April 18, 2008
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
FRANK KNIGHT, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Indictment No. 05-08-1731.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 10, 2008
Before Judges Parrillo and Baxter.
Defendant Frank Knight appeals from his April 27, 2007 conviction of second-degree theft by failure to make required disposition of property received, N.J.S.A. 2C:20-9. At sentencing, the judge imposed a five-year term of imprisonment, ordered defendant to make restitution in the amount of $560,771 to Qualified Pension Services and imposed appropriate fines and penalties. On appeal, defendant presents the following claims for our consideration:
I. THE COURT ERRED WHEN IT FAILED TO INSTRUCT THE JURY PURSUANT TO STATE v. DAMIANO.
II. THE COURT COMMITTED PLAIN ERROR WHEN IT FAILED TO INSTRUCT THE JURY PURSUANT TO THE APPARENT CONFLICT IN THE LANGUAGE OF THE DEFENDANT'S QUALIFIED PENSION PLAN AND ERISA.
III. AN ESSENTIAL ELEMENT OF N.J.S.A. 2C:20-9 PROVIDES THAT THE PROPERTY NOT REMITTED DID NOT BELONG TO DEFENDANT IN THE FIRST INSTANCE.
IV. DEFENDANT WAS SUBSTANTIALLY PREJUDICED BY THE INEFFECTIVE ASSISTANCE OF DEFENSE COUNSEL.
Defendant was the president and sole shareholder of Knight Contracting Company, a business that provides commercial roofing, masonry, waterproofing and restoration services. In 1999, defendant applied to the New Jersey School Construction Corporation (SCC) for approval to work on school construction projects. As a condition of such approval, defendant was required to establish a Qualified Pension Plan (QPP) for his employees in order to comply with the SCC requirement that non- union contractors on public projects pay their employees the prevailing union wage, which was $45.45 per hour. Consequently, whenever defendant's employees worked on a SCC-approved project, they earned $45.45 per hour, of which $31 was their standard salary and the remaining $14.45 was the required fringe benefit. The $14.45 per hour fringe benefit that the SCC required defendant to pay his employees was not paid to them directly. Instead, defendant was required by the terms of the QPP to deduct the fringe benefits portion from the employees' $45.45 per hour wage and deposit it into the QPP that he established with Transamerica.
Beginning in 2000, defendant's company was awarded roofing and restoration projects by the SCC at the Long Branch, Orange, Hoboken and Camden school districts. Defendant testified that despite the provisions of the Employee Retirement Income Security Act (ERISA)*fn1 and its regulations that required him to deposit the $14.45 per hour fringe benefit into the QPP, he stopped making such deposits in July 2002. He claimed that constant delays by the SCC in paying his company for completed work placed the company in such dire financial straits that he was no longer able to afford to make the required contributions into his employees' pension funds. Despite his failure to make the required contributions, defendant continued to deduct the pension contributions from his employees' $45.45 hourly wages. When defendant stopped making the required contributions, his employees also stopped receiving their quarterly pension statements. Although defendant had filed Form 5500 with both the Internal Revenue Service and the United States Department of Labor (DOL) from 1998 through 2001 detailing the pension contributions he had made, he did not file a Form 5500 in 2002 or at any time thereafter.
In response to employee inquiries in 2003 concerning the missing quarterly statements, defendant repeatedly assured his employees that they would soon be receiving their statements. In early 2004, one of defendant's employees, John Roselli, confronted defendant about rumors circulating within the company that defendant was not depositing into the pension fund the money that he had been withholding from their $45.45 per hour wages.
As a result of Roselli's complaints, in March 2004, Roselli and a number of other employees met with defendant to discuss his failure to make the required deposits. During the meeting, defendant admitted that he was not depositing the withheld $14.45 per hour fringe benefit, but was instead using the money to "keep the company afloat." He assured his employees that he would make payment into the pension fund within thirty to ninety days.
Another company employee, Robert Roselli, contacted Transamerica directly after defendant ignored Roselli's requests for early withdrawal of his money from the pension fund. A third employee, William Hernandez, contacted DOL in March 2004 after he too was unable to withdraw money from his pension plan. As a result of Hernandez's complaint, DOL instituted an investigation in October 2004 into the Knight Contracting Company pension plan.
