April 19, 2019

Colorado Court of Appeals: In Theft by Deceiving Case, Statute of Limitations Begins to Run When Theft is Discovered

The Colorado Court of Appeals issued its opinion in People v. Cito on Thursday, December 27, 2012.

Theft by Deception—CRS § 16-5-401(4.5).

The People appealed the district court’s order dismissing various theft by deception charges against defendant Kirk Cito. The order was vacated and the case was remanded with directions.

In 2006, Cito, a veterinarian, was hired as the hospital director for an animal hospital. Each month, he sent to the hospital’s certified public accountant (CPA) a packet of documents that included a list of the expenses he had incurred and checks he had written on the hospital’s behalf, receipts for charges made to the hospital’s credit card, and other supporting documents. A monthly report was prepared for the hospital’s owner summarizing this information.

In February 2011, the owner expressed concern to the CPA about the information Cito had been providing. The CPA went back through all five years of packets and concluded Cito had not been truthful in his submitted documentation. Cito was entitled to additional compensation for any unused personal time off, but not if he actually used the personal time. The CPA determined that Cito had paid himself approximately $53,700 for unused personal time off, even though he had actually taken the time off.

On December 5, 2011, Cito was charged with ten counts of theft by deception in violation of CRS § 18-4-401(1) and (4). Four of those counts, and a portion of a fifth, alleged thefts committed more than three years before the charges were filed. Cito moved to dismiss those counts, arguing they were barred by the three-year statute of limitations in CRS § 16-5-401(4.5). In response, the prosecution argued that the limitations period does not commence until the date of discovery, and the theft was not discovered until February 2011.

The district court rejected the prosecution’s argument, finding that “discovery of the criminal act” had occurred at the time Cito received payments from the hospital because all of the information available in February 2011 also was available at the time of the payments. The prosecution appealed.

The People argued that “discovery of the criminal act” did not occur when Cito obtained the money, because this ignores that the theft was by deception and the hospital didn’t discover the deception until February 2011. The Court of Appeals agreed that the district court erred, but for slightly different reasons.

The Court held that “discovery of the criminal act” is an ambiguous phrase. In turning to the legislative history of the act, the Court found no specific guidance, though there was testimony regarding applicability to financial crimes where information may be buried or it may take time to discover. The Court also noted that in the criminal context, this accrual question appeared to be one of first impression. However, in civil cases, Colorado courts have long and consistently held that “discovery” refers to the point at which the aggrieved party knew or in the exercise of reasonable diligence should have known of her claim. The Court held that “discovery” in this instance refers to the point at which the victim or the state knew or through the exercise of reasonable diligence should have known of the theft by deception. The order was vacated and the case was remanded for the district court to reconsider Cito’s motions in light of the Court’s ruling.

Summary and full case available here.

http://www.cobar.org/opinions/opinionlist.cfm?casedate=12/27/2012&courtid=1

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