State v. Lacount

• Decision Date: 20 March 2007
• Docket Number: No. 2006AP672-CR.,2006AP672-CR.
• Citation: 732 N.W.2d 29,2007 WI App 116
• Parties: STATE of Wisconsin, Plaintiff-Respondent, v. Louis H. LaCOUNT, Defendant-Appellant.<SMALL><SUP>†</SUP></SMALL>
• Court: Wisconsin Court of Appeals

732 N.W.2d 29

2007 WI App 116

STATE of Wisconsin, Plaintiff-Respondent, v. Louis H. LaCOUNT, Defendant-Appellant.^†

No. 2006AP672-CR.

Court of Appeals of Wisconsin.

Submitted on Briefs February 5, 2007.

Opinion Filed March 20, 2007.

On behalf of the defendant-appellant, the cause was submitted on the briefs of T. Christopher Kelly of Kelly & Habermehl, S.C. of Madison.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of James M. Freimuth, Assistant Attorney General, and Peggy A. Lautenschlager, Attorney General.

Before CANE, C.J., HOOVER, P.J., and PETERSON, J.

¶ 1 CANE, C.J

Louis LaCount appeals criminal convictions of theft by a bailee of property valued at more than $2,500 and securities fraud in the sale of a security, each relating to his employment at Gates, Paul, and Lear, L.L.C. LaCount raises four issues on appeal. First, LaCount argues the State's execution of the search warrant of GP & L's offices was unlawful because it seized business records unrelated to the warrant, which the State used as evidence of the theft by a bailee and the securities fraud charges. Second, LaCount argues the court erred in allowing expert testimony regarding the nature of investment contracts. Third, LaCount argues the evidence was insufficient for a jury to find him guilty of securities fraud because there was no investment contract. Finally, LaCount argues the court's finding him a habitual criminal violated his right to a jury trial. We disagree with LaCount's arguments and, accordingly, affirm the judgments.

BACKGROUND

¶ 2 LaCount was charged in a ten-count complaint. The counts revolved around three separate transactions relating to his conduct between June 1998 and October 1999, while he worked as a debt negotiator and office manager at GP & L. The first transaction involved the liquidation of assets held by SMC Corporation. The second transaction involved John Wills' alleged investment in a real estate venture. The third transaction involved the misappropriation of money belonging to Mirr Tree Service. After a preliminary hearing where one count was dismissed, the State filed an information charging LaCount with the remaining nine counts.

¶ 3 After the police executed a search warrant at GP & L's offices for financial records relating to specific clients named in the warrant's application, they discovered additional crimes relating to SMC, John Wills' investment, and Mirr Tree Service. LaCount moved to suppress the financial records relating to these additional charges because the seizures exceeded the scope of the warrant. After an evidentiary hearing, the court denied the motion.

¶ 4 The court had granted a motion to sever the securities fraud charges and this was the only charge tried to a jury. Prior to trial, LaCount moved for and was denied an order barring expert testimony by attorney David Cohen, the supervisory counsel for the Division of Securities at the Wisconsin Department of Financial Institutions, concerning the application of securities law to the assumed facts of LaCount's agreement with Wills. The jury found LaCount guilty of securities fraud.

¶ 5 The court sentenced LaCount to eleven years in prison, the maximum sentence after enhancement for habitual criminality. LaCount objected to being sentenced as a repeater because doing so would violate his right to a jury trial. The court rejected LaCount's argument.

¶ 6 After being sentenced on the securities fraud conviction, LaCount then negotiated a plea agreement with regard to the remaining charges. He entered pleas to four counts, while four other counts were dismissed. On the Mirr Tree theft charge, the court imposed a fifteen-year prison sentence, concurrent with the sentence previously imposed on the securities fraud conviction. On the remaining counts, LaCount was placed concurrently on probation for fifteen years, but consecutive to the prison term.

DISCUSSION

I. The Results of a Search of GP & L's Offices Did Not Exceed the Scope of the Warrant.

¶ 7 LaCount argues the evidence seized at GP & L's offices violated the Fourth Amendment prohibition on unreasonable searches and seizures. Whether searches and seizures are constitutionally permissible is a question of law we review independently. State v. Whiting, 2003 WI App 101, ¶ 8, 264 Wis.2d 722, 663 N.W.2d 299.

¶ 8 Here, LaCount does not argue that the warrant was constitutionally overbroad in its scope, nor does he argue that the warrant application lacked probable cause for such a search. Therefore, these issues are not before us. Rather, LaCount focuses on the execution of the search warrant because he asserts the police exceeded the scope of the warrant.

