Drakulich v. State

Decision Date12 December 2007
Docket NumberNo. 49A05-0612-CR-690.,49A05-0612-CR-690.
Citation877 N.E.2d 525
PartiesRichard DRAKULICH, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.
CourtIndiana Appellate Court

Elizabeth A. Gabig, Marion County Public Defender Agency, Indianapolis, IN, Attorney for Appellant.

Steve Carter, Attorney General of Indiana, Nicole M. Schuster, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.

OPINION

ROBB, Judge.

Case Summary and Issues

Following a jury trial, Richard Drakulich appeals his convictions of five counts of conspiracy to commit sale of unregistered securities, all Class C felonies, and six counts of conspiracy to commit securities fraud, all Class C felonies. He argues first that the convictions are not supported by sufficient evidence, and second that the multiple conspiracy convictions violate Indiana's "one conspiracy, one conviction" rule. Drakulich also appeals his aggregate sentence of nine years, with five years suspended, arguing first that it is improper as the trial court's finding of aggravating circumstances violated Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004), and second that the sentence is inappropriate given the nature of the offenses and his character. Concluding that sufficient evidence exists to support his convictions and that the multiple convictions do not violate the "one conspiracy, one conviction" rule, we affirm Drakulich's convictions. Concluding that any error in the finding of aggravating circumstances was harmless and that his sentence is not inappropriate, we also affirm his sentence.

Facts and Procedural History

Sometime around 1994, David Proctor and Casimir Szpunar formed an estate planning company, Golden Age Financial ("GAF"), which assisted clients by selling insurance and annuities, setting up revocable lifetime trusts, and otherwise structuring their estates. At some point during the period of 1994 to 1996, Proctor and Szpunar associated themselves with Great Midwest Technology ("GMT"), which had been formed by Larry Hunt to raise capital and develop his patented process of improving the energy output of poor-quality coal. Proctor and Szpunar agreed to sell GMT promissory notes to their estate planning clients during the spring of 1996, and continued to do so through the end of the year. They ceased selling these notes when Robert Webster, GMT's chairman of the board, expressed his concern regarding the practice's legality.

Proctor and Szpunar also associated themselves with John Grounds in the summer of 1996. Grounds had the idea of forming a business called Realfinder, which would allow prospective buyers and sellers of real estate to advertise and search for properties via the internet, thereby avoiding real estate agents and their fees.

In August, 1996, Proctor and Szpunar arranged a meeting in Effingham, Illinois, with Drakulich to discuss insurance matters related to GAF. However, during this meeting, Proctor and Szpunar's involvement with GMT came up, and Drakulich mentioned the possibility that he could secure funding for GMT from Morgan Weinstein & Co. ("Morgan"), a lending company based in California. Proctor and Szupnar shared the results of this meeting with Grounds, who also became interested in securing funding through Drakulich. In September 1996, Proctor, Szupnar, Grounds, and a company called Teton, joined together and incorporated as Realfinder. Realfinder also eventually enlisted Drakulich's services in hopes of securing funding through Morgan. Drakulich contacted Morgan, which eventually mailed Drakulich a letter with a preliminary funding agreement under which Realfinder would receive $100,000,000. No money ever arrived from Morgan, which turned out to be a shell company and part of a lending scam.

Near the end of 1996, Drakulich, Proctor, Szupunar, and Grounds formed Uterground for the principal purpose of purchasing GMT from Hunt, who the others feared could hinder GMT's chances for funding because of his felony conviction for tax evasion. Drakulich admits he was heavily involved with Uterground. Although Drakulich characterizes his involvement with Realfinder as "minimal," Appellant's Brief at 8 (citing Proctor's testimony that during the period of May through September of 2007, Drakulich was "doing minimal work related to Realfinder"), the two companies shared office space and Szpunar testified that Drakulich was a part owner of Realfinder. Also, Realfinder paid for a house used by Grounds and by Drakulich when he spent time in Indianapolis, for Drakulich, Proctor, and two others to go to China to promote GMT, and for promotional rings for Drakulich, Proctor, Szpunar, and Grounds. Proctor was not authorized to write checks on Realfinder's account for over five-thousand dollars without Drakulich's approval. According to Proctor's testimony, GMT and Realfinder "were operating as one." Tr. at 115.

