State v. Brandt

Citation2020 MT 79,460 P.3d 427,399 Mont. 415
Decision Date07 April 2020
Docket NumberDA 17-0398
Parties STATE of Montana, Plaintiff and Appellee, v. Richard (Rick) BRANDT, Defendant and Appellant.
CourtUnited States State Supreme Court of Montana

For Appellant: Chad Wright, Appellate Defender, Moses Okeyo, Assistant Appellate Defender, Helena, Montana

For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana, Wyatt Glade, Custer County Attorney, Miles City, Montana

Justice Beth Baker delivered the Opinion of the Court.

¶1 The State of Montana charged Richard (Rick) Brandt with six felonies stemming from a Ponzi scheme he devised that ultimately defrauded investors of $2 million. A jury found Brandt guilty of all six counts. The Sixteenth Judicial District Court sentenced him to a total period of sixty years with twenty years suspended. Brandt appeals, arguing that the "multiple charges statute," § 46-11-410(2), MCA, bars his convictions and punishment for five of the six felonies. We hold that Brandt’s convictions may stand on all but one of the six charges, reverse the remaining conviction, and remand for resentencing consistent with this Opinion.

PROCEDURAL AND FACTUAL BACKGROUND

¶2 From 2011 until 2015, Brandt ran an ostensibly legitimate house-flipping business, Home Investors LLC. Brandt, who was not licensed to sell investment opportunities in Montana, solicited investments from eighteen mostly elderly individuals, many of whom he knew from church or because he had served as their financial advisor or insurance salesman. Brandt promised his investors high rates of return—ranging from ten to twenty percent—to be paid on a monthly or annual basis as he used their investments to buy houses, renovate them, and sell them at much higher prices. He issued them "business agreements" to memorialize the terms of the investments, but no prospectus.

¶3 Brandt’s business turned out to be a Ponzi scheme—a fraudulent investment arrangement in which returns to investors are paid not from any profits of the underlying venture, but from money obtained from later investors. See Mosley v. Am. Express Fin. Advisors, Inc. , 2010 MT 78, ¶ 3 n.1, 356 Mont. 27, 230 P.3d 479. Though Brandt did purchase and resell several homes, after several years he ran out of money and stopped making payments to his investors. Some of Brandt’s investors tried contacting him when they stopped receiving payments. At first, Brandt offered excuses or promised that payments were forthcoming, but ultimately he stopped responding. Several investors reported Brandt to local law enforcement and to the Montana Commissioner of Securities and Insurance (the "CSI").

¶4 Brandt’s arrangement with Roger and Melba Losing is illustrative. Roger Losing met Brandt when Brandt sold him Medicare supplemental insurance. Roger considered Brandt a close friend. Brandt convinced the Losings, both in their late 70s at the time, to invest $50,000 in Home Investments LLC, and promised a 15% return to be paid annually. The Losings invested another $36,000 a month later. On the second investment, Brandt guaranteed a 15% return to be paid in monthly installments of $450. For a while, the Losings received monthly $450 installments, but the payments eventually stopped. Roger called, e-mailed, and wrote letters to Brandt but never heard back. In 2015, he finally contacted the local sheriff’s office to report that Brandt had defrauded him and his wife. Brandt never repaid the Losings either the principal of their first investment or the promised profit.

¶5 Another elderly woman, Oleta Geis, lost approximately $88,000 to Brandt’s investment scheme. Brandt knew Geis through church. Beginning in 2010, when Geis was approximately 95 years old, Geis’s daughter paid Brandt $150 per month to pay Geis’s bills and gave him authority to write checks from Geis’s bank account. Over the next few years, Brandt wrote multiple unauthorized checks from Geis’s account to Home Investors LLC, overdrew Geis’s account, and failed to pay her bills, including $20,000 owed to her assisted living facility. As a result, Geis’s daughter had to borrow money from friends to pay the assisted living bill and prevent the facility from beginning eviction proceedings. Brandt had depleted her life savings.

¶6 Lynn Egan, Deputy Securities Commissioner at the CSI, launched an investigation into Home Investments LLC after receiving numerous similar reports of Brandt’s activities. She determined that Brandt was not registered to sell securities; had not registered any of the "business agreements" as securities; was operating a Ponzi scheme; and was using his investors’ money for personal use, including to pay for his own mortgage, insurance bills, and multiple trips. The investigation revealed that Brandt had solicited a total of $1,939,132 from his investors and repaid only $404,740 of their cumulative principal. The investors did not make any profit as Brandt had promised. In fact, some of his investors were forced to liquidate their remaining assets, and others no longer have any savings on which to subsist.

¶7 On August 24, 2015, the State charged Brandt by Information with the following six counts: Count 1-Exploitation of an older person (common scheme); Count 2-Theft by embezzlement (common scheme); Count 3-Failure to register as a securities salesperson (common scheme); Count 4-Failure to register a security (common scheme); Count 5-Fraudulent practices (common scheme); and Count 6–Operating a pyramid promotion scheme (Ponzi scheme) (common scheme).

¶8 The case was tried before a jury in March 2017. Mid-trial, at the District Court’s direction, the State amended its proposed jury instructions on each of the six charges to include a companion element of "common scheme" to reflect the offenses as charged in the Information. The jury was so instructed.

