11 U.S.C. § 523

Section 523(a)(4) excepts a debt for embezzlement from discharge even when the creditor has not proved the debtor acted as a fiduciary.

Meis v. Meis (In re Meis) · filed 1996-06-27(a)(4)

This matter is before the Court on Robert C. Meis’s (“RCM”) adversary complaint against Debtor Judith A. Meis (“Debtor”) under § 523(a)(4). ... Having concluded that the Debtor embezzled $92,000.00 from LAM, the Court finds that the Debtor’s debt to RCM, as assignee of LAM, should be excepted from discharge.

Section 523(a)(4) requires a creditor claiming embezzlement or larceny to show that the debtor took the creditor’s funds, rather than funds belonging to a corporation that owes the creditor money.

Sullivan v. Clayton (In Re Clayton) · filed 1996-08-01(a)(4)

Proof of embezzlement or larceny of the Creditor’s funds, as opposed to those of CDS, is necessary to establish a cause of action under the embezzlement/larceny prong of § 523(a)(4).

Section 523(a)(4) excepts from discharge a debt arising when a former partner embezzles partnership property by refusing to return it after withdrawal.

Weigend v. Chwat (In Re Chwat) · filed 1996-09-16(a)(4)

As a result, the court finds that debtor’s refusal to return the filing cabinet, facsimile machine and reference materials was an embezzlement of this property, and the value of plaintiffs share of this property constitutes a debt which must be excepted from debtor’s discharge under § 523(a)(4).

Section 523(a)(4) requires fraudulent intent to except a debt arising from embezzlement from discharge.

H.P. Marketing Corp. v. Mills (In Re Mills) · filed 1996-11-08(a)(4)

This Court concludes that HPM failed to prove that Mills acted with the requisite fraudulent intent necessary to show embezzlement by the sale of the photographic equipment.

Section 523(a)(4) and (a)(6) make a debt from a partner’s unauthorized taking of partnership property nondischargeable when the taking satisfies their requirements for fiduciary misconduct and willful, malicious injury.

Hynes v. Needleman (In Re Needleman) · filed 1997-01-22(a)(4), (a)(6)

For all of these reasons, we find that Needleman’s taking of the property creates a nondischargeable debt under 11 U.S.C. § 523(a)(6). ... For the same reasons, we find that Needleman’s taking of the property creates a nondischargeable debt under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) prevents discharge of a debt for larceny.

Herbert W. Lux, Jr. v. Jack Kotvas, Dir., etc. · filed 1997-07-08(a)(4)

Moreover, 11 U.S.C. § 523(a)(4) prevents a discharge in bankruptcy for "fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny." Therefore, Lux's argument is without merit.

Section 523(a)(4) does not except a debt for larceny or embezzlement of partnership property when the debtor is a partner who owns an interest in that property.

Schreibman v. Zanetti-Gierke (In Re Zanetti-Gierke) · filed 1997-08-21(a)(4)

Because Ms. Zanetti-Gierke was a partner and was thus an owner of partnership property, Mr. Sehreibman’s claims fail as a matter of law. For purposes of § 523(a)(4), a partner cannot steal or embezzle partnership property.

Section 523(a)(4)'s larceny exception does not apply when the debtor came into possession of the property lawfully.

Davis v. Kindrick (In Re Kindrick) · filed 1997-07-18(a)(4)

In this case, the larceny exception would simply not apply because Defendant came into possession of the property lawfully.

Section 523(a)(4) embezzlement does not require a fiduciary relationship or an obligation to keep entrusted funds in a separate account.

First Delaware Life Insurance v. Wada (In Re Wada) · filed 1997-07-18(a)(4)

The Appellant correctly contends that proving embezzlement does not always require a pre-existing obligation to keep the funds in a separate account. Embezzlement does not require the existence of a fiduciary relationship.

A debt arising from embezzlement remains nondischargeable under § 523(a)(4) when memorialized in a later promissory note.

Richardson v. Hidy Honda, Inc. (In Re Richardson) · filed 1998-06-26(a)(4)

Thus, the debt evidenced by the second promissory note was undisputedly “as the result of’ or “with respect to” embezzlement and therefore was a “debt for” embezzlement within the meaning of § 523(a)(4).

Section 523(a)(4) does not require a fiduciary relationship for an embezzlement claim.

National Tour Ass'n, Inc. v. Rodriguez · filed 1998-07-08(a)(4)

This Court also agrees that a claim for embezzlement under § 523(a)(4) does not require the finding of a fiduciary relationship and, on this point, the Bankruptcy Court was in error.

Section 523(a)(4) excepts a debt for larceny from discharge when the debtor wrongfully takes another’s property with fraudulent intent to convert it without the owner’s consent.

Dynamic Food Service Equipment, Inc. v. Stern (In Re Stern) · filed 1999-03-11(a)(4)

This conclusion was correct since “larceny under 11 U.S.C. § 523(a)(4) necessitates a showing that the debtor wrongfully took property from the rightful owner with fraudulent intent to convert such property to its own use without the owner’s consent.”

Section 523(a)(4) excepts debts arising from embezzlement from discharge.

Goldstein, Buckley, Cechman, Rice & Purtz, P.A. v. Goldberg (In Re Goldberg) · filed 1999-03-17(a)(4)

The debt owed by the Defendant is hereby declared to be nondischargeable pursuant to 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when a state court’s civil theft findings establish the subsection’s requirements.

Parker v. Padgett (In Re Padgett) · filed 1999-05-18(a)(4)

However, the state court findings of liability under Florida Statutes § 812.014 and § 772.11 satisfy the requirements of Section 523(a)(4).

Section 523(a)(4) excepts debts arising from embezzlement from discharge, including damages and related awards stemming from the misappropriation.

KV Pharmaceutical Co. v. Harland (In Re Harland) · filed 1999-07-01(a)(4)

We therefore hold that all aspects of the Judgment stemming from the Debtor’s embezzlement of the Plaintiffs property are nondischargeable pursuant to the embezzlement prong of § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) excepts a debt from discharge when the debtor fraudulently appropriates property entrusted to him.

E.W. Wylie Corp. v. Montgomery (In Re Montgomery) · filed 1999-07-09(a)(4)

Thus, in sum, the Court finds that Wylie has met its burden of proof in its action against Montgomery under § 523(a)(4) insofar as it pertains to Montgomery’s liability for Wylie’s losses — that is Montgomery’s debt — connected with the training of WDAY employees.

Section 523(a)(4) excepts from discharge a debt arising from a debtor’s fraudulent appropriation of property entrusted to the debtor.

Securities Investor Protection Corp. v. Nappy (In Re Nappy) · filed 1999-10-13(a)(4)

The foregoing conclusively proves that Nappy embezzled SMC’s monies, and falls with the scope of § 523(a)(4). Of the one million dollar loss, SIPC has shown that Nappy personally benefitted from $854,569.02; therefore, Nappy’s indebtedness to SIPC is excepted from discharge in the principal amount of $854,569.02.

Section 523(a)(4) keeps an embezzlement debt nondischargeable when a later promissory note merely memorializes that debt.

Houston v. Cantrill (In Re Cantrill) · filed 2000-02-24(a)(4)

In the present case, of course, applying the holding of the Spicer decision means that the debt at issue is nondischargeable under 11 U.S.C. § 523(a)(4) as the Debtor, Helen Cantrill, does not deny that the debt arose from her act of embezzlement against the Plaintiff. ... Rather, an examination of the Parties’ promissory note simply shows that it memorializes the original debt arising from the Debtor’s wrongful conduct.

Section 523(a)(4) does not give a shareholder an individual nondischargeability judgment for embezzlement of property owned by the corporation.

Chapman v. Pomainville (In Re Pomainville) · filed 2000-03-07(a)(4)

Under these circumstances, any damages and related judgment of nondischargeability for embezzlement pursuant to § 523(a)(4) run to the corporation and not the shareholder.

Section 523(a)(4) larceny claims can be barred by a prior finding of no conversion when the conversion instruction encompassed the elements of larceny.

Smith v. Hayden (In Re Hayden) · filed 2000-03-14(a)(4)

Regardless of why the jury found Debt- or did not convert the Sons’ assets, the stricter larceny definitional requirements were subsumed within the more lenient definition given. Accordingly, collateral estoppel arises from Issue 6 and would preclude the Sons from asserting any § 523(a)(4) larceny claim against the Debt- or.

Section 523(a)(4) excepts a debt for larceny from discharge when the debtor wrongfully took the creditor’s property with fraudulent intent.

