State v. EngelkingState v. Engelking
AFFIRMED.
Opinion of the Court by Fair McEvers, Chief Justice.
Nicholas S. Samuelson, Assistant State’s Attorney, Fargo, ND, for plaintiff and appellee.
Kiara C. Kraus-Parr, Grand Forks, ND, for defendant and appellant.
No. 20250375
Fair McEvers, Chief Justice.
[¶1] Alexis Ann Engelking appeals from an amended criminal judgment awarding restitution. She challenges the inclusion of investigative expenses and the employee portion of insurance premiums not withheld from her payroll checks in the restitution award. We conclude the district court did not abuse its discretion by including investigative expenses and insurance premiums in the restitution award. We affirm.
I
[¶2] From January 2024 to August 2024, Engelking worked at Salon Professional Education Company (SPEC) and The Salon Professional Academy (TSPA) (together, “the companies”) as a controller, handling payroll and managing taxes.
[¶3] During Engelking’s employment, the companies’ president and chief executive officer, Jodi Brown, authorized Engelking to issue herself a $12,000 personal loan from business finances. Brown later discovered Engelking had issued herself a second, unauthorized $12,000 payment. Engelking was terminated in August 2024.
[¶4] Brown spent time apart from her typical duties, including personal time, investigating and mitigating Engelking’s theft from the companies. She also hired CPA Doreen Filler to review the companies’ financial records for irregularities that occurred during Engelking’s employment. Heather Link, the companies’ new controller, specifically dedicated time to investigating the theft. In addition, employees Amanda Maag and Michele Novotny worked extra weekend hours analyzing the extent of the theft. Through investigation, Brown discovered Engelking had not withheld insurance premiums from her paychecks and the companies had inadvertently paid Engelking two additional, unearned paychecks after her termination.
[¶5] On October 13, 2025, Engelking pled guilty to theft. The district court imposed sentence, held restitution open for 60 days, and entered a criminal judgment. The State moved for an order determining restitution. The court held a restitution hearing on November 25, 2025. Brown requested $32,695.95 in restitution, composed of: $12,000.00 for the unauthorized loan; $1,923.08 and $1,740.74 for the unearned paychecks; $1,362.46 for the insurance premiums not withheld; $9,061.99 for Filler’s services; $2,800.00 for Brown’s services; $307.68 for Link’s services; and $3,500.00 for Maag and Novotny’s services.
[¶6] In post-hearing briefs, the State conceded the unearned paychecks were unrelated to the theft; Engelking conceded the $12,000 unauthorized loan and disputed the amounts for investigatory fees and insurance premiums not withheld. The district court ordered Engelking to pay $29,032.13 in restitution, composed of: $12,000.00 for the unauthorized loan; $1,362.46 for Engelking’s insurance premiums that should have been withheld; $9,061.99 for Filler’s services; $2,800.00 for Brown’s services; $307.68 for Link’s services; and $3,500.00 for Maag and Novotny’s services. The court entered an amended criminal judgment. Engelking timely appealed.
II
[¶7] Engelking argues the district court abused its discretion by including investigative expenses in its restitution award. She contends the costs of investigating the quantity and extent of her theft fall outside the purview of
[¶8] District courts have a wide degree of discretion in determining restitution awards. State v. Gendron, 2008 ND 70, ¶ 8, 747 N.W.2d 125. This Court reviews restitution orders only for whether the district court “acted within the limits set by statute,” similar to an abuse of discretion standard. State v. Bruce, 2018 ND 45, ¶ 4, 907 N.W.2d 773. “A district court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, if its decision is not the
[¶9] The North Dakota Constitution provides victims “[t]he right to full and timely restitution in every case and from each offender for all losses suffered by the victim as a result of the criminal or delinquent conduct.”
[¶10] In determining the amount of restitution, the district court must consider the “reasonable damages sustained by the victim . . . limited to those directly related to the criminal offense and expenses actually sustained as a direct result of the defendant’s criminal action.”
A
[¶11] Engelking argues the district court misapplied
[¶12] The district court found:
The Defendant argues these investigative expenses are not compensable because they are unrelated to the theft conviction or represent ordinary business expenses. The evidence establishes that these expenses were incurred to discover, identify, and account for the Defendant’s theft. Because the Defendant served as TSPA/SPEC’s controlling officer and exercised control over payroll and accounting functions, it was a direct and foreseeable consequence of her criminal conduct that the companies would be required to undertake a detailed investigation of their financial records to determine the existence and extent of any loss.
The investigations revealed the Defendant’s conduct involved multiple methods of theft, including unauthorized transactions, payroll manipulation, and fraudulent credit card payments, including payments made after the Defendant’s termination. Given the scope, duration, and concealment of the theft, and the initial uncertainty regarding its full extent, the investigative services performed by Filler, Brown, Link, Maag, and Novotney [Novotny] were reasonably necessary to identify losses and protect the financial integrity of the businesses. There is no indication these services were duplicative or unnecessary.
Furthermore, the time expended and amounts paid were reasonable in light of the work performed. Accordingly, these investigative expenses are directly related to the criminal offense and constitute losses actually incurred as a direct result of that offense.
(Emphasis added.)