When the ninety days elapsed without defendant having made the required contributions, John Roselli, Robert Roselli, Jessie Henry and Nelson Soto, all Knight Contracting Company employees, contacted the Monmouth County Prosecutor's Office where they were interviewed by Lieutenant Jason Clark.
As a result of the employees' complaints, defendant was interviewed by both Clark and Carol Herzog, an investigator from DOL. During both interviews, defendant admitted that beginning in July 2002, he began retaining money from employee paychecks that was earmarked for the pension fund, while continuing to show such pension deductions on his employees' paystubs. He acknowledged that he retained the money he deducted from his employees' paychecks, rather than deposit it into the pension fund, in order to pay his company's operating expenses. During those interviews, defendant blamed his conduct on severe delays in receiving payment from the SCC. Herzog testified that the total amount that defendant had failed to deposit into the pension fund was $499,420.
When Herzog was asked during her testimony whether any federal statute or regulation specifies a time frame within which an employer is required to deposit funds that are withheld from employee paychecks into the pension fund, Herzog answered in the affirmative. She explained that the applicable ERISA regulation*fn2 provides that an employer must make the deposit no later than the fifteenth business day in the month after the money is withheld from the paycheck. She testified that federal regulations do not permit an employer to defer making the required contributions even if the employer is having difficulty in receiving payment on work he has performed. She explained, "there's no exception . . . ."
Herzog also testified that when she returned to her office after a second meeting with defendant, she went online to review the payments he had received from the SCC. She stated that the SCC website showed that defendant had been paid for all of the work he had performed as well as for the additional work for which he claimed the SCC still owed him money. The last question the prosecutor asked her on direct was whether, as of the date of trial, defendant had ever made the required payments into his employees' pension plans. She answered no.
At trial, Knight described the delays in receiving payment from the SCC. On the Long Branch job, thirteen months had elapsed between the time he billed the SCC in September 2000 and the time he received a $378,000 payment in October 2001; however, the October 2001 invoice was paid in full in December 2001. Although he testified that he did not receive the final payment until February 2004, the record does not establish when he submitted intervening invoices. Nonetheless, it was clear from defendant's testimony that the SCC had paid him in full for the Long Branch project.
As to the work defendant performed in Camden, his testimony established that he was paid a total of $1,861,000, of which more than $1,000,000 had been paid before he stopped making the required pension contributions in July 2002. Defendant testified that he had not experienced payment delays on the Camden job until February 2003. On the Orange project, which started in July 2001, defendant invoiced the SCC in September 2001 and received his first payment on January 15, 2002. Defendant did not describe any other payment delays on the Orange project. On the Hoboken job, the SCC required Knight Contracting to perform the work at night even though the contract had not originally so specified. Although defendant submitted invoices for the extra expense resulting from nighttime work, ultimately he was paid only $150,000 of the $325,968 that he invoiced. He received that payment in February 2004.
Defendant testified that as a result of the payment delays from the SCC, he had been forced to take out a second mortgage on his home, refinance two other properties he owned and cash out his and his wife's pensions and life insurance policies in order to keep Knight Contracting Company from declaring bankruptcy. He maintained that he would have made the required payments had he received timely payment from the SCC.
Defendant also insisted that the pension plan itself permitted him to defer depositing the pension contributions. He pointed to language in a portion of the pension plan that provided "should the employer for any reason fail to make a prevailing wage contribution for any year, then such deficiency shall be [satisfied] in subsequent years. Such contributions shall . . . equal the amount of the deficiency plus interest from the date the contribution was due until the date it is actually paid."
When asked by his attorney whether he believed in 2002 when he stopped making payments that "subsequent years would be 2006," he answered "absolutely not." He ended his testimony on direct with the statement that the $560,000 the SCC still owed him on the Camden project "was more than sufficient to cover what was due and owing on the pension plan."
