State of Tennessee v. Barbara Ann Riggs ( 2010 )

IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs February 23, 2010
STATE OF TENNESSEE v. BARBARA ANN RIGGS
Appeal from the Criminal Court for Knox County
No. 84997 Mary Beth Leibowitz, Judge
No. E2009-00820-CCA-R3-CD - Filed May 26, 2010
The Defendant, Barbara Ann Riggs, was found guilty by a Knox County jury of theft of
property valued at $10,000 or more but less than $60,000, a Class C felony. See T.C.A. §§
39-14-103; -105(4). The trial court imposed a Range I, six-year sentence to be served on
probation consecutively to a one-year sentence in another case and set the amount of
restitution at $28,600.95. In this appeal, the Defendant argues that the evidence was
insufficient to support her conviction, that the trial court erred in enhancing her sentence
based upon enhancement factors that were not found by a jury to exist beyond a reasonable
doubt, and that the court erred in awarding restitution for attorney’s fees and accountant’s
fees the victim incurred as a consequence of the crime. We affirm the judgment of the trial
court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court Affirmed
J OSEPH M. T IPTON, P.J., delivered the opinion of the Court, in which N ORMA M CG EE O GLE
and D. K ELLY T HOMAS, J R., JJ., joined.
Mark E. Stephens, District Public Defender, and Gianna Maio and David Gall, Assistant
Public Defenders, for the appellant, Barbara Ann Riggs.
Robert E. Cooper, Jr. , Attorney General and Reporter; Matthew Bryant Haskell, Assistant
Attorney General; Randall E. Nichols, District Attorney General; and Kevin James Allen,
Assistant District Attorney General, for the appellee, State of Tennessee.
OPINION
The events in issue occurred during the course of the Defendant’s employment as a
bookkeeper for Tile Sensations, which is owned by Jennifer Neil. Cash, checks, gift cards,
and a company debit card were used for purchases and the transactions were entered into the
company’s accounting program in a way that concealed the nature of the transactions.
At the trial, Jennifer Neil testified that she was the owner of Tile Sensations and that
she hired the Defendant as a part-time bookkeeper. She said the Defendant left to work for
another employer but returned to Tile Sensations on a full-time basis in August 2005. Ms.
Neil said she was overloaded with responsibilities, had recently divorced a violent husband,
was a single parent, and was running a struggling company at the time. She said she
welcomed the relief afforded her by having the Defendant take on primary responsibility for
bookkeeping and also perform other office tasks. She said she trusted the Defendant and did
not worry about placing the business’s finances in the Defendant’s control. She said that the
Defendant was issued a laptop computer that belonged to the business and that the Defendant
was able to access the business’s QuickBooks software from home.
Ms. Neil identified a copy of a debit card for the company’s bank account. She said
that at the Defendant’s urging, she obtained debit cards for herself and the Defendant. She
said the debit card issued to the Defendant was for business purposes, such as office supplies
or C.O.D. payments to a vendor. She said the Defendant was added to the business’s bank
account as a person authorized to sign checks. She said that after the Defendant began full-
time employment, the Defendant also volunteered to assume the responsibilities for
reconciling the monthly bank statement.
Ms. Neil said that on the Monday after Thanksgiving, the Defendant told her that the
Defendant had gone shopping but left her personal checkbook or credit card at home and that
the Defendant had used her company debit card for personal purchases totaling
approximately $1200. She said that the Defendant pledged not to do it again and that the
Defendant said she would repay the money. She said she was surprised that the Defendant
would have done this because there was no extra money in the checking account. She stated
that she believed the Defendant’s promise to repay the money, that she assumed the
Defendant did so, and that she had no idea the Defendant would not repay the money.
Ms. Neil testified that business had been brisk in November and December 2005. She
said that everyone worked hard during this time and that the business was closed early on
December 23 and remained closed until January 2. She said the employees were not paid for
this time off work unless they chose to use their accrued vacation time. She said the
Defendant would not have worked during this time and would not have been paid because
the Defendant was a contract employee and did not accrue vacation time.
Ms. Neil testified that she hoped that there was enough money in the checking account
on December 23 for all of the business’s checks to clear and that there would be some money
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left to begin business in January. She said the company’s finances were “really, really tight”
and that before the Defendant took over the accounting, Ms. Neil called the bank every day
to see whether any checks had bounced. She said she had invested her inheritance in the
business to keep it afloat financially.
Ms. Neil testified that the Defendant was on a cruise from January 6 through January
14 and that the Defendant returned to work on January 17. She said that while the Defendant
was gone, she discovered that the Defendant had written a check to herself for an amount that
was identical to the sum that had recently been paid to a creditor. She said she began
discovering irregularities in the business’s QuickBooks accounting program. She said that
each user of QuickBooks had a unique password, that the Defendant had a password of her
own, and that both she and the Defendant knew the password to use the program as the
system administrator. She said that “audit trail” reports were generated once she discovered
the irregularities. She said these reports detailed the date, time, and user identity for every
creation of an entry, viewing of an entry, and change to an entry.
