State v. Taylor
| Decision Date | 31 March 2015 |
| Docket Number | No. 20130556.,20130556. |
| Citation | 349 P.3d 696,2015 UT 42 |
| Parties | STATE of Utah, Appellee, v. Roger Edward TAYLOR, Appellant. |
| Court | Utah Supreme Court |
Sean D. Reyes, Att'y Gen., John J. Nielsen, Asst. Att'y Gen., Salt Lake City, for appellee.
Joan C. Watt, Michael D. Misner, Salt Lake City, for appellant.
Due to his retirement, Justice NEHRING did not participate herein; Court of Appeals Judge GREGORY K. ORME sat.
Justice DENO G. HIMONAS became a member of the Court on February 13, 2015, after oral argument in this matter, and accordingly did not participate.
INTRODUCTION
¶ 1 Roger Taylor was charged with multiple counts of securities fraud and theft on the basis of his alleged operation of a Ponzi scheme. Mr. Taylor asked the district court to dismiss eight of the ten charges based on the applicable statutes of limitations. The district court concluded that securities fraud and theft are continuing offenses and evaluated the timeliness of the charges accordingly. On interlocutory review, we hold that securities fraud and theft are not continuing offenses and therefore remand the case to the district court to re-evaluate the timeliness of the charges in light of our holding.1
¶ 2 Mr. Taylor and Richard Smith are alleged to have operated a Ponzi scheme in which multiple investors lost large sums.2 They initiated the alleged scheme by founding an investment firm known as Ascendus Capital Management. Once clients deposited money with Ascendus, Mr. Taylor and Mr. Smith created false account statements reflecting investment gains to lure further funds from their clients. Later, Mr. Taylor and Mr. Smith founded the Franklin Forbes Composite Fund. They asked existing clients to transfer funds to Franklin Forbes, assuring them that the investment was safe. Mr. Taylor and Mr. Smith falsely represented that Franklin Forbes would be investing in Lyxor, a French asset-management company, and that the investment would be guaranteed by Société Générale, a well-known and prestigious French bank. Instead, Mr. Taylor and Mr. Smith placed the funds in a larger Ponzi scheme in California, used some of the funds to pay other investors, and raided the remaining funds to pay personal expenses. Mr. Taylor and Mr. Smith again created false account statements showing investment gains to lull investors. Eventually, however, the Ponzi scheme collapsed and the “guaranteed” investments were lost.
¶ 3 On August 13, 2010, the State filed an information charging Mr. Taylor with two counts of securities fraud and one count of abuse, neglect, or exploitation of the elderly. One year later, on August 30, 2011, the State amended the information. Less than one month later, when the State failed to appear at a scheduling conference, the district court dismissed the case without prejudice. The State refiled a substantially similar information the same day, September 22, 2011, charging Mr. Taylor with five counts of securities fraud, four counts of theft, and one count of engaging in a pattern of unlawful activity, all second-degree felonies. It is this last information that is at issue here.
¶ 4 Mr. Taylor filed a motion to dismiss, claiming that four of the five securities fraud charges and the four theft charges were time barred. The district court denied the motion as to the four securities fraud charges and three of the theft charges after ruling that securities fraud and theft are both continuing offenses for which the limitations period did not begin to run until Mr. Taylor sent the last false account statement to investors.
¶ 5 The four securities fraud charges at issue in this case are based upon four separate investments in Franklin Forbes. Counts 1 and 2 are based on two investments by A.D. She began investing through Ascendus as early as June 2003 and, over the years, invested about $600,000. On the basis of false information from Mr. Taylor, A.D. transferred her Ascendus investment to Franklin Forbes in February 2006. And in July 2006, she invested an additional $401,000. Mr. Taylor then sent A.D. false account statements showing investment gains through December 2007.
¶ 6 Counts 6 and 7 arise from similar transfers by other investors. The factual predicate for count 6 is an $800,000 investment by W.M. and K.M. that they moved from their Ascendus account to Franklin Forbes in February 2006. W.M. and K.M. received false account statements through May 2008. The factual predicate for count 7 is an investment by A.W., who transferred almost $1.8 million from Ascendus to Franklin Forbes in February 2006. A.W. received false account statements through April 2007.
