Ieremia, Mekeli v. State

• Court: Court of Appeals of Texas
• Decided: August 22, 2002
• Docket: 08-00-00380-CR
• Status: Published

Opinion

COURT OF APPEALS

COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

MEKELI IEREMIA,                             Appellant, v. THE STATE OF TEXAS,                             Appellee.

'

No. 08-00-00380-CR Appeal from the 243rd District Court of El Paso County, Texas (TC# 20000D01680)

O P I N I O N

Mekeli Ieremia appeals his conviction for theft and misapplication of fiduciary property.  We affirm.

Summary of Evidence

Mekeli Ieremia began working for Socorro Independent School District in October 1991 as its safety officer.  He was later promoted to Director of Risk Management under the supervision of Tom Marcee.  As director, Ieremia was responsible for managing the District=s self-funded workers= compensation fund^[1] and cutting the fund=s costs.

Case management and other cost containment services were originally performed for the District by Argus Services Corporation, which charged the District an $8,500 flat fee for services begun under its contract and an additional $3,500 for each previously opened claim.  During Ieremia=s tenure, the service provider was switched from Argus to a company run by Michael Rhinehardt, who had been with Argus.  The costs of the services were to remain the same as under the Argus contract.

In November 1998, Nila Newton joined the District as an internal auditor.  She began aiding the District=s external auditor in gathering information.  Toward the end of the external audit, Newton was also given the duty of determining the reasons for certain variances within accounts between years.

One variance was within the workers= compensation fund.  According to Newton, the expenditures in the fund increased approximately $2,000,000 from one year to the next.  When Newton questioned Ieremia about the increase, he told her it was the result of five claims for back surgeries.  Neither she nor the external auditors were satisfied with Ieremia=s explanation for the increase in expenditures, so Newton investigated further.

Newton found that several companies were being paid large sums of money repetitiously.  Specifically, a total of approximately 4.6 million dollars was paid to the companies.  Payments to the particular companies continually increased so that they eventually accounted for 66 percent of the fund=s expenditures, exceeding all of the fund=s other expenditures.  The reserve available for future expenditures and liabilities was depleted as a result of the payments.

The majority of the invoices from the companies in question were in the amount of $3,500, each for an employee background check.  Specifically, 1,180 such invoices were presented to the District (for which only 1,160 reports were received).  Newton was suspicious of the invoices, which all looked very similar although they were from different companies.  After further investigation, she discovered that the four companies were all operated by Rhinehardt and that all of the invoices were signed by Ieremia.

In early February 1999, Don Schulte, then Assistant Superintendent of Finance, was apprised that Ieremia was doing background investigations on employees.  Newton drew Schulte=s attention to the large expenditures and Ieremia was asked about the checks.  According to Schulte, Ieremia stated that the costs for the investigations were consistent with industry standards and that the District needed to continue the checks pursuant to a contract.

Schulte immediately called the FBI and reported the problem.  Agent Tracy Massington began an investigation into the fund.  Thereafter, the District stopped further payment to the Rhinehardt companies and placed Ieremia on suspension.

Ieremia resigned on March 24, 1999 by a fax sent from Hawaii.

Charges were later brought against Ieremia as a result of the investigations.  In the first count, he was indicted for theft over $200,000 (aggregated).  The indictment charged that Ieremia exercised control over United States currency of $200,000 or more from the owner, Don Schulte, with the intent to deprive the owner of the property.  The property was allegedly obtained in one scheme and continuing course of conduct.  In the second count, Ieremia was indicted for misapplication of fiduciary property of more than $200,000 (aggregated).  The indictment charged that Ieremia, pursuant to one scheme and continuing course of conduct, beginning approximately January 1, 1997 and continuing until approximately February 28, 1999, misapplied United States currency that he held as a fiduciary contrary to an agreement by which he held the property and in a manner that involved substantial risk of loss to the owner, Don Schulte.

Ieremia filed a motion to quash the indictment.  A hearing was held on the motion but no order was entered.  Ieremia eventually pleaded not guilty to both counts.

