It is at the least breach of contract, if not fraud. You are already doing everything you are supposed to be doing here. You have an attorney, which is the first step and you should be suing the contractor. You also need to file a complaint for the fraud and theft with the local DA's office in addition to a complaint with the attorney general's office and they will investigate to determine if there was criminal wrongdoing or if this was merely a civil breach of contract claim.
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