¶ 7 The three theft charges at issue are based on Mr. Taylor's unauthorized use or withdrawal of funds from Franklin Forbes. Count 5 arises from Mr. Taylor's unauthorized use of funds from E.K. In March 2007, E.K. invested approximately $330,000 in Franklin Forbes with express direction that it be used for investment. But Mr. Taylor withdrew the funds soon thereafter and used them for another purpose. Mr. Taylor then sent E.K. false account statements showing investment gains through April 2008.
¶ 8 Counts 9 and 10 arise from Mr. Taylor's misuse and withdrawal of funds belonging to unknown investors. Count 9 arises from misuse of over $1.5 million removed from Franklin Forbes as late as January 2008. And Count 10 is based on a final withdrawal of funds from Franklin Forbes by Mr. Taylor as late as August 2008.
¶ 9 Following the district court's denial of his motion to dismiss, Mr. Taylor filed a petition for interlocutory review, which the court of appeals granted. It then certified the interlocutory appeal to this court. We have jurisdiction pursuant to Utah Code section 78A–3–102(3)(b).
¶ 10 The issue of whether securities fraud and theft are continuing offenses is one of statutory construction. We give no deference to the district court's ruling on such an issue and instead review it for correctness.3
¶ 11 The district court concluded that securities fraud, in violation of Utah Code section 61–1–1, and theft, in violation of Utah Code section 76–6–404, are continuing offenses. On the basis of that conclusion, the district court determined that none of the securities fraud counts and only one of the four theft counts were time barred. Mr. Taylor contends that neither securities fraud nor theft is a continuing offense and, therefore, that the charges are not timely. We agree with Mr. Taylor that securities fraud and theft are not continuing offenses and therefore remand the case to the district court to re-evaluate the timeliness of the charges.
¶ 12 We are asked to determine whether the criminal charges in this case are time barred. In general, “a prosecution for” a felony, misdemeanor, or infraction “shall be commenced within” four, two, or one year, respectively, “after it is committed.”4 If the State does not commence prosecution within this period, any criminal liability will expire. The limitations period begins to run when a crime is “committed.”5 A crime is committed when every “element of the offense” is met.6 But the Legislature has structured the elements of some offenses in such a way that a perpetrator continues to commit the offense so long as he continues to satisfy the elements. These offenses are considered continuing offenses. In the case of a continuing offense, while criminal liability attaches when every element is satisfied, the statute of limitations does not begin to run until the perpetrator ceases to satisfy the elements of the crime.7 At that point, the whole arc of criminal conduct is aggregated into a single criminal violation.
¶ 13 In determining whether a crime is a continuing offense, the United States Supreme Court looks to the intent of Congress. In Toussie v. United States, it recognized the inherent tension between the policies underpinning statutes of limitations—preventing prosecution of stale claims and motivating prompt investigation of crimes—and the imposition of criminal liability for proscribed acts.8 With that tension in mind, the Court reasoned that criminal statutes should not be interpreted to create a continuing offense “unless the explicit language of the substantive criminal statute compels such a conclusion, or the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one.”9 Other states considering this question have looked to Toussie, either adopting its language or citing its reasoning.10
¶ 14 The Toussie analysis is generally consistent with our longstanding approach to statutory construction. Our objective in construing statutes is to effectuate the intent of the Legislature as expressed in the statutory text.11 Thus, to determine whether a criminal statute creates a continuing offense, we look to the plain meaning of the enacted text, considering that text in the context of the whole statute.12 And we harmonize the statute with related provisions of the code, including any applicable statutes of limitations.13
¶ 15 In sum, we respect the legislative policy choice reflected in a clear statute of limitations and will effectuate that protection except in those instances where we find clear, contrary legislative intent in the terms of the substantive criminal statute at issue. In this case, we are asked to determine whether securities fraud and theft are continuing offenses. We turn first to securities fraud and then to theft.
¶ 16 The district court concluded that securities fraud, in violation of Utah Code section 61–1–1, is a continuing offense. On the basis of that conclusion, it determined that the securities fraud charges against Mr. Taylor were not time barred because Mr. Taylor...
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