Carolina Law BlogEmbezzlement Charges in North Carolina – Caselaw Review
In this episode of Law Talk with Bill Powers, we take a look at the case of State v Steele (as written by the Hon. Valerie Zachary) and discuss:
- What is Embezzlement in North Carolina?
- What is Larceny by Employee?
- Embezzlement vs False Pretense
- Entrustment of Funds, Accounts, and Fiduciary Duties
- Standards of Proof on Appeal
- Preserving Issues for Appeal – De Novo Review
- Motions to Dismiss
- Protections afforded to Banking Institutions
- FELONY Sentencing Chart – Class C Felony in NC vs Class H Felonies
- Why cases involving $100,000 or more are so serious
This case is an important reminder that anyone who is entrusted with company funds must be scrupulous in their handling of those funds.
It also clarifies some important technical points for criminal defense lawyers in North Carolina and other legal professionals who work with Embezzlement charges in NC.
CORRECTION: North Carolina v. Steele is an opinion of the NC Court of Appeals authored by the Hon. VALERIE Zachary. We extend a sincere apology to Her Honor for referencing an incorrect first name.
TXT AutoTranscription – Embezzlement in North Carolina – Crimes of Theft and Dishonest
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[Unknown]: you’re listening to law talk with bill powers your resource for answers to your
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[Unknown]: most pressing questions attorney bill power sits down with some of today’s leading
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[Unknown]: legal minds to discuss everything from legal issues and legislation to practice
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[Unknown]: tips and policy now here’s your host bill powers former president of the north
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[Unknown]: carolina advocates for justice recipient of the north carolina state bar john b
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[Unknown]: mcmillan distinguished service award and a founding member of the center for legal
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[Unknown]: education and advocacy
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[Unknown]: hello and welcome to another episode of law talk today i’m joined with chris beto
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[Unknown]: attorney extraordinaire and all around great guy good afternoon chris good
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[Unknown]: afternoon it’s good to be here i’m glad to have you this is our first
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[Unknown]: new co podcast excuse me of twenty twenty two so happy new year to our listeners
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[Unknown]: and last week the north carolin corp of appeals came out with
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[Unknown]: frankly a bunch of new opinions some publish some unpublished and we
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[Unknown]: casually look through the different opinions that we find are interesting for law
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[Unknown]: talk we actually i actually read all the opinions that come out especially if they
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[Unknown]: involve criminal defense or family law matters and
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[Unknown]: this is an interesting one that involves embezzlement crimes of dishonesty and
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[Unknown]: theft is what attorneys may call it and this particular podcast probably is a
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[Unknown]: little bit more interesting to legal professionals lost in although i guess anyone
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[Unknown]: who has a general interest in criminal laws may find it
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[Unknown]: of value or help and it’s chris and i basically talking about a case summary of
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[Unknown]: sorts so the case is formerly known as north carolina versus thomas wayne steel
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[Unknown]: sometimes lawyers call that state b st it’s the north carolina court of appeals
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[Unknown]: opinion two zero two two so it’s twenty twenty two nc coa thirty nine three nine
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[Unknown]: it’s probably so near they don’t have a site yet and if you’re an attorney you know
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[Unknown]: what sites mean it was filed january eighteenth twenty twenty two it’s a case that
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[Unknown]: comes out of paco county opinion written by susan zine for the court and
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[Unknown]: sometimes
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[Unknown]: i’m not a pellet person but i think they have a period of time the defendant may
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[Unknown]: have a period of time to appeal it and so it may not be binding precedent until
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[Unknown]: after that time period but it’s probably instructional and helpful
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[Unknown]: i think it’s important to point out that neither chris nor i or anyone at the
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[Unknown]: powers law firm have any affiliation with the case and we’re just reading the fact
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[Unknown]: pattern like
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[Unknown]: everyone else who reads the case also so chris if you could maybe just give us a
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[Unknown]: brief summary of what what’s going on in the case
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[Unknown]: yeah
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[Unknown]: the defendant became very close with
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[Unknown]: the victim in this case lily monk and her husband pastor mike monk they developed a
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[Unknown]: familial relationship over the years in fact
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[Unknown]: the defendant called miss munk and pastor mon dad and mom and they referred to him
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[Unknown]: as their son
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[Unknown]: pastor
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[Unknown]: monk passed away
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[Unknown]: and um even the defendant was the one who gave the eulogy at his funeral
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[Unknown]: after he passed away the mother went through a very tough time she said that his
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[Unknown]: death almost took her out and she can make it without him
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[Unknown]: and she had very little experience handling finances and she asked the defendant if
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[Unknown]: he would help in fact the defendant said that he would be happy to help um miss