On cross-examination, defendant was asked whether it was true that in the thirteen months after he stopped making contributions to his employees' pension funds he had received more than $2,169,032 from the SCC. He answered, "the numbers don't lie. That's correct." Defendant also conceded that between October 2001 and April 2004, he had received a total of at least $6,000,000 from the SCC but had nonetheless stopped making the required contributions in July 2002. In particular, he acknowledged that although he had received $187,930 on the Camden project in August 2002 and another $755,100 in November 2002, he had paid nothing from those amounts toward his employees' pensions despite his obligation to do so.
In 2003, the same pattern continued. Defendant acknowledged receiving $88,975 in February 2003, $55,650 in July 2003 and $224,094 in December 2004 on SCC projects, but nonetheless paid nothing toward his employees' pensions. Defendant also acknowledged that in 2003, when he had made no contributions, he paid himself a salary that exceeded $165,000. At the time of trial, which began on October 31, 2006, defendant had not satisfied any of the pension fund delinquencies that had existed ever since July 2002. In addition to the four contracts with the SCC, defendant conceded that his company performed work on jobs other than the SCC projects during the time period in question. He also acknowledged that despite his testimony on direct that he had liquidated his own personal pension plan in order to keep his company afloat, he now had some money in his own pension account. When asked how much, he answered "I'm not sure of the amount right now."
In addition to his own testimony, defendant called his former employee Gary Staudigl, who testified that in late 2002, defendant had permitted him to withdraw all of the funds that were in Staudigl's pension plan. Staudigl also said he was aware of a few others who had been permitted to do the same.
Defendant's final witness was Donald Cresitello, the director of the change order review unit of the SCC. Cresitello corroborated defendant's claim that between $500,000 and $600,000 was still outstanding on the invoice Knight Contracting submitted to the SCC for change orders on the Camden project. On cross-examination, Cresitello stated that in his opinion only $300,000 of that amount was justifiable. Cresitello also testified that defendant's company had received more than $6,000,000 from the SCC since 2001.
During the charge conference, the judge stated that she would give the model charge on N.J.S.A. 2C:20-9. She also explained that each side had provided her with a "statement of the case" that she would read to the jury. When the judge asked each side whether there were any objections to the proposed charge or verdict sheet, each lawyer said no. Nor did defendant object to the judge's charge to the jury once the charge was completed.
In Point I, defendant argues that the court's charge to the jury on the substantive offense was reversible error entitling him to a new trial. In particular, he argues that the jury charge was defective because the judge failed to tailor the charge to the facts of the case as required by State v. Damiano, 322 N.J. Super. 22 (App. Div. 1999), certif. denied, 163 N.J. 396 (2000).
Before analyzing defendant's argument under Damiano, we pause briefly to describe our scope of review. "Appropriate and proper charges to a jury are essential for a fair trial." State v. Green, 86 N.J. 281, 287 (1981). Jury instructions must provide the jury with a "comprehensible explanation of the questions that the jury must determine, including the law of the case applicable to the facts that the jury may find." Id. at 287-88. Model jury charges are often helpful to trial judges in performing the important function of charging a jury. State v. Concepcion, 111 N.J. 373, 379 (1988). However, where "the statement of relevant law, when divorced from the facts, [is] potentially confusing or misleading to the jury," the model jury charge may be insufficient and the Court has required courts to "mold" or "tailor" these instructions "to the facts adduced at trial." State v. Robinson, 165 N.J. 32, 42-43 (2000).
When we review a defendant's claim of error in a jury charge, we must read the charge as a whole. State v. Marshall, 123 N.J. 1, 135-36 (1991). Additionally, when a defendant fails to object to the charge at the time it was given, there is a presumption that the failure to object reflected the defendant's assessment that the charge was not error and was unlikely to prejudice his case. State v. Macon, 57 N.J. 325, 333-34 (1971). Accordingly, any claim of error concerning a jury charge is reviewed under the plain error standard and will be disregarded "unless it is of such a nature as to have been clearly capable of producing an unjust result." R. 2:10-2.
The pertinent portion of the statute defendant was charged with violating reads as follows:
A person who purposely obtains or retains property upon agreement or subject to a known legal obligation to make specified payment or other disposition, whether from such property or its proceeds or from his own property to be reserved in equivalent amount, is guilty of theft if he deals with the property obtained as his own and fails to make the required payment or disposition. [N.J.S.A. 2C:20-9.]