Wegmans Food Markets, Inc. v. MacArthur (In re MacArthur) · filed 2000-04-28(a)(4)

Larceny, for purposes of Section 523(a)(4), is defined by reference to Federal Common Law, and it requires that the creditor show that the debtor wrongfully took property from it with fraudulent intent. ... From the facts and circumstances presented in this Adversary Proceeding, it is clear that the Debtor never wrongfully took, obtained or withheld any property from Wegmans, so there was no Federal Common Law larceny.

Section 523(a)(4) and (a)(6) make a debt arising from theft nondischargeable when the theft establishes larceny and willful and malicious injury to another’s property.

United States v. Bryant (In re Bryant) · filed 2000-05-12(a)(4), (a)(6)

Admitting to the charge of taking property of the United States in violation of its rights falls clearly within the ambit of section 523(a)(4), ... and a judgment of conviction having been entered as to that charge, the debtor is precluded from relitigating the issue. ... Having been convicted of theft, the debt is nondis-chargeable pursuant to section 523(a)(6).

Section 523(a)(4) excepts debts for embezzlement or larceny from discharge.

Federal Insurance v. Gilson (In Re Gilson) · filed 2000-06-27(a)(4)

The complaint alleged embezzlement and larceny. Each of the elements of these counts are coextensive with the elements set forth in § 523(a)(4).

Section 523(a)(4)'s larceny exception covers conduct that satisfies Florida's civil theft statute.

In Re: Smith · filed 2001-04-13(a)(4)

Accordingly, we find a conviction under Florida’s civil theft statute satisfies the requirements for nondischargeability under § 523(a)(4).

Section 523(a)(4) requires findings on every element of embezzlement; a finding of fraudulent intent alone is insufficient to establish nondischargeability.

Helfrich v. Thompson (In Re Thompson) · filed 2001-05-17(a)(4)

The bankruptcy court’s only independent finding from its trial of the matter did not address all the elements necessary to establish nondischargeability for embezzlement pursuant to 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts from discharge a debt arising from a debtor’s fraudulent use of entrusted funds for personal benefit without the owner’s consent.

Helfrich v. Thompson (In re Thompson) · filed 2001-06-18(a)(4)

As to the final check cashed, in the amount of $2,733, the Court finds that the debtor intended to exercise control over the plaintiffs funds, without his consent, for her own benefit, and for a use other than that for which it was entrusted. Furthermore, as previously found by this Court on the BAP’s prior limited remand, the circumstances surrounding the debt- or’s cashing of this final check indicated fraud.

Section 523(a)(4) excepts a debt for embezzlement from discharge only to the extent the creditor proves the debtor misappropriated entrusted property.

Helfrich v. Thompson (In Re Thompson) · filed 2001-09-28(a)(4)

While the judgment of the Franklin County Common Pleas Court establishes the amount of the debt owed by the defendant to the plaintiff, it does not establish in and of itself the elements of embezzlement for purposes of 11 U.S.C. § 523(a)(4). ... Having reviewed the entire record, this Court determined that the plaintiff satisfied the elements of embezzlement only with respect to the final cashier’s check that the defendant cashed. It was this $2,733 entrusted to her by the plaintiff which the defendant misappropriated and used for her own benefit without the plaintiffs consent. With respect to the other cashier’s checks and certain of the deposits made to the defendant’s checking account, the record was less clear, and the Court concluded that the plaintiff had not satisfied his burden of proving these portions of the debt to be undischargeable under § 523(a)(4).

Section 523(a)(4) and (a)(6) can except converted sale proceeds from discharge when a debtor personally participated in the conversion through a corporation, even if his benefit was indirect.

Germain, Inc. v. Bean (In re Bean) · filed 2002-02-19(a)(4), (a)(6)

In addition, this Court held that the Debt- or’s debt comes within the exception of discharge under 11 U.S.C. § 523(a)(4), embezzlement and excepted under 11 U.S.C. § 523(a)(6), the portion of the debt concerning the unaccountable proceeds of the vehicles sold by the Debtor, separate from the worthless check claim. ... This record more than justifies the drawing of the inference that he was responsible for converting the funds obtained from selling the vehicles of Germain. There is authority to support the proposition that indirect benefit to the director for tortious conduct in which the debtor participated was sufficient to prevent the debtor from receiving benefits that the Bankruptcy Code affords to honest persons. ... Based on the foregoing, this Court is satisfied that the Motion to Alter or Amend is not well taken because the conclusions and findings as set forth in the Order were not an egregious misapplication of applicable law.

Section 523(a)(4) requires fraudulent intent for embezzlement; failure to remit consignment proceeds alone establishes only a breach of contract.

Bryant v. Tilley (In Re Tilley) · filed 2002-11-25(a)(4)

Without evidence of the fifth element, fraudulent intent, these facts only demonstrate a breach of the contract, rather than embezzlement.

Section 523(a)(4)’s larceny exception does not apply when the debtor acquired title to the property through a sale.

Brown v. Heister (Heister) · filed 2003-02-27(a)(4)

Debtor did not possess Plaintiffs property improperly. Title transferred to Debtor at the time of sale and Debtor’s actions do not constitute larceny. Plaintiffs claim for an exception to discharge for larceny under § 523(a)(4) must, therefore, be denied.

Section 523(a)(4) excepts a debt from discharge when the creditor proves fraud or defalcation while the debtor acted as a fiduciary, embezzlement, or larceny.

Pistorius v. Deornellas (In re Deornellas) · filed 2003-06-10(a)(4)

In order for a plaintiff to prevail under § 523(a)(4), he must prove either (i) that the debtor committed fraud or defalcation while acting as a fiduciary, (ii) that the debtor is guilty of embezzlement, or (in) that the debtor is guilty of larceny. ... For the reasons set forth above, the Court finds that Plaintiffs have failed to meet their burden of proof and that the debts subject to this adversary proceed are dischargeable in Defendant’s bankruptcy.

Section 523(a)(4) excepts a debt from discharge when an individual directs a corporation to embezzle entrusted funds.

Whitehall Street Real Estate Ltd. Partnership IX v. Zamias Services, Inc. (In re Calypso Zamias L.P.) · filed 2003-06-04(a)(4)

We conclude in light of the foregoing that: (1) ZSI converted the funds in question; (2) Damian Zamias is liable for the conversion along with ZSI under the so-called “participation doctrine”; (3) Damian Zamias committed embezzlement when he directed ZSI to withdraw and spend a portion of the funds in the operating accounts and to withdraw and retain another portion; and (4) the debt Damian Zamias owes to the Whitehall entities is excepted from discharge by virtue of § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) permits a nondischargeability claim based on a debtor’s alleged embezzlement of collateral sale proceeds.

Jones v. Hall (In Re Hall) · filed 2003-07-24(a)(4)

Hall’s alleged conversion of the proceeds from the sale of Ford Motor Credit’s collateral constitutes embezzlement.

Section 523(a)(4) excepts a debt for embezzlement from discharge even when the debtor did not act in a fiduciary capacity.

Maha v. Ardolino (In Re Ardolino) · filed 2003-09-12(a)(4)

Although the $2,400 claim in question does not constitute a debt for fraud or defalcation by the Debtor while acting in a fiduciary capacity within the meaning of § 523(a)(4), the Court holds that such claim constitutes a debt for embezzlement by the Debtor, thereby dictating that such claim be declared nondischargeable pursuant to § 523(a)(4).

Section 523(a)(4) requires fraud in fact, involving intentional wrong rather than constructive fraud, for embezzlement.

Cousatte v. Lucas (In Re Lucas) · filed 2003-10-20(a)(4)

Under § 523(a)(4), embezzlement will have occurred when there is a “ ‘fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come, and it requires fraud in fact, involving moral turpitude or intentional wrong, rather than implied or constructive fraud.’ ”

Section 523(a)(4) does not except a debt from discharge for embezzlement when a debtor sells shares she owns, even if they were pledged as collateral.

UmbrellaBank, FSB v. Michel (In Re Michel) · filed 2004-01-09(a)(4)

What is left under 523(a)(4) is embezzlement. ... Since the shares, in fact, were owned by the Defendant, the return of the shares was not an “entrustment” to a non-owner and the subsequent sale of a portion of the shares was not an appropriation by a non-owner.

Section 523(a)(4) excepts from discharge a debt arising from larceny, including an unlawful taking of another’s property.

Vans Inc. v. Rosendahl (In Re Rosendahl) · filed 2004-02-18(a)(4)

The findings of the Arbitrator directly support findings by this court that Rosendahl committed larceny in terms of an unlawful conversion against Vans, and Vans’ claim against Ro-sendahl should be excepted from Rosen-dahl’s discharge pursuant to § 523(a)(4).

