United States v. Lequire
United States Court of Appeals for the Ninth Circuit
672 F.3d 724 (2012)
Dwayne Lequire (defendant), treasurer of Patriot Insurance Agency, helped run a company that performed policy services for an affiliated risk-retention group, Spirit Mountain Insurance, under an agreement requiring Patriot to hold Spirit's funds as a fiduciary but explicitly allowing Patriot to deposit that money into its own general operating account rather than a separate trust account. Patriot routinely failed to timely forward premium payments, and Lequire instead diverted over $750,000 to the personal account of Patriot's owner over two years. Lequire was convicted of conspiracy and eight counts of federal embezzlement, based partly on witness testimony describing a fiduciary relationship even though those witnesses had no firsthand knowledge of the actual agreement; he appealed, arguing no true trust relationship existed.
Whether, under federal law, embezzlement of insurance premiums requires the funds in question to be held in trust by a person who has a fiduciary relationship with respect to the property.