Ms. Neil testified that the Defendant’s pay when the Defendant began working full-
time was $750 per week. She said that she discovered by reviewing QuickBooks that
beginning on October 24, the Defendant began paying herself for pay periods ending in the
future. She said that by December 8, the Defendant had already paid herself through
December 30. She said the Defendant should not have been paid for the period ending
December 30 because that was when the business was closed. She said that on December
29, the Defendant also paid herself a second time for three time periods, in a total amount of
$2250. She said that QuickBooks reflected that this transaction had been entered on
December 28 by the administrator and that she would not have been available at that time to
have entered the transaction. She said the Defendant again paid herself in advance on
January 3 for the pay periods ending January 6 and January 13. She said the Defendant
should not have been paid for the week ending January 13 because the Defendant had been
on a cruise that week.
Ms. Neil testified that the business was repaying her for the loan of her inheritance in
the amount of $1200 per week, although she did not always take the money. She identified
a cancelled check dated November 23, 2005, made payable to the Defendant in the amount
of $1200 and reflecting that it was for “weekly transfer.” She said the Defendant was not
entitled to a $1200 weekly payment. She said that the signature on the November 23 check
was neither hers nor the Defendant’s but that the check was endorsed with the Defendant’s
signature. She said that this payment was entered into QuickBooks by the administrator as
a payment to Ms. Neil and that she did not receive that payment. She said that two weekly
transfers to her were listed in Quickbooks for December 3 but that she would not have
received two transfers for the same time period. She said that another $1200 check payable
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to the Defendant was issued on December 8, that her name was forged on the signature line,
and that the cancelled check contained the Defendant’s signature on the endorsement. She
said that all of the checks in question were processed by Maryville Credit Union, where the
Defendant banked. She said she would not have received money by check for repayment of
the loan because this was done through an account transfer with the bank. She said that the
check numbers for the checks written to the Defendant were not entered into Quickbooks and
that the space for the check number where Quickbooks showed these transactions as a bank
transfer to her account was left blank.
Ms. Neil testified that she found a check dated December 29 that the Defendant wrote
to herself for $1443.15, an amount identical to a recent payment to Louisville Tile. She said
this transaction had not been entered into QuickBooks, and she entered it on January 10,
while the Defendant was on vacation. She said the Defendant accessed QuickBooks on
January 17 at 1:05 a.m. and changed the file to reflect that the payment was for two periods
of contract labor and “something for Stamps.com.”
Ms. Neil testified that also during the Defendant’s vacation, she learned from her bank
that a check had been processed for $1019.76. She said this amount was the same as an
outstanding invoice with Kemper Design Company. When she learned from her bank that
a check had been presented in this amount, she entered the payment into QuickBooks as
being for Kemper Design Company. She later learned, however, that the check was made
payable to the Defendant.
Ms. Neil testified that also during the Defendant’s vacation, she found an envelope
containing receipts in the Defendant’s office. She said that some of these receipts were for
transactions with the business’s debit card that was issued to the Defendant.
Ms. Neil testified that one of the receipts in the envelope was for a purchase at Kroger
on November 29 at 5:20 p.m. and reflected that it had been made with the Defendant’s
business debit card. She said the receipt noted purchases for grocery items for which the
business would have had no use. She said the $34.61 transaction was entered into
QuickBooks on December 3 using the administrator’s account and that it was listed as a
payment to Kroger for employee incentives. She said she did not authorize this purchase or
enter it into QuickBooks.
Ms. Neil testified that there was a transaction in which $10.05 was transferred from
the business’s bank account to the Defendant’s PayPal account. She said the PayPal receipt
reflected that the transaction was for the purchase of a ballerina ornament and that she would
not have purchased this item for the business. She said she did not authorize the Defendant
to link the business’s bank account to the Defendant’s PayPal account. She said this
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transaction was entered into QuickBooks on December 8 at 8:52 p.m. using the Defendant’s
account. She said it was listed as a payment to PayPal and categorized as cost of goods sold,
which would reflect items sold in the business. She identified a second PayPal receipt
reflecting a purchase by the Defendant of three ballerina ornaments for $10.24 on December
1. She identified banking records showing that the payment to PayPal came from the
business’s checking account. She said this item was entered in QuickBooks by the
Defendant on December 8 as a payment to PayPal and was categorized as cost of goods sold.
Ms. Neil testified that she did not shop at WalMart or Sam’s Club and would not have
permitted the Defendant to shop at these stores for the business. However, she discovered
a $30 payment to Sam’s Club for a membership on November 30. She said this item was
entered in QuickBooks by the administrator on December 3 to reflect payment to Sam’s Club
for dues and subscriptions. She also discovered a debit card transaction at Sam’s Club for
$130.08 on December 10 at 4:00 p.m. She said the receipt listed numerous grocery items and
reflected that payment was made with the Defendant’s business debit card. She said that a
transaction in this same amount was entered into QuickBooks on December 30, was
backdated to December 14, reflected payment to FedEx Freight, and was categorized as cost
of goods sold. She identified a second receipt from Sam’s Club, reflecting a $234.91
purchase made with the Defendant’s business debit card. She said this transaction was
entered into QuickBooks on December 30 at 10:00 p.m. using the administrator account. The
payee was listed as FedEx Freight. She identified a WalMart receipt for $80.67 dated
December 22. She said the purchase was made with the Defendant’s business debit card.
