United States v. Lequire
United States Court of Appeals for the Ninth Circuit
672 F.3d 724 (2012)
- Written by Craig Conway, LLM
Facts
Dwayne Lequire (defendant) was treasurer of Patriot Insurance Agency, an Arizona company owned by Rick Renzi. Patriot brokered insurance policies at group rates to nonprofit organizations. Subsequently, Renzi and Lequire formed Spirit Mountain Insurance Company in Arizona. Spirit, a risk retention group, assumed liability exposures on behalf of its company members. Patriot and Spirit entered into an agreement whereby Patriot performed policy-related services for Spirit (e.g., underwriting, paying claims, and charging and collecting premiums) and made monthly payments to Spirit. The agreement required Patriot to hold all funds received by it as a fiduciary of Spirit. However, the agreement permitted Patriot to deposit funds into its general operating account, rather than a trust account. Patriot routinely failed to timely pay the premiums to Spirit. Instead, Lequire transferred over $750,000 in premium funds to Renzi’s personal account over a two-year period. The United States (plaintiff) charged Lequire with 10 counts of embezzlement and one count of conspiracy to commit embezzlement. At trial, several witnesses testified that Spirit had a fiduciary relationship with Patriot even though the witnesses had no first-hand knowledge of the agreement. The jury convicted Lequire of conspiracy and eight of the embezzlement counts. The district court denied Lequire’s motion for a judgment of acquittal. Lequire appealed, arguing that there was no trust relationship between Patriot and Spirit.
Rule of Law
Issue
Holding and Reasoning (Silverman, J.)
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