[¶13] Engelking relies on State v. Miller, where the defendant was charged with theft of property and deceptive writings for buying a vehicle with falsified paystubs. 2024 ND 167, ¶ 2, 10 N.W.3d 795. Miller fled to Oregon where he was apprehended and returned to North Dakota. Id. The district court awarded restitution, including extradition costs. Id. This Court reversed, concluding the extradition costs were not directly related to the criminal conduct underlying the
[¶14] Miller, 2024 ND 167, ¶¶ 9-10, distinguished State v. Rogers, 2018 ND 244, 919 N.W.2d 193. Rogers failed to appear for trial on a charge of gross sexual imposition. Rogers, ¶ 2. He was extradited from Thailand and charged with bail-jumping. Id. This Court affirmed the restitution award, including extradition costs, because the costs were directly related to the bail-jumping charge. Id. ¶¶ 1, 25 (“It was his criminal action of fleeing from the GSI prosecution that directly resulted in the bail-jumping charge and the cost to return him for trial.” (emphasis in original)).
[¶15] Engelking’s reliance on Miller is misplaced. Unlike in Miller, the costs for Filler’s, Brown’s, Link’s, Maag’s, and Novotny’s services are connected to the theft conviction, more closely akin to Rogers. Brown testified the companies hired Filler for the sole duty of investigating the theft. Filler received $9,061.99 as compensation for her time spent investigating and remedying Engelking’s theft. Filler testified her work for the companies consisted of reviewing ACH transactions and general ledger activity for “anything that looked out of the ordinary” and reviewing bank statements and reconciling all bank accounts for “anything odd that could have been mis posted [sic].” Brown testified that she spent approximately two to three weeks working full time to investigate and remedy the theft, including consulting with other professionals. She clarified that these hours were dedicated exclusively to the theft matter and were separate from her typical duties. According to her testimony, the requested $2,800 for her time is only an estimate—one that likely undervalues the actual time she spent—since she arrived at the figure simply because she had spent so much personal time investigating the theft. Brown testified that the companies paid Link $307.68 for Link’s time revising spreadsheets relating to Engelking’s theft. This was not one of Link’s general duties, and Link tracked the hours she worked on the theft matter separately from her general hours. Maag and Novotny, together, received a total of $3,500 for the additional hours worked over several weekends, devoted exclusively to the theft issue and separate from their general job duties.
[¶17] While Brown holds a salaried position as president and chief executive officer, she spent time working exclusively on addressing and remedying the theft. By devoting this time to review financial records for Engelking’s theft, Brown lost opportunities and time she could have used to handle other matters for the companies. “[A]s long as a victim suffers damages which are a direct result of the defendant’s criminal action, the victim may be awarded restitution before actually incurring any expense.” State v. Yellow Hammer, 2022 ND 106, ¶ 10, 974 N.W.2d 635; see State v. Pagenkopf, 2020 ND 33, ¶ 9, 939 N.W.2d 2 (“A victim may sustain damages without having incurred any expense.”).
[¶18] The district court ultimately found the investigative expenses were directly related to the criminal offense. Based on our review, this finding was not induced by an erroneous view of the law, there is evidence to support it, and we are not left with a definite and firm conviction a mistake has been made. The finding is not clearly erroneous.
B
[¶19] Engelking further argues the cost of Engelking’s insurance benefit premiums fails the direct causal connection test because the cost is a result of Engelking’s failure to withhold from her own earned wages—not a direct misappropriation of employer funds.
[¶20] Relating to these premiums, the district court found:
The Defendant contends this conduct is not directly related to the theft, as it did not involve directly taking money from TSPA/SPEC. It is recognizable that the employee-paid portion of benefit premiums is paid from employee wages. Viewed in isolation, a failure to reduce a paycheck for employee-paid premiums could
appear to involve only earned wages rather than theft from an employer. Here, however, TSPA/SPEC was entitled to withhold those funds, and the Defendant knowingly prevented or bypassed that withholding while exercising control over payroll. In doing so, the Defendant exercised unauthorized control over funds to which TSPA/SPEC was entitled, with the intent to deprive TSPA/SPEC of them. The resulting loss is therefore directly related to the criminal offense and represents an expense actually incurred as a direct result of the Defendant’s criminal conduct.
(Emphasis added.)
[¶21] Filler testified that Engelking failed to withhold benefits from the time Engelking was hired to her termination. Filler further testified Engelking never withheld her Aflac premiums and only sporadically withheld a portion of her health insurance premiums. After reviewing benefit invoices and paystubs, Filler calculated Engelking owed $1,362.46 for both the Aflac and health insurance premiums not withheld. Brown testified that, because Engelking failed to withhold these premiums from her paychecks, the companies were responsible for paying them. The companies lost money because of Engelking’s failure to withhold premiums.
[¶22] The district court found the loss resulting from the premiums not withheld from Engelking’s paychecks was directly related to the criminal offense. This finding is not clearly erroneous.
III
[¶23] The investigative expenses and insurance premiums included in the restitution award are reasonable damages actually incurred and directly related to Engelking’s theft. We therefore conclude the restitution award of $29,032.13, including investigative expenses and premiums, is within the scope authorized by
[¶25] Lisa Fair McEvers, C.J.
Jerod E. Tufte
Jon J. Jensen
Douglas A. Bahr
Mark A. Friese