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Court: Nursing home a creditor, not victim, in embezzlement scheme

A nursing home that was not paid because its client’s fiduciary was embezzling funds is not a victim of the embezzlement for restitution purposes, Maryland’s intermediate appellate court has held in vacating a lower-court order.

Penny McCrimmon pleaded guilty to fraudulent misappropriation by a fiduciary in 2012 for using her cousin’s money for her own benefit while she had power of attorney and he was living at Chapel Hill Nursing Home in Reisterstown. McCrimmon, a former Baltimore County Council candidate, received a five-year, suspended sentence in Baltimore County Circuit Court and was ordered to pay $19,718 in restitution to the nursing home, the amount of her cousin’s outstanding bill.

McCrimmon appealed the restitution award, arguing the nursing home was not a victim entitled to restitution. A unanimous Court of Special Appeals agreed in a reported opinion issued Tuesday.

Judge Robert A. Zarnoch, writing for the three-judge panel, acknowledged Chapel Hill was a victim of McCrimmon’s embezzlement “in a general sense and possibly in common parlance.”

However, though Chapel Hill was owed money, the court found the business qualify for restitution as defined under state law because it did not suffer a loss as a direct result of a crime nor was it a third-party that compensated the victim or paid an expense on behalf of the victim.

“Under these circumstances, to treat a nursing home as an entity suffering loss as a ‘direct result’ of the embezzlement — even if [McCrimmon’s cousin] consented to the restitution order — would eviscerate the clear text of the restitution statutes,” Zarnoch wrote.

The appellate court remanded the case with a recommendation the state seek a restitution award in favor of McCrimmon’s cousin, whose trial-court testimony suggested he would redirect any money received to Chapel Hill to pay the bill.

McCrimmon was represented by the Office of the Public Defender’s Appellate Division. A call seeking comment Thursday was not returned.

The state attorney general’s office also did not respond to a request for comment Thursday.

The case is Penny McCrimmon v. State of Maryland, No. 1255, September Term 2013.