Johnson v. State, 21A-CR-1234

Citation21A-CR-1234
Case DateAugust 19, 2022
CourtCourt of Appeals of Indiana

Donald Johnson, Appellant-Defendant,
v.

State of Indiana, Appellee-Plaintiff

No. 21A-CR-1234

Court of Appeals of Indiana

August 19, 2022


Appeal from the Porter Superior Court The Honorable Jeffrey Clymer, Judge Trial Court Cause No. 64D01-1403-FC-002217

Attorneys for Appellant Robert W. Hammerle Hackman Hulett LLP Indianapolis, Indiana Julie Treida Treida Law, PC Indianapolis, Indiana

Attorneys for Appellee Theodore E. Rokita Attorney General of Indiana Kelly A. Loy Assistant Section Chief, Criminal Appeals Indianapolis, Indiana

MAY, JUDGE

[¶1] In this interlocutory appeal, Donald Johnson appeals the denial of his motion to dismiss the seventeen Class C felony securities-related charges filed against him. He presents multiple issues for our review, which we revise and restate as:

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1. Whether the trial court abused its discretion when it denied Johnson's motion to dismiss because
1.1. some of the charges were filed outside the statute of limitations period for those crimes
1.2. the charging information failed to state the crimes with sufficient certainty; and
1.3. pursuant to the relevant statutes, the financial instruments at issue were not securities, Johnson was not a broker-dealer, and the transactions were exempt as limited offerings;
and
2. Whether the trial court abused its discretion when it allowed the State to amend the charging information.

We affirm in part, reverse in part, and remand.

Facts and Procedural History[1]

[¶2] On January 21 and 30, 2012, Jeffrey Knutilla filed a complaint with the Office of the Secretary of State and the Chesterton Police Department, respectively, regarding certain financial transactions involving Johnson. Officer Charles

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Williams of the Prosecution Assistance Unit of the Indiana Secretary of State's Office, Securities Division, investigated Knutilla's complaint and discovered other possible victims, with whom he spoke on September 19, 2012. On March 14, 2014, Williams alleged in his affidavit of probable cause for the issuance of an arrest warrant, which was filed simultaneous with the charging information:

Johnson solicited monies from individuals by guaranteeing a certain high-interest return on their money; usually in real-estate development. Investors in this case typically rolled-over IRA accounts to Equity Trust Company, an independent IRA custodian, and then money would go to Johnson's company Private Lending, LLC. Investors received promissory notes showing the guaranteed interest rate return and were [sic] signed by Johnson. Many investors were unaware that their money was missing because Equity Trust would continue to send statements showing the money was in their accounts and bill them for custodial fees. In some cases, investors received interest payments as promised from Johnson for a period of time. When interest payments stopped and investors requested their investments back, Johnson told them that it was unavailable.

(App. Vol. II at 3.) Williams' affidavit also included specific allegations from six alleged victims and noted, "no security registration, or request for exemption, exists for Don Johnson, . . . or Private Lending, LLC, individually, nor is there any evidence that any was even filed." (Id. at 8.)

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[¶3] Based thereon, the State charged[2] Johnson with:

• COUNT I: Class C felony offer or sale of unregistered security;[3]alleged victim Jeffrey Knutilla on or about September 2009
• COUNT II: Class C felony transacting business by an unregistered broker-dealer;[4] alleged victim Jeffrey Knutilla on or about September 2009
• COUNT III: Class C felony offer or sale of unregistered security;[5]alleged victim Randall Hunt on or about July 2007
• COUNT IV: Class C felony transacting business by an unregistered broker-dealer;[6] alleged victim Randall Hunt on or about July 2007
• COUNT V: Class C felony offer or sale of unregistered security; alleged victim Joey Wrigley on or about December 2007
• COUNT VI: Class C felony transacting business by an unregistered broker-dealer; alleged victim Joey Wrigley on or about December 2007

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• COUNT VII: Class C felony offer or sale of unregistered security; alleged victim Thomas Diehl on or about September 2007
• COUNT VIII: Class C felony transacting business by an unregistered broker-dealer; alleged victim Thomas Diel on or about September 2007
• COUNT IX: Class C felony offer or sale of unregistered security; alleged victim Gloria Thornton on or about September 2010
• COUNT X: Class C felony transacting business by an unregistered broker-dealer; alleged victim Gloria Thornton on or about September 2010
• COUNT XI: Class C felony offer or sale of unregistered security; alleged victim Colleen Watson on or about March 2008
• COUNT XII: Class C felony transacting business by an unregistered broker-dealer; alleged victim Colleen Watson on or about March 2008
• COUNT XIII: Class C felony securities fraud[7]
• COUNT XIV: Class C felony securities fraud

