## Facts

- William Ambrose was appointed by the court as guardian for four minor children.
- The minors owned promissory notes as part of their property.
- Ambrose sold notes belonging to the minors and received proceeds from those sales.
- The government proved that Ambrose deposited at least some of the proceeds into a bank account held in his individual name, where the minors’ money was mixed with Ambrose’s personal funds.
- Ambrose then wrote checks on that individual account, and the account balance eventually fell to the point that the account was overdrawn.
- The prosecution introduced testimony that Ambrose had been in financial trouble for about two years before he became guardian.
- Ambrose attempted to introduce evidence that he made payments to the minors (or for their benefit), offered to show that he had not taken the money for himself.
- The trial court refused to admit that payment evidence because Ambrose did not first show that the payments came from the same bank account into which the note proceeds were deposited.
- Ambrose also sought to introduce evidence of a guardianship account that had been approved by the court in connection with one ward who had reached majority.
- The trial court excluded that approved accounting on the ground that it was filed after the bank account containing the note proceeds had already been depleted/overdrawn.
- A jury convicted Ambrose of embezzlement under § 841 of the District of Columbia Code, and Ambrose appealed.

## Issues

1. Whether proof that a guardian deposited ward funds into his personal account, mixed them with his own funds, and later overdrew the account is sufficient, by itself, to support an inference of fraudulent intent required for embezzlement under D.C. Code § 841.
2. Whether the trial court erred by excluding defense evidence of payments to or for the minors on the ground that the defense did not trace those payments to the specific account that received the note proceeds.
3. Whether the trial court erred by excluding evidence of a later court-approved guardianship accounting as irrelevant merely because it post-dated depletion of the bank account.

## Decision

- The Court of Appeals of the District of Columbia reversed the conviction and remanded for further proceedings.
- The court ruled that the mere fact of a guardian’s commingling of a ward’s money with the guardian’s own money does not, standing alone, justify presuming the “evil” or fraudulent intent needed for embezzlement under § 841.
- The court held that the excluded evidence of payments to or for the minors was relevant to whether Ambrose converted the funds and to whether he acted with fraudulent intent; it should not have been kept from the jury solely for lack of strict tracing to the particular deposit account.
- The court also held that the excluded evidence of a court-approved guardianship account involving a ward who had reached majority could bear on whether Ambrose ultimately accounted for the ward’s property and on his state of mind; exclusion simply because the filing occurred after the account was depleted was error.
- The court treated evidence of financial distress as possible motive evidence, but not a substitute for proof of conversion and fraudulent intent, especially where the defense was prevented from offering countervailing proof.

## Legal Principles

- Embezzlement by a fiduciary under D.C. Code § 841 requires proof of a fraudulent appropriation or conversion and a wrongful intent; careless handling of trust funds is not automatically a crime.
- A guardian’s act of depositing ward funds into the guardian’s individual account and mixing them with personal funds, without more, does not by itself create a sufficient presumption of fraudulent intent to convict for embezzlement.
- In an embezzlement prosecution, evidence that the accused made payments to or for the beneficiary may be admissible to contest conversion and intent, even if the defense cannot match each payment to the same bank account that received the entrusted funds.
- A later court-approved guardianship accounting may be admissible because it can tend to show continued responsibility for the ward’s funds (or lack of it) and can bear on intent, even if it occurred after a disputed depletion of a particular account.
- Motive evidence such as financial distress may be considered, but it cannot replace proof that the defendant actually converted the entrusted property with a fraudulent purpose.

## Conclusion

Ambrose’s embezzlement conviction was reversed because the government’s proof showed commingling and an overdraft but did not, by itself, establish the fraudulent intent required by § 841, and the trial court improperly kept the jury from hearing defense evidence of payments to the minors and a court-approved guardianship accounting that could rebut conversion and intent.


Ambrose v. United States, 45 App. D.C. 112 (1916)