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[Unknown]: monk made him the joint holder in some of the bank accounts that she had and
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[Unknown]: further on down the road she also executed a power of attorney granting defendant
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[Unknown]: power of attorney over all of her finances
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[Unknown]: um
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[Unknown]: and she also drafted a will making defendant the executor of the will also leaving
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[Unknown]: a majority of the estate to the defendant um the case deals with issues of the
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[Unknown]: defendant
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[Unknown]: um
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[Unknown]: abusing this fiduciary relationship basically utilizing these accounts to cover a
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[Unknown]: bunch of personal expenses
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[Unknown]: and
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[Unknown]: pretty much
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[Unknown]: abusing that relationship to his own benefit
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[Unknown]: yeah so these cases
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[Unknown]: crimes of theft vary from different degrees you’ll occasionally hear of misdemeanor
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[Unknown]: cases like maybe misdemeanor larsen shoplifting concealment and this is kind of the
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[Unknown]: top of the pile at least for state charges
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[Unknown]: because while embezzlement charges are serious but then there’s an amount in value
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[Unknown]: that we’ll talk about that a little bit so
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[Unknown]: this is a fact pattern that
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[Unknown]: i guess there were indictments or super seen indictments for exploitation of an
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[Unknown]: older adult and an a beez of one hundred thousand dollars or more and that means
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[Unknown]: something
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[Unknown]: so for lawyers and lawsuits legal issue number one the thing that the court of
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[Unknown]: appeals tends to address the original motions and the standards of review in this
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[Unknown]: instance the appellant the defendant in the case appealed through counsel a denial
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[Unknown]: of
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[Unknown]: the motion to dismiss there are several different reasons in this particular case
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[Unknown]: but the court pointed out that in reviewing a denial of a motion to dismiss they
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[Unknown]: base it on the
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[Unknown]: on those involving insufficiency of evidence they review those de novo de novo is
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[Unknown]: latin for of new it may be a literal translation or une it means that they’re not
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[Unknown]: bound by any
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[Unknown]: prior courts i guess inference of the facts they can look at things fresh and
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[Unknown]: decide what they want to do and the opinion the court basically said emotion
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[Unknown]: dismiss is denied properly when there is substantial evidence of each element of
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[Unknown]: the offense charge and the fant being the perpetrator of that alleged offense
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[Unknown]: substantial evidence is legal definition a term of art its evidence such relevant
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[Unknown]: evidence that the reasonable mind might accept is adequate to support and this may
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[Unknown]: come as a surprise uh for maybe law students excuse me that evidence is viewed in
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[Unknown]: the light most favorable to the state or the state’s given benefit of every eas a
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[Unknown]: reason strong theref
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[Unknown]: and when the state offers evidence even if its conflicting with other evidence
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[Unknown]: presented of the crime charge
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[Unknown]: the court writes that the defendants motion dismissed must be denied now chris you
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[Unknown]: previously actually clerked
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[Unknown]: at the appellate level and
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[Unknown]: is based on your background
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[Unknown]: how does the court approach this is a clerk like say okay here are different
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[Unknown]: standards or does everyone just sort of know what what’s going in on the case as
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[Unknown]: far as how the court’s going to review the matter
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[Unknown]: usually there is a primary issue and the judge will ask the clerks to research that
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[Unknown]: issue and provide a memorandum as to
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[Unknown]: whether they think
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[Unknown]: you know the appellants case is worthy of being heard or even whether that issue is
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[Unknown]: even a viable issue to be heard before the court
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[Unknown]: usually the judge has an inkling of how they’re going to rule on a certain case and
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[Unknown]: they’ll present their version of what they think and then they’ll ask the clerks to
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[Unknown]: draft a memo based on that right so obviously there may be a general idea about the
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[Unknown]: case going in but i think mines are not made up until the homework is done is that
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[Unknown]: correct that’s correct now tell me a little bit you know i have legal argument
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[Unknown]: number one what is embezzlement and
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[Unknown]: embezzle north carolina is
