People v. PotterPeople v. Potter
Aрpeal from a judgment of the Supreme Court of Essex County (Jung, J.), rendered July 15, 1996, upon a verdict convicting defendant of the crimes of falsifying business records in the first degree (seven counts) and grand larceny in the second degree.
By its verdict convicting her of grand larcеny in the second degree and seven counts of falsifying business records, a jury found that defendant, utilizing a sophisticated scheme involving fictitious computer entries, systematically stole funds in excess of $50,000 from her employer, the Mirror Lake Inn (hereinafter the Inn) in the Village of Lake Placid, Essex County). Defendant seeks reversal principally upon the ground that the trial evidence was legally insufficient to support the verdict. She also challenges certain evidentiary rulings made by Supreme Court, as well as its order of restitution in the amount of $142,276. The gist of defendant’s arguments on appeal is that the prosecution failed to prove (1) that funds were in fact missing or stolen from the Inn, (2) that defendant stole any such funds, and (3) that defendant made any false computer entries in the records of the Inn.
At the outset, it is well to articulate the scope of our review,
After a thorough review of the substantial record in this case, and upon application of the requisite standаrd of review, we conclude that the evidence was legally sufficient to sustain the jury’s verdict. The People presented considerable evidence from which the jury could rationally conclude that defendant stole substantial sums of cash from the Inn and concealed the thefts through a complex scheme of manipulating the company’s records with false entries to its computer system. By its very nature and design, the scheme was undetectable in the ordinary course of the Inn’s business, and came to light only fortuitously after the Inn’s owner applied for a business loan and was required in connection therewith to arrange for an independent audit of the Inn’s books.
The Inn is a resort facility with gross sales in excess of $5 million per year in 1991 and 1992. Defendant was employed by the Inn from 1986 to Nоvember 1992. Initially hired as a desk clerk, she rapidly ascended within the ranks to a management position. During the relevant periods, she managed the Inn’s sales department and front desk area, supervising the employees working therein. Edwin Weibrecht, owner of the Inn, tеstified that defendant was one of his most valued and trusted “key” employees. In 1988, he delegated to her the task of designing, selecting and implementing a new computer system for the Inn. Thereafter, she was the employee with the most knowledge and control ovеr the system, with other employees frequently consulting her with respect to problems they encountered using the computer system.
In the fall of 1992, certified public accountant Douglas Hoffman began preparations for the audit required in connection with thе loan being negotiated by Weibrecht.
Contrary to defendant’s contention that the People failed to prove that funds were in fact missing or stolen, this fact was established by proof that the negative entries did not correspond to actual credits paid or given to customers. The falsity of the entries was established through testimony of various witnesses. When a credit or refund was issued to a guest in the normal course of operations, a number of incidents would be present. First and foremost, the Inn’s records would reflect that the guest had in fact visited the Inn and incurred charges as to which the refund or credit wаs being issued. Second, the ostensible credit reflected on the computer sheet would be implemented by the issuance of a “hard copy” of a credit to a credit card, the issuance of a refund check or a cash “paid out” slip. Hoffman and the Inn’s comptroller testified that as to each questionable negative transaction, they searched for, but did not find, any record of the purported guest’s stay at the Inn or the incurring of corresponding charges in the first instance. Moreover, they found no “hаrd copies” of credit card vouchers, refund checks or cash “paid out” slips, nor were the issuance of any credit card credits reflected on the Inn’s bank statements.
While the People’s case implicating defendant in the thefts and false entries was almost wholly circumstantial, it nonetheless comprised a considerable web of incriminating evidence. Significantly, after occurring regularly during 1991 and 1992, the negative entries ceased entirely after defendant left the Inn’s employ in November 1992. None were found during the periods when defendant was absent from the Inn on vacation, although they occurred immediately before and after such absences. Although she did not ordinarily work in the front desk area, defendant was frequently seen there, particularly on Sunday mornings when checkout volume was the heaviest. She had unrestricted, unquestioned access to all areas of the Inn, including the safe and all aspects of the computer system.
Further, two Inn employees under defendant’s supervision testified that defendant gave them cash “bonuses” which she directed that they neither disclose nor discuss with anyone. Elizabeth McFadden testified that defendant gave her $2,500, in the form of five weekly $500 cash payments, which on each occasion she observed defendant remove from the Inn’s safe. Bridget Stueley-Draper received a $350 payment immediately prior to leaving the Inn’s employ. Neither “bonus” was included in the employee’s wage and tax statement. Weibrecht testified that the payment of bonuses was a matter upon which his knowledge and authority was essential, and that in no event would bonuses ever be paid in cash. He specifically denied authorizing bonuses for McFadden and Stueley-Draper, and no records pertaining to these cash payments were ever found. Stueley-Draper also testified that she reserved a room at the Inn in 1992 for a personal function and was told by defendant that she did not have to pay for the room. Upon checking the computer, Stueley-Draper saw a “cash” payment for the room.
Turning briefly to the evidentiary rulings of which defendant complains, we find no error in the receipt of the exhibits in question. People’s exhibit Nos. 2 and 3 were summaries, by month and dollar amount, of the negative transactions identified by Hoffman and Piilani Jaques. The computer printouts upon which these summaries were based were received into evidence as People’s exhibit No. 1 and consisted of over 350 pages of posted revenues and credits. Summaries of voluminous records are admissible as lоng as the opposing party is provided with the original data (see, Guth Realty v Gingold,
People’s exhibit No. 4 was a chart prepared by Hoffman to illustrate, using a hypothetical transaction, how negative computer entries сould be used to conceal the removal of cash without creating a discrepancy between the total posted revenue and the actual total. In permitting the exhibit, Supreme Court noted the inherent difficulty in understanding accounting terminology and deciphering complex financial records, and the relative ease of comprehending a model transaction with a simplified chart. The jury was instructed that the figures were hypothetical and that the exhibit did not relate to a transaction of which dеfendant was accused. The use of visual aids to assist the jury is permitted (see, People v Miller,
On the question of restitution, defendant presses the same arguments as she unsuccessfully advanced upon the merits of the appeal. Supreme Court conducted a three-day restitution hеaring, receiving numerous exhibits and voluminous records into evidence, and found that the People met their burden of establishing, by a preponderance of the evidence, that the victim is entitled to restitution. However, and as conceded by the Peoplе, the court erred in adopting figures compiled by the Inn’s comptroller without adjusting the totals to reflect at least one error to which she testified on cross-examination. We note
Cardona, P. J., Mercure, Peters and Carpinello, JJ., concur. Ordered that the judgment is modified, on the law and the facts, by reversing so much thereof as calculated defendant’s restitution; matter remitted to the Supreme Court for a new determinаtion as to the proper amount of restitution, and for further proceedings pursuant to CPL 460.50 (5); and, as so modified, affirmed.
Notes
. No audit of the Inn’s books had been conducted since the mid-1980s.
. Significantly, defendant did not disclose this account on a loan application dated September 10, 1992.