Grand Theft and the Failure to Return Money
In the case of Ernest Henry Vroom versus the State of Florida, Mr. Vroom was convicted of the crime of grand theft based on the following facts:
"Vroom was the principal in a business known as Funding American Mortgage Corporation (FAMC). FAMC was licensed by the State of Florida as a mortgage lender . . . . Vroom's role as an agent for FAMC was to negotiate loan agreements with potential borrowers and then 'sell' the transactions to the ultimate lenders. In each of the three transactions that are the subject of this [case], Vroom collected an advance fee as a part of the negotiations with the borrowers. Vroom, however, failed to close any of the three transactions. In two of the transactions, Vroom was able to return the advance fee to the borrower, but he failed to do so in the transaction with Mr. Thomas Coghill, Sr. This failure was the basis of Vroom's grand theft conviction.
At jury trial, after the close of the [prosecution's] case, Vroom [asked the judge to find him not guilty of grand theft], arguing that the [prosecutor] had failed to present sufficient evidence from which the jury could infer that he had the requisite intent to commit [grand theft]. The facts basically showed that Coghill paid to FAMC the required advance fee and that Vroom then transferred it to an attorney's trust account in London. Upon the failure of Vroom to close the loan, he and FAMC failed to return the deposit as agreed to by a commitment letter. There was no evidence that any of the funds remained with or were returned to Vroom or FAMC by the London attorneys or any other third party. Further, there was no evidence that Vroom had any relationship with the London attorneys or other parties that eventually received the money."
Vroom appealed his conviction to Florida's Second District Court of Appeal which concluded that the evidence presented at Vroom's trial did not show that, at the time of the transaction, he had the intent to obtain the money by fraud, deception, or with an intent to deprive the borrower of the funds. More specifically, the court of appeal rejected the following three arguments put forward by the prosecution on appeal:
1. The prosecution's first argument was that "Vroom provided to Coghill a personal financial statement that demonstrated that Vroom was personally able to guarantee the repayment of the advance fee. [Since] Vroom was unable to subsequently return the fee when the loan did not close as planned, the reasonable inference is that he had provided deceptive financial information in the disclosure statement for the purpose of intentionally deceiving Coghill in an attempt to obtain Coghill's funds."
The court of appeal rejected this argument stating that "[t]here was no evidence that the financial disclosure was inaccurate at the time it was made. The fact that, at some future time, Vroom could not make the repayment is not sufficient to support a conviction of grand theft. Although the facts may support the inference that Vroom was intentionally deceiving Coghill at the time he received the funds, the same facts could also support the reasonable inference that Vroom had encountered economic [troubles] after supplying the disclosure statement. As such, the fact that Vroom's financial condition at the time of the requested repayment was not consistent with that represented in the financial disclosure statement he provided to Coghill is not enough, on its own, to support a conviction for grand theft."
2. The prosecution's second argument on appeal was that "because Vroom had failed to proceed to closing on the prior two loans, he intentionally deceived Coghill as to his ability to obtain the loan and that the deception was for the purpose of unlawfully obtaining the advance fee from Coghill."
The court of appeal rejected this argument as well because "[t]he record indicates that Vroom was not very successful as a mortgage lender. But the fact that he had failed to obtain the prior loans does not, on its own, support the inference that he knew he could not complete this transaction and that he was fraudulently representing his ability to do so."
3. The prosecution's third and final argument on appeal was that "Vroom violated the statutory requirements that apply to mortgage lenders by failing to keep the funds from Coghill's advance fee in a federally insured bank account. This violation, argued the prosecution, was sufficient to support the inference that Vroom intentionally attempted to deprive Coghill of his funds."
The court of appeal rejected this final argument stating that "[a]lthough Vroom did move the funds out of the country by transferring them to the trust account of an attorney in London, he did so with Coghill's permission and knowledge. Although the placement of the funds may have violated [certain licensing requirements of Florida law], the facts of this case do not support the inference that this was being done for a criminal purpose, that is, attempting to deprive Coghill of the use of his funds."
