Contractor pleads no contest to theft, sentenced to jail


A Palo Alto contractor who had been accused of defrauding an Atherton homeowner pleaded no contest to one misdemeanor charge of grand theft and was sentenced to 60 days in county jail under a plea agreement accepted by San Mateo County Superior Court Judge Mark Forcum on Friday, Aug. 15.

Other charges against Richard James Smith, 56, owner of R.J. Smith & Associates, including a count of fraud/forgery, were dropped as part of the plea agreement, according to San Mateo County District Attorney Steve Wagstaffe. Because the evidence was mostly circumstantial, prosecutors would have had difficulty proving fraud, said Chief Deputy District Attorney Karen Guidotti.

The judge dismissed all charges against a second defendant, Tariel Gusseinov, a former chief financial officer of the company, the district attorney reported. Because he was not the owner of the company, prosecutors might not be able to prove "that he was responsible for non-payment of the supplier, nor could we prove that he in any way personally profited from non-payment of the supplier," Ms. Guidotti said.

The original charges brought against the two men alleged they had fraudulently over-billed Atherton homeowner Larry Lowry by thousands of dollars and diverted money owed to a subcontractor on the project, the District Attorney's Office said. The total amount of alleged fraud was originally estimated at $400,000 by the Atherton Police Department.

Court documents said Mr. Smith's company was hired to do a major construction job on Mr. Lowry's Stockbridge Avenue home. The alleged fraud came to light when fixtures from a subcontractor were late and the homeowner contacted the subcontractors directly, the documents say.

Ms. Guidotti said Mr. Smith's primary defense was that, "while these may have been poor business practices, it did not amount to actual fraud or theft." She said the DA's office was concerned it could not prove the case beyond a reasonable doubt in a trial.

In addition to 60 days in county jail with no credit for time served, Mr. Smith was sentence to two years of probation. He must pay $7,000 in restitution to the victim as well as $235 in court fines. He had been out on $75,000 bail and was scheduled to surrender himself into custody on Nov. 1.

According to the state of California's Contractors State License Board website, Mr. Smith's contractor's license was revoked on Feb. 11, 2013, and he may not reapply for a new license until at least five years from that date.


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