In short, I wouldn't pay the guy if I had convincing evidence of the theft.Er... SP, it was the sub-contractor's employee who stole, not the sub-contractor. So, in my mind, the OP is obligated to pay the sub-contractor for work done.Since the OP can prove only $300 of theft that would be the limit of damages and I doubt the OP has the time to go to small claims court to get it.If the OP wants to continue working with the sub-contractor he'd be best served to let the matter alone now methinks.
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