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The short answer is no, not usually. In Michigan, failing to complete work you were paid for is almost always a civil matter, not a criminal one. But that doesn’t stop unhappy clients from calling the police and trying to turn a contract dispute into a criminal false pretenses case.
When someone threatens to have you arrested over a business disagreement, it’s terrifying. And increasingly, people are weaponizing the criminal justice system to pressure contractors, freelancers, and small business owners into settlements they don’t owe.
Knowing the difference between civil vs. criminal fraud in Michigan could be what keeps you out of handcuffs and helps you fight back against bad-faith accusations.
Here’s a scenario that plays out across Michigan every single day. A contractor takes a deposit for a kitchen remodel. Material costs spike unexpectedly. The project takes longer than estimated.
The homeowner, frustrated and impatient, calls the police and claims they were scammed. They want the contractor arrested.
Or a freelance web designer collects payment upfront, delivers work the client doesn’t love, and suddenly faces accusations of theft and fraud.
This isn’t how the criminal justice system is supposed to work. Police departments are not collection agencies. Prosecutors are not meant to be leverage in business negotiations.
Yet unhappy customers routinely attempt to criminalize ordinary civil disputes, and sometimes, it works. An overzealous detective takes the report seriously. A prosecutor unfamiliar with contract law files charges.
And suddenly, a businessperson who simply had a deal go sideways is facing felony accusations.
If this is happening to you, understand this: having an unhappy client doesn’t make you a criminal.
Michigan’s false pretenses statute, MCL 750.218, makes it a crime to use a false representation to obtain money, property, or services with the intent to defraud. The key phrase there is intent to defraud.
To convict someone of false pretenses, prosecutors must prove four elements beyond a reasonable doubt:
That last element is critical. A breach of contract defense hinges on one simple question: did you intend to defraud the person when you accepted their money, or did you genuinely intend to do the work?
If a contractor takes a deposit fully intending to complete a remodel, encounters unexpected problems, and the project falls apart, that’s not fraud. That’s life. That’s business. That’s a civil dispute that belongs in small claims court or circuit court, not in criminal court.
The line between civil breach of contract and criminal false pretenses isn’t just legal nuance. It’s the difference between owing someone money and owing the state years of your freedom.
This occurs when one party fails to perform their obligations under an agreement. The remedy is money damages, specific performance (a court order to complete the work), or contract rescission.
According to the Michigan Courts Civil Proceedings Benchbook, the plaintiff in a breach of contract case has a duty to mitigate damages—meaning they must take reasonable steps to minimize their own losses. Nobody goes to prison. The dispute stays between the private parties involved.
This requires that extra ingredient: intent to deceive from the outset. A person who takes money knowing they’ll never deliver the promised goods or services commits a crime. But a person whose business deal simply doesn’t work out has not committed any crime at all.
Michigan courts have been clear on this distinction. In fact, before 2004, it was nearly impossible to prosecute someone for false pretenses based on a promise about future performance—the law only covered misrepresentations of existing facts.
The legislature added language about future events to close a loophole, but the intent requirement remains. Prosecutors must still prove the defendant knew the promise was false when they made it.
When someone reports a contractor or service provider to the police for fraud, here’s what typically happens. A police officer takes the report. If the officer believes a crime may have occurred, they forward the case to the prosecutor’s office. The prosecutor reviews the evidence and decides whether to authorize charges.
The problem is that many of these reports are one-sided. The complainant tells a story that makes them sound like an innocent victim, and the businessperson sounds like a con artist. They leave out the parts where they changed the scope of work six times, demanded extras without paying, or had unrealistic expectations that no one could meet.
Good prosecutors recognize civil disputes disguised as criminal complaints and decline to file charges. But not every prosecutor catches it. Some are overworked. Some are unfamiliar with the distinctions in contract law. Some face political pressure to do something when a constituent complains loudly enough.
This is where having immediate access to a defense attorney becomes critical. The earlier you can intervene in the process—ideally before charges are even filed—the better your chances of shutting down an illegitimate prosecution before it starts.
If you are charged with false pretenses in Michigan, the potential penalties depend entirely on the value allegedly involved. The statute creates a tiered system based on MCL 750.218 that escalates rapidly:
That triple the value provision deserves attention. A job worth $30,000 that results in a conviction could mean a $90,000 fine—on top of the prison sentence. Prior convictions can bump charges into higher tiers even if the dollar amount would otherwise place them lower.
These are serious consequences for what often amounts to nothing more than a business deal gone wrong.
When criminal false pretenses charges arise from what’s actually a civil dispute, several defense strategies come into play.
This is the most common and often most effective defense. If you can demonstrate that you genuinely intended to perform the work when you accepted payment, you didn’t commit fraud.
Evidence might include communications showing you were actively working on the project, receipts for materials purchased, records of other completed jobs, or testimony from employees or subcontractors about your legitimate business operations.
If you delivered most of what was promised, even if the client isn’t happy with the results, that’s a quality dispute—not fraud. The remedy is civil court, where a judge can determine what refund, if any, is appropriate.
Material costs exploded after COVID. Supply chains collapsed. Subcontractors became impossible to find. If external factors outside your control prevented completion, that’s not criminal conduct. This defense can defeat fraud charges entirely.
Did the client change specifications constantly? Did they refuse access to the worksite? Did they fail to make required payments that were prerequisites to continued work? Their behavior can demonstrate that any breach was mutual—or that they’re the ones who actually caused the deal to fall apart.
If you’re facing accusations or just trying to understand your exposure, these questions come up frequently in consultations with defense attorneys.
Not typically. Police will investigate the complaint before making an arrest. In many cases, prosecutors must authorize charges first. However, if police believe you’re a flight risk or that evidence might be destroyed, a warrant could issue more quickly. Having an attorney involved early helps protect your rights during the investigation phase.
This actually strengthens your defense significantly. Offering a refund demonstrates good faith—you weren’t trying to steal from anyone. Document the offer in writing. Your attorney can use this evidence to argue that the dispute is purely civil and that criminal charges are inappropriate.
Having a written contract helps establish what was actually promised, but its absence doesn’t automatically mean fraud occurred. Verbal contracts are enforceable in Michigan for most services. The question remains whether you intended to perform when you accepted payment, not whether the paperwork was perfect.
Yes, and this happens frequently. Civil and criminal proceedings are separate. Someone can file a lawsuit for breach of contract while simultaneously filing a police report alleging fraud. However, this dual approach can actually help your defense—it shows the accuser views the situation as a money dispute, not a criminal matter.
Many licensed professions, such as contractors, accountants, real estate agents, healthcare providers—have disciplinary boards that may take action based on criminal charges, even before conviction. A strong defense that results in dismissed or reduced charges can protect not just your freedom but your entire career.
When a business dispute crosses into criminal accusations, you need someone in your corner who understands both the law and the tactics used to weaponize it against honest people.
Ben Hall Law has built a reputation for standing between clients and the full weight of the justice system. Every person deserves relentless, principled defense, especially when they’re facing charges that never should have been filed in the first place.
If you’re dealing with false pretenses accusations in East Lansing or anywhere in Michigan, don’t wait for the situation to escalate. Call Ben Hall Law for a consultation. The earlier you act, the more options you have.