Trial commenced August 1, 2000.  Several witnesses, including Ieremia, testified.  At the conclusion of the trial, the jury found Ieremia guilty on both counts.  The jury assessed punishment for each count at ten years with a $10,000 fine, the sentences to run concurrently.

Discussion

Point One:  Motion to Quash

In his first point, appellant argues that the trial court erred in denying his motion to quash.  He argues that he was thereby deprived of sufficient notice with which to prepare his defense.

We believe that appellant has waived his complaint.  In order to preserve a complaint for appellate review, the complaining party must make a timely, specific objection and must obtain an adverse ruling from the trial court.^[2]  Tex. R. App. P. 33.1; Turner v. State, 805 S.W.2d 423, 431 (Tex. Crim. App. 1991); Gaines v. State, 789 S.W.2d 926, 927 (Tex. App.--Dallas 1990, no pet.); see also Ramirez v. State, 815 S.W.2d 636, 643 (Tex. Crim. App. 1991) (holding that error was waived where there was no definite or adverse ruling on a complaint).  In this case, appellant was indicted on April 18, 2000.  On July 24, 2000, a hearing was held on the motion.  At the conclusion of the hearing, the judge stated that he would make a decision as soon as he could.  He advised the parties that he would send them a letter informing them of his decision.  However, no such letter or appropriate ruling is within the record.  Nor was there any further complaint from appellant about the indictments.  At the beginning of the trial on the merits, after the two counts of the indictment were read in open court, appellant pleaded not guilty to both counts.

Therefore, we overrule appellant=s first point.

Points Two through Five:  Sufficiency of Evidence

Points Two through Five question the legal and factual sufficiency of the evidence against appellant for the theft and misapplication offenses.  Appellant argues Points Two and Three together and Four and Five together.  We address them similarly.

Theft

Points Two and Three assert that the evidence is neither legally nor factually sufficient to support the theft conviction.

On review for legal sufficiency, we view evidence in the light most favorable to the verdict.  All of the evidence and any reasonable inferences produced therefrom must be reviewed.  Teer v. State, 923 S.W.2d 11, 17 (Tex. Crim. App. 1996) (adopting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979)).  A rational trier of fact must have been able to find the elements of the offense beyond a reasonable doubt.  Id.  As Williams v. State, 827 S.W.2d 614 (Tex. App.--Houston [1st Dist.] 1992, pet. ref=d), noted, AIf there is evidence that establishes guilt, beyond a reasonable doubt, and if the trier of fact believes that evidence, [the reviewing court] is not in a position to reverse the judgment on sufficiency of evidence grounds.@  Id. at 616.

The reviewing court=s only function is to ensure the rationality of the fact finder.  Teer, 923 S.W.2d at 17.  The fact finder=s conclusions are given great deference.  He is better able to make a determination of credibility, as he has the distinct advantage of viewing the evidence live and seeing the demeanor and expressions of the witnesses.  Id. at 19.

The first count on which appellant was indicted was for theft.  A person commits theft if he Aunlawfully appropriates property with intent to deprive the owner of property.@  Tex. Penal Code Ann. ' 31.03(a) (Vernon 1994 & Supp. 2002).   Appropriation of property is unlawful where it is without the owner=s effective consent, Tex. Penal Code Ann. ' 31.03(b)(1) (Vernon 1994 & Supp. 2002), as for example where control is induced by deception, Tex. Penal Code Ann. ' 31.01(3)(A) (Vernon 1994 & Supp. 2002); Hinojosa v. State, 648 S.W.2d 380, 386 (Tex. App.--Austin 1983, pet. ref=d).  Such action may be pursuant to one scheme or course of conduct.  Tex. Penal Code Ann. ' 31.09 (Vernon 1994).  And even if one only facilitates another=s acquisition of the property, he may be liable as a party to the offense.  Tex. Penal Code Ann. ' 7.02 (Vernon 1994).

In this case, Schulte, as superintendent, was properly alleged as the owner of the property.  See Sowders v. State, 693 S.W.2d 448, 451 (Tex. Crim. App. 1985).  This issue was not in controversy and appellant does not argue that Schulte was not the owner.  Rather, he argues the legal sufficiency of evidence supporting the other elements of theft.