In order to prove defendant guilty of this theft offense, the State was required to prove each of the following elements beyond a reasonable doubt: 1) that defendant purposely obtained or retained the property; 2) that he did so either upon agreement or subject to a legal obligation; 3) that this agreement or legal obligation required him to make specified payment or other disposition from the property itself or its proceeds, or from his own property to be reserved in an equivalent amount; 4) that this legal obligation was known to defendant; 5) that defendant purposely dealt with the property as if it were his own; and 6) the defendant purposely failed to make the required payment or disposition. Model Jury Charge (Criminal), "Theft by failure to make required disposition of property received (N.J.S.A. 2C:20-9) (1993)."
We turn now to Damiano. We describe in some detail the charges that the defendant in Damiano was charged with in order to provide some context for our conclusion that Damiano is distinguishable. There, the defendant was charged with and convicted of forty-four theft and sales tax crimes of the second, third and fourth-degree, all arising out of his operation of an automobile dealership. Damiano, supra, 322 N.J. Super. at 28. He was charged with thirteen counts of third-degree theft by failure to make required disposition of property received, N.J.S.A. 2C:20-9, and thirteen related counts of third-degree misapplication of entrusted property by a fiduciary, N.J.S.A. 2C:21-15. He was also charged with five counts of third-degree theft by deception, N.J.S.A. 2C:20-4 and five related fourth-degree counts of the deceptive business practice of making a false or misleading written statement, N.J.S.A. 2C:21-7h. Other counts charged him with numerous crimes arising out of sales tax crimes, including failure to register as a sales tax collector, failure to file sales tax reports, failure to remit the sales taxes collected and misapplication by a fiduciary in failing to remit collected taxes. Id. at 28-29.
Within those forty-four counts were five different types of crimes. According to the proofs adduced at trial in Damiano, the defendant defrauded seven purchasers of new or used cars by accepting used cars as trade-ins without paying off the remaining retail installment debt, causing the customers to continue to be liable on the car loans for vehicles they no longer owned. Id. at 32. A second group of charges arose out of defendant's sale to five customers of used vehicles he accepted as trade-ins without ever paying off the liens. Id. at 32-33. Four additional convictions resulted from the defendant charging customers for extended new car warranties even though he had never purchased warranties for them from the manufacturer. Id. at 33. Eight other customers were defrauded by the defendant when he sold four vehicles without repaying Chrysler Financial the stipulated sum that was required to satisfy Chrysler's security interest in each of the vehicles. Id. at 34. Finally, the fifth group of charges arose from the defendant's violation of the sales tax laws. Id. at 35.
We reversed defendant's conviction in Damiano because: the charge, which . . . generally followed the model jury charge[,] . . . did not, however, undertake to explain to the jury the [various] categories of alleged crimes or the differences between them. . . . Nor did [the jury charge] undertake to explain to the jury how the recited elements of the statutory offense related to any of these disparate sets of facts. What reference was made to the facts of the case was, on the other hand, confusing and misleading. [Id. at 38-39.]
As we observed, "the potential for complete confusion . . . was exacerbated by the judge's failure to tell the jury which alleged victims were victims of which crimes and which scenarios could constitute which crimes. . . . In short, . . . there was no guidance - only confusion - in trying to help the jury understand the nature of defendant's conduct . . . ." Id. at 40.
Relying on Damiano, defendant here argues that the trial judge committed reversible error when she failed to tailor the model jury charge for N.J.S.A. 2C:20-9 to the facts of this case. In response, the State argues that defendant misconstrues the holding of Damiano and fails to acknowledge the enormous factual differences between Damiano and the present case. We agree with the State's argument that:
Unlike the defendant in Damiano, who was convicted on forty-four counts after a long and complex trial, the defendant here was charged, tried and convicted of only one count after a three-day trial. Moreover, the facts underlying the charge against defendant derived from only one course of conduct by the defendant: His continued use of employee pension withholdings to pay his own business expenses, and not a plethora of actions as in Damiano. Because this case was significantly less complex than Damiano, the jury instruction on N.J.S.A. 2C:20-9, consisting of the recitation of the indictment, the applicable portions of the relevant model jury charge, and a brief synopsis of the State's and defendant's divergent versions of the relevant facts, provided sufficient guidance to the jury.
