A new statute, effective next month (March 1, 2024), will give prosecutors greater power to combine the value of stolen property to justify a harsher sentence for certain financial crimes. S.L. 2023-151, § 2(a). Section 15A-1340.16F provides that if a person is convicted of two or more of the same financial crimes – embezzlement, false pretenses, or elder exploitation – the crimes may be “aggregated for sentencing” if: (1) the crimes were committed against more than one victim or in more than one county, and (2) the crimes were based on the same act or transaction or series thereof connected together or constituting parts of a common scheme or plan. The statute lays out a comprehensive arrangement for pleading, procedure, and punishment. This post explores the new law.
A. Eligible Offenses, G.S. 15A-1340.16F(a).
For purposes of this section, the term “financial crime offense” means any of the following: (1) embezzlement under Article 18 of Chapter 14 of the General Statutes, (2) false pretenses under G.S. 14-100, and (3) elder exploitation under G.S. 14-112.2. Embezzlement under Ch. 14, Art. 18 includes eight offenses, from embezzlement of property received by virtue of office or employment (G.S. 14-90) to embezzlement of taxes by officers (G.S. 14-99). Thus, despite the statutory enumeration, there are ten (not three) financial crimes subject to aggregation under the new law.
The crime of false pretenses is subject to the single taking rule. Under that rule, a single larceny is committed when, as part of one continuous act or transaction, a defendant steals several items at the same time and place. E.g., State v. Adams, 331 N.C. 317, 333, 416 S.E.2d 380, 389 (1992). In State v. Buchanan, 262 N.C. App. 303, 821 S.E.2d 890 (2018), our Court of Appeals concluded that the defendant had committed only a single taking when he presented a false affidavit to obtain credit on three separate checks, and it remanded for the trial court to vacate one of his two convictions for false pretenses. Id. at 308, 821 S.E.2d at 893. Section 15A-1340.16F does not change the result in Buchanan, as the statute requires multiple convictions. But, where the single taking rule is satisfied, it permits convictions to be combined for a higher penalty.
At least for embezzlement, the aggregation allowed by the new statute was anticipated by caselaw. Our Court of Appeals has held that separate misappropriations from the same victim over time do not constitute a single offense as a matter of law, but there is nothing to preclude a single indictment with the date of offense extending over time and including multiple conversions. State v. Mullaney, 129 N.C. App. 506, 512, 500 S.E.2d 112, 116 (1998) (Greene, J., concurring in result, joined by Timmons-Goodson, J.). “The choice of how to proceed” – that is, in prosecuting a series of embezzlements as one or many – “is with the district attorney.” Id. If Mullaney permits a form of aggregation of offenses against a single victim, Section 15A-1340.16F also allows aggregation against more than one victim, so long as the offenses are based on the same act or transaction, etc.
The statutory offense of elder exploitation was enacted in 1995 as part of Section 14-32.3 (domestic abuse, neglect, and exploitation). See N.C.G.S. § 14-32.3(c) (repealed 2005). In 2005, the legislature amended Section 14-32.3 and enacted Section 14-112.2, devoted exclusively to exploitation of an older (65 or older) or disabled (mentally or physically incapacitated) adult. See N.C.G.S. § 14-112.2. Section 14-112.2 makes it unlawful for a person by deception or intimidation to obtain or use the victim’s property with the intent to deprive the victim of his or her property. Id. at (b) & (c). Higher penalties are provided if the defendant stands in a position of trust and confidence or has a business relationship with the victim. Id. at (d) & (e). By its plain terms, Section 15A-1340.16F applies only to acts of exploitation of an older adult under G.S. 14-112.2, not exploitation of a disabled adult as defined by that section.
B. Conditions of Aggregation, G.S. 15A-1340.16F(b) & (c).
If a person is convicted of two or more of the same financial crimes, the crimes may be aggregated for sentencing if: (1) the person committed the crimes against more than one victim or in more than one county, and (2) the crimes are based on the same act or transaction or on a series of acts or transactions connected together [sic] or constituting parts of a common scheme or plan.
Section 15A-1340.16F thus establishes three conditions for aggregation. First, a defendant must be convicted of two or more of the same financial crimes. As noted above, false pretenses is subject to the single taking rule, so a prosecutor would first have to establish separate takings. See Buchanan, 262 N.C. App. at 307, 821 S.E.2d at 893 (suggesting that three different credit card transactions or presenting three different false affidavits would suffice). By contrast, a series of misappropriations from the same victim occurring over a period of time will support multiple convictions for embezzlement. See Mullaney, 129 N.C. App. at 512, 500 S.E.2d at 116. There is apparently no caselaw defining the unit of prosecution for elder exploitation, though given its similarity to larceny it seems likely that the courts would apply the single taking rule.
Second, the crimes must have been committed against more than one victim or in more than one county. The single taking rule has been cabined to takings from a single victim; multiple victims will support multiple convictions. State v. Greene, 251 N.C. App. 627, 638, 795 S.E.2d 815, 823 (2017). Generally, venue lies in the county where the offense occurred, and venue for cross-county offenses lies in both. N.C.G.S. § 15A-132. Accordingly, the new statute provides that each county where part of the violations occurred has concurrent venue. N.C.G.S. § 15A-1340.16F(c). This condition is disjunctive: offenses against the same victim are eligible if they cross county lines, and offenses in the same county are eligible if they involve different victims.
