No. 04-967TWENTY-EIGHTH JUDICIAL DISTRICT

NORTH CAROLINA COURT OF APPEALS

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STATE OF NORTH CAROLINA) From Buncombe County

)No. 02 CrS 15459-66;

v.) 02 CrS 58934, 58936

)

ROBIN MEDFORD JONES)

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QUESTIONS PRESENTED

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IWHETHER THE TRIAL COURT ERRED IN DENYING

DEFENDANT’S MOTIONS TO DISMISS AT THE CLOSE

OF THE STATE’S EVIDENCE AND AGAIN AT THE CLOSE

OF ALL THE EVIDENCE, BECAUSE THERE WAS

INSUFFICIENT EVIDENCE FROM WHICH A JURY COULD

FIND DEFENDANT GUILTY?

IIWHETHER THE TRIAL COURT ERRED IN PERMITTING A

WITNESS TO IDENTIFY DEFENDANT’S HAND-WRITING

WITHOUT LAYING A FOUNDATION FOR THE WITNESS’

TESTIMONY?

IIIWHETHER THE TRIAL COURT PLAINLY ERRED IN FINDING

THAT THE ALCOHOL BEVERAGE CONTROL BOARD WAS A GOVERNMENT AGENCY AS A MATTER OF LAW, RELIEVING

THE STATE OF ITS BURDEN TO PROVE EACH ELEMENT OF

THE OFFENSES OF EMBEZZLEMENT BY A PUBLIC EMPLOYEE BEYOND A REASONABLE DOUBT?

-iv-

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES iii

QUESTIONS PRESENTED iv

STATEMENT OF THE CASE 1

STATEMENT OF GROUNDS FOR APPELLATE REVIEW 1

STATEMENT OF FACTS 1

ARGUMENT

ITHE TRIAL COURT ERRED IN DENYING

DEFENDANT’S MOTIONS TO DISMISS

AT THE CLOSE OF THE STATE’S EVIDENCE

AND AGAIN AT THE CLOSE OF ALL THE

EVIDENCE, BECAUSE THERE WAS

INSUFFICIENT EVIDENCE FROM WHICH A

JURY COULD FIND DEFENDANT GUILTY. 12

IITHE TRIAL COURT ERRED IN PERMITTING A

WITNESS TO IDENTIFY DEFENDANT’S HAND-

WRITING WITHOUT LAYING A FOUNDATION

FOR THE WITNESS’ TESTIMONY. 25

IIITHE TRIAL COURT PLAINLY ERRED IN FINDING

THAT THE ALCOHOL BEVERAGE CONTROL BOARD

WAS A GOVERNMENT AGENCY AS A MATTER OF

LAW, RELIEVING THE STATE OF ITS BURDEN TO

PROVE EACH ELEMENT OF THE OFFENSES OF EMBEZZLEMENT BY A PUBLIC EMPLOYEE BEYOND

A REASONABLE DOUBT. 28

CONCLUSION 31

APPENDIX

STATEMENT OF THE CASE

This case came on to be tried at the September 30, 2003 Term of the Buncombe County Superior Court before the Honorable Janet Marlene Hyatt. The defendant was charged in ten separate indictments with embezzlement of U.S. currency by a public employee, the Asheville Alcoholic Beverage Control Board, during the months of March, April and May, 2002. (02 CrS 15459-66, 02 CrS 58934, 36). (R.pp. 14-23). Defendant was found guilty on the ten indictments. Judgments and Commitments were entered on November 3, 2003. (R. pp. 54-63). The ten indictments were consolidated into five cases for sentencing. The trial court imposed sentences of 13 to 16 months in each of the consolidated cases, all sentences to run consecutively, for a total sentence of 65 to 80 months. Defendant gave notice of appeal on November 3, 2003. The printed Record on Appeal was mailed to the parties on August 5, 2004. Counsel for Appellant obtained two extensions of time for filing the Brief for Appellant.

STATEMENT OF GROUNDS FOR APPELLATE REVIEW

Defendant appeals pursuant to N.C. Gen. Stat. 7A-27(b), from a final judgment of the Buncombe County Superior Court.