Moreover, as the State correctly observes, our reversal of the conviction in Damiano resulted to a considerable degree from the judge's improper intermingling of civil and criminal concepts, id. at 39-40, none of which happened here. We have carefully considered defendant's contentions that the charge to the jury was fatally flawed because it was insufficiently tailored to the facts of the case. We agree with the State's argument that its proofs were clear and uncomplicated, not confusing and complex as the State's proofs were in Damiano. This was a straightforward prosecution that did not require the detailed explanations and guidance that were required in Damiano.
Moreover, in order to ensure that the jury understood each side's factual contentions, the judge agreed to read to the jury the statement each side had prepared. She began by reading the State's version of the case:
[T]he State contends that Mr. Knight obtained money from his employees by withholding a portion of their wages. This was done pursuant to an agreement which required Frank Knight to deposit the withheld funds into a company-established employee pension fund. The money was to be credited to individual accounts in the name of each employee . . . . However, between July 26, 2002 through December 20, 2003, Frank Knight failed to make the required payments to the employee pension fund while continuing to withhold a portion of his employees' wages each pay period.
Frank Knight then purposely dealt with his employees' money as if it were his own property when he used their money to pay other business expenses. Now, that's what the State contends. That's what [the State] based this indictment upon.
The judge then read defendant's submission:
[Mr. Knight] states that [he] is a public works contractor who performed work for the Economic Development Authority and the SCC.
Mr. Knight had established an employee pension plan which on its face allowed him to make employer contributions into the plan in [the] current year or in following years.
Mr. Knight was beset by problems with the SCC in paying his bills in a timely manner.
And in one case, not finalizing a $560,000 bill for four and one-half years. And the same is still not satisfied.
Mr. Knight has bonded for the debt to the pension fund. Mr. Knight has always agreed to pay the debt and has earmarked his receivables from the SCC to pay the debt.
He has been stalled through no fault of his own in receiving payment. And Mr. Knight is in financial distress and has never willfully or purposely not paid his debt to the pension fund. So that's what the defendant contends.
The judge's charge to the jury tracked the model jury charge for N.J.S.A. 2C:20-9. We are satisfied that the charge amply satisfied the requirement of State v. Green that a judge provide the jury with a "comprehensible explanation of the questions that the jury must determine, including the law of the case applicable to the facts the jury may find." Green, supra, 86 N.J. at 287-88.
In addition to arguing that the judge erred by not tailoring the charge to the facts adduced, defendant also argues in Point I that the judge committed reversible error when she failed to instruct the jury that it could not render a guilty verdict unless the State proved that he did not intend to ever make the required deposits. In particular, defendant argues that he repeatedly testified "to his good faith belief that he would pay his employees the fringe benefits to which they were entitled, albeit on a delayed payment schedule." He contends that unless the State proved that he had no intention of ever making the required payments, no criminal liability should attach.
In support of that argument, defendant relies upon a portion of our opinion in Damiano, in which we held that the State was required to prove that when the defendant acquired the property in question, "he intended to divert the money or property entirely to his own purposes or that thereafter he purposely failed to make the required disposition during the period of his possession." Damiano, supra, 322 N.J. Super. at 41. In Damiano, we explained why the judge's failure to focus the jury's attention on the question of intent was reversible error:
There was certainly evidence from which the jury could have found that defendant obtained the property with every intention of meeting his legal obligations and that this continued to be his intention in retaining the property. The jury could have found that defendant was in no way conferring or intending to confer a personal benefit on himself, that he was attempting to deal with serious cash flow problems that had been generated by [his partner's] actions, that all available cash went into the meeting of business obligations, and that defendant was paying off these obligations as soon as sufficient cash flowed in -- in short that there was an absence of criminal intent. The court should have focused the jury's attention on this key question of intent but failed to do so. [Id. at 41-42.]
