State v. Jones

• Decision Date: 06 April 1990
• Docket Number: No. 88-908,88-908
• Citation: 453 N.W.2d 447,235 Neb. 1
• Parties: STATE of Nebraska, Appellee, v. Lonnie C. JONES, Appellant.
• Court: Nebraska Supreme Court

Page 447

453 N.W.2d 447

235 Neb. 1

STATE of Nebraska, Appellee, v. Lonnie C. JONES, Appellant.

No. 88-908.

Supreme Court of Nebraska.

April 6, 1990.

Syllabus by the Court

1. Verdicts: Evidence: Appeal and Error. On appeal, the Nebraska Supreme Court will reverse a verdict of guilty when the evidence is so lacking in probative force that the court can say as a matter of law that the evidence is insufficient to support a finding of guilt beyond a reasonable doubt.

2. Convictions: Appeal and Error. In reviewing a criminal conviction, it is not the province of the Supreme Court to resolve conflicts in the evidence, pass on the credibility of witnesses, determine the plausibility of explanations, or weigh the evidence. Such matters are for the finder of fact, whose findings must be sustained if, taking the view most favorable to the State, there is sufficient evidence to support them.

3. Appeal and Error. On a question of law, the Supreme Court has an obligation to reach a conclusion independent of that reached by the trial court.

4. Constitutional Law: Effectiveness of Counsel: Proof. To sustain a claim of ineffective assistance of counsel as a violation of the sixth amendment to the U.S. Constitution or article I, § 11, of the Nebraska Constitution, and thereby obtain reversal of a defendant's conviction, the defendant must show that (1) counsel's performance was deficient and (2) such deficient performance prejudiced the defense, that is, a demonstration of reasonable probability that but for counsel's deficient performance, the result of the proceeding would have been different.

5. Effectiveness of Counsel: Proof. To sustain a claim of ineffective assistance of counsel, the defendant has the burden to present a record that shows counsel's deficient performance in representing the defendant.

6. Effectiveness of Counsel. A court need not determine whether counsel's performance was deficient before examining the prejudice suffered by the defendant as a result of the alleged deficiencies. The object of an ineffectiveness claim is not to grade counsel's performance.

7. Securities Regulation: Convictions: Intent: Proof. Proof of specific intent, evil motive, or knowledge that the law was being violated is not required to sustain a conviction under the Securities Act of Nebraska, Neb.Rev.Stat. §§ 8-1101 to 8-1124 (Reissue 1987).

8. Trial: Effectiveness of Counsel: Witnesses. The decision to call, or not to call, a particular witness, made by counsel as a matter of trial strategy, even if that choice proves ineffective, will not, without more, sustain a finding of ineffective assistance of counsel.

9. Appeal and Error. Error assigned but not discussed will not be considered by this court on appeal.

Lonnie C. Jones, pro se.

Robert M. Spire, Atty. Gen., and LeRoy W. Sievers, and, on brief, Neal P. Nelson, Lincoln, for appellee.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

FAHRNBRUCH, Justice.

Lonnie C. Jones appeals two cases consolidated for trial wherein he was convicted by a jury of 21 violations of the Securities Act of Nebraska, Neb.Rev.Stat. §§ 8-1101 to 8-1124 (Reissue 1987). The defendant received sentences totaling 3 to 9 years' imprisonment. We affirm.

Jones was found guilty in the district court for Dawson County on three counts of offering or selling unregistered securities, in violation of § 8-1104; eight counts of aiding and abetting the sale of unregistered securities; two counts of transacting business as a broker-dealer, issuer, or agent while not registered as a broker-dealer, issuer, or agent, in violation of § 8-1103; and eight counts of offering a security by employment of a scheme to defraud or by making untrue statements or engaging in a course of business which operated as a fraud upon the purchaser, in violation of § 8-1102.

On appeal, the defendant claims that his convictions should be reversed because (1) the evidence was insufficient to support his convictions; (2) he was denied effective assistance of counsel; and (3) the trial court abused its discretion in imposing an excessive sentence.

Jones, having discharged his court-appointed counsel at the time of sentencing, appears in this court pro se. Failure of any court to appoint counsel for this appeal is not an assigned error in this proceeding.

We first consider Jones' contention that the evidence was insufficient to support his convictions.