STATEMENT OF FACTS

State’s Evidence

Gale Cole

Cole was a manager with the Asheville Alcoholic Beverage Control Board, and had been employed by the Board for seventeen years. (T.8-9).[1] She worked in the Mixed Beverage Outlet, Store #3, for fifteen years. Defendant Jones began employment at the Mixed Beverage Outlet in 1990, as a clerk. (T. 9-10). Cole was an assistant manager at Store #3 at that time. (T. 9-10).

The Mixed Beverage Outlet sold alcohol to 140 to 145 restaurants and bars. No public sales were made at the Outlet. (T. 10-11). The procedure was that a restaurant or bar called in an order, which was then recorded and entered into the computer. The computer generated an invoice, and the order was removed from the shelf, boxed and stamped to indicate that taxes had been paid. The purchaser was called and told the purchase price of the order. (T. 10-11). Customers picked up their orders, paid for the orders by cash or check, and signed invoices for the orders. The store retained the original of the invoices. (T. 12).

A check guarantee letter from the customer’s bank was required in order for the customer to pay by check. If no letter was on file, the customer paid in cash. No personal checks or credit cards were accepted. (T. 14). When an order was placed and an invoice printed, the invoice showed whether a customer was permitted to pay by company check. (T. 13).

During the first half of 2002, Jones, Cole and a warehouse worker were the only employees of the store. (T. 11-12). Although Cole was the manager, she and Jones worked together. Both took orders and filled orders. The warehouse worker stocked the shelves and helped load the orders for the customers. (T. 12).

The State introduced, by stipulation, thirteen notebooks containing clerk’s reports, invoices and deposits for the periods charged in the indictments. Exhibit 1 contained records for March 1 through March 8, 2002; Exhibit 2, from March 11 through 15, 2002; Exhibit 3, March 18 through 22, 2002; Exhibit 4, March 25 through 29, 2002; Exhibit 5, April 1 through 5, 2002; Exhibit 6, April 8 through 12, 2002; Exhibit 7, April 15 through 19, 2002; Exhibit 8, April 11 through 26, 2002; Exhibit 9, April 29 through May 3, 2002; Exhibit 10, May 6 through May 10, 2002; Exhibit 11, May 13 through 17, 2002; Exhibit 12, May 20 through 24, 2002, and Exhibit 13, May 27 through 31, 2002. (T. 15-16).

A clerk’s report was completed for each day’s transactions. (T. 17). All cash customers that picked up orders were listed on the report, along with the amount paid. Checks included with the day’s deposit slip were totaled on the report. The checks and cash should equal the total of invoices for the day. (T. 18). A deposit slip was prepared for each day. The clerk’s report listed each check received, and the total amount of cash received for the day. (T. 19).

The invoices reflected a total count of bottles delivered, the cost of the bottles, the mixed beverage price, and the total owed by the customer. (T. 19).

Cole identified from Exhibit 1 a March 1 invoice for Applebee’s for an order totaling $651.50. The restaurant paid by check on the same day. The invoice noted that the restaurant had a check guarantee letter on file for the amount of $1,000. If the order had exceeded that amount, it would not have been approved. (T. 20). On March 1, 2002, Espardezo ordered $228.40 worth of liquor, and picked it up on the same date. (T. 20-21). The invoice was marked “zero, zero” at the top and did not reflect that the restaurant had a bank guarantee letter on file. However, Cole knew that the customer was entitled to pay by check. The customer had accounts for two establishments, so she speculated that the check guarantee letter was listed on the other account. Espardezo was allowed to pay for its order by check, without the guarantee letter being listed on the invoice. Cole identified an invoice for another restaurant, a cash customer; the invoice was marked with “zero, zero” at the top. (T. 21-22).

The clerk’s report was prepared at the end of each work day, and reflected orders which were picked up that day. Cole and Jones both worked on the reports. They prepared deposits for the receipts. (T. 22-23). Cash and checks should match the total of invoices. (T. 23-24). Jones counted the money and put it in a bank bag, which she locked in a drawer until the next day. (T. 23). Jones would work on the report while Cole took deliveries for loading by customers. (T. 23-24). The deposits were prepared at the same time as the clerk’s reports. (T. 24-25). Cole also did the clerk’s reports and deposits, but Jones did them more frequently. (T. 25). The clerk’s report and deposit should reflect the same amount, the receipts for a particular day. (T. 25). The deposit was usually taken to the bank the next day. Jones usually made the deposits. (T. 25-26). The clerk’s reports and invoices were filed together, and the deposit tickets were filed separately. (T. 26). Jones reported each day’s receipt to the central office accounting department, located one level above the warehouse, in the same building. (T. 26-27).