A finding of conversion does not establish embezzlement under § 523(a)(4) through collateral estoppel because conversion does not require fraudulent intent.

Old Republic National Title Insurance v. Moskowitz (In Re Moskowitz) · filed 2004-05-24(a)(4)

The Debtor’s conversion is distinguishable from embezzlement in that wrongful intent or fraud is not a necessary component of conversion. ... Therefore, the issues decided in the prior proceeding and in this particular cause of action are not identical, and Old Republic cannot rely on collateral estoppel to prove embezzlement.

A creditor’s security interest in sale proceeds does not make the proceeds its property for an embezzlement claim under § 523(a)(4).

Bombardier Capital, Inc. v. Tinkler (In Re Tinkler) · filed 2004-06-02(a)(4)

The Court finds that BCI’s interest in the proceeds from the sale of Grand Lake’s rental machines was a security interest. Such an interest does not convert those proceeds to BCI’s property such that it can maintain an action for nondischarge-ability under § 523(a)(4) on account of embezzlement.

Section 523(a)(4) excepts debts arising from larceny from discharge when the debtor intended to steal; proof of deception or fraudulent misrepresentation is unnecessary.

Bryant v. Lynch (In Re Lynch) · filed 2004-09-22(a)(4)

Absent a controlling Tenth Circuit precedent that expressly holds that the use of “fraudulent” in the federal common law definition of larceny requires a finding of deception or a fraudulent misrepresentation, this Court finds that the requisite mental state required to establish a claim for larceny is “animus furandi” or intention to steal.

Section 523(a)(4)’s larceny exception requires an intent to permanently deprive the creditor of the property.

Webber v. Giarratano (In Re Giarratano) · filed 2004-11-29(a)(4)

Therefore, because it was not Debtor’s intent to permanently deprive Creditor of the $12,000, a larceny exception under section 523(a)(4) is not warranted.

Section 523(a)(4) excepts a debt arising from embezzlement from a Chapter 7 discharge.

Arcadia Farms Ltd. v. Rollinson (In Re Rollinson) · filed 2005-04-15(a)(4)

The individual liability of Shelley based on the underlying embezzlement and fraud is not subject to the Chapter 7 discharge at least pursuant to Code § 523(a)(4).

Section 523(a)(4) requires proof of its larceny elements before a wrongful eviction or conversion judgment can establish nondischargeability.

Williams v. Noblit (In Re Noblit) · filed 2005-07-19(a)(4)

The Court concludes that neither the wrongful eviction count, nor the conversion count is a cognizable basis under Section 523(a)(4). As noted, other than the state court complaint and Default Judgment, there is no other substantive state court record upon which the Court can determine whether the requisite Section 523(a)(4) elements were actually litigated.

Section 523(a)(4) requires proof of fraudulent intent to except a debt arising from embezzlement or larceny from discharge.

DiCrispino v. Adams (In Re Adams) · filed 2005-08-25(a)(4)

As such, this court holds that the plaintiff has failed in her burden to show fraudulent intent necessary to prove embezzlement or larceny under § 523(a)(4).

Section 523(a)(4) excepts debts arising from embezzlement from discharge.

Voyatzoglou v. Hambley (In Re Hambley) · filed 2005-08-23(a)(4)

The defendants engaged in embezzlement and the debt is excepted from discharge under 523(a)(4).

Section 523(a)(4) excepts a fully adjudicated civil theft judgment from discharge, including its treble damages award.

Petty v. Petty (In Re Petty) · filed 2005-09-21(a)(4)

Since the claim was fully adjudicated, the Debtor is precluded from relitigating the civil theft cause of action, and the entire Judgment, including the award of treble damages, is entitled to collateral estoppel effect. The entire amount of the Judgment for civil theft, including the award of treble damages, is nondischargeable under § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) excepts a debt for embezzlement from discharge when entrusted property is fraudulently appropriated through actual fraud or intentional wrongdoing.

Hill v. Putvin (In Re Putvin) · filed 2005-11-07(a)(4)

Under § 523(a)(4) embezzlement will have occurred when there is a “ ‘fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come, and it requires fraud in fact, involving moral turpitude or intentional wrong, rather than implied or constructive fraud.’ ” ... We find no error in the bankruptcy court’s application of the law under § 523(a)(4) to the state court factual findings.

Section 523(a)(4) excepts from discharge a debt arising from a debtor’s embezzlement of another person’s funds.

Rainey v. Davenport (In Re Davenport) · filed 2006-02-02(a)(4)

Under the facts in the proceeding at bar, it is clear that in not paying Rainey, the Debtor embezzled funds rightly belonging to Rainey under § 523(a)(4). Consequently, Rainey’s claim is not dischargeable under § 523(a)(4).

Section 523(a)(4) excepts a debt for embezzlement from discharge when a debtor uses entrusted funds for personal benefit with fraudulent intent.

May v. Lyon (In Re Lyon) · filed 2006-07-26(a)(4)

Whatever the Debtor’s emotional and/or mental state during that period, she could not have reasonably believed that she still was authorized to invade the ASB Account for her own benefit when that authorization was based on a relationship that was not active after the end of March, 2001. The court draws an inference of fraud from the foregoing.

Section 523(a)(4) makes debts arising from larceny nondischargeable.

Fitch v. Fitch (In Re Fitch) · filed 2006-07-27(a)(4)

Plaintiff is granted herein a summary judgment that the amounts owing under the Criminal Restitution Order are nondischargeable pursuant to sections 523(a)(4) and (a)(7) (i.e., Plaintiff is entitled to a $150,000 nondischargeable judgement, less whatever amounts have been paid thus far on that amount).

Section 523(a)(4) makes a debt for embezzlement nondischargeable when a debtor ratifies and benefits from another’s embezzlement.

Farley v. Romano (In Re Romano) · filed 2006-10-30(a)(4)

In short, she ratified his fraudulent conduct and embezzlement, and, therefore, is liable with him under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) does not except a debt from discharge for embezzlement when a contractor uses payments in which the customer retained no property interest.

Cripe v. Mathis (In Re Mathis) · filed 2006-12-06(a)(4)

Thus, when Mr. Mathis used the funds to pay himself for work performed on the project, even if the amount due to him was in dispute, he was not embezzling.

Section 523(a)(4) permits a direct embezzlement claim when allegations that the debtor used intermediary companies as alter egos support treating investors’ funds as entrusted to the debtor.

Nibbi v. Kilroy · filed 2006-12-18(a)(4)

Additionally, under § 523(a)(4), the Plaintiffs have successfully stated a direct claim for embezzlement against the Debtor, but will not be allowed to proceed with any derivative claims of Aegis 2000.

Section 523(a)(4) excepts from discharge a debt for embezzling property entrusted to the debtor.

Port Louis Owners Ass'n v. Savage (In Re Savage) · filed 2007-04-13(a)(4)

The Court finds that the Savages owe the PLOA a $56,866.39 nondischargeable debt under section 523(a)(4) for embezzling insurance proceeds entrusted to them.

Section 523(a)(4) does not treat an owner’s failure to remit proceeds from the sale of collateral to a lienholder as embezzlement.

Franklin Bank, S.S.B. v. Barnes (In Re Barnes) · filed 2007-06-04(a)(4)

Upon reflection, this Court believes that the proper application of the term “embezzlement” within the context of 11 U.S.C. § 523(a)(4) is that an owner of collateral, when he sells the collateral and fails to remit the proceeds to the lienholder, has not embezzled funds from the lienholder.

Section 523(a)(4)'s embezzlement exception requires fraudulent intent, which can be proved without a misrepresentation or creditor reliance.

Cash America Financial Services, Inc. v. Fox (In Re Fox) · filed 2007-06-13(a)(4)

By requiring the Appellant to prove the elements of misrepresentational fraud in support of its embezzlement claim, the bankruptcy court imposed an overly restrictive definition of "circumstances indicating fraud." ... Under this broad definition, a creditor may establish circumstances indicating a debtor's fraudulent intent, even if the debtor did not make a misrepresentation or misleading omission on which the creditor relied.

Section 523(a)(4) requires proof of fraudulent intent for embezzlement, but does not require a misrepresentation or reliance.

In re: Robert Fox v. · filed 2007-06-13(a)(4)

Under this broad definition, a creditor may establish circumstances indicating a debtor’s fraudulent intent, even if the debtor did not make a misrepresentation or misleading omission on which the creditor relied.

Section 523(a)(4) makes a debt from the fraudulent appropriation of entrusted property nondischargeable.