We reject defendant's argument that his trial required the same. First, unlike the defendant in Damiano, who shared the responsibility for making required dispositions of property with his business partner, id. at 54, and whose own personal responsibility was substantially unclear from the proofs, here defendant served as the president and sole shareholder of his company. He acknowledged that he alone had control of the funds in question. Additionally, the proofs here established that ERISA regulations required him to make pension contributions within fifteen days following the month in which the contribution was earned. As we understand the record in Damiano, the State produced no evidence demonstrating the timeframe in which the defendant's financial obligations should have been satisfied. These factors together make defendant's circumstances distinguishable from those in Damiano, especially in light of the protracted period of misconduct involved here.
We reject defendant's contention that the judge's charge to the jury failed to properly focus the jury's attention on the element of intent for a second reason. As we have already discussed, the judge read to the jury defendant's statement in which he asserted that he intended to make the required disposition as soon as the SCC paid him and that he fully intended to satisfy his obligations.
Defendant argues that the judge was obliged to have done more than simply read to the jury defendant's statement of the case. He maintains that the judge was required to also instruct the jury that if defendant intended to pay his employees, but could not do so due to financial problems, then he was not guilty. Relying on Damiano, supra, 322 N.J. Super. at 41-42, he further contends that such an instruction was required in order to differentiate between mere civil liability and criminal culpability. He argues that that a charge on criminal intent "could possibly have read as follows:
This statute requires that the defendant intended to divert the money or property to his own purposes for his own personal benefit. If you find that there is a reasonable doubt that defendant retained the property - in this case, Knight Contracting Company's account receivables and outstanding invoices-with every intention of meeting his legal obligation to pay his employees, but could not due to financial problems, then he lacks the criminal intent required for this charge and you must therefore find the defendant not guilty.
You may therefore consider the defendant's entire financial picture as bearing on his intent or lack thereof when determining his guilt of this theft offense.
We reject his contention that such an instruction was required. Were we to accept his argument, we would essentially be engrafting into the statute an additional element the Legislature could have, but did not, incorporate. Although we concluded in Damiano that such an instruction was required there in light of the extraordinarily complex set of facts, we do not interpret Damiano as inflexibly requiring such an instruction in every N.J.S.A. 2C:20-9 prosecution.
In further support of his argument that the judge was required to give the jury a specific instruction that defendant's financial problems could raise a reasonable doubt as to his guilt, defendant points to four questions the jury asked during its deliberations. He argues that these questions demonstrate that the jury was "struggling" with the question of where civil liability ends and criminal culpability begins.
We decline to draw such an inference from the jury's questions because such an inference would be based on nothing more than speculation. These were the jury's questions: 1) "Was the 2003 tax return from Knight Construction considered evidence? If so, we would like to see it"; 2) "Please refresh our memory on the five different things, elements, the judge told us to consider to come up with the verdict guilty beyond a reasonable doubt"; 3) "We need another reading of the elements or can we have them in writing?" and 4) "Why are we asked question number two*fn3 on the verdict sheet?"
In response to the first question, the judge told the jury that the tax return was not in evidence and therefore could not be provided but they were entitled to consider any evidence about the tax return that they might have heard. In response to the second question, the judge recharged the jury on N.J.S.A. 2C:20-9, including the parties' respective statement of the case we have described. In response to the third question, she provided a written copy of the six elements of the offense. In her answer to the fourth question, the judge explained, without elaborating, that "if you find the defendant guilty, then our law provides, then you go on to determine what is the amount of the theft." Neither side objected to any of these answers.
As is evident, the jury did not hesitate to ask questions. Had the jury been confused about the issue of intent, the jury likely would have asked that question directly. Accordingly, we decline defendant's invitation to infer from the jury's questions that it was struggling with the impact of defendant's financial obligations on whether the State proved its case beyond a reasonable doubt.
We conclude that the charge to the jury properly focused the jury's attention on the elements the State was required to prove. The instruction defendant now proposes was not required.