On April 10, 2015, the State filed another probable cause affidavit and charged Johnson with:

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• COUNT XV: Class C felony offer or sale of unregistered security; alleged victim Michael Jeffress between September 12, 2013, and January 6, 2014
• COUNT XVI: Class C felony transacting business by an unregistered broker-dealer; alleged victim Michael Jeffress between September 12, 2013, and January 6, 2014
• COUNT XVII: Class C felony securities fraud

On May 12, 2016, the State amended Count V, Count VI, and Count XI to allege Johnson concealed his actions such that the alleged victims "would not know the investment was not valid." (Id. at 23-4.) Further, the amended charges alleged the State could not have discovered the alleged crimes until they were reported by the alleged victims on September 19, 2012, and March 22, 2013.

[¶4] On June 22, 2016, Johnson filed a motion to dismiss Counts III, IV, V, VI, VII, VIII, XI, XII, and XIII, arguing they were "barred by the relevant statute of limitations." (Id. at 27.) On August 24, 2016, the trial court denied Johnson's motion to dismiss by summary order. On September 28, 2016, Johnson filed a motion to certify the trial court's order for interlocutory appeal. The trial court granted Johnson's request on October 3, 2016. On December 2, 2016, the Indiana Court of Appeals denied Johnson's motion for interlocutory appeal.

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[¶5] On July 16, 2018, Johnson filed a renewed motion to dismiss, arguing new case law, Dvorak v. State,[8] 78 N.E.3d 25 (Ind.Ct.App. 2017), trans. denied, was "on all fours with the current case." (App. Vol. II at 47.) Johnson renewed his argument that Counts III, IV, V, VI, VII, VIII, XI, XII, XIII, and XIV "must be dismissed because they violate the statute of limitations[.]" (Id. at 50) (original formatting omitted). He additionally asserted all of the counts should be dismissed "because they fail to state the offenses with sufficient certainty[,]" "because the financial instruments are not securities[,]" and "because the State did not allege that Mr. Johnson knowingly violated securities law[.]" (Id. at 52-54) (original formatting omitted). He also alleged Counts II, IV, VI, VIII, X, XII, and XVI should be dismissed "because Mr. Johnson was not required to register as a broker-dealer[.]" (Id. at 58) (original formatting omitted). Finally, Johnson contended "all counts should be dismissed "because the financial instruments are exempt from securities registration by statute[.]" (Id. at 59) (original formatting omitted).

[¶6] On April 1, 2021, after a series of continuances by both parties and the court, substitution of counsel, retirement of the original judge, and appointment of a special judge, the State responded to all of Johnson's arguments. The State additionally requested leave to amend the charges against Johnson "to the extent any charging documents or specific counts are deemed insufficient[.]"

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(Id. at 77.) The State argued it should be granted its request to do so because "such amendments do not meaningfully prejudice the Defendant and the Defendant is already on reasonable and sufficient notice of any claims in his Motion to Dismiss that warrant an amended information or probable cause affidavit." (Id. at 78.)

[¶7] In his response to the State's request for leave to amend the charges against him, Johnson asserted the State's call to amend "is an open acknowledgement that these fossilized charges must be dismissed" and that it is time for the State to "put up or shut up." (Id. at 79-80.) He also argued the amendments would be of substance and not form, and thus would prejudice him "given the length of the case and that the amendments are coming almost three years after this motion to dismiss was filed and approximately 7 years after the omnibus date." (Id. at 81.) Johnson claimed "[a]ny amendments would require Mr. Johnson to file and litigate a third motion to dismiss" and give the State "a fourth bite of the proverbial apple." (Id.)

[¶8] The trial court held a hearing on Johnson's motion to dismiss on April 19, 2021. On April 21, 2021, the trial court issued its order denying Johnson's motion to dismiss and granting the State's leave to amend the charges against Johnson, stating:

The State is granted leave to amend to incorporate the statutory mens rea requirement. Although some of the alleged crimes occurred in 2007, in addition to those alleged in 2009, the Defendant is not prejudiced by the delay for two reasons: this

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Court has not yet set a trial date, and, [sic] he is responsible for some of the delay himself.

(Id. at 99) (footnote omitted). On May 20, 2021, Johnson filed a petition to certify the trial court's order for interlocutory appeal and to stay the proceedings pending the outcome. The trial...

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