When Drakulich determined that GMT or Uterground needed funding for operations, he would make a request to Proctor, who would in turn sell promissory notes for Realfinder. Szpunar drafted these notes, and Grounds signed them. Proctor continued to sell these notes through the summer of 1997. Proctor told investors that the notes were secured by property owned by Grounds's family. When selling these notes, Proctor failed to disclose his interest in Realfinder. Realfinder was not registered to sell securities, and these notes were not in fact secured by any real estate.

On July 15, 1999, the State charged Drakulich with twenty-one felonies: ten counts of conspiracy to commit sale of an unregistered security, ten counts of conspiracy to commit securities fraud, and one count of corrupt business influence. These charges were based on the allegations that Drakulich had agreed with Proctor to sell Realfinder promissory notes and transfer assets from Realfinder to GMT. The State subsequently filed two motions to amend, resulting in Drakulich being charged with eight counts of conspiracy to commit sale of an unregistered security and eight counts of conspiracy to commit securities fraud. At some point prior to Drakulich's trial, he pled guilty in the United States District Court for the Southern District of Illinois to three counts of mail fraud,1 four counts of wire fraud,2 four counts of transportation of money taken by fraud,3 and one count of securities fraud.4 As a result of pleading guilty, Drakulich was sentenced to a total term of 151 months. He remained incarcerated up to his jury trial in this case, held on October 16 through October 18, 2006. Before the case was submitted to the jury, the trial court granted Drakulich's motion to dismiss three of the conspiracy counts. The jury found Drakulich guilty of five counts of conspiracy to commit sale of an unregistered security, six counts of conspiracy to commit securities fraud, and not guilty of the remaining two counts of conspiracy to commit sale of an unregistered security. On November 2, 2006, the trial court conducted a sentencing hearing. At the hearing, the trial court made the following comments:

There are a number of competing concerns going through my system right now; one is the proportionality argument because it really kind of makes a lot of sense.[5] The other is the number of victims, the age of the victims, the record however I don't think shows that Mr. Drakulich knew the age of the victims that Proctor and Szpunar were taking advantage of. We can say that he probably knew or should've known, but there's nothing in the record that takes us there. As I look at his age and their age, look at the complexity of this entire scheme, look at what happened to the others, my greatest desire is to make sure that he can't create any more victims. . . . At the time he was doing this offense, committing these acts, he was likely also committing the Federal acts, but at that time he had no prior criminal history; that's a big mitigating factor. On the Conspiracy to Commit Securities fraud Counts . . . the sentence will be the presumptive. . . . And again the number of counts and the complexity of the scheme, the number of the overt acts, the number of victims and the complexity of the scheme are aggravating factors, balance out. . . . On the sale of Unregistered Securities Conspiracy. . . I'm going to find that the aggravating factors outweigh the mitigating factors.

* * *

The balancing here was the difficult part, and again my knowledge of this entire enterprise is confined to hearing the guilty plea of Szpunar and Proctor, being aware of the plea agreement they reached, hearing what the contributions of Hunt and Grounds was [sic], recognizing that they never got charged at all and recognizing that Mr. Drakulich was a latecomer to the entire enterprise. Not an innocent, don't get me wrong, but a latecomer. If the other four weren't failing at their own scheme they would've never brought Mr. Drakulich onboard.

Tr. at 848-50. The trial court then sentenced Drakulich to four years for each count of conspiracy to commit securities fraud, all to run concurrently, and five years for each count of conspiracy to sell unregistered securities, all to run concurrently to each other, but consecutively to the sentences for conspiracy to commit securities fraud. The trial court also ordered the five-year sentence suspended to probation, for an aggregate sentence of nine years with five years suspended. Finally, the trial court ordered that the aggregate sentence run consecutively to Drakulich's federal sentence. Drakulich now appeals.

Discussion and Decision
I. Sufficiency of the Evidence

Our supreme court has recently summarized our standard of review when assessing claims of insufficient evidence.

When reviewing the sufficiency of the evidence to support a conviction, appellate courts must consider only the probative evidence and reasonable inferences supporting the verdict. It is the fact-finder's role, not that of appellate courts, to assess...

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