She said that this transaction was entered into QuickBooks on December 27 by the
administrator as a payment to WalMart for showroom decorations. She said that the business
closed early on December 23 and that she would not have purchased showroom decorations
on December 22. She also noted that the purchase was made in Alcoa and was not near the
business in Knoxville. She identified another WalMart receipt for items including a 32" flat
CRT on December 26. The amount of the purchase was $466.60. She said the Defendant’s
signature appeared on the receipt and that the Defendant’s business debit card had been used
to pay for the purchase. She said the business did not have a 32" flat CRT. She said a
transaction for this amount was entered in QuickBooks on December 30 by the administrator.
The payee was listed as Mexican Handcrafted. She said her bank records identified that the
WalMart where this purchase was made as being in Brunswick, Maine. She said the
Defendant had flown to Maine to visit one of her children for Christmas. She identified a
December 29 Sam’s Club receipt for $129.46, of which $40.00 was for cash back. She said
two items for $15.48 each were listed on the receipt that might have been used for the
business but that the other items and the cash back had no business purpose. She said
another employee entered this transaction into QuickBooks while the Defendant was on
vacation as an uncategorized expense because it had been processed by the bank and they did
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not know how to categorize it at the time. She said this purchase was made on a date the
business was closed.
Ms. Neil testified that in reviewing her banking records, she discovered a $43.65
payment to Apple Computer on December 12. She said that she did not make the purchase
and that the business did not have any Apple computers. She said this transaction was
entered into QuickBooks on December 30 using the administrator account as a payment to
Apple Computers for “Repairs Computer.”
Ms. Neil testified that she found a receipt for $143.65 for Day Timers from Franklin
Covey. She said the December 20 receipt reflected the purchase was made with the
Defendant’s business debit card. She said the Defendant gave some of the business’s staff
members Day Timers for Christmas as a personal gift from the Defendant. She said she did
not authorize the purchase. She said she gave her employees a meal, show tickets, and cash
for Christmas. She said the Franklin Covey transaction was entered into QuickBooks on
December 30 as a payment to Franklin Covey and was categorized as office expense.
Ms. Neil testified that she found a packing list for a December 21 purchase of a men’s
NFL shirt from Foot Locker for $59.28. She said the business would have no need for this
item. She said a transaction with a like amount was entered into QuickBooks on December
23 as a payment to UPS and was coded as cost of goods sold. The packing list reflected that
it was shipped to the Defendant at Tile Sensations.
Ms. Neil testified that she found a $52.99 receipt for Borders Airport for a December
25 purchase. She said that there was an item entered in QuickBooks on December 30 by the
administrator for this same amount and that it was coded as a payment to UPS and
categorized as cost of goods sold.
Ms. Neil identified banking records for a November 18 debit transaction made with
the Defendant’s business debit card for $5.92. She said this item was entered in QuickBooks
on November 28 by the Defendant reflecting a payment to Pilot and was categorized as
automobile expense. She said that she sometimes had automobile expenses when she
traveled to clients’ locations but that she did not purchase gas at Pilot. She said that any
employee mileage was reimbursed based upon a set rate per mile, rather than as a
reimbursement for gas purchased. Ms. Neil identified banking records for a November 28
purchase at Pilot for $25.84. She said the administrator entered this transaction in
QuickBooks on December 3 as a payment to Pilot for automobile expense. She also
identified banking records for a December 6 debit at Pilot for $30.71. She said this item was
entered into QuickBooks by the Defendant as a payment to Pilot in the automobile expense
category. She identified banking records for another Pilot debit transaction for $24.90 on
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December 8. She said this was entered into QuickBooks on December 13 by the
administrator as a payment to Pilot in the automobile expense category. She said there was
another Pilot transaction on December 27, a date the business was closed. She identified
banking records showing this transaction was for $11.25. She said this transaction was
entered into QuickBooks by the administrator on December 27 as a payment to Pilot for
automobile expense.
Ms. Neil identified banking records for a November 23 debit card purchase of $37.45
from 1-800-SUNBEAM. She said Sunbeam sold items such as electric blankets, irons, and
toasters. She said this transaction was entered in QuickBooks on November 28 by the
Defendant as a payment to Sunbeam for building maintenance.
Ms. Neil identified banking records for a November 25 purchase of $31.75 at
Weigel’s in Maryville. She said an entry was made in Quickbooks on November 28 which
listed the transaction at Weigel’s and categorized it as “Barbara Uncategorized Expense.”
Ms. Neil identified banking records for a November 28 purchase at JCPenney for
$89.79. She said this was entered into QuickBooks on December 3 by the administrator as
a payment to JCPenney for uniforms. She said that the only employee who was subject to
a dress code purchased his own shirts and that she reimbursed him for the purchase.
