section is a wobbler offense, meaning it can be charged as either a misdemeanor or a felony.

Either charge is punishable by:

• imprisonment in the county jail; and/or,
• a significant fine.⁸

4.3. False advertising – BPC 17500

Business and Professions Code 17500 makes it a crime for a person or company to engage in false advertising.

Under BP 17500, false or deceptive advertising is when a person or company makes false or misleading statements to consumers about the nature of a product or service.⁹

A person that violates BP 17500 is guilty of a misdemeanor. The offense is punishable by:

• imprisonment in the county jail for up to six months; and/or,
• a fine not to exceed $2,500.¹⁰

For additional help…

If you or someone you know has been accused of a crime under Business and Professions Code 7027.3, we invite you to contact us. Our contact information is on this page. We have offices in Los Angeles and throughout California.

To report unlicensed activity, scams, or red flags within the construction industry, contact California’s CSLB’s (cslb.ca.gov) Statewide Investigative Fraud Team (SWIFT) hotline.

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