A federal appeals panel recently overturned the embezzlement convictions of an associate of former Rep. Rick Renzi, the Arizona congressman representing Rim Country who was indicted in 2008 on 48 counts of fraud, conspiracy and other charges.
Dwayne Lequire was convicted in 2010 of conspiracy and eight counts of embezzlement after he took Patriot Insurance Agency funds and transferred “over $750,000 to Renzi” instead of sending them to Spirit Mountain Insurance Co. Renzi, in turn, “used those funds for personal expenditures,” according to court documents.
But a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled Monday that while Patriot owed money to Spirit, it was not holding the money in trust for Spirit. Lequire could not be convicted of embezzling the money since Spirit did not own it in the first place, the court ruled.
The court returned the case to district court with an order to enter a judgment of acquittal against Lequire.
A spokesman for the U.S. Attorney’s Office in Arizona would only say Monday that the office had “received the decision, we’re reviewing it and we’re weighing our options.”
While the government could appeal, Lequire’s attorney said he hoped the ruling would mean the end of the case.
“The three judges that heard the case spoke unequivocally,” said Barry Pollack, of the Washington, D.C., firm Miller and Chevalier. “The facts simply do not support a charge of embezzlement .... This should be the end of this case.”
Lequire was the treasurer for Patriot, which Renzi owned it before turning control over to his wife after he was elected to Congress in 2002. Lequire was also treasurer for Spirit, which he and Renzi formed in 2005.
While Renzi had turned Patriot over to his wife, he was still “in charge; he instructed Patriot’s staff whom to pay and when to pay them,” the court said. After Spirit was set up, Renzi ordered premiums Patriot collected to be deposited into Patriot’s general operating account. From there, Lequire transferred funds to Renzi’s personal account, even as the insurance agency “routinely failed” to pay premiums to Spirit.
The whole time that Patriot was delinquent in its payments, Lequire was filing reports to regulators accurately outlining the failure to pay.