Ms. Neil identified a November 30 packing slip from Laptops for Less for a PDA car
charger. The amount of the sale was $59.00. She said that neither she nor the business
owned a PDA. She said that the Defendant had a PDA but that the business would not have
needed a car charger for the Defendant’s PDA. She said this transaction was entered into
QuickBooks on December 8 by the Defendant as a payment to Laptops for Less for computer
repairs.
Ms. Neil identified a receipt from Pancho’s Mexican Restaurant in Maryville. The
receipt lists a pre-tip amount of $26.44 and has “30.–” handwritten in the “Total” line. Ms.
Neil said that QuickBooks contained an entry made by the administrator on December 13 as
a purchase by the Defendant at Pancho’s. She said the transaction was entered as travel and
entertainment. She said the Defendant’s job duties would not entail her taking anyone to
dinner in Maryville. She said the bank records reflected that the purchase amount was
$29.80, rather than $30.00.
Ms. Neil testified that she did not know the PIN number to her own debit card. She
said there would have been no business reason to withdraw cash from an ATM machine. She
identified a receipt she found in the Defendant’s office for an ATM withdrawal November
11 for $200. She said there was an entry in QuickBooks made by the administrator for this
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amount under her name as a shareholder loan. She said she did not make this withdrawal.
She identified two other receipts for ATM withdrawals of $100 and $20 on November 18.
She said there was a $120 transaction entered in QuickBooks by the administrator on
December 5 as a payment to her for shareholder loans. She identified another ATM receipt
for a $200 withdrawal on December 3. She said the administrator made a QuickBooks entry
on December 5 reflecting a $100 payment to her for shareholder loans. She said there was
a $200 entry listed as ATM and categorized as petty cash. She said that the business had a
petty cash box but that it was rarely used and there would be no reason to keep large amounts
of money or large bills in the box. She said a check would be cashed if petty cash were
needed. She identified another ATM withdrawal receipt for $200 on December 20. She said
there was a December 20 entry in QuickBooks made by the administrator reflecting that she
received $200 for shareholder loans. She identified another ATM receipt from a WalMart
in Brunswick, Maine for $201.50. She said the receipt reflected that the Defendant’s
business debit card was used for the transaction. She said the administrator made a
QuickBooks entry on December 30 for this amount for “miscellaneous.” She said that she
never sent the Defendant to the ATM to get money for her or the business and that the
Defendant never discussed with her the need to make ATM withdrawals for business use.
Ms. Neil identified a November 30 Office Depot receipt for $103.74. She said that
some of the items appeared to be legitimate business expenses but that there were two lap
desks purchased for $24.99 each that would not be used in her business. She said the entire
amount was charged to the business. A QuickBooks entry reflected that the entire amount
was entered as a payment to Office Depot for office supplies. Ms. Neil said the cost of the
lap desks with tax was $54.60.
Ms. Neil identified a December 15 receipt for a reimbursement payment to the
Defendant for various office supplies. One of the amounts listed, $56.15, had no explanation
for its purpose, and Ms. Neil said she was not able to find a receipt for this amount. The
entire amount of the reimbursement was $275.43. She said that on January 12 she made an
entry into QuickBooks for this item showing that the Defendant was issued a check for the
entire amount.
Ms. Neil identified UPS receipts for shipments made to Topsham, Maine, on
December 9, December 12, December 15, December 21, and December 23; to Louisville,
Kentucky, on December 12; and to Surprise, Arizona, on December 21. She said the
Defendant’s son and grandchild lived in Maine. She said her business was charged $128.01
for these shipments. She said the Defendant admitted on January 17 that the shipments were
hers. She said that the Defendant had not told her about the shipments previously and that
they had been entered in QuickBooks as legitimate business payments to UPS.
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Ms. Neil testified that she purchased gift cards from her church as part of a
fundraising effort for various charities and the school associated with the church. She said
the gift cards were to be used for business purposes and were purchased with business funds.
She said they were stored in a safe to which the Defendant and other employees had access.
Ms. Neil identified a December 9 receipt from Office Depot for a purchase of
$260.20. The receipt reflected that gift cards totaling $177.81 were used to pay for the
transaction, with the balance of $82.39 being paid by a debit card. She said her banking
records reflected a debit for this amount. She said there was a QuickBooks entry made by
the administrator on December 12 reflecting $82.39 being paid to the Defendant for
shareholder loans.
Ms. Neil identified a December 9 Home Depot receipt for purchases of $36.07 and
cash back of $50.00. A $25.00 gift card was used, and $63.07 was paid with the Defendant’s
business debit card. She said there was a QuickBooks entry by the administrator on
December 13 reflecting a payment of $63.07 to Home Depot for office expense. She noted
that the transaction took place in Maryville.
Ms. Neil testified that she noticed that many of the transactions in question were
entered in QuickBooks on December 13 and 30. She said she also noted that the QuickBooks
entries were made within a few minutes of each other on those dates. She said the business
was closed on December 30.
