Theft by Deception, Deferred Deposit Transaction

A affirmed Defendant’s convictions for Theft by Deception in Jefferson Circuit Court. Park was not entitled to dismissal of the charges based upon KRS 368.100(16), which exempts individuals who have entered into deferred deposit transactions from being convicted of TBD.

A “deferred deposit transaction” is defined at KRS 368.010(4) as meaning “for consideration, accepting a check and holding the check for a period of time prior to deposit or presentment in accordance to an agreement with or any representation made to the maker of the check, whether express or implied.”

Further, KRS 368.100 provides with regard to deferred deposit transactions:

(16) No individual who enters into a deferred deposit transaction with a licensee shall be convicted under the provisions of KRS 514.040 [theft by deception]. 

(17) No licensee who enters into a deferred deposit transaction with an individual shall prosecute or threaten to prosecute an individual under the provisions of KRS 514.040. 

(18) Each licensee shall conspicuously display in every deferred deposit business location a sign that gives the following notice: “No person who enters into a post-dated check or deferred deposit check transaction with this business establishment will be prosecuted or convicted of writing cold checks or of theft by deception under the provisions of KRS 514.040.[”]

At first glance these provisions appear to exempt from conviction of TBD all individuals who enter into deferred deposit transactions. However, we agree with the circuit court that the checks at issue here were atypical, as they were drawn upon an account which was not authorized for writing checks. As the checks therefore were negotiated without proper legal authority, they fell under KRS 368.100(6). As this provision clearly contemplates criminal prosecution when, as here, a financial institution returns a check that has been negotiated without proper legal authority, we must conclude that the legislature did not intend to exempt from conviction of TBD an individual who engages not in a typical deferred deposit transaction, but instead in a transaction involving an unauthorized check as described in KRS 368.100(6). This is not a case in which the check was returned for insufficient funds. As a result, the trial court did not err by failing to dismiss the charges against Park.

Digested by Scott Byrd

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