University of Minnesota employee sentenced on embezzlement charge

The University of Minnesota contracts manager for the Office for Technology Commercialization was sentenced Tuesday in Hennepin County District Court on one felony count of theft by swindle.While James David Hines worked as an independent contractor for Wayzata patent attorney Hugh Jaeger, he allegedly embezzled approximately $40,000 through various unauthorized U.S. Bank check deposits and telephone transfers from April 2005 through January 2007, according to the Hennepin County criminal complaint.
Hennepin County Judge Joseph Klein sentenced Hines to 90 days electronic home monitoring in addition to a five-year probationary period, which will begin June 1.
Hines was also ordered to pay roughly $27,000 in restitution to Jaeger as well as $5,000 in punitive damages to the state of Minnesota.
“It was a well-reasoned decision by the court,” Jaeger said. “The Hennepin County court system did a fantastic job.”
On Feb. 17, Hines pled guilty to one of eight felony embezzlement charges brought against him by Jaeger. He pled guilty to depositing one of Jaeger’s $4,482 payroll checks into his personal account on Oct. 16, 2006, according to the complaint.
Klein amended Hines’ original guilty plea to include the $27,000 in restitution for damages that would have been included in the other dropped charges, Klein said during the sentencing.
Klein said he will be releasing a memorandum within the next few days addressing the rationale behind his restitution claim decision.
According to Jaeger’s restitution claim, approximately $18,000 dollars stemmed from four forged payroll checks. An additional $5,000 appeared from an unauthorized phone bank transfer and $19,000 in embezzled funds from Jaeger’s South Carolina rental property.
The claim also reported roughly $7,500 in allegedly stolen computer-related electronics, for which Hines had also been facing theft charges.
For his job, Jaeger authorized Hines to deposit payroll and rental property checks into the attorney’s U.S. Bank account.
Hines then would allegedly fill out counter deposit slips for these checks with his personal U.S. Bank account number, allowing the money to be transferred to him, according to the criminal complaint.
A large number of checks presented as evidence to The Minnesota Daily demonstrate such deposit patterns.
However, a gray area still remained as to whether Jaeger ever authorized Hines such use of his finances.
Hines’ attorney, James Ventura, said the deposits were authorized by Jaeger at the time they occurred.
Moreover, the deposit slips from Hines’ alleged banking patterns remained on record at Jaeger’s office, allowing Jaeger to trace the checks directly to Hines’ bank account.
“That is not the act of a guy who is stealing,” Ventura said, referring to the fact that Hines left such a visible paper trail.
In spite of this, Jaeger maintains that his firm never authorized such allocation of funds.
Hines began working with Jaeger in October 2001, taking on various duties for the law firm including paralegal work, technology assistance and the management of Jaeger’s South Carolina condominium.
Jaeger said that Hines left after being notified of Jaeger’s plans to bring in an accounting firm with an interest in auditing the firm’s financial records.
I think he knew that I was going to figure it out,” Jaeger said.
In the summer of 2007, Wayzata police began an investigation of Hines based on computer theft claims purported by Jaeger, according to the investigation report.
Wayzata police closed the case in November 2007 because the employment and personal history between both Hines and Jaeger suggested it would better be solved through civil actions, the report said.
According to the report, Hines has a criminal history similar to his current charge. He received three years of unsupervised probation for a felony grand theft charge in South Dakota in 1997 and a year of probation for a 1998 theft by swindle charge in Minneapolis.
It remains unclear how this sentencing will affect Hines’ employment with the University.
“There is no change in his status at this time,” University spokesman Daniel Wolter said in an e-mailed statement Tuesday. “This is very new information, however, so it’s fair to say the University is reviewing it.”
His duties in the OTC largely pertain to reviewing technology transfer agreements for the department, according to an online University biography.
In this position, Hines oversees patented technology products resulting from University research. He then works to license the patented work with outside companies.
Hines declined to comment after the sentencing