Ms. Neil identified a ledger listing the purchases the Defendant admitted making over
Thanksgiving weekend, the repayment made by the Defendant, and additional purchases that
were later made by the Defendant and entered into the shareholder loan account. The
balance was $1289.62. She said the balance reflected a $900.00 check the Defendant wrote
to the business as a reimbursement. She noted that the Defendant’s personal check was
drawn on Maryville Municipal Credit Union. She also noted that the Defendant’s check was
written the same day that one of the $1200.00 checks the Defendant wrote to herself was
deposited. She noted that one of the items on the ledger was a $268.30 payment to
Travelocity. She said the Defendant told her that the Defendant had been able to budget the
trip to Maine. She said she had no idea business funds were being used for the Defendant’s
travel expenses.
Ms. Neil testified that she spent many hours reviewing the records with her
accountant, Terry Chervenak, and an assistant during the Defendant’s vacation. She
acknowledged that she had made changes in QuickBooks for the first five or six items she
found that were miscategorized. She said that she stopped making the corrections on the
advice of Ms. Chervenak, who wanted to preserve the Defendant’s actions. She said that in
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any event, the audit trail memorialized any changes that were made to each transaction. She
acknowledged that the audit trail reports reflected that she had viewed all of the transactions
in question after they had been entered by the Defendant, and she said she accessed them
during the Defendant’s vacation when she was trying to understand the accounting
irregularities.
Ms. Neil testified that she and her accountant decided to call a meeting to discuss their
concerns with the Defendant upon the Defendant’s return on January 17. She said Ms.
Chervenak took the lead in questioning the Defendant about the transactions. She said that
when Ms. Chervenak showed the Defendant some of the checks payable to the Defendant,
the Defendant said, “Well, I don’t know how that could have happened. They are clearly
made payable to me. I don’t know how it could not be in Quick Books[,]” or she said “I
don’t know.” She said the Defendant appeared to be distressed, was crying, and was running
her fingers through her hair. She said the Defendant kept professing, “I don’t know.” She
said the Defendant claimed the ATM withdrawals were for petty cash. She said the
Defendant was able to explain some purchases as being for the business, admitted that some
of the purchases were for her personal use, and said she did not know how many of the
QuickBooks entries had been made incorrectly. She said the Defendant admitted making
personal purchases with gift cards belonging to the business. She said the 32" CRT screen
purchased in Maine and the DVD player were among the items the Defendant admitted
purchasing for her own use.
On cross-examination, Ms. Neil acknowledged that blank, signed checks and the gift
cards were kept in a safe at the business and that employees other than the Defendant had
access to the safe. She admitted that other office employees had access to QuickBooks at
some level. She said that despite the fact she had access to QuickBooks with the
administrator password, she normally logged in as Jen or Jen2. She said the administrator
mode was normally used to make accounting entries or to create a new user account. She
said only she and the Defendant were able to access QuickBooks from home. She
acknowledged that after the Defendant admitted making personal purchases with the
Defendant’s business debit card over the Thanksgiving weekend, she had no further
discussion with the Defendant about using business funds for personal use. She said it never
occurred to her that the Defendant would continue to purchase items for the Defendant’s own
use with her business debit card. She said the timing of some items being entered into
QuickBooks by the administrator led her to conclude that the Defendant must have been the
person who made the entry because the Defendant admitted her responsibility for some of
the purchases, and many of the disputed entries were made in close proximity to the ones the
Defendant admitted.
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Terry Ann Chervenak, a Certified Public Accountant, testified as an expert witness
in general accounting. She said she had been Tile Sensations’ accountant since late 2004 or
early 2005. She said her firm supported clients who used QuickBooks software as their
accounting system. She said she was not aware of any way to modify a QuickBooks audit
trail. She acknowledged that before 2005, the audit trail could be turned off in QuickBooks.
Ms. Chervenak testified that she was asked in early January 2006 to investigate
irregularities in Tile Sensations’ accounting. She said both she and one of her employees
helped Ms. Neil review the records. She said she advised Ms. Neil not to make changes in
the records when she became aware that Ms. Neil was correcting errors in Tile Sensations’
QuickBooks records. She said they made a list of items about which they had questions,
which she assembled into a spreadsheet to be reviewed with the Defendant.
Ms. Chervenak testified that she and Ms. Neil met with the Defendant on January 17.
She said that both she and Ms. Neil’s attorney thought she should be the person to conduct
the meeting and that she did so. She said she began by questioning the Defendant about the
$1200 checks that were entered as a payment to Ms. Neil but were payments to the
Defendant. She said the Defendant became flustered and said, “Well, that’s impossible, I
don’t know how that could have happened. . . . I know I entered that into Quick Books as
Barbara Riggs, the check to Barbara Riggs as Barbara Riggs.” She said she did not get very
far into the questioning about these entries because the Defendant became panicked and
upset and was crying. She said she changed the subject of the questioning to another area.
