No. 2056 October Term, 1979, Appeal from the Judgment of Sentence of the Court of Common Pleas, Criminal Division of Elk County, No. 1 of 1978, entered October 3, 1979.
Harold Gondelman, Pittsburgh, for appellant.
James A. Meyer, District Attorney, Ridgway, for Commonwealth, appellee.
Price, Cavanaugh and Hoffman, JJ.
[ 311 Pa. Super. Page 95]
Appellant, Lee N. Celane, was convicted by a jury of failure to make required disposition of funds received*fn1 and
[ 311 Pa. Super. Page 96]
of misapplication of entrusted property,*fn2 while being acquitted on an additional charge of theft by deception.*fn3 On this appeal from the judgment of sentence, entered October 3, 1979, appellant contends that: (1) the district attorney had a conflict of interest requiring reversal of his conviction; (2) acquittal on the count of theft by deception precludes his conviction on the other two counts; (3) the court below erred in ordering him to make restitution in the amount of $209,830.63. We find all appellant's contentions to be without merit, except insofar as the restitution order apparently reflects a clerical error in the amount of $63.89.
Appellant was the owner and operator of Regional Contractor's Association ("Regional"), an organization joined by small businessmen for the purpose of obtaining health and accident insurance at reduced group rates for themselves and their employees. From January, 1975 until April 1, 1977, Regional members were insured by, and paid premiums directly to Blue Cross/Blue Shield. In December of 1976, Blue Cross notified Regional members that their coverage through Regional would be terminated, effective April 1, 1977.
The Commonwealth presented witnesses who testified that appellant assured members (as well as his own employees who were to pass this information on to members) that the same insurance protection would be provided through Lincoln National Life Insurance Company ("Lincoln") as had been provided by Blue Cross/Blue Shield. (see, e.g., N.T. Trial 495-496, 566-567, 700). According to the Commonwealth's witnesses, they were informed that this coverage was to be at the same rates charged by Blue Cross/Blue Shield, and that members would receive an additional $5,000 life insurance policy at no extra charge (e.g. N.T. Trial 496).
[ 311 Pa. Super. Page 97]
Mr. Celane did meet with representatives of Lincoln, but was told that coverage could not be provided. (N.T. Trial 593-594). The accountant retained by the D.A.'s office to review Regional's books testified that from March, 1977 to January, 1978, $209,766.74 was paid by 133 members to Regional (N.T. Trial 960). Regional Members testified that they thought the payments were for premiums to Lincoln, and that they would not have paid these sums except to obtain insurance with a reputable licensed company (e.g. N.T. Trial 913, 932). Appellant maintained to the contrary that he had informed all members that the group was to be self-insured, and that they would be part of a multiple employer trust.
A portion of the money received from members was used to pay some medical claims submitted. (N.T. Trial 964). The balance appears to have been used by Mr. Celane and his family personally (e.g. N.T. Trial 945-949), and for operating expenses of Regional. After complaints by Regional members as to non-delivery of policies and failure to pay ...