Third, the crimes must be based on the same act or transaction or on a series of acts or transactions connected together or constituting parts of a common scheme or plan. This language mirrors that used by the legislature to describe when two or more offenses may be joined for trial. See N.C.G.S. § 15A-926(a). In determining whether offenses have the requisite transactional connection, courts consider several factors: (1) the nature of the offenses, (2) any commonality of facts, (3) the lapse of time between the offenses, and (4) the unique circumstances of each case. E.g., State v. Perry, 142 N.C. App. 177, 181, 541 S.E.2d 746, 749 (2001). For larceny crimes, the best guide is the defendant’s culpable state of mind. See State v. West, 180 N.C. App. 664, 667, 638 S.E.2d 508, 511 (2006) (“each taking was motivated by a unique criminal impulse or intent”).
C. Pleading and Procedure, G.S. 15A-1340.16F (d) & (e).
The pleading must allege the conditions that warrant aggregation – that is, (1) the crimes are against more than one victim or in more than one county, and (2) the crimes are based on the same act or transaction, etc. – and identify the crimes to which aggregation would apply.
The pleading is sufficient if it alleges that the defendant committed the financial crime offenses against more than one victim or in more than one county and that the financial crime offenses are based on the same act or transaction or on a series of acts or transactions connected together or constituting parts of a common scheme or plan.
N.C.G.S. § 15A-1340.16F(d).
The State must prove the issues (conditions for eligibility and value of the property) beyond a reasonable doubt during the same trial in which the defendant is tried for the financial crimes unless the defendant pleads guilty or no contest. If the defendant pleads guilty or no contest to the financial crimes but not guilty to the conditions or value, then a jury must be impaneled to determine the issues. N.C.G.S. § 15A-1340.16F(e).
The United States Supreme Court has held that a defendant is generally entitled to a jury determination and proof beyond a reasonable doubt of any factor that may increase the sentence. See Blakely v. Washington, 542 U.S. 296, 159 L.Ed.2d 403 (2004). This holding required a reevaluation of sentencing in North Carolina and resulted in some confusion as to whether factors previously deemed relevant to sentencing are now to be considered elements of a greater offense. See State v. Harris, 222 N.C. App. 585, 592, 730 S.E.2d 834, 839 (2012) (“there is no such offense as ‘aggravated common law robbery’”). Notwithstanding, our Supreme Court has rejected the suggestion that all aggravating sentencing factors must be alleged in a criminal pleading. E.g., State v. Roache, 358 N.C. 243, 268, 595 S.E.2d 381, 398 (2004). Section 15A-1340.16F provides simplified charging language that should withstand judicial scrutiny. Cf. N.C.G.S. § 14-100.
Although the statute allows aggregation of the financial offenses “for sentencing,” the procedure prescribed contemplates submitting the issues that would justify aggregation to the same jury that is to pass on the defendant’s guilt of the substantive crimes. N.C.G.S. § 15A-1340.16F(d). Alternatively, the defendant may plead guilty to the substantive offenses and demand a jury trial on conditions for aggregation. Id.; cf. N.C.G.S. § 15A-1340.16(a3). The statute does not address (but does not seem to prohibit) a defendant being tried by a jury on the substantive offenses and stipulating to the facts justifying aggregation. In that case, the trial court should follow the procedure prescribed by Section 15A-1022.1 (admissions to aggravating factors).
It is not entirely clear whether Section 15A-1340.16F requires that all the convictions to be aggregated arise from the same trial, that is, whether the crimes must have been joined in the first place. To be sure, the statute requires that the conditions for joinder be satisfied. Compare N.C.G.S. § 15A-926(a), with N.C.G.S. § 15A-1340.16F(b)(2). But a defendant might have legitimate reasons for seeking separate trials for offenses that might otherwise have been joined. See N.C.G.S. § 15A-927(b) (severance to promote a fair determination). Or, charged with multiple offenses, a defendant might plead guilty to some and demand a trial on others. Absent any explicit statutory requirement that eligible offenses be tried together, aggregation is probably permissible. Insofar as it provides a single punishment for multiple convictions, however, aggregation under Section 15A-1340.16F would require that judgment had not been entered on any other convictions.
D. Punishment, G.S. 15A-1340.16F(f).
If convictions are aggregated per this section, the trial court must use the aggregated value of the property stolen when determining the level of punishment. If the value exceeds $1,500, the offenses must be punished as one Class H felony; if more than $20,000, as one Class G; if more than $50,000, as one Class F; if more than $100,000, as one Class C. N.C.G.S. § 15A-1340.16F(f). These provisions thus allow multiple offenses to be treated as one for purposes of punishment.
The punishment provisions are obviously the raison de’etre of the new statute. False pretenses, for example, is a Class C felony or Class H felony depending on whether the value of the property stolen is more or less than $100,000. N.C.G.S. § 14-100. Under Section 15A-1340.16F, a prosecutor could aggregate several counts of false pretenses to reach an amount warranting punishment as a Class G, Class F, or Class C felony. Similar sentencing provisions allowing aggregation also appear in Section 14-86.6(a2) (organized retail theft), dating from 2007. And the same legislation that created the new Section 15A-1340.16F also amended Section 14-56 (breaking or entering a motor vehicle) to add a comparable scheme (effective December 1, 2023).
E. Conclusion
The potential for combining the value of multiple financial offenses for a single harsher punishment is a significant addition to a prosecutor’s toolbelt. Of course, Section 15A-1340.16F does not require even eligible offenses to be aggregated. The determination will likely turn on the number of offenses charged and the value of the property implicated. Given a few high-value crimes, a prosecutor might prefer to seek consecutive sentences. But given a greater number of low-value offenses, aggregation might permit a more severe sentence than could otherwise be imposed. The new statute provides more options, and hence greater flexibility both at trial and during plea negotiations. As the Court of Appeals recognized in another context, “[t]he choice of how to proceed is with the district attorney.” Mullaney, 129 N.C. App. at 512, 500 S.E.2d at 116.