She said that they reviewed items line-by-line for over four hours and that the Defendant
said, “I don’t know; I don’t know,” throughout the process. She said the Defendant was able
to answer questions about some of the charges. She said that the Defendant admitted that
many of the purchases had been for the Defendant’s personal use, that the Defendant said she
did not know why they were not coded properly in QuickBooks, and that the Defendant
stated she would reimburse the business for those transactions.
On cross-examination, Ms. Chervenak acknowledged that she had never performed
a formal audit for Tile Sensations. She said audits were very expensive. She also admitted
that she was not involved in the day-to-day business at Tile Sensations. She agreed that the
Defendant reviewed with her each transaction about which she had questions. She admitted
that the audit trail reports had not yet been generated on January 17 but said that they
reviewed QuickBooks entries with the Defendant that day.
The Defendant did not present proof. After receiving the evidence, the jury found the
Defendant guilty of theft of property valued at more than $10,000 and less than $60,000.
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At the sentencing hearing, the court addressed a prior theft case for which the
Defendant had been granted a diversion. The court revoked probation in that case and
imposed judgment for theft of property valued at more than $1000 but less than $10,000.
The court received the Defendant’s presentence report. It reflected that the Defendant
was a high school graduate with some college education. She had three adult children. She
had a pending theft charge and some prior misdemeanor convictions. The presentence report
also contained a lengthy statement submitted by the Defendant in which she detailed personal
expenses of Ms. Neil’s that were paid with Tile Sensations’ funds and claimed that she had
Ms. Neil’s permission to use her business debit card for personal purchases as long as she
kept up with the amount.
Ms. Neil gave a victim impact statement in which she detailed the difficulties she had
encountered as a result of the Defendant’s theft from her business. She said the ordeal had
required that she devote time to matters related to the case or working extra hours to make
up for the money lost, rather than to her family, her employees, her clients, and charities she
supported. She said she had not been able to give her employees raises or Christmas bonuses
because of the loss. She said she was not able to provide financial support to a charity for
Haitian children, as she had previously. She said that it had been necessary to pay vendors
late and that her landlord allowed her not to pay rent for a year. She said she had only
recently been able to repay the landlord. She said that she had been notified in February
2008 that a check had been dishonored at Sam’s Club in Chattanooga and that the purchase
had been made by someone using Tile Sensations’ membership. She said she learned that
the Defendant had maintained the Sam’s Club membership in the business’s name and had
presented a forged check.
The Defendant offered an allocution in which she apologized to Ms. Neil and the
employees of Tile Sensations. She said she wanted to repay the money she had taken. She
admitted she had taken money from a previous employer and said she had paid restitution
immediately in the criminal case that resulted from that theft. She said she had worked hard
in the past three years to rebuild her life. She said she had not been employed as an
accountant since working at Tile Sensations, although she admitted she had worked for one
employer reconstructing financial statements for tax purposes. She said she now was
working as an office manager. She said she would never steal from anyone again.
The court applied the following enhancement factors:
(1) The defendant has a previous history of criminal
convictions or criminal behavior, in addition to those necessary
to establish the appropriate range;
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...
(3) The offense involved more than one (1) victim;
...
(6) The personal injuries inflicted upon, or the amount of
damage to property sustained by or taken from, the victim was
particularly great;
...
(13) At the time the felony was committed, one (1) of the
following classifications was applicable to the defendant:
(A) Released on bail or pretrial release, if
the defendant is ultimately convicted of the prior
misdemeanor or felony;
(B) Released on parole;
(C) Released on probation;
(D) On work release;
(E) On community corrections;
(F) On some form of judicially ordered
release;
(G) On any other type of release into the
community under the direct or indirect
supervision of any state or local governmental
authority or a private entity contracting with the
state or a local government;
(H) On escape status; or
(I) Incarcerated in any penal institution on
a misdemeanor or felony charge or a
misdemeanor or felony conviction[.]
T.C.A. § 40-35-114(1), (3), (6), (16) (Supp. 2009). The court imposed a sentence of six
years to be served on probation. The court ordered the sentence to be served consecutively
to the Defendant’s one-year sentence for the prior theft. The court ordered restitution of
$11,603.22 and stated that the amount of restitution was subject to modification based upon
the State’s request for a further hearing on the final amount.
The court later heard a motion filed by the State seeking modification of the restitution
amount. At that hearing, Ms. Neil testified that she had incurred accounting fees and legal
fees as a result of the Defendant’s actions. She said she had discovered additional purchases
made by the Defendant for personal use that were not subject to the proof at trial, although
some of these items were not within the period of time covered by the indictment. She
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presented exhibits which listed her total loss as a result of the Defendant’s actions as
$31,880.84, which included accounting fees of $16,696.70 and legal fees of $861.03.
The court filed a written order in which it set restitution at $28,600.95, reflecting the
amount of the theft and the accounting and attorney’s fees. The court considered the
Defendant’s assets and financial obligations and set the Defendant’s monthly restitution
payments at $250.
I
In her first issue, the Defendant challenges the sufficiency of the convicting evidence.