In Re Savage · filed 2007-06-29(a)(4)

11 U.S.C.A. § 523(a)(4) states that a discharge in bankruptcy does not discharge an individual debtor from any debt incurred as a result of embezzlement. For the purposes of this section, “embezzlement” has been defined to mean “the fraudulent appropriation of property by a person to whom such property has been entrusted, or into whose hands it has lawfully come.”

Section 523(a)(4) does not treat a borrower’s use of collateral it owns as embezzlement or larceny merely because a lender has a security interest in it.

Bank of Castile v. Kjoller (In Re Kjoller) · filed 2008-11-10(a)(4)

Embezzlement, which is the fraudulent appropriation of property by a person to whom such property has been entrusted, does not include property owned by a borrower in which a lender has a security interest. Larceny, which is the fraudulent and willful taking and carrying away of property of another with the intent to convert that property, does not apply to collateral in the hands of a borrower that owns the collateral when they are operating their business in a bankruptcy reorganization proceeding.

Section 523(a)(4) excepts debts for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny from discharge.

ZITANI v. Reed · filed 2008-10-15(a)(4)

Examining section 523 in light of the claims the Reeds made in the California action, section 523 has no provisions that prevent discharge of debts based on breach of contract or simple negligence, but it does provide that a debt is nondischargeable if it is "for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny." 11 U.S.C. § 523(a)(4).

Section 523(a)(4) does not make a breach of contract nondischargeable as embezzlement when the debtor lawfully receives the creditor’s payment and the funds then belong to the debtor.

Hernandez v. Dorado (In Re Dorado) · filed 2008-12-16(a)(4)

Here, there was no security agreement, and once Plaintiffs paid the funds to Defendant, the funds no longer belonged to Plaintiffs. Defendant then breached their contract. Consequently the debt does not fall within the non-dischargeability exception contained in 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts from discharge debt arising from embezzlement of funds entrusted to the debtor.

Little Family Farms Corp. v. Mortensen (In Re Mortensen) · filed 2009-03-17(a)(4)

The court concludes that these sums, which total $33,081.18, were embezzled from the account. This debt should be excepted from his discharge under § 523(a)(4).

Section 523(a)(4) bars discharge of a debt for embezzlement when circumstances show fraudulent intent, even if the debtor hoped to save the business and later repay the creditor.

Sherman v. Potapov · filed 2009-03-30(a)(4)

While it may well be true that Sherman hoped to eventually save the company and repay Potapov, the bankruptcy court had ample evidence that there were “circumstances indicating fraud” and that Sherman had the necessary fraudulent intent when he shifted the risk from one client to another.

Section 523(a)(4)’s embezzlement exception requires misappropriation of the creditor’s property; an investor cannot claim embezzlement based on a company’s misuse of funds it received from the investor.

Murrin v. Scott (In Re Scott) · filed 2009-04-10(a)(4)

Accordingly, any “investor” like the Plaintiffs could not, in its own right, claim a “misappropriation” that gave rise to an embezzlement — even for a self-dealt, wasteful, or excessive use of corporate funds, whether traceable to its infusion or not.

Section 523(a)(4)'s embezzlement and larceny exceptions require the wrongful taking of another party’s property; unpaid services provided on credit do not qualify.

Treadwell v. Glenstone Lodge, Inc. (In Re Treadwell) · filed 2009-06-16(a)(4)

Neither embezzlement nor larceny applies here because both contemplate the wrongful appropriation or taking of another party’s funds or property. Here, the Tread-wells did not “take” anything tangible from Glenstone Lodge; rather, the relationship between the parties was a credit transaction whereby Glenstone Lodge provided services in exchange for payment. As a result, I find that § 523(a)(4) does not apply.

Section 523(a)(4) requires proof of fraudulent intent to except a debt for embezzlement from discharge.

Savage v. Port Louis Owners Ass'n · filed 2009-06-15(a)(4)

Without the policy, coverage was arguable, and when combined with no express restrictions on the insurance proceeds, the PLOA failed to carry its burden of demonstrating the intent necessary for a finding of embezzlement.

Section 523(a)(4) excepts debts arising from larceny from discharge, including debts for intentional theft of satellite television services.

DirecTV, Inc. v. Figler (In Re Figler) · filed 2009-06-25(a)(4)

Section 523(a)(4), in pertinent part, excepts from discharge a debt for ... larceny. ... The record in the District Court contains ample evidence of Debtor’s intentional and larcenous conduct with respect to interception of transmissions from DirecTV. ... The debt in the amount of $70,450 is nondischargeable.

Section 523(a)(4) excepts a debt for larceny from discharge when the debtor wrongfully takes property with fraudulent intent; embezzlement requires proof that the property was entrusted to the debtor.

Digital Systems Engineering, Inc. v. Moreno (In Re Moreno) · filed 2009-08-17(a)(4)

As to § 523(a)(4), the elements also appear to be met, at least as to larceny. To qualify for the larceny exception to discharge, this Court must find that Moreno wrongfully and with fraudulent intent took money from DSE. ... Embezzlement requires a finding that Moreno fraudulently appropriated money that had been entrusted to her. It is not clear that the state court ever made a specific finding that the funds were entrusted to Moreno, as this was not a necessary element of the fraud count. ... Therefore, I cannot appropriately apply collateral estoppel as to embezzlement.

Section 523(a)(4) permits a nondischargeability claim based on embezzlement without deciding whether the debtor acted in a fiduciary capacity.

Rands, LLC v. Young (In Re Young) · filed 2009-07-25(a)(4)

However, the allegations set forth appear to be consistent with proving embezzlement. For purposes of § 523(a)(4), embezzlement is defined under federal common law. ... Therefore, it is not necessary for the court to address the fiduciary capacity issues.

Section 523(a)(4) excepts debts arising from embezzlement from discharge.

Gamble-Ledbetter v. Andra Group, L.P. · filed 2009-10-27(a)(4)

Accordingly, the Court concludes that the $400,000 debt owed to Andra Group, L.P. by the Debtor as reflected in the agreed judgment is thereby rendered nondischargeable under 11 U.S.C. § 523(a)(4).

A debt that arises from embezzlement is nondischargeable under § 523(a)(4).

In Re Cline · filed 2010-01-06(a)(4)

For the reasons stated above, the Panel affirms the bankruptcy court's order finding that the Appellant has a nondischargeable debt to GMAC in the amount of $2,486,699.77. The debt is nondischargeable as embezzlement under 11 U.S.C. § 523(a)(4).

A debt arising from misappropriation of sale proceeds can be nondischargeable under § 523(a)(4).

King v. Lough (In Re Lough) · filed 2010-01-15(a)(4)

Accordingly, Plaintiff holds a nondis-chargeable claim against Defendants for $2,000 stemming from their misappropriation of the proceeds from the yard sale pursuant to § 523(a)(4).

A receiving-stolen-property judgment did not establish that federal common law larceny under § 523(a)(4) had been decided.

Falk Engineering & Surveying, Inc. v. Luedtke (In Re Luedtke) · filed 2010-04-02(a)(4)

Simply put, the record in the state court record does not support a finding that the issue of federal common law larceny under 11 U.S.C. § 523(a)(4) was decided in the state court.

Section 523(a)(4) bars discharge of a debt for embezzlement when a debtor knowingly uses entrusted property for an unauthorized purpose, even to save the debtor’s company.

Sherman v. Potapov · filed 2010-04-21(a)(4)

The essence of the common law concept is knowing use of entrusted property for an unauthorized purpose; there is no exception for financial joyriding, see Young, 955 F.2d at 104 (unauthorized “borrowing” with intent to repay is still embezzlement, the borrowing being unauthorized), and nothing like a Robin Hood limitation excusing defendants who misuse the entrusted property of the solvent in order to save a poor company.

Section 523(a)(4) requires a creditor claiming embezzlement to show that it entrusted its property to the debtor; loan proceeds become the borrower’s property when funded.

JP Morgan Chase Bank, NA v. Algire (In Re Algire) · filed 2010-06-01(a)(4)

Plaintiffs claim for nondis-chargeability of Defendant’s debt under § 523(a)(4) for embezzlement fails because Plaintiff did not entrust its property to Defendant.

Section 523(a)(4) excepts a debt for embezzlement from discharge when the debtor appropriates property for personal benefit with fraudulent intent.

Wallner v. Liebl (In Re Liebl) · filed 2010-07-27(a)(4)

A debt for embezzlement is excepted from discharge in bankruptcy. 11 U.S.C. § 523(a)(4). Embezzlement is the “fraudulent appropriation of property by a person to whom such property has been entrusted or into whose hands it has lawfully come.” In re Weber, 892 F.2d 534, 538-39 (7th Cir.1989), abrogated on other grounds by Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). In order to prove embezzlement, a creditor must show that the debtor (1) appropriated property for her own benefit; and (2) that she did so with fraudulent intent or deceit. Id. Thus, it is not sufficient that the debtor act without authority, but she must also have fraudulent intent.

