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People v. Curoe





APPEAL from the Circuit Court of Cook County; the Hon. AUBREY F. KAPLAN, Judge, presiding.


Defendant, Thomas Curoe, was charged in an indictment with theft and perjury. Following a bench trial, defendant was found guilty of theft and not guilty of perjury and was sentenced to serve 30 months' probation. From that judgment defendant appeals raising the following issues for our review: (1) whether the indictment was barred by the statute of limitations; (2) whether the indictment was void; and (3) whether defendant was proven guilty beyond a reasonable doubt of the offense of theft. For the reasons hereinafter set forth, we reverse defendant's conviction.

The criminal charges brought against defendant arose out of his handling of the estate of Louis Moritz, who died intestate on September 25, 1972. Defendant, an attorney, was appointed administrator of the estate on December 18, 1972. The indictment charging defendant with theft alleged that during the period from December 18, 1972, the date of his appointment, to January 10, 1974, defendant "exerted unauthorized control" over the property of the heirs of Louis Moritz in the amount of $326,000. *fn1

At his death, Moritz owned real estate in Chicago, had a large savings account at the Continental bank, owned various stocks and bonds and had substantial quantities of silver coins at his residence. On December 22, 1972, defendant opened a savings account at Continental under the name, "The Estate of Louis Moritz, Deceased; Thomas J. Curoe, Administrator." Defendant was the sole signatory.

The opening balance of the estate savings account was $345,788.75. On December 28, 1972, defendant withdrew from the account $230,000 in the form of two cashiers checks. One check, for $5,000, was used to open an estate checking account at Continental. The other check in the amount of $225,000 was deposited directly into defendant's personal account at the First National Bank of Chicago which, prior to December 27, 1972, reflected a balance of $7,266.56. According to defendant, he informed a Continental Bank official, Edward Domke, that he "was going to withdraw a large sum of this and earn higher interest for the estate." Defendant failed to obtain court approval for this transaction and did not advise either the attorney for the estate, James Dolan, or any of the heirs apparent as to what he intended to do with these funds.

On February 2, 1973, defendant withdrew $15,000 from the estate savings account for a cashiers check made payable to himself, which he endorsed and deposited into his personal account on February 5, 1973. On February 28, 1973, defendant received a check for $5,000 in partial payment of the proceeds from the sale of the coins found in Moritz' residence. Defendant endorsed the check and deposited it into his own account. When a check for the balance of $46,670 was received on March 7, 1973, he did the same. Defendant again failed to obtain approval for or advise anyone of the sale or the disposition of the proceeds.

At defendant's request, Continental sold 53 Series "E" United States Savings Bonds and credited the proceeds, approximately $58,000, to the estate checking account on March 22, 1973. Although defendant told Domke (the bank official) that the "heirs want these cashed in," the heirs were unaware of the existence of these assets and had not instructed defendant to dispose of them. The same day defendant wrote a check to himself for $54,000 and deposited it in his own checking account.

Defendant issued five more checks on the estate account made payable to himself, dated March 28, 1973, March 30, April 11, July 27 and January 10, 1974, in the amount of $3,500, $10,500, $9,330, $20,000 and $10,000, respectively. All of these checks except the one dated January 10, 1974, were deposited directly into defendant's personal account at the First National Bank. The last one, which defendant said represented payment for part of his fees as administrator, was deposited into his account at the Northern Trust Company.

In November of 1974 defendant sent the heirs letters informing them how much each was to receive from the estate. During the same month, they received post-dated checks for their respective shares. When several of the heirs attempted to cash the checks, or otherwise determine if the checks would be honored, they were informed that there were insufficient funds in the estate account. Ultimately 11 checks were returned due to lack of funds. As a result, George Raff, an attorney for the estate of an heir who had died, notified the Moritz estate attorney, James Dolan, that the checks had been returned. Dolan, in turn, informed defendant of the shortage. Defendant told Dolan that "there was a problem" because there "were not sufficient funds in the account to cover the checks." Dolan then advised defendant to consult with an attorney.

On November 8, 1974, a meeting was held at defendant's office regarding the depletion of the estate's assets. Present were defendant and his counsel, the attorney for the estate, Dolan, several heirs and their attorneys and Gerald Schloetter, a representative from National Surety Corporation, which had issued a bond for the estate in the amount of $664,500. One of the heirs' attorney, George Raff, testified that defendant privately admitted to him that he had taken funds out of the estate for the purpose of purchasing farms in Iowa but that he had given promissory notes to the estate to cover all of the withdrawals and could make restitution either in cash or in real estate. Defendant refused to tell anyone else what he had done with the assets, but the State presented evidence that defendant had used the funds to pay premiums on life insurance policies and to make mortgage payments on his Iowa farm property. Between December 28, 1972, and March 15, 1973, defendant wrote checks on his personal account in excess of $368,000.

