The Fifth Circuit has recently made the following statement:
The Texas Property Code requires, “Construction payments are trust funds . . . if the payments are made to a contractor . . . under a construction contract for the improvement of specific real property in this state.” TEX. PROP. CODE § 162.001(a). The contractor holds these construction payments in trust for the benefit of the materialmen that furnished construction material. TEX. PROP. CODE §§ 162.002–003. The Fifth Circuit has determined that violation of this trust can result in non-dischargeability under § 523(a)(4). In re Nicholas, 956 F.2d 110, 112–14 (5th Cir. 1992). Texas law does not require trust funds to be kept in separate accounts. In re Boyle, 819 F.2d 583, 592 (5th Cir. 1987). Nor must these funds be spent only on the project for which they were received—they may be spent on other projects or on expenses related to general business overhead. Id. Mrs. Swor does not dispute that they held the payment in trust for Bartley or that if impermissible payments were made using trust funds, § 523(a)(4) would render the debt to Bartley non-dischargeable.
Bartley Texas Builders Hardware Inc. v. Swor No. 09-20061 Summary Calendar
http://www.ca5.uscourts.gov/opinions/unpub/09/09-20061.0.wpd.pdf. However, under some circumstances, a separate account must in fact be maintained.
Texas Property Code § 162.006. CONSTRUCTION ACCOUNT REQUIRED IN CERTAIN CIRCUMSTANCES.
(a) A contractor who enters into a written contract with a property owner to construct improvements to a residential homestead for an amount exceeding $5,000 shall deposit the trust funds in a construction account in a financial institution.
(b) The periodic statement received from the financial institution must refer to the account as a "construction account" to satisfy the requirements of this section.
The Texas Property Code goes on to say:
§ 162.031. MISAPPLICATION OF TRUST FUNDS. (a) A trustee who, intentionally or knowingly or with intent to defraud, directly or indirectly retains, uses, disburses, or otherwise diverts trust funds without first fully paying all current or past due obligations incurred by the trustee to the beneficiaries of the trust funds, has misapplied the trust funds.
Violation of Chapter 162 can be a crime.
§ 162.032. PENALTIES. (a) A trustee who misapplies trust funds amounting to $500 or more in violation of this chapter commits a Class A misdemeanor.
(b) A trustee who misapplies trust funds amounting to $500 or more in violation of this chapter, with intent to defraud, commits a felony of the third degree.
(c) A trustee who fails to establish or maintain a construction account in violation of Section 162.006 or fails to establish or maintain an account record for the construction account in violation of Section 162.007 commits a Class A misdemeanor.
Counsel should be careful to check specific facts of each case, because otherwise a client may have committed a crime and reliance on the Bartley case will be misplaced.
Comments from IT professional on how to "prove up" a website:
I would think that you would have to look for the presence of a third party verification indicator. See the following.
http://www.buzzle.com/articles/3rd-party-website-verification-services-the-ultimate-online-conversion-strategy-and-solution.html
http://www.trust-guard.com/
I don’t know how it would hold up in court, but you can also use a WHOIS search to determine where a site “should” be, and who owns it, etc.
http://www.whois.net/
If you are investigating a site I think you might be out of luck without a verification seal…and not even sure that would hold up based on the case you sent. Interesting question though…seems like you might be able to post whatever the heck you want and not be held accountable/liable for it, but that doesn’t make much sense, especially with how the gov’t is cracking down on anonymous bloggers, etc.