¶ 9 The execution of a search warrant "must be conducted reasonably and appropriately limited to the scope permitted by the warrant. Whether an item seized is within the scope of a search warrant depends on the terms of the warrant and the nature of the items seized." State v. Andrews, 201 Wis.2d 383, 390-91, 549 N.W.2d 210 (1996). To satisfy the "particularity" requirement, a warrant "must enable the searcher to reasonably ascertain and identify the things which are authorized to be seized." State v. Noll, 116 Wis.2d 443, 450-51, 343 N.W.2d 391 (1984).

¶ 10 LaCount asserts the warrant authorized the search for and seizure of records relating only to GP & L business with clients specifically named in the probable cause for the warrant and also did not allow police to search his office within GP & L's offices. "[I]n cases involving [an alleged] complex scheme to defraud, a criminal investigation may require piecing together, like a jigsaw puzzle, a number of bits of evidence which if taken alone might show comparatively little." State v. DeSmidt, 155 Wis.2d 119, 133, 454 N.W.2d 780 (1990); see also Andresen v. State of Maryland, 427 U.S. 463, 480-81 n. 10, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976). Thus, "[w]here there is probable cause to believe that there exists a pervasive scheme to defraud, all the records of a business may be seized." DeSmidt, 155 Wis.2d at 133-34, 454 N.W.2d 780.

¶ 11 When read as a whole, the search warrant authorizes the search for and seizure of more than just the records of those clients specified in the warrant's application, and includes searching LaCount's office within GP & L. The search warrant's first five paragraphs allow for the search for and seizure of paper records and computer records. In particular, the warrant allowed police to search and seize (1) any type of bank account or investment account owned by GP & L, (2) any type of bank account or investment account owned by Louis LaCount, (3) records relating to payroll, accounts payable, telephone logs or accounts receivable of GP & L, and (4) records indicating the names of past and present employees of GP & L or past and present owners or shareholders in GP & L.

¶ 12 The evidence used by the State to convict LaCount came within the warrant's scope and LaCount does not challenge the constitutionality of the warrant itself. The State introduced evidence at the preliminary hearing and at trial consistent with the terms of the warrant in order to convict LaCount. Specifically, regarding the theft from Mirr Tree, the State introduced eight exhibits at the preliminary hearing. Those exhibits included the following:

1. An agreement dated March 23, 1999, in which Mirr Tree paid GP & L to "take over the finances of Mirr Tree Service;"

2. A $6,000 check from Mirr Tree to GP & L as part of the retainer;

3. A "Settlement Authorization" and "Limited Power of Attorney" between Mirr Tree and GP & L 4. An "accounts receivable" document showing client checks that Philip Mirr delivered to GP & L;

5. A list of Mirr Tree Service creditors in 1999; and

6. A document titled "Deposits of Mirr Tree Service into GP & L Union State Bank Account" for paying Mirr Clients.

Regarding the securities fraud charge, the State's evidence at trial included:

1. A "mortgage assignment" document in the name of GP & L for property in Fond du Lac County, which LaCount said he gave to John Wills as "collateral" for Wills' investment in LaCount's purported endeavor to buy and develop the Northland Turkey property;

2. A computer printout of April 5, 1999, summarizing GP & L bank deposits made by bookkeeper Mary Verboomen at LaCount's direction, including wire transfers of $24,000 and $15,000 from John Wills to GP & L;

3. Computer printouts of GP & L "reconciliation statements" for the firm's checking account, prepared by bookkeeper Verboomen for March and April 1999; and

4. Union State Bank checking account statements for GP & L for March and April 1999, showing wired deposits of $25,000, $24,000 and $15,000 into the GP & L account from CPR.

¶ 13 LaCount also maintains the search warrant did not authorize police to search his office. As we noted previously the search warrant allowed police to search GP & L's offices, of which LaCount's office was a part. Thus, the search of his office within GP & L's offices was within the scope of the warrant.

II. The Expert Testimony Regarding the Nature of Investment Contracts Was Properly Admitted.

¶ 14 LaCount argues the court erred by admitting attorney David Cohen's expert testimony regarding what constitutes an investment contract. Whether to admit expert testimony rests within the discretion of the trial court. See State v. Blair, 164 Wis.2d 64, 74, 473 N.W.2d 566 (Ct.App.1991). We must affirm if the discretion is exercised in accordance with the relevant law and facts, and we will "search the record for reasons to sustain" that discretion. State v. Thiel, 2004 WI App 225, ¶ 26, 277 Wis.2d 698, 691 N.W.2d 388.

¶ 15 WISCONSIN STAT. § 907.02¹ governs the admissibility of expert testimony. Expert testimony is admissible if: "(1) it is relevant. . .; (2) the witness is qualified as an expert...; and (3) the evidence will assist the trier of fact in determining an issue of fact...." State v....