We spend a lot of time here looking at civil cases involving corporate and individual fiduciaries.  That doesn’t mean that the wrongful acts underlying a breach of fiduciary duty can’t also pose criminal problems for a fiduciary.  Occasionally a criminal fiduciary case catches our attention, like the United States District Court for the Eastern District of Tennessee’s opinion in Elkins v. Gibson (link provided through Justia.com).  This was a case where a fiduciary sued a police detective for malicious prosecution stemming from a warrant issued for the fiduciary’s alleged theft from his principal.  The fiduciary was arrested but was not convicted of any crime.  Why we’re interested is because the alleged theft took place using a power of attorney.

The federal court dismissed the plaintiff’s case finding that the detective was entitled to qualified immunity.  Specifically, the federal court found that at the time the objectionable warrant was issued, the evidence known to the detective at the time supported probable cause that the plaintiff committed theft from the principal of over $10,000.  Let’s take a look at that evidence.

David Lee Elkins, as attorney-in-fact pursuant to a power of attorney executed by his mother, transferred $40,000 from his mother’s bank account to an account in his name but marked “For Mae Elkins.”  Mae Elkins was the mother’s name.  Elkins wrote a number of checks from this account, including a “graduation gift” check to his daughter that he claimed was written at Mae Elkins’ request.  He also wrote a check to First Community Bank for a reason which Elkins could not explain.  After Mae Elkins’ death, Elkins wrote a check to the nursing home that housed Mae Elkins.  This left $27,167.53 in the account.  About 6 months after Mae Elkins’ death, Elkins and his wife applied for a truck loan and listed the $27,167.53 held in this account as an asset.

Elkins and his brother were caught up in a will contest lawsuit over Mae Elkins’ will.  During Elkins’ deposition in that will contest lawsuit, he denied moving any money out of Mae Elkins’ accounts.  Elkins, however, continued to withdraw money from the “For Mae Elkins” account.  He wrote a check in the amount of $10,000 “for cash,” which he used to pay the loan on his truck.  He used $8,000 from the account to pay an attorney who was representing him in an IRS tax audit proceeding.  He wrote another $7,000 check “for cash” that he couldn’t remember what it was used for.  He used another $3,300 to pay the truck loan.  Elkins didn’t deny using the money from the account for his personal use, however, he claimed that he did so on the advice of his attorney.

Detective Charlie Gibson, the defendant, had discussed all of this information and other evidence from his investigation of Elkins with an Assistant District Attorney.  The ADA opined that probable cause existed to obtain a warrant for theft over $10,000 and the ADA assisted in drafting the warrant.  The ADA opined that the statute of limitations had been tolled by Elkins’ concealment of the theft.  Nevertheless, after Elkins was arrested, the criminal court judge dismissed the criminal charges against Elkins because “it [was] outside the statute of limitations.”

After the charges against him were dismissed, Elkins sued Gibson for malicious prosecution.  Gibson claimed he was entitled to qualified immunity for the alleged violations.  The federal court found that Gibson was entitled to qualified immunity because “there exists plenty of evidence in the record, evidence that was known to the defendant at the time he sought the warrant, to support probable cause that the plaintiff committed theft over $10,000.00.”