Section 523(a)(4) excepts from discharge a debt arising from the fraudulent appropriation of property that initially came into the debtor’s hands lawfully.

Asher v. Koper (In Re Koper) · filed 2010-10-20(a)(4)

Although the Defendant initially came into lawful possession of the insurance proceeds, she knew about the Plaintiffs superior claim to the funds under the JOD. She nevertheless embarked on a spending and transfer spree marked by traditional indi-cia of fraudulent intent. Under the circumstances, the court has no difficulty concluding that the resulting debt should be excepted from discharge under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) does not except a debt from discharge for embezzlement or larceny when the creditor freely gave the debtor funds without entrusting them for an agreed purpose.

Valley Title & Escrow Agency, Inc. v. Metzger (In Re Metzger) · filed 2010-12-28(a)(4)

Instead, there were no strings attached, that would cause the Court to find that the funds were entrusted in any sense to the Defendant for an agreed upon purpose. In addition, there is no basis for this Court to find that there was an unlawful taking of property, since the check was freely given to the Defendant, and the Plaintiff waited approximately thirteen months to discover and seek to rectify the alleged error.

Section 523(a)(4) makes a debt arising from embezzlement of entrusted funds nondischargeable.

Old Republic National Title Insurance v. Vermilio (In Re Vermilio) · filed 2011-02-11(a)(4)

Vermilio was entrusted with the Bayview Mortgage payoff funds of $126,921.00 pursuant to the Directive in which he falsely represented he would pay such funds to the Bayview Mortgage holder. Vermilio fraudulently appropriated the funds. His actions constitute embezzlement. Plaintiff has established by a preponderance of the evidence the indebtedness of $139,462.43 is nondischargeable pursuant to Section 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) excepts a debt for embezzlement from discharge when property lawfully in the debtor’s hands is fraudulently appropriated.

Caviness Ex Rel. Metis/America Marketing, Inc. v. Lane (In Re Lane) · filed 2011-02-28(a)(4)

Third, a debt may be excepted from discharge if the debtor commits embezzlement. Under federal common law, embezzlement requires a showing that “(1) the person was lawfully entrusted with property or property lawfully came into the hands of that person, and (2) the property was fraudulently appropriated.”

Section 523(a)(4) permits an embezzlement claim when a debtor lawfully receives funds and then fraudulently misappropriates them; lawful receipt defeats a larceny claim.

Griff v. Marsh (In Re Marsh) · filed 2011-03-21(a)(4)

The facts alleged in this Complaint are insufficient to support a claim of larceny because Defendant lawfully obtained Plaintiffs $200,000.00 payment through the Contract. However, sufficient facts are alleged to support a claim for embezzlement.

Section 523(a)(4) excepts debts arising from embezzlement even when the debtor was not acting in a fiduciary capacity.

Murray v. Woodman (In Re Woodman) · filed 2011-03-22(a)(4)

Embezzlement under § 523(a)(4) does not require the existence of a fiduciary relationship.

Section 523(a)(4) excepts debts arising from fraud or defalcation in a fiduciary capacity, and debts arising from embezzlement or larceny, from discharge.

In Re Boltz-Rubinstein · filed 2011-06-17(a)(4)

The § 523(a)(4) discharge exception for debts arising while a debtor is acting in a fiduciary capacity encompasses "defalcation” as well as "fraud.” Thus, separate and apart from the discharge exception for debts arising while the debtor was acting in a fiduciary capacity, § 523(a)(4) also excepts from discharge debts for "embezzlement” and “larceny.”

Section 523(a)(4) excepts a debt from discharge when the debtor fraudulently appropriates property lawfully in his possession.

Town Centre Self Storage, LLC v. Conoryea (In Re Conoryea) · filed 2011-11-03(a)(4)

The Plaintiffs evidence supports findings that satisfy the elements of an embezzlement under 11 U.S.C. § 523(a)(4). ... First, there is the presence of the collected cash rents lawfully in the Defendant’s hands, in his capacity as manager and as received from the Plaintiffs renters. Then, there is the appropriation of those funds by the Defendant. The more credible evidence supports the finding that the Defendant took the funds for his own use. Finally, that appropriation was fraudulent. The more credible evidence supports the finding that the Defendant concealed his appropriation, when he had a duty to report and turn over the cash receipts. So, a debt owing by the Defendant to the Plaintiff is nondischargeable.

Section 523(a)(4) excepts from discharge a debt arising from the fraudulent appropriation of funds that lawfully came into the debtor’s hands.

Belfor USA Group, Inc. v. Hopkins (In Re Hopkins) · filed 2012-03-12(a)(4)

I therefore find that Belfor proved Hopkins’ actions meet the elements of embezzlement under § 523(a)(4) and, as a result, the debt of $37,676.33 is nondischargeable.

Section 523(a)(4) excepts debts arising from embezzlement or larceny from discharge, whether or not the debtor acted in a fiduciary capacity.

Joyce v. Wish (In re Wish) · filed 2012-04-20(a)(4)

While the fiduciary theory is certainly arguable as to the $100,000 taking, regardless of whether that theory applies here, Plaintiff clearly prevails under his larceny and embezzlement theory.

Section 523(a)(4) excepts from discharge a debt arising from a debtor’s embezzlement of company property for personal use.

Frost & Co. v. Smithey (In re Smithey) · filed 2012-07-06(a)(4)

These transactions have what the Court considers a strong indicia of embezzlement: an appropriation of company property for personal use. Once more, for the last two expenditures, the Defendant was unable to provide any cohesive justification for the transactions. As such, the Court must conclude that such transactions constitute embezzlement within the meaning of § 523(a)(4).

Section 523(a)(4) excepts a debt for embezzlement from discharge when the debtor fraudulently appropriates entrusted property; circumstantial evidence can establish fraudulent intent.

Lacourse Builders, LLC v. D'Anello (In re D'Anello) · filed 2012-08-07(a)(4)

With respect to embezzlement, however, the Court finds that Lacourse Builders satisfied its burden of proof by a preponderance of the evidence. ... Although the Court had no direct evidence of fraudulent intent, the circumstantial evidence surrounding the appropriation of funds by the Debtor compels the conclusion that the appropriations were made with fraudulent intent.

Section 523(a)(4)’s embezzlement exception requires the creditor to have an ownership interest in the property; a lien or security interest is insufficient.

Hulsing Hotels Tennessee, Inc. v. Steffner (In re Steffner) · filed 2012-08-17(a)(4)

However, a mere lien or security interest does not rise to the level of ownership sufficient to support a claim under § 523(a)(4)’s embezzlement provision.

Section 523(a)(4) excepts a debt for embezzlement from discharge when funds are diverted with fraudulent intent; partial repayment does not erase that intent.

Houlne v. Long (In re Long) · filed 2012-09-13(a)(4)

Thus, even though there is evidence of Long’s repayment of significant funds, that partial repayment — while it does reduce the ultimate amount of damages — does not negate the fact that Long diverted the Loan proceeds from their intended use with the fraudulent intent that is required in order for the Court to find a debt nondischargeable for embezzlement under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) makes a debt for embezzlement nondischargeable when a debtor appropriates entrusted property for another use under circumstances indicating fraud.

Lawson v. Conley (In re Conley) · filed 2012-10-05(a)(4)

To establish embezzlement under § 523(a)(4), Lawson needed to establish entrustment of the tractors to the Conleys, appropriation of the tractors by the Con-leys for a use other than for which they were entrusted and circumstances indicating fraud.

Section 523(a)(4) excepts a debt from discharge when the debtor takes another person’s property without consent and with fraudulent intent.

Cunningham v. Cunningham (In re Cunningham) · filed 2012-11-14(a)(4)

Accordingly, Lynda Cunningham’s debt to James Cunningham, Jr. in the amount of $140,513.44 is nondischargeable under § 523(a)(4).

Section 523(a)(4) makes a debt arising from embezzlement nondischargeable when a debtor intentionally uses entrusted property for personal benefit, even without a fiduciary relationship.

Chriswell v. Alomari (In re Alomari) · filed 2013-02-14(a)(4)

Because Defendant agreed to hold the Security Deposit for Plaintiffs benefit, by intentionally spending that money to benefit his own interests, Defendant thereby committed embezzlement and therefore his obligation arising from failure to return Plaintiffs security deposit is not discharge-able in bankruptcy under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge for embezzlement when a manager is complicit in diverting entrusted funds from their intended use.