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[Unknown]: different than in say larson bue or family lar by an employee so chris what does
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[Unknown]: north carolina define as embezzlement what are the factors that we’re looking at in
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[Unknown]: court the primary factor is it has to involve a person of trust
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[Unknown]: basically what that means it applies to any person who is a guardian administrator
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[Unknown]: executor trustee or any receiver or any other fiduciary a fiduciary
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[Unknown]: holds a responsibility um they have to act in the best interest of the person
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[Unknown]: they’re serving
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[Unknown]: embezzlement is also defined as embezzled or fraudulently or knowingly and
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[Unknown]: willfully miu apply or convert to own use or take make away with or secrete with
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[Unknown]: intent to embezzle or fraudulently or knowingly and willfully mis apply
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[Unknown]: or convert to his own use any money goods or other channels bank note check or
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[Unknown]: order for the payment of money issued by or drawn on any bank or other corporation
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[Unknown]: any treasury warrant treasury note bond or to take any other person or corporation
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[Unknown]: unincorporated association or organization
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[Unknown]: which shall have come into his possession or under his care shall be guilty of a
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[Unknown]: felony now i know that is a lot to take in so i want to shorten that to a sentence
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[Unknown]: that is more digestible
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[Unknown]: and more succinct than the statutory definition so in short to constitute
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[Unknown]: embezzlement the property in question initially must be acquired lawfully pursuant
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[Unknown]: to a trust relationship and then wrongfully converted
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[Unknown]: right and i think it’s fair to say that this is
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[Unknown]: an expansive statute which means it’s meant to cover a wide range of different type
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[Unknown]: of
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[Unknown]: banking instruments notes things of values as well as types of different types of
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[Unknown]: relationship if you’re particularly interested in the general statute the criminal
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[Unknown]: statute that applies its north carolin general statute section fourteen one four
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[Unknown]: nine zero nine
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[Unknown]: subsection a as an apple three
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[Unknown]: and
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[Unknown]: and it you know what chris gave was actually the abbreviated version that goes on
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[Unknown]: and on about this but i think one of the primary
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[Unknown]: differences between
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[Unknown]: an embezzlement charge and sometimes we have people that work for companies and
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[Unknown]: they’re accused of taking something from the company and you know they asked what’s
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[Unknown]: the difference between embezzlement and
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[Unknown]: largely by an employee
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[Unknown]: embezzlement means that you are entrusted specifically for the care and control
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[Unknown]: of of something of value it could be money it could be
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[Unknown]: cash checking accounts banking accounts could be real property personal property
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[Unknown]: whereas felony larson by employee may be that you as an employee have access to it
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[Unknown]: or because of the nature of your employment and they they trust you to work in the
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[Unknown]: place but you’re not necessarily entrusted with it as in the disposition ultimately
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[Unknown]: disposition of it it’s a pretty fine point
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[Unknown]: uh of law
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[Unknown]: the substantive effect is that basically you take something that doesn’t belong to
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[Unknown]: you and it it’s kind of the every person’s view of larson
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[Unknown]: chris what’s the
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[Unknown]: i call it the big tama but what’s the big deal with one hundred thousand dollars in
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[Unknown]: the allegation
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[Unknown]: well the hundred thousand dollars elevates this to a whole nother level of
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[Unknown]: penalties
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[Unknown]: if the value embezzled is less than one hundred thousand dollars it’s a class h
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[Unknown]: felony if it’s one hundred thousand dollars or more it’s elevated to a classy
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[Unknown]: felony
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[Unknown]: and that means if even if you have no prior record the top of the presumptive range
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[Unknown]: if convicted on embezzling a hundred thousand dollars a more is seventy three to a
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[Unknown]: hundred months right so i mean
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[Unknown]: once you hit that mark you’re looking at some pretty serious time you’re convicted
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[Unknown]: right and that isn’t just a substantive difference
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[Unknown]: it is a substantial difference in time to give me an example in north carolina we
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[Unknown]: classify different levels of offenses class a b one b two and then c all the way