In Point II, defendant argues that the judge's charge to the jury was erroneous because it failed to explain his good faith defense that arose from the conflict between the provisions of defendant's QPP and the requirements of ERISA regulation 29 CFR 2510.3-102(b). His argument lacks merit. First, we note that when the judge presented the jury with defendant's theory of the case, she explained: "Mr. Knight had established an employee pension plan which on its face allowed him to make employer contributions into the plan in the current year or in following years." Under those circumstances, the jury was clearly made aware of defendant's good faith defense. Second, there is no conflict between the terms of defendant's QPP and the ERISA regulation. The ERISA regulation requires an employer to remit the withheld money to the pension plan within fifteen days following the month in which the employee became entitled to the contribution. Defendant's QPP provides an employer the option of satisfying contribution deficiencies in subsequent years. The fact that the QPP allows an employer to satisfy the deficiency in subsequent years does not change the fact that the ERISA regulation requires that such payment be made within fifteen days. The QPP cannot reasonably be interpreted as countermanding the fifteen-day ERISA requirement.
We turn next to the argument defendant raises in Point III. His point heading reads as follows: "An essential element of N.J.S.A. 2C:20-9 provides that the property not remitted did not belong to defendant in the first instance." It is difficult to determine from that point heading the precise legal argument defendant is advancing.*fn4 In his legal argument in Point III, defendant argues that unlike escrow funds, "[t]he money at the center of this dispute never belonged to his employees in the first instance [and] was a debt he owed to them as part of their wages." Accordingly, he maintains, he merely "owes a debt to them, and therefore at best incurred a civil liability." We disagree.
We are satisfied that the evidence produced at trial demonstrated that under the terms of defendant's QPP as well as the applicable ERISA regulation, defendant was obligated to timely contribute the $14.45 per hour fringe benefit to the pension fund. Rather than timely depositing those funds, as required, he retained them and used them to satisfy his own business debts and "keep his business afloat." In light of his obligation to deposit the deducted funds into the pension account, defendant's retention of those funds establishes that he "deal[t] with the property obtained as his own," thus establishing a violation of N.J.S.A. 2C:20-9.
Finally, we reject defendant's argument that the money in question "never belonged to his employees" but was instead merely "a debt he owed to them as part of their wages." Defendant's employees earned $45.45 per hour when they worked on SCC projects. As we understand the record, their paychecks reflected an earned hourly wage of $45.45. The $14.45 fringe benefit portion that defendant was obligated to deposit to his employees' pension funds was thus as much "their" property as was the $31 regular hourly wage. Thus, contrary to defendant's contention, the money in question "belonged to his employees." It was their money, not his.
In Point IV, defendant argues that he was "substantially prejudiced by the ineffective assistance of defense counsel." In support of that argument, he contends that trial counsel's performance failed to satisfy the Sixth Amendment requirement of effective assistance of counsel because his attorney: 1) failed to propose a modified jury charge pursuant to State v. Damiano; 2) failed to refute Herzog's testimony by presenting expert testimony from an accountant and a pension manager; and 3) failed to call defendant's accountant as a witness.
To prove ineffective assistance of counsel, and therefore a constitutional violation, defendant must demonstrate that counsel's performance was deficient and that this deficient performance prejudiced his defense. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed. 2d. 674, 693 (1984). "Our courts have expressed a general policy against entertaining ineffective-assistance of counsel claims on direct appeal because such claims involve allegations and evidence that lie outside the trial record." State v. Castagna, 187 N.J. 293, 313 (2006) (quoting State v. Preciose, 129 N.J. 451, 460 (1992)). "However, when the trial itself provides an adequately developed record upon which to evaluate defendant's claims, appellate courts may consider the issue on direct appeal." Ibid. Here, we conclude that defendant's last two claims of ineffective assistance of counsel should not be entertained on direct appeal because those claims cannot be resolved without consideration of matters that lie outside the trial record.
In contrast, the record is sufficiently developed to permit us to evaluate defendant's first claim, in which he asserts that trial counsel was ineffective for failing to request the type of jury charge we required in Damiano. We have already determined that the charge the judge gave to the jury here amply satisfied the court's obligation to instruct the jury on the relevant points of law. Because the charge satisfied all applicable legal requirements, counsel was not ineffective because he failed to request different language. Indeed, as we have discussed, trial counsel succeeded in persuading the judge to present to the jury defendant's version of the case. Under these circumstances, we reject defendant's contention that trial counsel was ineffective in relation to the jury charge. The balance of defendant's ineffective assistance of counsel claims are preserved for post-conviction review.