We believe the evidence was legally sufficient to support the theft conviction, as Rhinehardt would not have obtained the money without appellant=s aid.

First, authority to use the Rhinehardt companies was effected by deception.  Scott Irot, the District=s account executive with its insurance company, testified that appellant asked him to write various letters of recommendation.  Initially, the District was paying Argus a lump sum for services of peer review, private investigation, and case management.  Then, appellant told Irot that he liked the services of a Rhinehardt company and asked Irot to recommend it to the District.  When Irot questioned appellant about the change, appellant stated the services would be the same and at the same price, so Irot agreed to write the recommendation letter.  Later, a similar letter was written about case management services.^[3]

Irot testified that he had given his approval for the switches only because he believed that the net effects would be the same.  They were not.  The charges from Rhinehardt were not the same as they would have been through Argus but were instead much greater.  Although Argus=s services were seemingly sufficient, appellant sought transfer of the accounts to Rhinehardt.

There were no contracts between the Rhinehardt companies and the District.  If appellant had wanted to start a program to perform background checks on all employees, he was aware of the protocol to be followed to get approval for it.  However, no such protocol was followed.  Regardless, appellant authorized continuous payment to Rhinehardt for services.  Appellant also authorized large payments of money that were not authorized or approved by the District.  Appellant=s superiors claimed they had not known of the large expenditures.  If they had known of the expenditures, the purchases would not have been authorized.

Appellant was essentially the ultimate authority for the approval for the expenditures.  Although other individuals gave final approval for the purchases of the services, as several witnesses testified, approval was only to the degree invoices complied with District policies and the law; no one was in a position to question appellant=s authorization.  With appellant=s help, then, Rhinehardt wrested control of the money.

The services rendered were for background checks on prospective, current, and resigned or terminated employees.  When appellant was ultimately questioned about the expenses, he argued that the services were necessary.  Ben Debellis, Assistant Superintendent for Personnel, disagreed, stating that the reports were done at Aan incredible cost@ to the District and were not needed.  Similarly, Schulte stated that the routine background checks were already being done and placed within personnel files.  The District had a procedure for doing background checks and the duty to perform them was not within appellant=s realm of responsibilities.

The information contained in the Rhinehardt reports was of no value to the District.  It would be unusual to perform background checks on all employees.  Schulte testified that although it would be reasonable to check employees for previous workers= compensation claims, it would not be prudent to spend 66 percent of funds on such investigations, as appellant had.  Other witnesses also acknowledged that it would be inappropriate to use an applicant=s workers= compensation status against him or her in making an employment decision.  Certainly, to do so was not the typical practice.  Regardless, the total amount of the billings for the services was $4,644,606.57.

There was sufficient evidence to show that there was an intent to deprive the District of at least $200,000, as the District was actually deprived of at least that amount.  See Rowland v. State, 744 S.W.2d 610, 612 (Tex. Crim. App. 1988) (holding that evidence of actual deprivation may itself be evidence of an intent to deprive).  Agent Massington analyzed the evidence and found that there were often duplicate background reports, although the information was obtained on different dates and the information might not be exactly the same on all of the reports.  Over half a million dollars was expended on these duplicate reports alone.

Agent Massington also found that background checks were done on employees that were known to have workers= compensation claims.  There were no reports for some invoices.  Appellant approved all of the invoices nonetheless.

The money was deposited in various bank accounts owned by Rhinehardt.  Agent Massington contended that almost all of the money in the accounts came from the District.  Within two months of some of the companies= incorporation, the District was receiving bills from them.  The money was not to be returned, as the approximate amounts of deposits were often withdrawn shortly thereafter.^[4]

Appellant was aware of what services he should have received from each company.  Yet, as he testified on cross-examination, he paid the invoices even when he received the wrong services from a company.  He admitted that he should have gotten medical case management from one company from which he paid for background investigation reports.  Similarly, he paid a company that should have acted as a third-party administrator but that did investigatory work instead.  In addition, appellant paid invoices that asked for varying amounts that often were for much more than the purportedly agreed-upon amounts.