¶9 The jury found Brandt guilty of all six counts. At a separate hearing, the District Court sentenced Brandt to consecutive terms of ten years on each count, suspending a combined total of twenty years. Brandt appeals, arguing that §§ 46-11-410(2)(a) and (d) and 46-1-202(9), MCA, preclude his convictions on five of the six counts with which he was charged because they are all "included offenses" or "specific instances" of fraudulent practices. He asserts that defense counsel rendered ineffective assistance of counsel by failing to object to the sentence on double jeopardy grounds or, alternatively, that we should review his unpreserved claims under the plain error doctrine.

STANDARDS OF REVIEW

¶10 A claim of ineffective assistance of counsel constitutes a mixed question of law and fact that we review de novo. State v. Hooper , 2016 MT 237, ¶ 5, 385 Mont. 14, 386 P.3d 548 (citing Deschon v. State , 2008 MT 380, ¶ 16, 347 Mont. 30, 197 P.3d 476 ). Where ineffective assistance of counsel claims are based on facts of record in the underlying case, they must be raised in the direct appeal. Hooper , ¶ 5 (citing State v. White , 2001 MT 149, ¶ 12, 306 Mont. 58, 30 P.3d 340 ). We may exercise our discretion to review unpreserved issues alleging violation of a fundamental right under the plain error doctrine. See, e.g., State v. Barrows , 2018 MT 204, ¶ 8, 392 Mont. 358, 424 P.3d 612 ; State v. Reim , 2014 MT 108, ¶ 38, 374 Mont. 487, 323 P.3d 880.

DISCUSSION

¶11 Although Brandt cites the Montana Constitution as one of two bases for his appeal, he provides no distinct constitutional analysis, focusing instead on the "multiple charges" statute, § 46-11-410, MCA.

We resolve the issues on appeal by applying the multiple charges statute and decline to consider constitutional double jeopardy principles. See State v. Parks , 2013 MT 280, ¶ 22, 372 Mont. 88, 310 P.3d 1088.

¶12 Brandt argues that the District Court violated the "multiple charges" statute, § 46-11-410, MCA, when it sentenced him on all six counts with which he was charged. He contends that his fraudulent practices conviction (Count 5) subsumes the remaining offenses (Counts 1, 2, 3, 4, and 6) because all six counts are part of the same transaction, and Counts 1, 2, 3, 4, and 6 are included within or are specific instances of Count 5. He thus contends that only his conviction for fraudulent practices may stand.

¶13 Section 46-11-410, MCA, provides in pertinent part:

Multiple charges. (1) When the same transaction may establish the commission of more than one offense, a person charged with the conduct may be prosecuted for each offense.
(2) A defendant may not, however, be convicted of more than one offense if: (a) one offense is included in the other; ...
(d) the offenses differ only in that one is defined to prohibit a specific instance of the conduct[.]

¶14 We first determine whether Brandt’s offenses were part of the same transaction. Parks , ¶ 24. Section 46-1-202(23), MCA, defines "same transaction" as:

[C]onduct consisting of a series of acts or omissions that are motivated by: (a) a purpose to accomplish a criminal objective and that are necessary or incidental to the accomplishment of that objective; or
(b) a common purpose or plan that results in the repeated commission of the same offense or effect upon the same person or the property of the same person.

To determine whether offenses are part of the "same transaction" under § 46-11-410, MCA, we look to the facts underlying the charged offenses, including the defendant’s motivation by a common purpose or plan. State v. Ellison , 2018 MT 252, ¶ 21, 393 Mont. 90, 428 P.3d 826 (internal quotations and citations omitted). "Whether two offenses arise from the same transaction or involve the same criminal objective does not depend on the elements of the charged offenses, but rather on the defendant’s underlying conduct and purpose in engaging in that conduct." Ellison , ¶ 21 (citing State v. Glass , 2017 MT 128, ¶ 12, 387 Mont. 471, 395 P.3d 469 ).

¶15 State v. Ellison is instructive. There, Ellison staged a crime scene to frame a...

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3 cases
  • State v. Valenzuela
    • United States
    • Montana Supreme Court
    • September 28, 2021
    ...¶8 A claim of ineffective assistance of counsel constitutes a mixed question of law and fact that this Court reviews de novo. State v. Brandt, 2020 MT 79, ¶ 10, Mont. 415, 460 P.3d 427. Where ineffective assistance of counsel claims are based on facts of record in the underlying case, they ......
  • State v. Webb
    • United States
    • Montana Supreme Court
    • April 13, 2021
    ...statute?¶12 "A claim of ineffective assistance of counsel constitutes a mixed question of law and fact that we review de novo." State v. Brandt , 2020 MT 79, ¶ 10, 399 Mont. 415, 460 P.3d 427 (citing State v. Hooper , 2016 MT 237, ¶ 5, 385 Mont. 14, 386 P.3d 548 ). We conduct review under S......
  • State v. Felde
    • United States
    • Montana Supreme Court
    • January 5, 2021
    ...the issue on appeal by applying the multiple charges statute and decline to consider constitutional double jeopardy principles. State v. Brandt , 2020 MT 79, ¶ 11, 399 Mont. 415, 460 P.3d 427.¶11 A prosecutor has discretion to charge and prosecute separate acts as separate offenses. See § 4......

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