PMM Investments, LLC v. Campbell (In re Campbell) · filed 2013-03-31(a)(4)

The evidence reflects a misappropriation of property, with the complicity of Campbell, for a purpose other than which the funds were entrusted. ... Thus, he was a part of the misappropriation of funds as if he had improperly executed the checks. ... Based upon the foregoing, the Court concludes that Mr. Campbell and the community property of the Debtors shall be liable to PMM in an amount to be determined later under Section 523(a)(4) as a result of the embezzlement by Mr. Campbell of funds invested by PMM Investments, LLC.

Section 523(a)(4)’s larceny exception does not require the debtor to have acted in a fiduciary capacity.

Countrywide Home Loans, Inc. v. Cowin (In re Cowin) · filed 2013-04-25(a)(4)

As the phrase “while acting in a fiduciary capacity” does not qualify “embezzlement” or “larceny,” there is no requirement that the Plaintiffs demonstrate that the Debtor was acting in a fiduciary capacity.

Section 523(a)(4) does not except a debt for conversion from discharge without fraudulent conduct.

Duggins v. Bratt (In re Bratt) · filed 2013-05-08(a)(4)

Conversion is not equivalent to embezzlement and § 523(a)(4) does not except debts for conversion from discharge in the absence of fraudulent conduct.

Section 523(a)(4) requires an intent to steal for embezzlement, but does not require deception or intentional misrepresentation.

Alternity Capital Offering 2, LLC v. Ghaemi (In re Ghaemi) · filed 2013-05-22(a)(4)

Importing such elements into an embezzlement claim would render § 523(a)(4) superfluous. Accordingly, this Court finds that the requisite mental state required to establish a claim for embezzlement is “animus furan-di” or intention to steal.

Section 523(a)(4) requires proof of fraudulent intent for embezzlement; conversion alone does not establish that intent.

In re: Mehran Shahverdi · filed 2013-06-07(a)(4)

While in the instant case, the taking was a breach of the duty that Debtor owed to his employer, conversion by itself does not provide an adequate basis for finding the mens rea necessary to support embezzlement under Section 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when a debtor fraudulently diverts consignment proceeds that belong to the consignor.

Lento v. Marshall (In re Marshall) · filed 2013-06-11(a)(4)

Therefore, I conclude that the Debtor committed an act of embezzlement against the Plaintiff, rendering the debt nondischargeable under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts an embezzlement debt from discharge when state partnership law makes the debtor vicariously liable for a partner’s embezzlement, even if the debtor was unaware of it.

Chenaille v. Palilla (In re Palilla) · filed 2013-05-28(a)(4)

It matters not that Debtor was unaware of Mr. Andrews' felonious conduct. Colorado law places liability on Debtor for his partner's activities. Thus, under Strang, Debtor is liable for Mr. Andrews' embezzlement and that embezzlement debt is nondischargeable in Debtor's bankruptcy case pursuant to § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when the debtor fraudulently uses entrusted property for a purpose other than the one agreed upon.

Taylor v. Davis (In re Davis) · filed 2013-07-26(a)(4)

The Court finds that the debt owed to Plaintiffs is nondischargeable under section 523(a)(4) based on embezzlement. Plaintiffs entrusted $950,000 to Defendant with the understanding that it would go towards paying down the loan used to purchase Plaintiffs’ share of the Georgian Bank stock. Defendant used the funds for interest on the entire $5 million loan, for his businesses, and for personal expenses.

Section 523(a)(4) excepts a debt from discharge when a debtor lawfully receives insurance proceeds and fraudulently uses them instead of paying the creditor entitled to them.

First National Bank v. Simerlein (In re Simerlein) · filed 2013-08-26(a)(4)

As discussed, the insurance proceeds paid to the Defendant should have been payable to First National Bank or, at the very least, to First National Bank and the Defendant jointly, and the Defendant’s use of the proceeds for purposes other than to repay the mortgage to First National Bank constituted embezzlement of those funds and provide for a determination that Auto Owners Insurance Company is entitled to a judgment in the amount of $86,653.14 that is nondischargeable under § 523(a)(4).

Section 523(a)(4) excepts from discharge a debt arising from the fraudulent misappropriation of property entrusted to the debtor.

NWI Orthodontics, P.C. v. Bell (In re Bell) · filed 2013-09-18(a)(4)

In short, a sufficient pattern of deception exists in this case as to warrant the inference that Bell acted with fraudulent intent. As a result, I conclude that Bell deliberately withdrew corporate funds as dividends for his own personal use which he knew were unauthorized under the terms of his Employment Agreement and otherwise. This taking constituted an embezzlement under § 523(a)(4).

Fraudulent intent for embezzlement under § 523(a)(4) may be shown by circumstantial evidence.

Bank of America, N.A. v. Armstrong · filed 2013-09-19(a)(4)

A debtor’s fraudulent intent for purposes of § 523(a)(4) may be, and often must be, shown by circumstantial evidence.

Section 523(a)(4) excepts from discharge a debt arising when a debtor embezzles an employer’s entrusted manuals and handbook for use in a new business.

Sierra Chemicals, LLC v. Mosley (In re Mosley) · filed 2013-11-13(a)(4)

Here, Defendant was given the Safety Manual and Employee Handbook as part of his job. On the day he anticipated getting fired, he emailed the manual, handbook, and other documents to his personal Yahoo account without Plaintiffs knowledge or consent. Defendant then used the documents in his new business. Defendant’s conduct constitutes embezzlement for purposes of § 523(a)(4).

Section 523(a)(4) excepts a debt for embezzlement from discharge when a debtor fraudulently uses property entrusted to them for an unauthorized purpose.

D'Amour v. Birchall (In re Birchall) · filed 2013-11-18(a)(4)

Accordingly, I find that the Debtor’s debt to the Plaintiff is excepted from discharge pursuant to § 523(a)(4) as a debt for embezzlement.

Section 523(a)(4) does not except a debt from discharge for embezzlement when a borrower uses loan proceeds improperly but owns those proceeds.

In re: Stephen Flanagan and Charlotte Flanagan · filed 2014-02-26(a)(4)

Consequently, when a borrower uses properly acquired loan proceeds in an unauthorized manner, in addition to remaining liable on the obligation, there may exist a basis for fraud, as there was here, or breach of contract; but, this situation would not constitute embezzlement in as much as the borrower owns the proceeds.

Section 523(a)(4) does not treat keeping money contractually owed to another as embezzlement when the money came from the debtor’s own property.

Schaul ex rel. Estate of Crawford v. Ludwig (In re Ludwig) · filed 2014-04-02(a)(4)

The monies that Schaul accuses Ludwig of embezzling were proceeds from the sale of property of which Ludwig was the sole owner. The proceeds were therefore her property, not property of Crawford’s probate estate. True, Ludwig may have had an obligation under the PSA to pay most of those proceeds to Crawford’s estate, and she may have breached the PSA by not paying them. But keeping money contractually due another is a breach of contract, not embezzlement.

Section 523(a)(4) makes a debt for embezzlement nondischargeable when a debtor fraudulently appropriates property lawfully in his possession.

Fernandez v. Havana Gardens, LLC · filed 2014-04-04(a)(4)

Havana Gardens has shown by a preponderance of the evidence that Ricardo acted with a fraudulent intent to appropriate certain company funds for his own benefit. Thus, the portion of Ricardo’s debt attributable to the undeposited rent and the unexplained credit card charges is non-dischargeable under section 523(a)(4) as embezzled funds.

Section 523(a)(4) can except a debt from discharge for embezzlement when someone authorized to use a company credit card misuses it.

Reiss v. McQuillin (In re McQuillin) · filed 2014-04-15(a)(4)

In short, I am satisfied that the misuse of a company credit card by one authorized to use the card on behalf of the company can be embezzlement within the meaning of § 523(a)(4).

Section 523(a)(4) excepts from discharge debts for embezzlement, including funds a debtor diverts to herself through unauthorized payments and unaccounted cash withdrawals.

Keogh v. Fleming Manufacturing Co. (In re Keogh) · filed 2014-04-30(a)(4)

The culmination of the above compels the conclusion that by a preponderance of the evidence, Fleming has met its burden that the debt owed by Ms. Keogh for funds she caused to be diverted to herself in either commissions or unaccounted excessive cash withdrawals were embezzled within the meaning of Section 523(a)(4). Therefore Fleming is entitled to have the debt for funds embezzled by Ms. Keogh excepted from discharge.

Section 523(a)(4) excepts a debt from discharge when the debtor embezzles property entrusted to them by appropriating it for personal use with fraudulent intent.

