## Facts

- Sentry Armored Courier Corp. transported and stored large sums of client cash; John Jennings was president and Angela Fiumefreddo was senior vice-president.
- After an outsider burglary of Sentry’s Bronx facility resulted in an approximately $11 million loss, prosecutors investigated Sentry’s internal handling of client funds.
- The prosecution alleged multiple courses of dealing in which defendants used or redirected client money for Sentry’s benefit or in ways inconsistent with clients’ interests, including short-term investment and banking arrangements and retention or misdirection of certain insurance proceeds.
- The People’s theory treated these practices as grand larceny and/or misapplication of property based on defendants’ custody of client funds and alleged self-interested use and exposure of the funds to risk.
- Two successive grand juries returned multiple indictments against Jennings, Fiumefreddo, a bank officer (Finnerty), and corporate defendants; trial courts dismissed all outstanding indictments for legal insufficiency of grand jury proof.
- The Appellate Division reinstated only two indictments (against Jennings and Fiumefreddo) and otherwise affirmed dismissals; both sides obtained leave to appeal.

## Issues

1. Whether grand jury proof of temporary diversion or use of entrusted client funds, with an expectation of return, was legally sufficient to establish grand larceny under New York’s definitions of “deprive” and “appropriate.”
2. Whether the same proof was legally sufficient to establish misapplication of property where defendants had fiduciary-type custody and used the property in a way creating a substantial risk of loss or detriment to the owner.
3. Whether certain objections to grand jury procedure and instructions were preserved or waived.

## Decision

- The Court of Appeals modified the Appellate Division’s order.
- It held that many larceny counts were legally insufficient because the proof did not establish intent to permanently deprive owners of property or to appropriate the major portion of its economic value.
- It held that certain misapplication of property counts were legally sufficient where defendants’ use of entrusted funds subjected owners to a tangible, substantial risk of loss or detriment.
- It reinstated some counts (particularly misapplication counts and limited theft-related counts where the evidence more strongly suggested wrongful appropriation or meaningful risk) and left other dismissals in place.
- It concluded some prosecutorial procedural objections were waived for lack of timely preservation, while independently reviewing legal sufficiency count by count under the grand jury standard.

## Legal Principles

- Larceny requires proof of intent to “deprive” (permanently or so long that the major portion of economic value is lost) or to “appropriate” (to obtain the major portion of economic value), not merely unauthorized temporary use of another’s property.
- Temporary diversion or short-term use of entrusted funds, coupled with an intent to return them, generally does not satisfy larcenous intent under New York’s consolidated theft statutes.
- Misapplication of property is established where a person with custody of another’s property under a fiduciary or similar obligation intentionally uses or disposes of it contrary to that obligation in a manner known to create a substantial risk of loss or detriment to the owner.
- Criminal theft-type liability is narrower than civil breach of fiduciary duty; not every disloyal or self-interested handling of entrusted funds constitutes larceny absent statutory intent requirements.
- On review of an indictment, the question is whether legally sufficient, competent grand jury evidence, if unexplained and uncontradicted, would support conviction on each count.

## Conclusion

The court drew a line between felony larceny and improper but non-larcenous handling of entrusted funds, rejecting larceny charges premised on temporary use without statutory intent to deprive or appropriate while allowing prosecution for misapplication where fiduciary misuse exposed owners to substantial risk of loss.


People v. Jennings, 69 N.Y.2d 103, 504 N.E.2d 1079 (N.Y. 1986)