Two California brothers who marketed affordable backyard homes to homeowners are facing dozens of felony charges after prosecutors accused them of taking more than $1 million from customers without completing the promised work.
Austin and Colton Paulhus, the co-founders of Anchored Tiny Homes, have each been charged with 35 felony counts. The Sacramento County District Attorney’s Office alleges they accepted substantial payments for construction projects that were either left unfinished or never started.
Prosecutors say the brothers collected more than $1 million from customers connected to 13 projects but failed to carry out the work or provide the required materials.
Authorities further allege that more than $653,000 was diverted from company accounts to cover expenses and activities unrelated to the construction projects.
Each brother faces 33 counts of diverting construction funds, along with one count of conspiracy and one count of employee wage theft.
The company’s dramatic collapse reportedly left frustrated homeowners throughout California in its wake, including older residents and families seeking backyard housing for aging relatives.
One of those customers was Renee Kumamoto, who reportedly paid $168,000 for a backyard home planned for her father, who was battling cancer.
According to Realtor.com, the company closed just two weeks after Kumamoto made her final payment—before construction had begun.
Another customer, Mariah Dorn, accused Anchored Tiny Homes of taking $266,000 from her elderly parents and leaving them with an unfinished structure and severe financial hardship.
“They have scammed my elderly parents out of $266k before I stopped my mom from making another payment,” Dorn wrote in a July 2024 Facebook post.
She alleged that subcontractors had not been paid for six months and were placing liens on her family’s property.
“They stopped all communication and we are just left with a shell of a home and out of money,” she wrote.
Dorn urged other Californians to avoid the company, saying families from Southern California to Northern California had reported similar problems.
The allegations prompted a major investigation by the California Contractors State License Board, which received more than 200 consumer complaints from 18 counties.
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Regulators revoked Anchored Tiny Homes’ contractor license in November 2024, while the investigation continued after the company stopped operating.
Retired nurse Jan Truelock said her ordeal began in January 2023, when she paid more than $40,000 for a 450-square-foot backyard home at her Roseville property.
The company told her construction would take roughly a year. Instead, her backyard was still empty 12 months later. Truelock ultimately sued for breach of contract and reached a $25,000 settlement, according to Realtor.com.
“I’m very glad they are finally held accountable,” Truelock told the outlet, adding that she believes prison would be an appropriate consequence.
The Paulhus brothers, however, maintain that the company’s collapse was not criminal.
In a lengthy Facebook post published in December 2024, Colton Paulhus acknowledged Anchored Tiny Homes’ disastrous failure but strongly denied any wrongdoing.
“My last business failed. In a major way,” he wrote. “There’s nothing for me to hide. Nothing illegal was done.”
He attributed the company’s downfall to rapid growth and inadequate financing.
“We simply grew too fast, scaled too quickly, and were not properly capitalized to support the growth,” he wrote. “I feel horrible for how many people were affected. The intentions were pure, the execution was not.”
Blair Goss, the Sacramento-based criminal defense attorney representing Austin Paulhus, also disputed the allegations in a statement to the California Post.
“A business failure is not proof of a crime. When a company fails and customers lose money, that is painful, but it does not necessarily mean anyone broke the law,” Goss said.
“The prosecution has made its accusations, but it has not yet shown us its evidence. Austin will be judged on his own conduct, not on a company’s collapse. The case returns to court January 12.”
Both brothers appeared virtually in court on Oct. 14 but did not enter pleas. They are also pursuing bankruptcy protection in federal court.
The California Post contacted Colton Paulhus’ attorney for comment.