On appeal, the Nebraska Supreme Court will reverse a verdict of guilty when the evidence is so lacking in probative force that the court can say as a matter of law that the evidence is insufficient to support a finding of guilt beyond a reasonable doubt. State v. Wyatt, 234 Neb. 349, 451 N.W.2d 84 (1990).

In reviewing a criminal conviction, it is not the province of the Supreme Court to resolve conflicts in the evidence, pass on the credibility of witnesses, determine the plausibility of explanations, or weigh the evidence. Such matters are for the finder of fact, whose findings must be sustained if, taking the view most favorable to the State, there is sufficient evidence to support them. Id.; State v. Boham, 233 Neb. 679, 447 N.W.2d 485 (1989).

Taking the view most favorable to the State, the record reflects that Jones' convictions stem from the selling of "charter memberships" in his business, Cash Explosion Promotions, by the defendant and an employee, Lowell Rose. Cash Explosion was to be financed by the sale of 100 $1,500 "charter memberships" that entitled the membership owner to receive 16 percent interest on each $1,500 investment for 2 years. Additionally, the membership owner was to share equally in 25 percent of the net profits of the business. Each membership was evidenced by a written document given to the investor.

Investors testified that they understood they were not required to do anything other than make their initial investment in order to receive the 16-percent interest and the profit sharing. Two investors stated they bought "shares" of stock in Cash Explosion. There was no indication on the memberships that any affirmative acts were required of the purchasers.

Rose testified he worked for Jones and that he made representations to the investors under defendant's direction. Jones testified that he hired Rose and authorized Rose to make the representations on the membership agreements. Defendant personally, and through Rose, represented to the investors that their funds would be safe, that the investments were low risk, and that they were secured up to 125 percent by income-producing properties, mortgages, and corporate bonds. One investor stated she did not believe she was taking a chance on losing her investment. At the time of trial, the investments had never been secured by any form of collateral. Jones admitted at trial that he had no collateral by way of property, first mortgages, or corporate bonds securing the charter memberships.

On February 13, 1986, Jones met with an attorney for the Nebraska Department of Banking and Finance regarding the Cash Explosion program. Defendant was told that his program constituted the offering of a security, that the security was required to be registered with the Department of Banking, and that he was required to be registered with the department to sell such a security. Jones was also told that any future offerings or sales should not occur until registration had been accomplished. The defendant was advised to seek legal counsel knowledgeable in securities law. Jones stated he saw an attorney and learned that registration would be costly. Defendant concluded that with internal bookkeeping changes, he could avoid registration. Jones continued to market the Cash Explosion program without registration. Although Jones represented that only 100 memberships would be sold, 121 were sold.

It is a well-established rule that on a question of law, the Supreme Court has an obligation to reach a conclusion independent of that reached by the trial court. State v. Wren, 234 Neb. 291, 450 N.W.2d 684 (1990).

In support of his claim that the evidence was insufficient to support his convictions, Jones argues only that his Cash Explosion venture activities did not amount to the selling or offering of securities because the "membership program" did not meet the definition of an "investment contract." Brief for appellant at 10. An investment contract is a security under § 8-1101(12). In interpreting the Securities Act of Nebraska, § 8-1122 encourages reference to federal law and the law of other states that have adopted the Uniform Securities Act. In S.E.C. v. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946), the U.S. Supreme Court found that an investment contract is a security if it evidences (1) an investment (2) in a common enterprise (3) with a reasonable expectation of profits (4) to be derived from the entrepreneurial or managerial efforts of others. See, also, Reves v. Ernst & Young, 494 U.S. 56, 110 S.Ct. 945, 108 L.Ed.2d 47 (1990).

In Jones' case, he offered to and did sell "non-merchant charter memberships" to purchasers for $1,500 each. The written membership agreements provided that the owner would receive interest at the rate of 16 percent per year for the first 2 years of the membership "PLUS: Equal share in 25% of net profit of Cash Explosion along with the retail charter members until the year 2000 A.D. First 100 charter members to share equally." Charter members were encouraged to purchase more than one membership. It is self-evident from the membership sale agreement that each member's $1,500 was an investment and that there was a common enterprise involving at least 100 people. In his first "Newsletter For Charter Members Of Cash Explosion Promotions" Jones said, "[W]e are dealing with a ONE HUNDRED MILLION DOLLAR a year business!!!" In his second newsletter, in which he referred to an advertising campaign, Jones declared, "All this means is that your...