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[Unknown]: down the eye
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[Unknown]: there’s a pretty substantial difference between a class c as in charlie felony and
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[Unknown]: class h felony class i felony for for prior record level one you’re not even really
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[Unknown]: looking at the possibility of jail time and class c prior record level one one
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[Unknown]: hundred thousand dollars or more in this instance is actually more serious than
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[Unknown]: armed robbery okay and their class c is really towards the top and that’s top of
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[Unknown]: the presumptive assuming there aren’t additional factors in aggravation
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[Unknown]: which is
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[Unknown]: or prior record level points based on your history if you have more questions about
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[Unknown]: that i would tell you i’d encourage you to consult the you can google the f
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[Unknown]: sentencing chart guidelines it is available at carolina attorneys com that’s our
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[Unknown]: firm website
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[Unknown]: and
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[Unknown]: it’s a big deal so issue number one excuse me is what is investment issue number
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[Unknown]: two is what’s the big deal with one hundred thousand dollars and the statutes
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[Unknown]: written a hundred thousand dollars or more and then
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[Unknown]: it may be a cumulative value and then issue number three is what is a fiduciary
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[Unknown]: relationship so chris if you kind of go into that a little bit that again is a term
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[Unknown]: of art meaning that’s what lawyers use fiduciary relationship
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[Unknown]: basically means there’s a relationship created by a power of attorney between the
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[Unknown]: principal um and then turning effect is fiduciary nature um so basically fiduciary
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[Unknown]: is someone who is entrusted um with something of value and they’re they have
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[Unknown]: primary responsibility for doing or or managing that thing of value in the best
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[Unknown]: interests of the individuals or corporation that has entrusted them or something of
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[Unknown]: value um however a fiduciary relationship may arise under a variety of
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[Unknown]: circumstances
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[Unknown]: it exists in all cases where there has been a special confidence reposed in one who
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[Unknown]: an equity and good conscience is bound to act in good faith and with due regard to
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[Unknown]: the interests of one repos in confidence this was an interesting issue at least i
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[Unknown]: found interesting the case because i think there was a
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[Unknown]: and i think the court ultimately came down with it it’s a difference with our
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[Unknown]: distinction upon a difference but in this particular instance there was actually a
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[Unknown]: power returning was executed there was some mention that they went to an attorney’s
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[Unknown]: office and they you know checked off all the boxes and signed off on it
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[Unknown]: and so they were actually made attorney in fact but i think the court repeal said
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[Unknown]: well that is great in this instance that is correct we had it but it doesn’t
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[Unknown]: necessarily require a legal filing or a legal execution it could be inferred from
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[Unknown]: the relationship meaning that
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[Unknown]: fiduciary relationship may arise using your language under a variety of
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[Unknown]: circumstances which means that court takes into consideration
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[Unknown]: the relationship between the parties
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[Unknown]: and frankly it’s not terribly unusual for these cases to involve things other than
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[Unknown]: just an employee or an officer of a bank it could be a closely held relationship
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[Unknown]: in this instance where they weren’t related by blood but they referred to each
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[Unknown]: other’s mom and dad our son and daughter he was and it was a close close
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[Unknown]: relationship
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[Unknown]: so the intent for
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[Unknown]: embezzlement is what chris what does the court like talk about intent the men’s rad
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[Unknown]: the evil mind
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[Unknown]: in order to prove intent intent is to willfully or corrupt use or mis apply the
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[Unknown]: property of another for purposes other than those for which the asian or producer
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[Unknown]: received it so basically you’re entrusted with something of value you’re required
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[Unknown]: to manage it in a certain way and you
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[Unknown]: instead use it for your own purposes
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[Unknown]: would be you know an example of misappropriating funds for your own use right so it
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[Unknown]: could be
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[Unknown]: paying off a credit card or buying a car putting down payment on your house it
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[Unknown]: could be you know taking cash out and just spinning it there are a lot of different