Jones became assistant manager of the Mixed Beverage Outlet in 1993 or 1994. She and Cole worked alone for seven years. When the office moved, a third employee was hired to work with the stock. (T. 28-29). Cole never noticed any problems with deposits from the Mixed Beverage outlet. It was not until Frank Worley, the supervisor of all employees of the Alcoholic Beverage Control Board, questioned her about deposits in May, 2002, that she was made aware of any problem. (T. 29-30). No action was taken at that time. (T. 30-31). On June 1, 2002, Cole was advised by Worley that, “something is going on,” and that the outlet was $32,000 short. Cole questioned how that could be, since the daily records balanced. (T. 31-32). Worley inquired about the invoices, and Cole told him that Jones had taken the invoices home to file them. Worley directed Cole to retrieve the invoices that day, and she did. (T. 33). She got the invoices for the month of May, which had been at Jones’ home. (T. 33). Worley and she reviewed the invoices and determined that the total of the invoices for the period did not match the daily clerk’s sheets and records. (T. 34). The invoices totaled $332,000 but the receipts, as reflected in the daily sheets and the deposits, totaled $300,000. (T. 34).

Investigator [Rick] Matthews was called in at that point. (T. 34). Matthews asked Cole to retrieve the records for previous months. Records for each month- the sheet listing cash customers, the inventory sheets, deposit slips, daily sheets, breakage sheets - were kept in a separate folder in a file cabinet. When Cole tried to retrieve records, some were missing. (T. 35).

During the last week in May, Worley asked Cole for deposit slips. Cole asked Jones where the deposit slips were, and Jones said she put them in her glove box after she made deposits, she cleaned our her van, and the deposit slips were at her house. (T. 36-37). Cole told Jones to get the deposit slips and bring them to her, and Jones did so. (T. 36-37).

Sometime during March to May, 2002, Cole learned that deposits were being made approximately three weeks late. Cole had thought the deposits were being made daily, because Jones left with the bank bag every morning or afternoon and reported that she was going to make the deposit. (T. 38). The deposits sometimes included checks which were dated three weeks later than the date on the deposit slips. (T. 38). The deposits did not have the amount of cash that was listed on the clerk’s reports, and less than the amount of cash that was indicated by the number of cash customer invoices for a given day. (T. 38-39).

At Matthews’ request, Cole reviewed all the deposits and clerk’s reports for the period March to May, 2002, and identified those documents which were in her handwriting. (T. 39). One clerk report for the period March 1 to March 29 was in her handwriting; it was dated March 18. No deposit slips were in her handwriting. (T. 40-41). The other clerk reports and deposit slips were in Jones’ handwriting. In April, three clerk reports were in Cole’s handwriting, dated April 8, 15 and 22. No deposit slips were in her handwriting. Jones’ handwriting was on the other clerk reports and the deposit slips which existed for that period. (T. 42). There were some days for which there were no deposit slips. (T. 42). For May, Cole wrote two clerk reports, dated May 7 and May 30, and one deposit slip, dated May 30. Jones wrote the other clerk reports and deposit slips for May. (T. 42-43).

Cole denied any wrongdoing with regard to the receipts. (T. 43). She denied any knowledge, as a manager, that there discrepancies between the invoices and the receipts. She and Jones were friends, they had worked together for twelve years, and she had no reason to mistrust Jones. (T. 43-44). Cole knew of no catastrophe in Jones’ life during the period March through May. (T. 45). Jones was in the process of buying a trailer during that time. (T. 55). She also bought a three-wheeler or a four-wheeler. “[A] lot of landscaping things” were purchased, as well as new furniture. (T. 55). Jones had financial problems during the three-month period from March to May, 2002, because her husband failed to pay child support for a time after her divorce and when he began to pay support, was not paying regularly. (T. 57). The grand total of all the purchases Cole observed Jones to make was not even close to $300,000.00. (T. 58).

