NY Penal Law § 165.00: Misapplication of property

Misapplication of property involves encumbering or disposing of property that someone entrusted to you. It is a form of theft. However, it is different from larceny and other theft crimes in that the owner of the property initially allowed you to use or hold the property. However, instead of returning it you disposed of it in some manner, or you simply held on to it after the owner demanded it to be returned. Under New York Penal Law § 165 you would have committed the crime of misapplication of property if someone entrusts property to you and you:

1. Loan, lease, pledge or pawn it without the consent of the property's owner, or
2. Refuse to return the property to its owner as agreed to in a rental agreement.

Example

Sheila loaned her cousin Suzy a pair of diamond earrings to wear to a special dinner party. When Suzy returned home from the dinner party she realized that one of the earrings was missing. When she told Sheila, Sheila was furious and threatened to call the police. Suzy could not be prosecuted for misapplication of property because there is no evidence that she in any way encumbered the earrings, purposely disposed of them, or refused to return them.

1. Grand larceny in the fourth degree: New York Penal Law § 155.30
2. Criminal possession of stolen property in the fifth degree: New York Penal Law § 165.40

In order to be convicted of misapplication of property, the prosecutor must prove that you did not have the permission of the owner of the property to encumber it or otherwise unlawfully dispose of it. Under New York Penal Law § 165.00(3) another defense is that even though you may have disposed of the property unlawfully, the owner was able to recover it and has possession of it. In addition, if the reason that you were not able to return the property to its owner is that it was accidentally destroyed, then you cannot be convicted under the misapplication of property statute.

Because misapplication of property is a Class A misdemeanor if you are convicted you could be sent to county jail for up to one year, and you may be required to pay a fine and restitution to the owner of the property. It is also possible for the judge to sentence you to a probation term of 3 years.

1. A person is guilty of misapplication of property when, knowingly possessing personal property of another pursuant to an agreement that the same will be returned to the owner at a future time,
   1. he loans, leases, pledges, pawns or otherwise encumbers such property without the consent of the owner thereof in such manner as to create a risk that the owner will not be able to recover it or will suffer pecuniary loss; or
   2. he intentionally refuses to return personal property valued in excess of one hundred dollars to the owner pursuant to the terms of the rental agreement provided that the owner shall have made a written demand for the return of such personal property in person or by certified mail at an address indicated in the rental agreement and he intentionally refuses to return such personal property for a period of thirty days after such demand has been received or should reasonably have been received by him. Such written demand shall state: (i) the date and time at which the personal property was to have been returned under the rental agreement; (ii) that the owner does not consent to the continued withholding or retaining of such personal property and demands its return; and (iii) that the continued withholding or retaining of the property may constitute a class A misdemeanor punishable by a fine of up to one thousand dollars or by a sentence to a term of imprisonment for a period of up to one year or by both such fine and imprisonment.
   3. as used in paragraph (b) of this subdivision and in subdivision three of this §, the terms owner, personal property, and rental agreement shall be defined as in subdivision one of § three hundred ninety-nine-w of the general business law.
2. In any prosecution under paragraph (a) of subdivision one of this §, it is a defense that, at the time the prosecution was commenced, (a) the defendant had recovered possession of the property, unencumbered as a result of the unlawful disposition, and (b) the owner had suffered no material economic loss as a result of the unlawful disposition.
3. In any prosecution under paragraph (b) of subdivision one of this §, it is a defense that at the time the prosecution was commenced,
   1. the owner had recovered possession of the personal property and suffered no material economic loss as a result of the unlawful retention; or
   2. the defendant is unable to return such personal property because it has been accidentally destroyed or stolen; or
   3. the owner failed to comply with the provisions of § three hundred ninety-nine-w of the general business law.

Even though misapplication of property is a misdemeanor and not a felony, it is still important to have experienced representation to help you fight the charge. The staff at Stephen Bilkis & Associates, PLLC has years of experience successfully defending clients in New York criminal courts who have been charged with crimes such as grand larceny, embezzlement, robbery, criminal trespass, criminal mischief, and reckless endangerment of property. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your case. We serve those accused of crimes in the following locations: