Section 79-A. Misappropriation of funds of trust

1. Any trustee of a trust
  arising under this article, and any officer, director or agent  of  such
  trustee,  who  applies  or  consents  to  the application of trust funds
  received by the trustee as money or an instrument  for  the  payment  of
  money  for  any  purpose other than the trust purposes of that trust, as
  defined in section seventy-one, is guilty of larceny and  punishable  as
  provided in the penal law if
    (a)  such  funds  were  received  by the trustee as owner, as the term
  "owner" is used in article three-a of this chapter,  and  they  were  so
  applied  prior  to  the  payment  of all trust claims as defined in such
  article three-a, arising at any time; or
    (b)  such  funds  were  received  by  the  trustee  as  contractor  or
  subcontractor,  as  such  terms  are  used  in  article  three-a of this
  chapter, and the trustee fails to pay, within  thirty-one  days  of  the
  time  it is due, any trust claim arising at any time; provided, however,
  that  if  the  trustee  who  received  such  funds  as   contractor   or
  sub-contractor  disputes in good faith the existence, validity or amount
  of a trust claim or disputes that it is due, the  application  of  trust
  funds  for  a purpose other than a trust purpose, or the consent to such
  application, shall not be deemed larceny by reason of failure to pay the
  disputed claim within thirty-one days of the date when it is due if  the
  trustee   pays  such  claim  within  thirty-one  days  after  the  final
  determination of such dispute.
    2. Notwithstanding subdivision one of this section, if the application
  of trust funds for a purpose other than the trust purposes of the  trust
  is  a  repayment to another person of advances made by such other person
  to the trustee or on his behalf as trustee and the  advances  so  repaid
  were actually applied for the purposes of the trust as stated in section
  seventy-one,  or  if the trustee has made advances of his personal funds
  for trust purposes and the amount of trust funds applied for  a  purpose
  other than the trust purposes of the trust does not exceed the amount of
  advances  of  personal  funds  of  the  trustee actually applied for the
  purposes of the trust, such application  or  consent  thereto  shall  be
  deemed justifiable and the trustee, or officer, director or agent of the
  trustee,  shall  not  be  deemed  guilty  of  larceny  by reason of such
  application or by reason of his consent thereto.
    3. Failure of the trustee to keep the books  or  records  required  by
  section  seventy-five shall be presumptive evidence that the trustee has
  applied or consented to the application of trust funds received  by  him
  as  money  or  an instrument for the payment of money for purposes other
  than a purpose of the trust as stated in section seventy-one.
    4. Notwithstanding any other provision of law, no act of  the  trustee
  in  relation  to the assets of the trust shall, by reason of any express
  covenant as provided in section thirteen or section twenty-five of  this
  chapter,  be  deemed  larceny  in  a case in which it is not declared by
  subdivision one of this section to be larceny or in a case in which  the
  act  is  deemed  justifiable  as  provided  in  subdivision  two of this
  section.