Breach of Trust

A breach of trust defines a scenario where a person initially borrows a property from someone and is entrusted with the undertaking and control of the property. Still, they should have used it with consent or returned it, technically stealing it from the actual property owner. This property can be anything from a car, apartment, book, furniture, appliance and so on.

It is observed as an act of violation of the duties of a trustee. It need not be intentional or have a criminal mindset, but it can be due to negligence. A trust is breached when a trustee does anything they should not have done or fails to do something that they have promised to do. Although it is observed as a criminal offense, not all breaches of trust are subject to legal proceedings.

A breach of trust is an act of violation of trust and confidence between two parties. One is the owner of the property, and the second is the borrower. When the borrowers, with consent, borrow something or come in possession of something given by the owner for temporary use or in good faith, they become trustees. It occurs if the trustee misuses the property in any way, indulges in malicious practices, or does anything that the lender did not authorize. This property can be anything from an apartment to confidential documents, cars, jewelry, furniture, artwork, home appliances, and so on. In the US, it is considered a form of property theft involving trust and is almost identified as larceny.

Three distinct elements determine such charges:

1. The property has been lawfully and consensually given to the defendant with the expectation that they will return it or use it to further their own interests.
2. The defendant needs the owner's consent to possess or use the granted property for personal gain.
3. The borrower intends to remove the owner's possessions.

If the borrower asks another party to commit this crime with them, it still constitutes a breach of trust. The original owner can take the borrower to court for any form of damages, intention of theft, or violation. The owner may draft a valid notice as a formality, which is part of the legal process as a formal communication notifying the borrower of the official alert. However, the two parties can choose to agree with the court.

As far as legal consequences are concerned, there are three levels of severity, which follow as follows:

• Misdemeanor Charge - If the stolen property is worth two thousand dollars, it is accounted for as an act of misdemeanor. In such a case, the legal consequences are that the trustee may face a fine of up to one thousand dollars and prison time of up to 30 days.
• Felony Charge - In case the stolen property is worth between more than two thousand dollars and less than ten thousand dollars, it will be considered a felony charge. With such a charge, the final punishment power resides with the court to determine the fine amount, and typically, the prison time is five years.
• Felony Charge II - t is one level above the felony charge with a felony conviction. In such cases, the property included is typically above ten thousand dollars. Anyone convicted at this level serves a prison sentence of up to 10 years. Again, the court finalizes the fine amount.

Many arguments suggest that in most cases, the convicted is only penalized by fines and no prison time.

Here are two examples of the concept: the first is hypothetical, and the second is from world news:

Example #1

Suppose David owns a fully furnished apartment in New York but lives mainly in Washington. David’s friend Daniel borrows it from him in good faith and trusts it to live. David happily gives the apartment keys to Daniel, trusting him as a friend. In this arrangement, David is the owner, and Daniel is the trustee. While David was in Washington for a couple of months, Daniel started renting the apartment to another family and earning extra money from it without telling David about it. 

The family misused the apartment facilities, left garbage, and messed up the whole apartment, damaging the furniture, electricity, and home appliances. It is a direct case of breach of trust and confidence. When David finds out, he immediately makes the family leave the place, confronts Daniel about it, and takes him to court, filing for a violation of property, trust, and confidence. Now, based on the damages and circumstances, the court has the right to order the punishment for Daniel. It is a simple example. However, in the real world, there are multiple factors to be considered.

Example #2

For the second example, the Austrian prosecutors investigating Herbert Kickl, who is a far-right leader, suggest that they have a strong suspicion of breach of trust for allegedly using public funds to bribe media advertising in exchange for favorable party coverage. It was when he was a minister. An anonymous media entrepreneur is also mentioned.

Herbert Kickl is not the only far-right minister; there are others, including the Freedom Party’s former leader Heinz-Christian Strache, who is also under investigation in a statement on a scheme from the time they were in a coalition government. There is also an unnamed Freedom Party spokesman who reported the investigation, saying that the advertising was taken out for the right reasons.

The violation by a trustee of a duty makes the trustee liable for a breach of trust to a beneficiary under California Probate Code §16420. To remedy the breach, the court may:

• Compel the trustee to perform the rightful duties they were entrusted with.
• Instruct the trustee and refrain from committing the breach.
• Order the trustee to readdress and compensate by paying money and restoring or fixating the property through suitable means.
• The court may appoint a special fiduciary officer to undertake the possession of the trust’s property and administer the trust.
• The court may limit the scope of the trustee’s power or suspend the trustee.
• May not allow any form of trustee’s compensation or reduce a trustee’s pay.
• The court can impose a lien or trace the trust property wrongfully disposed of and make efforts to recover it.
• At last, the court can order any other appropriate relief that suits the underlying breach of trust scenario.