People v. Luciano, s. 81SA232
| Decision Date | 02 May 1983 |
| Docket Number | Nos. 81SA232,81SA382,s. 81SA232 |
| Citation | 662 P.2d 480 |
| Parties | The PEOPLE of the State of Colorado, Plaintiff-Appellant, v. John Fiore LUCIANO, Defendant-Appellee. (Two cases) |
| Court | Colorado Supreme Court |
J.D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Mary J. Mullarkey, Sol. Gen., Alan R. Beckman, Nathan B. Coats, Asst. Attys. Gen., Litigation Section, Denver, for plaintiff-appellant.
Gerash & Robinson, P.C., Scott H. Robinson, Walter L. Gerash, Denver, for defendant-appellee.
These appeals have been filed by the People to obtain appellate review 1 of the judgments of the District Courts for Larimer and Weld Counties dismissing grand jury indictments charging the defendant with fraud in violation of section 39-21-118, C.R.S.1973 (1982 Repl.Vol. 16B), 2 and conspiracy to commit fraud in violation of section 18-2-201, C.R.S.1973 (1978 Repl.Vol. 8). 3 We affirm the decisions of the trial courts.
Each case is before us in a different procedural posture. Therefore, the fact pattern and procedural history of each case will be discussed separately.
The People have appealed the judgment of not guilty entered by the Weld County District Court. The record establishes the following pertinent facts: In the late summer of 1978, Clayton Wayne Miller, Jr. (Miller) and Gary Wayne Brown (Brown) formed a corporation known as Wayne's Investment Corporation which purchased the Library Bar located in Greeley, Colorado. Miller and Brown each owned 50 percent of the corporate stock. Miller and Brown changed the name of the bar to the Country Palace. The bar was operated as a country-western establishment. Immediately after the Country Palace opened for business, it was beset by severe financial difficulties. Within three weeks after Miller and Brown began their ill-fated venture they were "about $10,000 in the hole."
Miller and Brown then contacted the manager of PT's, a nude bar in Denver, to determine if anyone would be interested in purchasing their interest in the Country Palace. The defendant, John Fiore Luciano (Luciano), and William Michael Terranova (Terranova), who is named as a co-defendant in the indictments, contacted Miller and Brown. An agreement was reached among the four parties. Miller refused to accept the arrangement until it was reduced to a written contract by his attorney. Pursuant to the contract, Luciano and Terranova agreed to purchase the liquor inventory and pay all outstanding bills in return for their receiving 75 percent of the corporate stock. Miller and Brown each retained 12 1/2 percent of the stock in the corporation. Luciano and Terranova instructed Miller and Brown not to inform the Department of Revenue of the change in ownership because they were not permitted to have an ownership interest in more than one liquor license. Luciano also told Miller and Brown that the copies of the contract should be destroyed after "they got to know each other."
Under the management of Luciano and Terranova, the name of the bar was changed from the Country Palace to Dirty Dan's. The operation was converted from country-western to topless-bottomless entertainment. The new image of the bar resulted in increased revenue, but also attracted the attention of law enforcement authorities in Weld County who appeared at Dirty Dan's on a regular basis to investigate alleged criminal conduct. Apparently, a search warrant was obtained for the residence of Terranova. The search resulted in the seizure of a copy of the contract showing the interests of Luciano and Terranova in the bar. The grand jury indictments followed.
The Weld County case was tried to the court. Luciano was found not guilty on two grounds. First, the court made a factual determination that the defendant had not violated the statute because asking someone not to disclose a change in ownership of a liquor license "is not a trick, scheme, or device." Second, the court determined that the statute under which the defendant was charged did not apply to the facts of the case. Specifically, the court found that section 39-21-118 is limited by section 39-21-102 to the taxes and charges enumerated in the latter provision and does not apply to violations of the liquor code.
The trial court in Larimer County dismissed the indictment following a hearing on the defendant's motion to dismiss in which he urged dismissal based on the ruling of the Weld County District Court on the question of law. The indictment alleges a scheme similar to that involved in the Weld County case. According to the indictment, Luciano and Terranova directed Donald Underhill (Underhill) to lease Clancy's Show Club Bar from Kenneth Hilt. Pursuant to his agreement with Luciano and Terranova, Underhill obtained the liquor license in his name and represented himself as the only person who had a financial interest in Clancy's. In fact, however, Luciano, Terranova, and John Cerrone each owned a one-third interest in the bar.
The issue common to both cases and which is dispositive of the People's appeals is whether the prohibition against fraud found in section 39-21-118, C.R.S.1973 (1982 Repl.Vol. 16B), applies to violations of the liquor code. We hold it does not.
Section 39-21-118 provides:
The People argue that the language "concerning any matter within the jurisdiction of the department" contained in the statute is sufficiently broad to permit application of the fraud prohibition to the administration and liquor licensing provisions of title 12, article 47, as well as all other matters within the jurisdiction of the Department of Revenue. However, the scope of the statute is limited and circumscribed by section 39-21-102, C.R.S.1973 (1982 Repl.Vol. 16B), which states:
Two fundamental rules of statutory construction dictate the result reached in this case. First, under the rule of lenity, criminal statutes are to be strictly construed in favor of the accused. See, e.g., People v. Lowe, 660 P.2d 1261 (Colo.1983) (1983, opinion modified April 4, 1983); People v. Cornelison, 192 Colo. 337, 559 P.2d 1102 (1977); Cokley v. People, 168 Colo. 280,...
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