Anchored Tiny Homes Brothers Colton and Austin Paulhus Face 35 Felony Counts Over Unfinished ADUs

Published Oct. 21, 2026. Case status is current as of that date.

Homeowners say they paid for backyard homes that, in many cases, were never built. After investigating more than 200 consumer complaints across 18 California counties, state regulators and Sacramento County prosecutors have brought felony charges against the two brothers behind the now-defunct ADU builder Anchored Tiny Homes.

On Oct. 20, 2026, the Contractors State License Board (CSLB) announced that Colton Paulhus and Austin Paulhus each face 35 felony counts: 33 counts of diversion of construction funds, one count of conspiracy to commit a crime, and one count of employee wage theft [1]. KCRA 3 identified the brothers by their full names, Austin James Paulhus and Colton Scott Paulhus, and reported that the Sacramento County District Attorney's Office filed the felony complaint [2].

Important: Charges are allegations. Both brothers are presumed innocent unless and until proven guilty in court. No plea or conviction has been reported.

Status: Charged in Sacramento County. A settlement conference hearing that was initially scheduled for the week before CSLB's announcement was continued to Jan. 12, 2027 [1].

What is alleged

According to CSLB, the complaints it investigated alleged [1]:

• Abandoned ADU projects across 18 counties;
• Unpaid subcontractors;
• Payments taken in advance of work performed, "or often not performed"; and
• Homeowners' payments not used for those homeowners' projects.

KCRA reported that, according to the criminal complaint, prosecutors claim the co-founders billed customers and received more than $1 million in multiple installments on 13 separate construction projects "despite performing no work and supplying no materials" [2]. KCRA described Anchored Tiny Homes as a Fair Oaks-based company that shut down without notice to customers. In earlier reporting cited in the same story, one homeowner said she paid $168,000 for a unit that was never started and another said she paid $211,000 and was left with an unfinished project. We are not naming those homeowners.

The "diversion of construction funds" charge generally refers to taking money paid for a specific construction project and using it for something else. The brothers have not been convicted of that or any other charge.

How regulators got here

CSLB said that, because of "the volume and severity of the allegations," it pursued a criminal investigation and filed an accusation with the California Attorney General's Office seeking revocation of the company's contractor's license. CSLB revoked Anchored Tiny Homes' license in November 2024. Complaints kept coming after the revocation, and CSLB began referring cases to the Sacramento County District Attorney's Office for possible criminal charges [1].

The California Statewide Law Enforcement Association, which republished the announcement, quoted its president, Alan Barcelona: "Hiring and working with contractors can be very intimidating for consumers. It's reassuring to know CSLB is a resource that can assist and protect" [3].

The people charged

Name (as reported)	Role	Charges
Colton Scott Paulhus	Co-founder, Anchored Tiny Homes	33 counts diversion of construction funds; 1 count conspiracy; 1 count employee wage theft
Austin James Paulhus	Co-founder, Anchored Tiny Homes	Same 35 counts

Ages and cities of residence were not given in the CSLB release [1][2].

The legal payment limits most homeowners don't know

CSLB's release spells out California's home improvement payment rules for ADU builders: a down payment should never exceed $1,000 or 10% of the project's total cost, whichever is less, and any later "progress payments" cannot exceed the value of the work performed or materials delivered [1]. A contractor asking for tens of thousands of dollars before breaking ground is a warning sign under those rules.

Red flags

• Large payments before work begins, or payment schedules that run ahead of visible progress.
• Pressure to pay the next installment to "lock in" materials or a build slot.
• Subcontractors or suppliers contacting you about unpaid bills on your project.
• A license that is suspended, revoked, or doesn't match the company name on your contract.
• Sudden silence from the office, unreturned calls, or crews that stop showing up.

What to do

1. Check the license first. CSLB's consumer pages let you check a contractor's license or home improvement salesperson registration before you sign [4].
2. Keep payments tied to progress. Don't pay beyond the work completed and materials delivered, and get lien releases from subcontractors and suppliers as you pay.
3. Pay by traceable methods and keep every invoice, contract and message.
4. If a project is abandoned, file a complaint with CSLB and contact your county district attorney's consumer fraud unit.
5. If you were an Anchored Tiny Homes customer and haven't reported, contact CSLB through cslb.ca.gov.

Case status (as of Oct. 21, 2026)

Defendant	Court	Status as of Oct. 21, 2026	Source
Colton (Colton Scott) Paulhus	State criminal case, Sacramento County (filed by Sacramento County DA)	Charged with 35 felony counts; settlement conference continued to Jan. 12, 2027; presumed innocent	[1][2]
Austin (Austin James) Paulhus	State criminal case, Sacramento County (filed by Sacramento County DA)	Charged with 35 felony counts; settlement conference continued to Jan. 12, 2027; presumed innocent	[1][2]
Anchored Tiny Homes	CSLB (administrative)	Contractor's license revoked November 2024	[1]

Statuses can change. Those not convicted are presumed innocent.

Sources

1. Contractors State License Board, "Former Contractors Behind Anchored Tiny Homes Face 35 Felony Charges" (CSLB #26-02), Oct. 20, 2026. https://www.cslb.ca.gov/Resources/PressReleases/2026/Anchored%20Tiny%20Homes.FINAL.pdf
2. KCRA 3, "Sacramento County DA's Office files charges against Anchored Tiny Home co-founders," updated Oct. 9, 2026. https://www.kcra.com/article/sacramento-county-da-files-charges-anchored-tiny-homes/74096522
3. California Statewide Law Enforcement Association, "Former Contractors Behind Anchored Tiny Homes Face 35 Felony Charges," Oct. 20, 2026. https://cslea.com/2026/10/former-contractors-behind-anchored-tiny-homes-face-35-felony-charges/
4. Contractors State License Board, "Hire a Licensed Contractor" consumer resources (accessed Oct. 21, 2026). https://www.cslb.ca.gov/Consumers/Hire_A_Contractor/

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