Appellant authorized the invoices, citing them as necessary and misrepresenting their value.  He caused the District to pay for improper background checks that, further, were of no value to the District.  In these ways, appellant aided Rhinehardt in its acquisition of the funds.  Thus, viewed in the light most favorable to the evidence, there is legally sufficient evidence to support appellant=s guilt of the theft.  See Hinojosa, 648 S.W.2d at 386 (holding that evidence was sufficient as a matter of law to support a conviction for theft where checks falsely certified work done and false supporting documents were furnished where others relied on these representations and where payment authorizations would not have been made without them).

We turn then to a discussion of the factual sufficiency of the evidence to support the theft offense.

Under a test for factual sufficiency, the reviewing court analyzes all of the evidence before it.  Unlike with legal sufficiency, the evidence is not viewed in the light most favorable to the verdict.  Rather, the evidence is assumed to be legally sufficient and is judged as a whole.  Clewis v. State, 922 S.W.2d 126, 128, 134 (Tex. Crim. App. 1996).  The verdict will be reversed only if it was clearly wrong and unjust.  Id. at 129 (adopting the standard of review set forth in Stone v. State, 823 S.W.2d 375 (Tex. App.--Austin 1992, pet. ref=d, untimely filed)).  It is not enough that the reviewing court feels that a different result would be more reasonable.  Id. at 135.  If there is some evidence to support the verdict, the verdict is usually conclusive.  The reviewing court=s power is only to prevent manifest injustice.  Id.

In support of his argument that the evidence is factually insufficient to support the theft conviction, appellant argues that Athe State totally failed to show that [he received] any money from Michael Rhinehardt as a kickback.@  Indeed, the FBI was unable to specifically trace any of the money to appellant.  But whether appellant received anything is not germane to our analysis; no such proof was necessary.  See McNeely v. State, 34 S.W.2d 873, 873 (Tex. Crim. App. 1930) (holding that a conviction for theft may be sustained even where the accused is not found in physical possession of stolen property).

Notwithstanding, we note that there was evidence suggesting that appellant received some of the money.  Evidence was presented to show that appellant=s expenditures increased dramatically during the period in question, although his income did not.  Coincidentally, there was also evidence that Rhinehardt and appellant would fly to and meet briefly in the Austin airport, the periods before and after which Rhinehardt would make large withdrawals from his accounts.

Appellant also argues that the State failed to show the specific amount of loss to the District.  In conjunction, appellant alleges that one weakness in the State=s case is the fact that the District received a service in exchange for the money that was spent and that, as he testified at trial, the reports were of great value to the District.  The State then failed to prove that the loss to the District was at least $200,000.

We disagree.  First, we note that the duplicate reports alone satisfied the $200,000 threshold.  In addition, there was testimony at trial denying appellant=s assertions of the value of the reports.

Several witnesses testified that the reports were of minimal value to the District.  The $3,500 cost per investigation was an overcharge of great magnitude.  Clifton Grumbles, Deputy Director of the Texas Commission on Private Security, testified that $3,500 for a background investigation would be Aexorbitant.@  At most, he would have paid $250 for such an investigation.  Kathleen Becker of Ward North America, the District=s third-party administrator during the period of time in question, confirmed this.  Becker testified that $3,500 was a lot to pay for the investigations and she said that no one would have paid that amount of money for them.

Appellant attempted to argue that the information in the reports might be useful.  For example, a background check on an employee who had resigned might be useful if the employee returned to the District.  Others testified to the contrary.  Becker testified that she did not believe there would be any reason to do background checks on all employees and that a typical risk manager would not perform such an exhaustive investigation.  She also testified that the background checks would have nothing to do with claims reduction within the plan.  Testimony from Delia Hernandez, also with Ward, supported Becker=s testimony.  In addition, Hernandez testified, she would not have paid more in investigative fees than was paid on medical claims.

Despite appellant=s assertion of the reports= worth, there was evidence that the reports were valueless.  Even assuming the reports had some value, that value was, at most, minimal.  The reports were worth no more than 10 percent their actual charge.  There was factually sufficient evidence of the District=s loss.  The invoices were paid and there was no discernible intent that the money would be returned.

