In Summer 2023, the payment system for a small office and warehouse project that Beck Properties was developing for itself in South St. Paul, Minn., seemed to be running smoothly. Emails were criss-crossing back and forth and paper checks were landing in mailboxes.

Each pay application required prime contractor R.J. Ryan Construction to sign and send an unconditional receipt and waiver of lien rights to a funds disbursement agent, FSA Title Services, which worked for Beck Properties’ bank lender. After an initial $1.57-million payment, R.J. Ryan sought full or partial payment for costs such as grading and excavating ($26,600), concrete and masonry ($80,000) and steel deck and joists ($442,000).