During the meeting on November 8, 1974, defendant produced promissory notes which he said he had executed each time he had taken money from the estate. At trial he introduced nine promissory notes made payable to "L.S. Moritz Administrator." The dates written on the notes corresponded to the dates defendant diverted funds from the estate. No note was executed for the January 10, 1974, check in the amount of $10,000 because defendant claimed that the check represented partial payment of his fees as administrator. Although defendant testified that his purpose in executing the notes was to confirm his responsibility for and his intention to repay the funds taken from the estate, he kept the notes in the estate filed in his own office, and no one knew of or saw these notes until November 8, 1974.

Each of the notes defendant prepared stated an interest rate of 9% and was payable one year from the date of issuance. Two of the nine notes were repaid on time, but defendant defaulted on the other seven, including the $225,000 note which he said he had executed on December 28, 1972. Defendant did not repay this note, which fell due on December 28, 1973, because the "estate was going to be kept open for another year." Defendant said he did not repay the remaining notes because he "wanted to keep the money working at 9% interest. * * * I thought I would be negligent if I put it in a bank. And I wanted to keep the money working for the heirs."

At trial, defendant testified that his personal assets were more than sufficient to cover his withdrawals from the estate. On November 8, 1974, however, he told Frances Fox, an attorney for one of the heirs, that he did not have the money to pay the heirs. According to Fox defendant said his personal worth was "in excess of several million dollars" but that he had no assets in Illinois. His assets consisted of real estate in Iowa. Because of the liquidity problem defendant had created in the estate's assets, National Surety agreed to pay the heirs their distributive shares in the event defendant was unable to raise the necessary funds. At the insistence of the heirs who were present, defendant agreed to return to the estate the $16,750 he had received for his services as administrator. This sum was repaid in January 1975.

Ultimately, National Surety paid out over $400,000 in claims. On July 29, 1977, it obtained a judgment against defendant in the amount of $380,157.50 on a promissory note he had signed. In return for an assignment of defendant's interests in land contracts, the surety gave defendant a release and satisfaction of judgment on November 14, 1978. By the time of trial National had recovered only $151,000.

John O'Brien, a reporter for the Chicago Tribune, testified that in May 1976 he had a conversation with defendant regarding the case. O'Brien asked defendant why he had taken money from the estate. Defendant said that "it was for investment purposes." When the reporter asked him "did he think that there was anything wrong in doing that," defendant said he never gave it a thought, that he intended to put every penny back into the fund. O'Brien also inquired if defendant had ever asked the probate court to approve his withdrawals. Defendant answered, "I have given that a thought." Defendant testified that he had never read the Probate Act and did not know until 1975 that withdrawals and investments had to be approved by the court. O'Brien also said that defendant told him that he had invested the money, and that he took the money from the estate because of the interest rate the banks were charging: "Money was tight," was his phrase; and he "intended to put the money back in after it earned a higher rate of interest."

In his own defense, defendant testified that he had executed a promissory note each time he withdrew money from the estate and never intended to permanently deprive the heirs of their inheritance. He admitted that when he wrote the checks for the distributive shares of the estate he knew there were insufficient funds in the estate account to cover them. He issued the checks because he expected that he was going to be paid $450,000 from the sale of some real estate.

On cross-examination defendant stated that at the time he withdrew funds from the estate and signed promissory notes bearing 9% interest he could have borrowed the money from a commercial lending institution directly at 7 1/2 to 8%. When asked why he was willing to pay a higher rate of interest to the estate, defendant said his only motivation was to benefit the heirs: "* * * all these heirs were poor heirs. The banks would only give them 4 1/2%. I used money — now, I had a lot of assets and I was giving them 9%. I was going to make more money for these heirs. Some of these heirs were living in poverty." Defendant admitted that when he was asked the same question at the grand jury proceedings in December 1976 he answered, "That is a good question. The money was there and I used it. I put in notes and did not go through the normal means of getting a loan." Elsewhere in his testimony defendant stated that he used the assets from the estate for his personal benefit because he was unable to borrow any money on his own account. Defendant knew the estate's assets were protected by a bond. Seven witnesses testified regarding defendant's character and reputation for truthfulness.

Defendant was found not guilty of perjury and guilty of theft and was sentenced to serve 30 ...

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