Contractor Fraud?

Hello,
My husband and I are building a house using a General Contractor. We were told we would be in the house by January 2007 and at this point they are at about 65%. Instead of the four man crew we were told he had, it has been himself and another guy. I have many pictures of some very questionable things. After the first draw, I asked for the reciepts and he reluctantly gave them to me. In the mix were numerous purchases that were not related directly to my home. This raised our suspisions. At the very beginning we fronted him 17,000.00 because he had not established enough credit to "get the ball rolling", and in the run-down for the first draw it is allotted for "Reimbursement to (our names) in the amount of 17,000.00. This was back in Aug 06. We have up tp now recieved back only 13,000.00 and we asked for the remainder of it and were told NO it was being "funneled into other things". There is much more. But I would really like to know what I can do about this. It is written in the first draw to be paid back, why isn't he? And doesn't he have to? Did I mention we don't believe he gave us a valid licsence # and that our chimney for our pellet funace sticks out the back of our home next to our deck, not anything in writing to change this either. Thanks in advance.

[Law200]

Based on what you say here, you could file suit against him (or at least threaten to do so) in small claims court or in regular court; filing in small claims court is easier and requires no attorney...you could try to collect all of the costs and damages that you suffered due to his behavior... You may also report him to your state attorney general's office. WLD could also intervene if need be and help you resolve this.

Thank you for your quick response.
Would we continue to let them work until at least until we are able to pass the occupancy inspection? The reason I am asking this is he told us we could put our 30 day notice in on our apt. as soon as the dry wall was up and we did so at the beginning of Feb. because the dry wall was up and the mudding almost complete. We will be forced to move into our camper that is on the land until we pass the occupancy insp.
I also am interested in how World Law could intervene and how to go about having this done. Thanks again