There was also factually sufficient evidence of the deception.  At trial, appellant attempted to argue that he was not the final authority for payment approval and attempted to blame the scheme on others.  He denied that any deception had been involved in his handling of the invoices.  He stated that his superiors were aware of the background checks procedure and that they authorized it.  Appellant even testified that Marcee had instructed him that one of appellant=s duties was pre-employment screening and that the reports were requested for that purpose.

Although appellant attempted to blame others for the scheme, his testimony was often contradictory and contradicted by the testimony of others.  Appellant never received approval to perform the checks; there was testimony that appellant=s superiors did not know about the expenditures prior to the auditor=s attention to them; and none knew of any program requesting background information on employees.  It was appellant who argued the necessity of the checks in attempting to convince the others to continue the checks.

There was evidence that continuation of the checks was of great importance to appellant.  This was consistent with the evidence suggesting that appellant and Rhinehardt were working in conjunction.  For instance, a Rhinehardt employee testified that he had picked up his business cards from appellant.  But it was appellant=s actions with respect to the Rhinehardt companies and their invoices that were particularly suspicious.

Many of the Rhinehardt invoices were for large amounts.  When appellant was questioned about the payments, he was vague about their explanation.  He requested that the Rhinehardt checks not be inputted into the automated computer system but that purchase orders for them be created manually.  He often took the invoices to the appropriate department himself and asked that the checks be expedited.  Finally, he asked that they be picked up immediately, even calling others to remind them to do so when he was out of the office.

Appellant also followed a different protocol for shipment of the checks.  Although the checks might have been sent by certified mail, they were instead shipped through the much more costly Fed Ex service.  These procedures were followed only for the particular Rhinehardt vendors.

Thus, after a neutral review of the evidence, we believe the evidence was factually sufficient to support the theft conviction.  We are unconvinced by appellant=s assertions to the contrary.

We overrule appellant=s second and third points.

Misapplication of Fiduciary Property

Misapplication of fiduciary property is a felony of the first degree where the value of misapplied property is $200,000 or more.  Tex. Penal Code Ann. ' 32.45(c)(7) (Vernon 1994 & Supp. 2002).  The Penal Code states:  AA person commits an offense if he intentionally, knowingly, or recklessly misapplies property he holds as a fiduciary . . . in a manner that involves substantial risk of loss to the owner of the property or to a person for whose benefit the property is held.@  Tex. Penal Code Ann. ' 32.45(b) (Vernon 1994 & Supp. 2002).

Appellant concedes that he occupied a position of trust and had a fiduciary responsibility to the District.  However, he argues the State failed to show that there was an agreement that was violated or that there was a misapplication of funds.

We find there was evidence of an agreement between appellant and the District.  As the Court of Criminal Appeals noted in Bynum v. State, 767 S.W.2d 769 (Tex. Crim. App. 1989), A[A]n agreement is a harmonious understanding or an arrangement, as between two or more parties, as to a course of action.@  Id. at 777.  Such agreement need not be written.  Id.  Rather, the Court may apply the commonly understood definition of an agreement.

It was within appellant=s job responsibilities to take care of the fund.  Debellis testified that one of appellant=s functions was to have a good safety program and to have a program to decrease claims.  Schulte testified that it was appellant=s responsibility to run the risk management program in accordance with laws, procedures, and policies.  Appellant was entrusted with the well-being of the fund.  He helped develop the position he occupied.  He knew that he was charged with reducing the amount of claims and making sure that costs were Aput to a minimum.@  Thus, all were in agreement about appellant=s intended functions and restrictions.

The reports that appellant requested and received were not consistent with his responsibilities.  Almost all of the reports were billed at $3,500.  The invoices purported to be for various services, including open medical claims, but virtually all were for background checks only.  In turn, the background reports noted prior workers= compensation claims and contained criminal records but while criminal histories were detailed, workers= compensation claims were merely listed at the number of claims made; there was nothing more in the reports.^[5]  The reports did not contain any other information that might be useful to appellant in the execution of his duties.

Debellis testified that he thought the background checks unusual because such checks were being authorized by a different department for inclusion in each individual=s personnel file.  According to Debellis, appellant explained that the checks were both normal and necessary, an idea that Debellis seemed to indicate was without merit.  Appellant was not responsible for doing the checks and he never requested approval to do them.