Frank Worley, as the supervisor of all the outlet stores, had keys to every store. (T. 49). Cole no longer worked at the Mixed Beverage Outlet. She worked at another ABC store. (T. 49).

John Bradford

Bradford was employed for 34 years with the Asheville Board of Alcoholic Control [sic]. (T. 59). He was the accountant for the Board for 20 years, and since Worley left in May, was the interim supervisor. (T. 59-60). The ABC Board operates the liquor stores in the city of Asheville. (T. 61). There are seven stores, and the outlet store. (T. 61). The outlet distributes liquor to the businesses in Asheville with licenses to sell liquor by the drink. There are no sales to individuals by the outlet. (T. 62).

As accountant, his duties were to oversee the financial reports, to keep track of deposits, bank statements, to keep up with inventories. At the end of each month, he got a printout of deposits that had been made by each store. He compared the deposits with the bank statements, to guarantee that the deposits were made. Each store had a deposit code for the Board’s bank account. (T. 63).

A year to a year and a half before the shortage was detected, he noticed that deposits from the outlet were being made late. (T. 64). He reported the observation to Worley, his supervisor. (T. 64). No changes were made as a result of his report. (T. 65, 69). When he noticed that the deposits continued to be late, sometimes as late as two weeks, he again reported to Worley, but again no action was taken, although Worley said that he would “look into it.” (T. 65, 69-70). This was in the winter of 2001. (T. 65). The problem continued, and worsened to the point that deposits were being made three weeks after they were due. He reported this to Worley toward the end of April, 2002. (T. 65-66). In April, 2002, Bradford went to Store 3 and asked for the deposit slips for that month, but they were not available. He asked for any prior month’s slips, but they were not available. (T. 66-67). He reported to Worley, who then went to make an inquiry. (T. 67). Bradford had no further role in the matter. Worley left the Board for health reasons at the end of May, 2003, and subsequently retired. (T. 67-68, 71-73).

Bradford is not a CPA [certified public accountant]. (T. 68). Worley was a trained accountant, but not a CPA. (T. 68-69).

Rick Matthews

Matthews had been the chief investigator for the Asheville ABC [Alcoholic Beverage Control Board] since 1994. (T. 77). Prior to 1994, he was a vice narcotics investigator for the city of Asheville for seven or eight years. (T. 77). He worked with the Asheville Police Department from 1982 through 1992. As chief investigator for the ABC Board, his duties were to inspect local ABC stores and the restaurants serving mixed beverages, to prevent sales to underage patrons. (T. 78).

He investigated the deposits for the mixed beverage outlet. (T. 78). Worley contacted him on June 3, 2002, and advised that he had a potential problem with deposits from the mixed beverage outlet, store number 3. Worley contacted him again on June 7 to say that there were shortages in deposits from the store. (T. 79). On June 11, 2002, Matthews spoke with Jones, who agreed to speak with him. He told her that there was a problem with the deposits. Jones said that she did not know that anything was wrong with the deposits. (T. 80-81). At that time, Matthews had only a few invoices, along with the bank statements for March, April and May. He did not have any deposit slips or clerk reports. Jones said that if there was something wrong, Cole would surely know about it. (T. 81). On the same day, he spoke with Cole, who said she had no idea anything was wrong. She did not know that deposits were missing until Worley had told her a couple of days earlier. He knew of no one handling deposits but Jones and Cole. (T. 82).

After interviewing Cole and Jones, he compiled information on daily sales through the invoices, clerk reports, or any other information the office had relating to daily sales activity for store 3. (T. 82-83). He got the clerk reports, the daily call-in sheets (a book kept in the accounting office indicating the total sales per day for each outlet). He got photocopies of the actual deposits for March through May, including the checks which accompanied each deposit and a list of the cash which was actually deposited. (T. 83-84). He matched the sales per day from the invoices, whether cash or check sales, against the deposit that was actually made at the bank that day. (T. 84). He examined documents of the Mixed Beverage outlet for every day from March 1 through May 31. The notebooks, State’s Exhibits 1 through 13, contain the documents he analyzed. (T. 84).