Hot Shot Kids Inc. v. Pervis (In re Pervis) · filed 2014-05-29(a)(4)

The Court concludes that Pervis did convert the funds with fraudulent intent and thus that all the elements of embezzlement as defined under 11 U.S.C. § 523(a)(4) have been established.

Section 523(a)(4)’s embezzlement exception does not apply when an ordinary contract payment transfers ownership of the funds to the debtor.

Nasch v. Laos (Laos) · filed 2014-07-02(a)(4)

The Court finds and concludes that, given the totality of the evidence, the Debtors were not non-owners of the funds for the purposes of § 523(a)(4). Accordingly, the conditions of § 523(a)(4) have not been met and Plaintiffs’ request for denial of Debtors’ discharge pursuant to 11 U.S.C. § 523(a)(4) is denied.

Section 523(a)(4) excepts an embezzlement debt from discharge when property belonging to another is used contrary to its entrustment with fraudulent intent.

Sand-Stone, Inc. v. Camp (In re Camp) · filed 2014-07-08(a)(4)

As defined above, embezzlement requires appropriation of property rightfully belonging to another, as well as the existence of fraudulent intent. Moreover, embezzlement also requires a use of the appropriated property in a manner that is contrary to its entrustment. ... These facts defeat necessary elements of the claims against Camp, resulting in a prima facie showing that he is entitled to judgment as a matter of law.

Section 523(a)(4) does not require a fiduciary relationship for debts arising from embezzlement or larceny.

Mirarchi v. Nofer (In re Nofer) · filed 2014-08-12(a)(4)

Claims of embezzlement and larceny under 11 U.S.C. § 523(a)(4) differ from fraud and defalcation in that neither require that the debt have been incurred in a fiduciary capacity.

Section 523(a)(4) makes debts arising from embezzlement or larceny nondischargeable without requiring a fiduciary relationship.

Kim v. Hyungkeun Sun (In re Hyungkeun Sun) · filed 2014-09-12(a)(4)

However, § 523(a)(4) does not require the existence of a fiduciary relationship in order to establish that a debt created by acts of embezzlement or larceny is nondischargeable in bankruptcy.

Section 523(a)(4) does not except a debt from discharge as embezzlement when the debtor received the money by mistake and there is no entrustment or evidence of fraudulent intent.

In re Lerner · filed 2014-08-28(a)(4)

As stated above, B & B alleges that its debt for unpaid legal fees should be excepted from discharge under § 523(a)(4) due to embezzlement. ... There is simply no good faith basis upon which B & B can argue that Debtor embezzled money that both the SSA and B & B acknowledged was sent to Debtor in error. Moreover, there simply was no entrustment; there is no evidence or even any suggestion that the SSA advised Debtor when it sent the $6,000.00 that such money was sent to him to hold for the benefit of B & B or to turn over to B & B.

Section 523(a)(4) requires the bankruptcy court to determine whether a state-law theft judgment satisfies the larceny exception to discharge.

Kishpaugh v. John Odegard and Miriam Odegard · filed 2014-09-23(a)(4)

Rather, it is the role of the bankruptcy court to review the record and analyze whether the state law elements of Kishpaugh’s theft also satisfy the larceny prong for a non-dischargeable debt under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when the debtor knowingly uses entrusted funds for an unauthorized purpose.

Orumwense-Lawrence v. Osula (In re Osula) · filed 2014-09-30(a)(4)

With respect to the Embezzlement Claim, the Court finds that the Plaintiff established by a preponderance of the evidence that the debt owed to him by the Debtor, in the amount of $62,200, is the result of embezzlement and is nondischargeable pursuant to 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepted the full debt from discharge when the debtor acted in concert with the person who embezzled the funds.

Richardson Hauling, Inc. v. Hutchens (In re Hutchens) · filed 2015-01-26(a)(4)

The Court finds that the Plaintiff has met its burden to prove that the Debtor acted in concert with his wife such that her embezzlement is imputed to him for purposes of this dischargeability determination. Therefore, the total amount of the Judgment Debt, $819,000, is excepted from discharge.

The § 523(a)(4) embezzlement claim could not be resolved on summary judgment because material facts remained disputed.

Rice v. Morse (In re Morse) · filed 2015-02-05(a)(4)

Thus, the court concludes that both parties have demonstrated that there exist issues of fact to be determined by the court. For these reasons, the court will DENY both motions for summary judgment regarding the Section 523(a)(4) claim with respect to embezzlement.

Section 523(a)(4) does not make an unpaid trade debt nondischargeable as embezzlement merely because the buyer failed to pay.

Interstate Plywood Co. v. Blankenship (In re Blankenship) · filed 2015-02-13(a)(4)

The Plaintiffs have proven only that materials were supplied to Cabinet, the payment for which was guaranteed by the Debtor, and that no payment was received. Simple nonpayment is not evidence of fraud or embezzlement, but rather a simple breach of contract.

Section 523(a)(4)’s larceny exception does not apply when the creditor voluntarily loans the debtor the funds.

Sega Auto Sales, Inc. v. Flores (In re Flores) · filed 2015-02-05(a)(4)

Rather, the Debtor obtained the funds loaned to him with the Plaintiffs consent. Accordingly, the Plaintiff cannot prove the first element of larceny pursuant to 11 U.S.C. § 523(a)(4) by a preponderance of the evidence.

Section 523(a)(4)'s larceny exception requires the debtor to take another's property unlawfully at the outset; later withholding of lawfully received property does not qualify.

In re: Mark Jenkins and Roxanna Ramey · filed 2015-02-20(a)(4)

Simply put, for purposes of § 523(a)(4), larceny only occurs when the debtor first comes into unlawful possession of the property of another.

Section 523(a)(4) requires fraudulent intent for a debt arising from larceny to be excepted from discharge.

Schaul v. Ludwig (In re Ludwig) · filed 2015-04-02(a)(4)

The second amended complaint fails to state a larceny claim under section 523(a)(4). Fraudulent intent is a critical element of that claim, and Schaul has again pled no facts raising a plausible inference that in selling the Highland Park Property Ludwig had any fraudulent intent.

Section 523(a)(4) excepts a debt from discharge when the debtor appropriates funds for personal benefit with fraudulent intent.

3N International, Inc. v. Carrano (In re Carrano) · filed 2015-04-23(a)(4)

Furthermore, 3N established that retention of the overpayment was done with fraudulent intent or deceit. Carrano failed to contest or in any way refute Franz’s testimony that Carrano held on to the money for as long as he could. It is therefore appropriate to conclude that Carrano decided to retain the overpayment for his benefit.

Section 523(a)(4)’s larceny exception can cover the wrongful conversion of intellectual property.

Meade v. Pinkerman (In re Alwood) · filed 2015-05-20(a)(4)

In a nondischargeability context, intangible property is included within the scope of the statute, and a creditor can be deprived of his use of intellectual property just as easily as tangible personal property.

Section 523(a)(4) excepts debts for embezzlement or larceny from discharge, whether the debtor initially obtained the property lawfully or unlawfully.

Hyungkeun Sun v. United States Bankruptcy Court for the District of Colorado · filed 2015-08-11(a)(4)

Section 523(a)(4), in pertinent part, excepts from discharge any debt for embezzlement or larceny. ... We need not decide whether the Suns lawfully obtained the money because if it was not larceny, it was most certainly embezzlement.

Section 523(a)(4) permits an embezzlement claim to proceed when genuine factual disputes remain about the agreed use of entrusted funds and the debtor’s use of them.

Smith v. Morse (In re Morse) · filed 2015-08-03(a)(4)

The court concludes that genuine disputes of material fact exist regarding the Plaintiffs Section 523(a)(4) embezzlement claim. The Defendants’ motion for summary judgment on this claim will be denied.

Section 523(a)(4) excepts from discharge debts arising from the fraudulent appropriation of property entrusted to the debtor.

Patel v. Patel (In re Patel) · filed 2015-08-21(a)(4)

The Court concludes that Patty and Danny embezzled a total of $35,946 from Usha. That amount is therefore nondis-chargeable under § 523(a)(4).

Section 523(a)(4) requires specific intent to defraud for a debt arising from embezzlement to be nondischargeable.

Zamani v. Razavi (In re Razavi) · filed 2015-10-14(a)(4)

In addition to the three elements outlined above, a claim of embezzlement under § 523(a)(4) requires a specific intent to defraud.

Section 523(a)(4) excepts debts arising from a debtor’s embezzlement from discharge.

Frisco Medical Center, L.L.P. v. Bledsoe · filed 2015-11-30(a)(4)

Baylor Frisco has also has demonstrated that the Bledsoe Defendants committed embezzlement as defined under section 523(a)(4), The summary judgment evidence conclusively establishes that the Bledsoe Defendants’ debts under the Fraud Lawsuit are non-dischargeable pursuant to section 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4)’s embezzlement exception requires that the debtor initially obtained the property lawfully.