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[Unknown]: financial tools to do that now let’s case said another and i call it legal issue
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[Unknown]: number four interesting twist
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[Unknown]: because
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[Unknown]: at some point
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[Unknown]: some formalized uh paperwork was filed with the bank or banks in this instance
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[Unknown]: saying that they were essentially
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[Unknown]: co owners of the
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[Unknown]: bank account whatever big bank account savings account and definit argued that
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[Unknown]: because there was
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[Unknown]: money that was legally titled in his name that he was entitled to use you can’t
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[Unknown]: embezzle something
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[Unknown]: that was your to start with so because it was a joint account i can’t embezzle what
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[Unknown]: was mine how de court respond to that
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[Unknown]: well they i mean they thought that was merit less um basically what they said the
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[Unknown]: statute that the defendant was trying to apply basically serves to protect the
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[Unknown]: financial institutions specifically section fifty four c one hundred sixty five
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[Unknown]: governed savings banks it is essentially the same as section fifty three c six dash
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[Unknown]: six and section fifty four dash one hundred nine point five eight
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[Unknown]: the court said the statutes simply provide in some that the financial
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[Unknown]: institution may safely pay either of the two persons so
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[Unknown]: the defendant basically misinterpreted that statute the purpose of those statutes
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[Unknown]: is to protect the financial institutions it has
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[Unknown]: nothing to do with the rights of
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[Unknown]: joint people in a bank account yeah that surprised me because
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[Unknown]: it said it is well established that these statutes are and i bold in this area for
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[Unknown]: protection of the financial institution only and absent any other evidence are not
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[Unknown]: as positive as the ownership of the funds so it is a type of protection that if you
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[Unknown]: i guess go after your bank and say i didn’t authorize the withdrawal that account
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[Unknown]: banks as well you both around the account your name and you know that’s what we do
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[Unknown]: we actually see this a fair amount in divorce family law
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[Unknown]: type of actions where there going to be joint checking or joint savings accounts
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[Unknown]: and someone comes in and
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[Unknown]: takes the funds because they’re both entitled to do that
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[Unknown]: so
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[Unknown]: this is a good read it’s um i think it gives you some basic tenants of law if
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[Unknown]: you’re a law student check out state fee steel
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[Unknown]: and if you have further questions about what’s embezzlement or what’s different in
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[Unknown]: besar by an employee feel free to give uh chris or me a call at powers law firm
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[Unknown]: carolina attorneys dot com that’s seven o four three four two four three five seven
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[Unknown]: anything to add chris
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[Unknown]: uh nothing was it was a a riveting and enlightening experience was and it’s an
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[Unknown]: interesting case cause uh even with no prior record you’re looking at um what was
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[Unknown]: that six to eight yeah active well i think that
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[Unknown]: they don’t differentiate between arm robbery and this because basically you’re
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[Unknown]: doing arm robbery with a patent or right
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[Unknown]: siphoning funds through a secret bank account so they don’t see the difference it’s
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[Unknown]: basically
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[Unknown]: white collar a prob right it’s a confidence it’s a crime of confidence and that’s
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[Unknown]: where the term actually comes from a con person a con man is that you rely on
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[Unknown]: someone’s confidence and relationship and
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[Unknown]: take and abuse that situation financially so well thanks so much chris and it was a
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[Unknown]: pleasure talking with you and please make sure to join us for the next episode of
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[Unknown]: law talk
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[Unknown]: we’ll talk with bill powers your resource for legal issues and legislation practice
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[Unknown]: tips professionalism and policy discussions want to talk to bill powers call seven
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[Unknown]: zero four three four two help that’s seven zero four three four two four three five
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[Unknown]: seven
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[Unknown]: talk with bill powers is an educational resource only the information presented
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[Unknown]: does not constitute legal advice and is not a substitute for consulting with an
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[Unknown]: attorney every situation is unique therefore you should always consult with a
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[Unknown]: licensed attorney before making any legal decision
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