James, a successful stockbroker, gives a lecture about investing. Some of the people who attend the lecture are from ER Investing Inc., an investment club, and they ask James to advise them. ER Investing Inc. allows James to set up an account for the club with a brokerage firm and gives James control of the account, but does not authorize James to withdraw funds for his own benefit. James uses the money in the ER Investing Inc. account to repay personal loans. Before ER Investing Inc. discovers it, James returns the money. However, an independent audit clearly shows James took money. Charged with embezzlement, James defends his actions on the ground that he repaid the club.

1. Is James guilty of embezzlement? Why or why not?