While the $3,500 checks might have been utilized by appellant, they were unnecessary and their costs were excessive.  There was no logic in performing such investigations on all employees.  As we discussed in Points Two and Three, the reports were shown to be of little value.  It would be of little benefit to spend a great deal of money researching an employee in case he or she filed a claim or in case he or she would one day return to work in the District and then some day subsequent file a claim.  And, as several witnesses testified at trial, it would be illegal to use the person=s workers= compensation history against him in an employment decision.

It was appellant=s job, as a fiduciary, to handle the funds in a manner that would not expose the District to a substantial risk of loss.  He failed in this task.  As previously discussed, appellant paid for duplicate reports and paid invoices for which no reports were received.  The record was replete with other evidence of appellant=s mishandling.

Appellant paid duplicate invoices.  This was best exemplified by certain payments to Rhinehardt in September, October, November, and December 1998.  In September 1998, a $56,000 fee was paid to Rhinehardt.  On October 20, another check for $56,000 was authorized to Rhinehardt for the same services for the month of October.  On October 30, a $56,000 check was made for the same services for the first two weeks of November.  Then, on November 20, another $56,000 was authorized for the last two weeks in November.  On November 11, another $56,000 was authorized to Rhinehardt for services for the last two weeks in November.  Finally, on November 30, a third check for $56,000 was authorized on Rhinehardt=s behalf for the last two weeks in November.  And, a similar situation occurred where Rhinehardt was paid twice for the same period in December.  What began as a $56,000 per month payment soon became several such payments during the course of a month.

Appellant paid for the wrong services.  He authorized bills from case management services and third-party administrators for investigative work they did, although the companies were not authorized for such purposes.^[6]  There was also testimony that invoices were inconsistent with services rendered.  At trial, appellant claimed he paid the invoices, irrespective of who presented them, because he knew all of the companies were under Rhinehardt=s control.  But, even though appellant understood changeovers in services to be in name only with no additional costs to the District, he nevertheless paid invoices for greater or different amounts in the aggregate of approximately 4.6 million dollars.

And, appellant paid for information that was inaccurate.  He was confronted at trial with invoices billing for such information.  Some employees who had made workers= compensation claims were listed as having no claims.  Some current employees were listed as having pre-employment background screening reports done.  Additionally, checks were performed on employees who had left the District.  In one instance, appellant received a report on an employee listing that she had no workers= compensation claim, although in the preceding month he had received an invoice for an open medical background check on the same employee, indicating that there was an open medical claim.  Later, in October, appellant did a new employee background check on the same employee.  Yet, the employee had resigned in January of that year.  As the State showed, appellant authorized payment of $7,000 in checks on an employee that was not with the District.  And a similar check was performed on Marcee in the month Marcee left the District.  So, without proper consideration, appellant allowed payments for improper invoices.^[7]

Appellant failed to maintain control over the fund.  At a minimum, appellant, who had ultimate power to authorize payment of the invoices, failed to ensure that the invoices he paid were proper.

The reports that were received were kept in appellant=s office.  Appellant never informed the Human Resources division that he already had reports on individuals for whom they were requesting reports, preventing them from requesting reports he already had.  Hernandez testified that the District=s third-party administrator for claims had not known of such information and that appellant had never precluded it from seeking other investigative reports, either.  Appellant=s request for reports did nothing to prevent duplicate reports from being ordered by others, at additional expense to the fund.

It was appellant=s job to decrease costs to the fund or at least to keep them in check, a fact to which appellant himself testified.  Appellant failed in this responsibility and costs increased under his tenure.  The expenses, for which appellant was responsible, skyrocketed.  Prior to the expenses, the account balance had been positive.  Because of the expenses, the retained earnings (the amount of money for future expenses and liabilities) was depleted and a negative balance resulted on the account, negatively impacting other District programs.

The fund was also negatively impacted by appellant=s overstatement of the fund balance.  There was some testimony that it was also appellant=s responsibility to gather information needed by the actuaries in determining the amounts to withhold.  Although appellant stated that he did not have access to the budget, there was evidence to the contrary.  Even if appellant had not gathered the figures himself, he was the person with ultimate responsibility for them.

