Criminal Law

Ryan M. Borden
Practicing at Ford, McDonald, McPartlin & Borden in Portsmouth,
NH with a focus on bankruptcy representation of
trustees, creditors and debtors, corporate law and commercial litigation.

No. 2018-0708
No. 2018-0710
January 10, 2020
Affirmed in Part, Reversed in Part

  • Whether the evidence was sufficient to support defendants’ convictions
  • Whether the trial court erred by ordering defendants to pay restitution because recipient of restitution was not entitled to compensation under RSA 651:62.

In 2006, James’ elderly sister executed a durable power of attorney prospectively authorizing James to act as her attorney- in-fact on financial decisions if she became unable to make those decisions. She subsequently moved into an assisted living facility after being diagnosed with Parkinson’s dis- ease, but was still otherwise in good physical and mental condition. She maintained control over her finances until 2011, with mod- est pension and social security income and minimal expenses. She added James to her bank account in 2011.

Shortly after being added to his sister’s bank account, James obtained a debit card and made a few cash withdrawals and pur- chases at retail stores. A few months later, James changed the address on the account to his personal address and engaged in an “explosion in spending.” James eventually depleted the account, reducing the balance from $140,000 to $1,342.

During this period, James moved his sister to the memory care unit, as her mental and physical health declined, and used the power of attorney to control her finances. James convinced the facility to reduce the rent due to his sister’s financial condition. By February 2014, James informed the facility that his sisters funds were gone, and again persuaded the facility to lower her rent.

James’ conduct  first  came  to  light  in April 2015. With no funds to pay the rent, he applied for Medicaid for his sister through New Hampshire DHHS. A DHHS staff member met with the defendants and informed them that DHHS would review the sister’s finances for the previous five years. At that point, James disclosed that the victim’s bank records would reflect a $50,000 gift to James, which he described as an “inheritance.” DHHS’s review of the victim’s finances raised more questions about the spending. Receiving vague and inadequate explanations, DHHS denied the application. James was unsuccessful in persuading DHHS to reconsider.

James’ sister revoked the power of attorney in 2016 and died in 2017. The defendants were investigated for financial exploitation of the victim and indicted, charged and convicted on multiple counts of theft by unauthorized taking and one count of financial exploitation of an elderly adult. They were ordered to pay $81,890.83 in restitution to the facility, being the difference between the monthly rent and the reduced amount the facility had agreed to accept. The defendants appealed their convictions and the court’s restitution order.

On appeal, the defendants challenged the theft by unauthorized taking charges arguing an absence of direct evidence on the element of authorization precluded conviction. The Court held that circumstantial evidence was sufficient to prove that lack of authorization. Based upon the sister’s frugal spending habits, the defendants’ inconsistent, explosive spending habits, coupled with the defendants’ statements to DHHS attempting to explain purchases and withdrawals that contradicted the evidence, there was sufficient evidence to support the convictions.

On the financial exploitation charge, James challenged the lack of direct evidence on authorization. The Court held that charge instead required proof of a taking in breach of a fiduciary duty, without authorization, where the duty arose from the power of attorney. Again, Court held that the circumstantial evidence was sufficient to sustain the conviction, because the evidence excluded all reasonable conclusions to the contrary.

The Court overturned the restitution order, stating the facility was not a victim that suffered economic loss as a result of defendants’ conduct. The victim here was the sister; the facility’s decision to accept lower rent after the sister’s funds were depleted was merely a collateral consequence. The Court did not, however, opine on whether the facility was entitled to any other remedy against the defendants.

Gordon J. MacDonald, attorney general (Bryan J. Townsend, II, assistant attorney general), for the State. Justin C. Shepherd, Law Office of Shepherd & Osborne, Nash- ua, for James Folley. Michael J. Zaino, Law Office of Michael J. Zaino, Hampton, for Karen Folley.