State v. Schult, A-1-CA-38693

• Citation: A-1-CA-38693
• Case Date: August 24, 2021
• Court: Court of Appeals of New Mexico

STATE OF NEW MEXICO, Plaintiff-Appellee,
v.
DAIN SCHULT, Defendant-Appellant.

No. A-1-CA-38693

Court of Appeals of New Mexico

August 24, 2021

Corrections to this opinion/decision not affecting the outcome, at the Court's discretion, can occur up to the time of publication with NM Compilation Commission. The Court will ensure that the electronic version of this opinion/decision is updated accordingly in Odyssey.

APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY Douglas R. Driggers, District Judge

Hector H. Balderas, Attorney General Van Snow, Assistant Attorney General Santa Fe, NM for Appellee

Patrick J. Martinez & Associates Patrick J. Martinez Albuquerque, NM for Appellant

MEMORANDUM OPINION

KRISTINA BOGARDUS, Judge

{¶1}Defendant Dain Schult appeals his convictions of fraud, contrary to NMSA 1978, Section 30-16-6(F) (2006); conspiracy to commit fraud (over $20, 000), contrary to Section 30-16-6(F) and NMSA 1978, Section 30-28-2 (1979); securities fraud, contrary to NMSA 1978, Section 58-13C-501 (2009); and offer or sale of an unregistered security, contrary to NMSA 1978, Section 58-13C-301 (2009). Defendant raises four arguments on appeal. He argues that (1) the district court lacked subject matter jurisdiction, (2) the district court plainly erred by admitting the testimony of other investors, (3) the district court erred in failing to properly instruct the jury and, (4) the security Defendant sold was exempt from New Mexico's reporting requirements. Unpersuaded by these arguments, we affirm.

BACKGROUND

{¶2}In May 2011, Las Cruces, New Mexico residents Laura and Curt Miller (collectively, the Millers) were approached by a friend and fellow Las Cruces resident Joel Hixon about an investment opportunity with Defendant's company American Radio Empire, Inc. (American Radio). Hixon told the Millers that American Radio purchased radio stations and put the stations' programming on the internet. Hixon told the Millers that Defendant wanted to trade securities in American Radio on a public stock exchange and asked the Millers to invest $25, 000. Hixon spoke with the Millers several times in person and over the phone, and the Millers met with Defendant at Hixon's house in Las Cruces. Following additional phone calls between Defendant and the Millers, the Millers met with Defendant at a restaurant in Texas, and ultimately decided to accept Defendant's offer. Mrs. Miller wired $25, 000 from her account at Pioneer Bank in Las Cruces to American Radio in Texas. Defendant sent her a promissory note, binding American Radio to repay the $25, 000. The note provided that if American Radio failed to repay the amount owed, the Millers would receive shares of the company's restricted common stock. American Radio ultimately failed to pay the Millers the amount owed under the promissory note or issue them stock. The Millers subsequently learned that Defendant and Hixon had made false representations and omitted material information. Defendant was arrested and charged with fraud, conspiracy to commit fraud, securities fraud, and offer or sale of an unregistered security. The jury convicted Defendant on all counts.

DISCUSSION

I. The District Court Had Jurisdiction

{¶3} Defendant asserts the district court lacked jurisdiction. Defendant claims that the Millers' decision to invest was made in Texas, and points out that the wire transfer, while originating in New Mexico, was ultimately concluded in Texas. Defendant relies on State v. Faggard, 1918-NMSC-133, ¶ 4, 25 N.M. 76, 177 P. 748, for the proposition that fraud occurs "where the offense was consummated by the obtaining of the property[.]" We review jurisdictional issues de novo. State v. Heinsen, 2005-NMSC-035, ¶ 6, 138 N.M. 441, 121 P.3d 1040.

{¶4} Defendant claims that the rule of law announced in Faggard-that jurisdiction lies with the state in which the offense was completed-has not been changed or modified in more than one hundred years since the decision. Defendant misrepresents the evolution of the law on this issue. Under the common law doctrine of territorial jurisdiction, state courts could only prosecute "those crimes which occurred entirely within that state's boundaries[.]" State v. Allen, 2014-NMCA-111, ¶ 15, 336 P.3d 1007 (internal quotation marks and citation omitted). It remains the law "that a criminal charge must have been committed within the territorial reach of the court for it to have authority (i.e., jurisdiction) to try the case." Id. ¶ 10. However, in Strassheim v. Daily, 221 U.S. 280, 285 (1911), the Supreme Court of the United States departed from the common law doctrine of territorial jurisdiction by holding that state courts may exercise jurisdiction over "[a]cts done outside a jurisdiction, but intended to produce and producing detrimental effects within it[.]" New Mexico has recognized the Strassheim Court's expanded view of territorial jurisdiction. See Allen, 2014-NMCA-111, ¶ 16 ("[I]f a crime has a detrimental effect in a state, that state has territorial jurisdiction to prosecute the perpetrator notwithstanding that the acts were committed entirely within another state."). In addition, the Legislature has specifically declared that New Mexico courts may try a defendant for selling an unregistered security and committing securities fraud if the offer to sell "is made in New Mexico or the offer to purchase or the purchase is made and accepted in New Mexico." NMSA 1978, § 58-13C-610(A) (2009). Under the current statutory scheme "an offer to sell or to purchase a security is made in New Mexico, whether or not either party is then present in New Mexico, if the offer: (1) originates from within New Mexico; or (2) is directed by the offeror to a place in New Mexico and received at the place to which it is directed." Section 58-13C-610(C).

{¶5} "[J]urisdiction is satisfied if the trier of fact can infer from the evidence that the crime occurred in the state." State v. Mirabal, 1989-NMCA-057, ¶ 12, 108 N.M. 749, 779 P.2d 126. In this case, a jury could infer from the facts that Defendant produced a detrimental effect in New Mexico. Defendant was charged with fraud, which "consists of the intentional misappropriation or taking of anything of value that belongs to another by means of fraudulent conduct, practices or representations." Section 30-16-6(A). In this case, the alleged fraudulent acts occurred in New Mexico; Hixon and Defendant solicited the Millers in New Mexico by phone and in person at Hixon's house and made false representations and deceptive omissions.^[1] The fraudulent offer to sell the unregistered security also fell within Section 58-13C-610(C)'s provisions in that it was "directed by the offeror to a place in New Mexico"-the Miller's home in Las Cruces-and "received at the place to which it [was] directed"-Defendant's bank account in Texas." Because a jury could infer from the facts that Defendant produced a detrimental effect in New Mexico, and because Defendant directed his offer "to a place in New Mexico," Defendant's argument is without merit, and we conclude that the district court had jurisdiction over the alleged crimes. See id.

II. The District Court Did Not Abuse Its Discretion in Admitting the...