Therefore, the evidence was sufficient that the plan was not run according to agreement.  Property was misapplied in a way that resulted in not only a substantial risk of loss to the District but an actual loss.

Appellant cites Aiken v. State, 36 S.W.3d 131 (Tex. App.--Austin 2000, no pet.), an Austin Court of Appeals case, in arguing that his actions in paying the Rhinehardt companies to perform investigations did not amount to action toward the property in a manner that involved a substantial risk of loss.  In that case, Douglas Aiken was convicted of the offense of misapplication of fiduciary property.  Id. at 131.  Aiken executed a contract on behalf of a contracting business agreeing that he would build a house for a couple, the Ristaus.  Id. at 132.  Before the project was completed, Aiken informed the Ristaus that the company was insolvent and would be unable to finish building the house.  Id.

Aiken was accused of failing to pay subcontractors and materialmen pursuant to his contract with the Ristaus.  Id.  He was convicted and brought appeal claiming that the evidence was legally insufficient to support his conviction.  Id. at 131.  Specifically, he argued that the State failed to show that he dealt with the owners= property in a manner that involved a substantial risk of loss.  A portion of the funds that Aiken had requested were retained in compliance with the Property Code.  Id. at 133.  The money, which belonged to Aiken subject to the claims of the unpaid subcontractors and materialmen, id., was eventually used to pay fully the subcontractor and materialmen=s claims, id. at 134.  Therefore, the appellate court agreed with Aiken that the State failed to show that there had been a substantial risk of loss to the owners.  Id.  The conviction was reversed.  Id.

In this case, appellant attempts to argue that because there were other insurance policies in effect during the time the District=s program was self-funded, there was no substantial risk of loss to the District.  We disagree.  While it is true that Debellis testified that after claims per individual reached a certain amount the insurance company covered a portion of the claims, notwithstanding, the District=s plan was self-funded and appellant caused the money to be spent on unnecessary background checks such that the fund ran into a deficit.  The insurance company would have paid for some of the claims after they reach a certain level but the District remained liable through its self-funded program for the other claims.  Appellant depleted the reserves from which such claims were to be paid.  In contrast, in Aiken, the materialmen and subcontractors were paid completely from the reserves in the bank; the Ristaus were not liable for any more than they had already paid.  We believe Aiken is inapplicable to the present situation.

During appellant=s tenure, the fund ran into a deficit.  Expenditures to Rhinehardt grew from 25 percent of fund expenditures to 66 percent of fund expenditures^[8] two years later.  Although the percentage of claims went down, this corresponded with an increase in costs of maintenance; that is, the decrease in percentage of medical claims occurred while there was an increase elsewhere.  There was no evidence that appellant=s efforts resulted in a reduction in claims.

There was legally and factually sufficient evidence to support the conviction for misapplication of fiduciary property.  Accordingly, we overrule appellant=s fourth and fifth points.

Conclusion

Based on the foregoing discussion, we overrule appellant=s five points and affirm the judgment of the trial court.

SUSAN LARSEN, Justice

August 22, 2002

Before Panel No. 4

Barajas, C.J., Larsen, and McClure, JJ.

(Do Not Publish)

---

^[1]The District was originally a subscriber but became self-funded during the time Ieremia worked there.

^[2]As the State correctly notes, appellant=s motion to quash complained of a charge for theft by a public servant.  The grounds on which he now complains were first raised at the hearing on the motion to quash.

^[3]Appellant later requested an additional letter recommending another Rhinehardt company as a third-party administrator but Irot denied the request.

^[4]There was also testimony to the effect that the balances of the accounts dropped to zero around the time appellant left the District.

^[5]Appellant testified that the files presented into evidence were incomplete, however.

^[6]In fact, there was testimony that Rhinehardt, which appellant suggested as a case management service, did not even employ any medical personnel.

^[7]Appellant attempted to use the inaccuracies to explain the duplicate reports.  He testified that he had requested reports on individuals for whom he already had reports because of inconsistencies in the information in different reports.

^[8]The last period in question only ran from September through January (five months).