State v. Moon

755 A.2d 527 (2000)

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Nature of the Case

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Facts

D was recruited to be a resident advisor of the Sigma Chi Fraternity house. After the local chapter of the Sigma Chi was closed, he was again recruited by alumni of the Rho Rho Chapter of Sigma Chi to resurrect the chapter at the University. D was hired as director of the fundraising campaign, project manager of the renovation project, and live-in resident advisor. D served as treasurer of the Rho Rho Chapter. D was not compensated to serve as treasurer. D transferred funds from the fraternity's bank accounts to either himself personally or to Marsh Island Development Company (MIDCO), a corporation in which he was a significant shareholder. They were used to renovate a four-story brick townhouse with the intention of then obtaining conventional residential financing. D concealed these transfers from the Board of Trustees of the fraternity and obtained no authorization from the Board. D continued to take funds even when he knew that obtaining the residential financing would be difficult. D took approximately $120,000.00, returned over $100,000.00, and still owes $19,972.41. D was indicted in 1997 for theft by unauthorized taking and for theft by misapplication of property. D claimed he had no intent to deprive. D kept a separate account entitled 'accounts receivable-other' in the journal and properly recorded each transaction in which D either took funds from the fraternity or returned funds. According to an expert, D left a very good audit trail so that it was easy for an auditor to trace the transactions back to the check register and determine that the funds were made payable to D or MIDCO. D was convicted and appealed. D wanted an expert to testify that from the manner in which he kept the books he had no intention of concealing anything and that such an audit trail was inconsistent with all methods of obscuring theft in the books of a business. On voir dire, the expert testified that there are four basic 'embezzlement schemes,' i.e., lapping a/k/a kiting, fictitious receivables, diverting payments in old written off receivables, and borrowing against receivables; that in fourteen years of experience he has not seen a situation of account receivable or cash fraud that fell outside of these four categories; and this case is distinguished because 'every transaction was documented right to the T.' The court refused to allow this testimony.