Brannon v. Reynolds (In re Reynolds) · filed 2015-12-09(a)(4)

Absent an'allegation that the Defendants obtained -the fuel from WOCO lawfully, the embezzlement requirements. of § 523(a)(4) were not met in the State Court Action and cannot bre met in the instant adversary proceeding through collateral estoppel.

Section 523(a)(4) excepts debts for embezzlement from discharge, but another person’s embezzlement cannot be attributed to a debtor without an agency relationship.

In re: Thomas Sheidler v. · filed 2016-03-28(a)(4)

11 U.S.C. § 523(a)(4) provides, in relevant part, that a discharge can be denied as to a debt for “embezzlement.” As discussed above, the bankruptcy court correctly applied Michigan law to determine that Newpower did not act as the Debtors’ agent, and therefore, the Debtors could not be held responsible for Newpower’s embezzlement.

Section 523(a)(4) excepts a debt from discharge for embezzlement when a debtor fraudulently uses entrusted funds for personal expenses.

Kern v. Taylor (In re Taylor) · filed 2016-06-06(a)(4)

The Court can also plausibly infer that Defendant’s managerial responsibilities did not authorize her to use Decatur LLC’s finances to pay for her personal expenses. ... The Courtyard Plaintiffs have adequately alleged a claim of embezzlement under § 523(a)(4).

Section 523(a)(4)’s larceny exception does not require proof that the debtor made false representations, signed promissory notes, or personally solicited funds.

Nasif v. Palladino (In re Palladino) · filed 2016-11-03(a)(4)

Moreover, an exception to discharge under § 523(a)(4) for larceny does not require false representations or the execution of promissory notes to investors, or even actual solicitation of funds from investors.

Section 523(a)(4) makes a debt nondischargeable for embezzlement when a debtor fraudulently uses entrusted funds for a purpose other than the one agreed upon.

Sheen Falls Strategies, LLC v. Keane (In re Keane) · filed 2016-11-08(a)(4)

The $50,000 loan from Sheen Falls Strategies to the debtor was explicitly for “business purposes” only. The debtor knew that the purpose of the loan was only for business, but he never used the money for its intended purpose. Instead, the debtor spent the money on personal expenses. ... Accordingly, the state court judgment in favor of Sheen Falls Strategies is nondis-chargeable pursuant to § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when the debtor fraudulently appropriates another person’s property that was lawfully in the debtor’s possession.

Gazzola v. Brandt (In re Brandt) · filed 2017-03-20(a)(4)

The Court finds that Gazzola has established by a preponderance of the evidence that the Debtor misappropriated the ’59 Porsche and its parts with fraudulent intent. All of the elements for embezzlement under § 523(a)(4) having been satisfied by Gazzola, the Court shall enter judgment in his favor under Count II of the Complaint.

Section 523(a)(4)'s larceny exception requires a wrongful and intentional taking of another's property; using one's own property does not qualify.

Sterling v. Lanum (In re Lanum) · filed 2017-06-02(a)(4)

At all times the funds that were used (or not used) to pay Sterling’s wages were the original property of either Russell Communications, LLC, or one of the other business entities in which Lanum was involved. An entity’s or individual’s use of its own property does not amount to larceny. For this reason Sterling has failed to meet her burden of proof under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) makes a debt arising from larceny nondischargeable when the debtor is liable for it, even if a co-conspirator committed the wrongful acts.

Cowin v. Countrywide Home Loans, Inc., et · filed 2017-07-18(a)(4)

Like § 523(a)(2), a plain reading of the provision is that a debtor cannot discharge a debt that arises from larceny so long as the debtor is liable to the creditor for the larceny.

Section 523(a)(4) requires fraudulent conduct or its equivalent for embezzlement; breaching an agreement to remit insurance proceeds alone is insufficient.

PHI Air Medical, L.L.C. v. Blair (In re Blair) · filed 2017-06-16(a)(4)

It is not every breach of contract which will fit within the § 523(a)(4) criteria. Fraudulent conduct, or its equivalent, is a necessary element of finding cause has been established under § 523(a)(4).

Section 523(a)(4) makes a debt for embezzlement nondischargeable when the debtor uses entrusted property for another purpose under circumstances indicating fraud; no fiduciary relationship is required.

HST Corporate Interiors, LLC v. Sherrick (In re Sherrick) · filed 2017-07-06(a)(4)

In the present case, the proof supports a finding of embezzlement. There can be no dispute that the funds were lawfully entrusted to the debtor and Sher-rick Construction and that the funds were used for other purposes. Moreover, the circumstantial evidence supports a showing of deceit. ... Accordingly, the Court finds that HST’s claim is nondischargeable pursuant to 11 U.S.C. § 523(a)(4).

Section 523(a)(4) does not require misappropriated funds to be deposited directly into the debtor’s account to support an embezzlement claim.

Federal Insurance Co. v. Sorge (In re Sorge) · filed 2017-08-01(a)(4)

However, because the direct deposit component is not a component of proving embezzlement dis-chargeability, the court need not consider the detour of the funds through Mertz here.

Section 523(a)(4) excepts a debt from discharge for embezzlement when a nonowner lawfully possesses property, appropriates it for another use, and the circumstances indicate fraud.

Yahalomey Paz Israel, G.P. v. Wolf (In re Wolf) · filed 2017-11-09(a)(4)

Under federal law, embezzlement in the context of nondischargeability requires three elements: “(1) property rightfully in the possession of a nonowner; (2) nonowner’s appropriation of the property to a use other than which [it] was entrusted; and (3) circumstances indicating fraud.”

Section 523(a)(4) excepts a debt from discharge for larceny when a debtor wrongfully takes another’s property without consent and with intent to convert it.

Maine Coast Shellfish, LLC v. Cowles (In re Cowles) · filed 2017-12-18(a)(4)

Section 523(a)(4) excepts from discharge debts for “larceny.” ... The evidence was overwhelming that Cowles’s taking of the commissions which rightfully belonged to Maine Coast as part of its profit margin was wrongful, occurred without the knowledge or consent of Maine Coast and its principal Adams, and was done with the intent to convert the property.

For § 523(a)(4) embezzlement, trust property belongs to another to the extent its beneficial interest belongs to someone other than the trustee, even when the trustee holds legal title.

Elizabeth W. Ackerman Trust v. Ackerman (In re Ackerman) · filed 2018-06-25(a)(4)

In each instance at issue, the property at issue belonged to another because, although Jeffrey, as trustee, had legal title to the property, he did not own the beneficial interest in that property; and by the acts complained of, Jeffrey appropriated the beneficial interest to his own use. I conclude that, to the extent of the beneficial interest, the property in question belonged to another for purposes of the embezzlement prong of § 523(a)(4).

Sections 523(a)(2)(A) and (a)(4) require a creditor to prove the grounds for excepting a debt from discharge, including fraudulent misrepresentation, embezzlement, or larceny.

Kassebaum v. Smith (In re Smith) · filed 2018-11-01(a)(2)(A), (a)(4)

For the reasons stated above, I conclude that the plaintiff failed to meet his burden to establish claims under 11 U.S.C. § 523(a)(2)(A) and (a)(4).

Section 523(a)(4) requires a creditor claiming embezzlement or larceny to prove the debtor’s fraudulent intent by a preponderance of the evidence.

Hebl v. Windeshausen · filed 2018-10-04(a)(4)

Therefore, all of the exceptions to discharge pursued by Hebl in this bankruptcy court required her to demonstrate by a preponderance of the evidence that Windeshausen acted with fraudulent intent in taking funds from the parties' business.

Section 523(a)(4)'s larceny exception requires a wrongful taking with intent to use the property for the debtor's benefit.

Farm Credit Mid-Am., PCA v. Tingle (In re Tingle) · filed 2018-11-21(a)(4)

Larceny requires a wrongful taking of property with the intent to use the property for the defendant's benefit. ... Thus, there is a dispute over whether the Tingles used sale proceeds solely for their benefit. This is enough to survive the request for summary judgment on this issue.

Section 523(a)(4) requires a creditor claiming nondischargeability for larceny to prove a wrongful taking and fraudulent intent.

Ideal Development Concepts, LLC v. Gross · filed 2019-05-31(a)(4)

Both elements of larceny—the wrongfulness of the taking and fraudulent intent—are in dispute. ... Thus, Plaintiff has failed to meet its burden in establishing the absence of a genuine material fact; accordingly, summary judgment is not warranted under Section 523(a)(4).