cdTOCtest

the equitable jurisdiction of the bankruptcy court by
filing claims. Id. at 45

XX. RECEIVING DEPOSITS IN A FAILING

FINANCIAL INSTITUTION

It is a fourth degree crime for an officer, manager, or
other person directing or participating in the direction of
a financial institution to receive or permit the receipt of
a deposit, premium payment or other investment in the
institution knowing that (a) due to financial difficulties
the institution is about to suspend operations or go into
receivership or reorganization; and (b) the person making
the deposit or other payment is unaware of the precarious
situation of the institution. N.J.S.A. 2C:21-14.

XXI. MISAPPLICATION OF ENTRUSTED

PROPERTY AND PROPERTY OF GOVERN-

MENT OR FINANCIAL INSTITUTION

A. Offenses

It is a crime for a person to apply or dispose of
property, either entrusted to him as a fiduciary or
belonging to or required to be withheld for the benefit of
the government or a financial institution, in a manner
which he knows is unlawful and involves substantial risk
of loss or detriment to the property’s owner or to the
person for whose benefit the property was entrusted,
regardless of whether or not the actor derives a pecuniary
benefit. N.J.S.A. 2C:21-15.

“Fiduciary” includes a trustee, guardian, executor,
administrator, receiver and any person carrying on
fiduciary functions on behalf of a corporation or other
organization which is a fiduciary. Id.

This statute applies to persons who are entrusted
with property in a capacity as trustee, guardian, executor,
administrator, or similar functionary, as well as persons
who are entrusted with property that belongs to, or is
withheld for, the government or a financial institution.
State v. Damiano, supra, 322 N.J. Super. at 43. A person
who withholds sales tax and fails to pay it to the State is
covered under the statute. State v. Pescatore, 213 N.J.
Super. 22, 26 (App. Div. 1986), aff’d. o.b., 105 N.J. 441
(1987). A 1987 amendment made the statute apply to
persons who fail to charge tax despite an obligation to do
so. L. 1987, c. 76, § 33; cf. State v. Altenburg, 223 N.J.
Super. 289, 297 (App. Div.), aff’d., 113 N.J. 508

(1988)(pre-amendment case holding that the statute did

not apply to instances where no tax was charged).

The state must prove that the defendant knowingly

misused trust funds. State v. Manthey, 295 N.J.Super. 26,

31 (App. Div. 1996). The State does not have to prove

that the defendant had a fraudulent intent or purpose.

Id.

In Damiano, supra, the Appellate Division held that

the defendant, who ran a financially troubled automobile

dealership, was liable to prosecution under this statute

with respect to his failure to remit the balance of loans due

to institutional lenders who held liens on trade-ins that

the defendant took in partial satisfaction of the purchase

price of new cars. 322 N.J. Super. at 43.

However, because Chrysler is not a financial

institution, defendant was not liable to prosecution

under this section for “floor plan financing charges” owed

to Chrysler as payment for new cars or for charges relating

to defendant’s failure to obtain two extended warranties

from Chrysler that his customers had paid for. Id. at 43-

44. Also, defendant had never been entrusted with a sum
    of money specifically to pay off the lien. Id. Defendant
    is liable for his conduct in this regard under N.J.S.A.
    2C:20-9.

Jury instructions regarding this section must relate

principles of law to the facts of the case and indicate to the

jury which of numerous sets of scenarios constituted

transactions falling within the statute. State v. Damiano,

supra, 322 N.J. Super. at 44-45.

B. Grading

The crime is of the second degree if the benefit

derived is $75,000 or more. Id. It is of the third degree

if the benefit derived is more than $1,000 but less than

$75,000. Id. It is of the fourth degree if the benefit

derived is less than $1,000. Id.

For purposes of this section, “benefit derived”

includes, but is not limited to, the amount of any tax

avoided, evaded or otherwise unpaid or improperly

retained or disposed of. Id.

Where money is diverted to the defendant’s own use

and is later repaid, the “benefit derived” is the amount

diverted and not the value of use. State v. Modell, 260 N.J.

Super. 227, 250 (App. Div. 1992), certif. denied, 133 N.J.