State v. Steele, ___ N.C. App. ___, 2022-NCCOA-39 (Jan. 18, 2022)

The defendant was close friends with older couple in Pamlico County. They considered each other family. When the husband of the couple unexpectedly died, the defendant offered to assist the surviving widow. She ultimately turned over complete control of her finances to the defendant. Two months later, she signed a power of attorney making the defendant her attorney in fact and named the defendant as the primary beneficiary of her will. Money was withdrawn from the widow’s accounts and deposited into new bank accounts opened jointly in the names of the widow and the defendant. The defendant then used the widow’s funds to make personal purchases and pay individual debts. Additionally, some of the widow’s funds were automatically withdrawn by the bank from the joint accounts to cover overdrafts owed by the defendant on his individual bank accounts.  After the discovery that more than $100,000.00 had been withdrawn from the widow’s accounts, the defendant was charged with embezzlement and multiple counts of exploitation of an older adult. At trial, the defense requested a special jury instruction regarding the rights of joint account holders based on provisions in Chapter 54C (“Savings Banks”) of the North Carolina General Statutes. The trial court declined to give the proposed instruction, the jury convicted on all counts, and the defendant was sentenced to a minimum 73-months imprisonment.

On appeal, a unanimous Court of Appeals found no error. (1) The defendant’s motion to dismiss for insufficient evidence was properly denied. The evidence showed a fiduciary relationship existed between the defendant and the widow, even before the execution of the power of attorney. “[T]he evidence sufficiently established that a fiduciary relationship existed between Defendant and Mrs. Monk prior to that point, when he ‘came into possession of the funds in Mrs. Monk’s bank accounts.’” Steele Slip op. at 10. The defendant also argued that, as a joint account holder with the widow, the money in the accounts was properly considered his property. The court disagreed. While joint account holders may be presumed to be the owners of the money in a joint account, that presumption can be overcome when ownership is disputed. Then, ownership of the funds is determined by examining the history of the account, the source of the money, and whether one party intended to gift money to the other joint account holder (among other factors). It was clear here that the widow was the source of the funds in the joint accounts and that she did not intend to make any gift to the defendant. “[T]here was sufficient evidence that the funds taken were the property of Mrs. Monk, and that she did not have the requisite ‘donative intent’ to grant Defendant the money to withdraw and use for his personal benefit.” Id. at 14 (citation omitted). There was also sufficient evidence that the defendant intended to embezzle an amount exceeding $100,000. While more than $20,000 of the missing funds had been automatically withdrawn by a bank to cover the defendant’s preexisting overdraft fees and the defendant denied being aware of this, the overdraft repayments occurred over a 9-month period of time. The defendant received bank statements recounting the repayments each month during that time frame. The total amount deducted as overdraft repayments exceeded $20,000, more than one-fourth of the defendant’s yearly salary. There was also evidence of the defendant’s financial problems. This was sufficient circumstantial evidence of the defendant’s fraudulent intent to embezzle over $100,000. The defendant’s various sufficiency arguments were therefore all properly rejected.

(2) The trial court did not err in failing to give the jury a special instruction on joint accounts and joint tenancy. The proposed instruction was based on the language of G.S. 54C-165 and related laws regarding banking regulations. These laws are intended to protect banks, and allows them to disburse joint funds to either party listed on the account. The laws do not allow a joint account holder to wrongfully convert the funds to their own use simply by virtue of being a joint account holder. The proposed instruction therefore would have been confusing and misleading to the jury. In the words of the court:

Because the requested special instruction could have misled the jury and was likely to create an inference unsupported by the law and the record—that Defendant’s lawful access to the funds in the joint accounts entitled him to freely spend the money therein—the trial court properly declined to deliver Defendant’s requested special jury instruction. Steele Slip op. at 19.