Our standard of review when the sufficiency of the evidence is questioned on appeal is
“whether, after viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime beyond a reasonable
doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979). This means that we may not reweigh
the evidence, but we must presume that the jury has resolved all conflicts in the testimony
and drawn all reasonable inferences from the evidence in favor of the State. See State v.
Sheffield, 676 S.W.2d 542, 547 (Tenn. 1984); State v. Cabbage, 571 S.W.2d 832, 835 (Tenn.
1978). Any questions about the credibility of the witnesses were resolved by the jury. See
State v. Bland, 958 S.W.2d 651, 659 (Tenn. 1997).
The relevant statutes provide, “A person commits theft of property if, with intent to
deprive the owner of property, the person knowingly obtains or exercises control over the
property without the owner’s effective consent” and “the value of the property or services
obtained is ten thousand dollars ($10,000) or more but less than sixty thousand dollars
($60,000)[.]” T.C.A. §§ 39-14-103, -105 (2006).
The Defendant argues that the State failed to prove that the Defendant was the person
who made the questioned entries with the administrator’s QuickBooks account, that there
was no proof the Defendant intentionally miscoded her personal purchases in QuickBooks
to make them appear to be legitimate business expenses, and that the gift cards Ms. Neil
claimed were used by the Defendant for personal purchases were stored in a safe to which
other employees had access. Reviewing the facts in the light most favorable to the State, the
evidence shows that the Defendant made numerous purchases for her personal use with the
business’s funds. After she admitted making the Thanksgiving weekend purchases, she
agreed to reimburse Tile Sensations, but she continued to make new purchases for which she
never made any reimbursement before she was questioned about them on January 17. The
Defendant made entries in QuickBooks which concealed the nature of her personal
purchases. She issued checks to herself in amounts that matched checks paid to vendors, and
she made payments to herself for shareholder loans even though she was not an owner of the
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business. She admitted that some of the transactions were for items for her personal use, and
some of the QuickBooks entries for these transactions were entered using the administrator’s
Quickbooks account within minutes of other entries she disputed were her personal
purchases. The Defendant and Ms. Neil were the only people who knew the administrator’s
password, and Ms. Neil testified that she did not make the entries which she attributed to the
Defendant. Ms. Neil presented proof of losses to her business of $11,603.22. Ms. Neil and
Ms. Chervenak testified that the Defendant admitted making many of the purchases in
question, including purchases with the gift cards. The jury assessed Ms. Neil’s and Ms.
Chervenak’s credibility favorably and accredited the State’s proof. The evidence was
sufficient to support the Defendant’s conviction, and she is not entitled to relief on this issue.
II
The Defendant argues that the trial court erred in applying three of four enhancement
factors because they were not found by a jury beyond a reasonable doubt. The Defendant
argues that Tennessee’s sentencing scheme is unconstitutional under Blakely v. Washington,
542 U.S. 296 (2004), and Cunningham v. California, 549 U.S. 270 (2007). She urges this
court to impose the minimum sentence of three years.
The Defendant has failed to account for the fact she was sentenced under a version
of the sentencing act that had been amended to comply with constitutional dictates. The 2005
Act removed the provisions requiring the trial court to make factual findings upon which it
could then enhance a sentence from the minimum, presumptive sentence. Instead, the new
act provides that the court shall set a sentence within the range and that in doing so, the court
shall consider that the minimum sentence should be imposed and that the length should be
adjusted as appropriate for any enhancement and mitigating factors. T.C.A. § 40-35-210(c).
In doing so, the court “shall consider, but is not bound by” certain “advisory sentencing
guidelines,” which include that the sentence should be adjusted, as appropriate, for any
enhancement or mitigating factors shown. Id., § 40-35-210(c)(2). The Defendant was
sentenced under the 2005 Act, not the previous version. Thus, the trial court did not err in
applying enhancement factors without the factors having been found by a jury beyond a
reasonable doubt. The Defendant is not entitled to relief.
III
The Defendant argues that the trial court erred in ordering her to pay restitution for
Ms. Neil’s accounting and attorney’s fees. She argues that the accountant’s fees were not
reasonable out-of-pocket expenses incurred by Ms. Neil and that the accountant’s statement
of her fees was too brief to substantiate the “unreasonably high sum.” She also argues that
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the attorney’s fees amount to a payment to a special prosecutor, which is specifically
exempted by the restitution statute.
Generally, restitution may be ordered as a component of sentencing pursuant to Code
sections 40-35-104(c)(2) and 40-35-304. Additionally, in theft cases, restitution is mandated:
Whenever a felon is convicted of stealing or feloniously taking
or receiving property, or defrauding another of property, the jury
shall ascertain the value of the property, if not previously
restored to the owner, and the court shall, thereupon, order the
restitution of the property, and, in case this cannot be done, that
the party aggrieved recover the value assessed against the
prisoner, for which execution may issue as in other cases.
T.C.A. § 40-20-116(a). Section 40-20-116(a) contemplates restitution to the victim of the
property itself or the value of the property, whereas section 40-35-304 allows restitution for
the victim’s “pecuniary loss,” consisting of special damages and “[r]easonable out-of-pocket
expenses incurred by the victim resulting from the filing of charges or cooperating in the
investigation and prosecution of the crime . . . .” T.C.A. § 40-35-304(e)(2). Section 40-35-
304 also states that in determining a proper amount and method of payment of restitution,
“the trial court shall consider the financial resources and future ability of the defendant to pay
or perform.” T.C.A. § 40-35-304(d). If the trial court determines that the proper restitution
amount pursuant to section 40-35-304(d) is less than the amount established by the jury under
section 40-20-116(a), the court should establish the deficiency amount, which is collectable
by execution. See T.C.A. § 40-20-116(a); State v. Patricia White, No. W2003-00751-CCA-
R3-CD, Gibson County (Tenn. Crim. App. Oct. 15, 2004) (relying on State v. Charles
Chesteen, E1999-00910-CCA-R3-CD, Cocke County (Tenn. Crim. App. June 8, 2000)).
We consider first the propriety of the award of attorney’s fees. Ms. Neil testified that
when she initially discovered the Defendant’s actions, she consulted with her attorney about
how to proceed, and the bill for her attorney’s services was $861.03. The Defendant argues
that Code section 40-35-304(e)(2) specifically exempts from recovery as restitution any
payments to a special prosecutor and that Ms. Neil’s consultation with her attorney in a
private law firm was a payment to a special prosecutor.
The Defendant is correct that payment to special prosecutors cannot be recovered as
restitution. However, she has not explained how Ms. Neil’s private attorney acted as a
special prosecutor. Code section 8-7-401(a) permits a crime victim or the victim’s family
to employ a special prosecutor to act as co-counsel with the district attorney general. Notice
to the Defendant and a hearing is required before a special prosecutor will be allowed to
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participate in any criminal hearing, trial, or other proceeding. T.C.A. § 8-7-401(b)(1). Ms.
Neil testified that when she first discovered the Defendant’s actions, she consulted with her
attorney about how she should proceed. There is no indication in the record that this private
attorney was ever involved as co-counsel with the district attorney general in the prosecution
of the criminal case. Further, the attorney’s fees incurred were a reasonable expense for a
victim who had suffered a substantial loss as a result of criminal activity, and the trial court
did not err in awarding restitution for the attorney’s fees.
The Defendant also challenges the accounting fees. Ms. Neil testified that she worked
extensively with Ms. Chervenak trying to reconstruct what had happened. She presented a
$16,696.70 bill for the hours Ms. Chervenak spent conferring with Ms. Neil, reviewing the
business’s records, meeting with the Defendant, preparing for trial, attending the trial,
preparing additional information for the sentencing hearing, engaging in various other
communication associated with the case, and for copying charges. The one-page document
does not contain an itemization by date, time, and activity. It is a summary statement on the
accountant’s letterhead of the categories of tasks performed and costs incurred. Ms. Neil
testified that she had received and reviewed more complete documentation of her
accountant’s work and that the amount reflected on this statement was related solely to the
accountant’s work on the criminal case and did not include any of the normal accounting fees
the business incurred.
The Defendant argues that “hours of forensic accounting” were not necessary to
determine what happened. She also complains that the trial court erred in including the
accounting fees in the restitution amount because the document submitted in support of the
fees was too speculative and did not list the number of hours assigned to the listed tasks or
the hourly rate for each task.
The record reflects that the Defendant, in an effort to hide her actions, made numerous
convoluted and erroneous entries in Tile Sensations’ accounting system. The Defendant used
various forms of payment, including cash, checks, debit cards, gift cards, and PayPal. Ms.
Neil testified that she handed the day-to-day accounting over to the Defendant and that the
business was better served with her time being devoted to selling tile rather than performing
the tasks for which the Defendant was hired. The Defendant’s actions were complex, and
Ms. Chervenak’s testimony and written summaries of the transactions were essential to the
prosecution of the case. Accounting fees were a reasonable, necessary expense in this case.
The remaining question is whether evidence of the amount charged was detailed
enough to form the basis of a restitution award. The accountant’s summary statement has
several general categories of work performed and lists the total amount for the services
rendered. Although there was no itemization within the categories, Ms. Neil testified that
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she had received more complete documentation from the accountant and had reviewed it.
She said the document that was received as an exhibit was a summary of the information she
received and reviewed. Further, the evidence showed this case to be a complex case which
required intensive, detailed review of the records in order to determine the nature and extent
of the Defendant’s actions. The State presented proof that Tile Sensations was already a
struggling business when the Defendant began stealing from the business, and the
Defendant’s actions caused a dire financial hardship that required Ms. Neil’s hard work over
an extended period of time to keep the business open. The extent of the accounting work
necessary in this case is evident from the proof, which also supports the accounting fees
charged for that extensive effort. The trial court did not err in ordering restitution for the
accounting fees.
In consideration of the foregoing and the record as a whole, the judgment of the trial
court is affirmed.
___________________________________
JOSEPH M. TIPTON, PRESIDING JUDGE
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