State v. Steffes

• Decision Date: 20 June 2013
• Docket Number: No. 2011AP691.,2011AP691.
• Citation: 347 Wis.2d 683,832 N.W.2d 101,2013 WI 53
• Parties: STATE of Wisconsin, Plaintiff–Respondent, v. Matthew R. STEFFES, Defendant–Appellant–Petitioner.
• Court: Wisconsin Supreme Court

347 Wis.2d 683

832 N.W.2d 101

2013 WI 53

STATE of Wisconsin, Plaintiff–Respondent,

v.Matthew R. STEFFES, Defendant–Appellant–Petitioner.

No. 2011AP691.

Supreme Court of Wisconsin.

Argued Feb. 12, 2013.

Decided June 20, 2013.

For the defendant-appellant-petitioner, there were briefs by Jeffrey W. Jensen, Milwaukee, and oral argument by Jeffrey W. Jensen.

For the plaintiff-respondent, the cause was argued by Daniel J. O'Brien, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general, with assistance from Jason Gorn, legal extern.

MICHAEL J. GABLEMAN, J.

[347 Wis.2d 686]¶ 1 We review a published decision of the court of appeals affirming Matthew R. Steffes's conviction of two counts of conspiracy to commit theft of property by fraud. See State v. Steffes, 2012 WI App 47, 340 Wis.2d 576, 812 N.W.2d 529. While in prison, Steffes was part of a conspiracy that defrauded AT & T out of more than $28,000 of phone services through a scheme that involved furnishing the company with fraudulent information. Specifically, Steffes and his cellmate—with the help of friends and family members outside of prison—submitted fictitious business names and stolen personal identifying information to AT & T to set up phone numbers. Steffes would then make collect calls to these numbers with the knowledge they would never be paid for. The plan would work for short bursts of time; once it was clear that the phone bill was not going to be paid, AT & T would shut down the number. Steffes and the other members of the conspiracy would then move on and set up a new telephone number. Over the course of the eighteen-month life of this plan, Steffes made 322 phone calls, free of charge.

[347 Wis.2d 687]¶ 2 Steffes was subsequently charged and convicted of two counts of conspiracy to commit theft by fraud of property in excess of $10,000. SeeWis. Stat. §§ 939.31, 943.20(1)(d), and 943.20(3)(c) (2011–12). ¹

¶ 3 Two issues are presented in this case. The first is whether submitting fictitious business names and stolen personal identifying information is a “false representation” under Wis. Stat. § 943.20(1)(d). Steffes alleges that such conduct is not a false representation because the statute requires that the actor make an express promise to pay. The second issue is whether the applied electricity that AT & T uses to power its network is included within the definition of “property” found in § 943.20(2)(b). Steffes argues that his conviction cannot be sustained because the evidence at trial showed that he stole telephone services and not property.

¶ 4 On the first issue we hold that Steffes made “false representations” to AT & T. The theft-by-fraud statute says that “ ‘[f]alse representation’ includes a promise made with intent not to perform if it is part of a false and fraudulent scheme.” Wis. Stat. § 943.20(1)(d) (emphasis added). Because the word “includes” is not restrictive, the statute clearly anticipates that other conduct aside from an express promise falls under the umbrella of a “false representation.” The scope and history of the theft-by-fraud statute make plain that providing fictitious business names and stolen personal identifying information to a phone company as a way of avoiding payment falls within the meaning of “false representation.”

¶ 5 As to the second issue, “property” under the theft-by-fraud statute is defined as “all forms of tangible property, whether real or personal, without limitation including electricity, gas and documents which represent or embody a chose in action or other intangible rights.” Wis. Stat. § 943.20(2)(b) (emphasis added). Relying on the plain language of the statute in conjunction with commonly used dictionaries, we conclude that Steffes stole electricity from AT & T. AT & T purchases and stores electricity to power its network. When consumers make phone calls, AT & T must buy more electricity. The conspiracy perpetrated against AT & T therefore deprived the company of its property. We affirm the court of appeals.

I. FACTUAL BACKGROUND

¶ 6 While Matthew Steffes and Joshua Howard were cellmates at the Waupun Correctional Institution, Howard devised an illicit scheme that would allow the two of them to make free collect calls from prison. The conspiracy worked as follows. Friends and family members outside the prison walls would set up a phone number by giving false information to the phone company—in this case AT & T.² Once the dummy number was set up, Howard and Steffes could make unlimited collect calls to the number. The benefit to the people setting up the fraudulent numbers was that they would receive free phone service for a short period of time. After the phone company would shut the number down because of unpaid bills, the process would start over again.

[347 Wis.2d 689]¶ 7 The plan was elaborate and long-lasting, involving Steffes's father, his sister (who also has a child with Howard), his cousin, several friends, and another woman who has a child with Howard. In sum, 60 fraudulent phone numbers were created between May 2002 and May 2003. Part of the operation entailed giving fictitious business names to AT & T, while other numbers were set up using stolen personal identifying information obtained through a health care clinic where Steffes's sister's roommate worked. Over an 18–month period in 2002 and 2003, Steffes made 322 calls totaling 6,562 minutes. The loss to AT & T from setting up the fraudulent phone numbers and the unpaid calls was $28,061.41.

II. PROCEDURAL HISTORY

¶ 8 Steffes was charged with two counts of conspiracy to commit theft by fraud of property in excess of $10,000 pursuant to Wis. Stat. §§ 939.31, 943.20(1)(d), and 943.20(3)(c).³Section 939.31 is the conspiracy statute and it provides that “whoever,with intent that a crime be committed, agrees or combines with another for the purpose of committing that crime may, if one or more of the parties to the conspiracy does an act to effect its object, be fined or imprisoned or both.” The theft-by-fraud statute, § 943.20(1)(d), makes it a crime to obtain “title to property of another person by intentionallydeceiving the person with a false representation which is known to be false, made with intent to defraud, and which does defraud the person to whom it is made.” “Property” is defined as “all forms of tangible property, whether real or personal, without limitation including electricity, gas and documents which represent or embody a chose in action or other intangible rights.” § 943.20(2)(b). Steffes pled not guilty and the case proceeded to a jury trial.⁴

¶ 9 Robert Lindsley, an engineer for AT & T, testified at trial that someone making a phone call is using “an applied form of electricity,” and that all telephone companies need a “power network” to connect electricity to the telephone network. The key to understanding this concept, Lindsley explained, rests in the difference between AC and DC power. AC power is the electricity that runs through outlets in a wall. Conversely, DC power is stored in batteries. In Lindsley's words, “the telephone company actually buys AC power from the commercial utility[,] [turns] AC power into a DC form, [and] stores that energy in batteries so that if we lose commercial power to our central office, your phone continues to work.”

¶ 10 According to Lindsley, AT & T customers are given a “subscriber pair.” This is a wire that connects the registered phone line to the switch at AT & T's central office. The switch is what directs a phone call to the dialed number and connects the circuit, so when a customer makes a phone call he is not only using the subscriber pair, but also power from the switch. As Lindsley explicated, “We digitize the signal, so it uses equipment that can transmit that telephone call either through fiberoptic cables, over cable systems, or even through radio links using radio towers.”

¶ 11 Steffes was convicted of two counts of conspiracy to commit theft by fraud. The court sentenced him to two years in prison followed by thirty months of extended supervision on each count, to be served concurrently. He and the other members of the conspiracy were also ordered to jointly and severally pay the full $28,061.41 loss in restitution to AT & T. Steffes appealed his conviction to the court of appeals and argued: (1) the evidence was insufficient to support his conviction because no “false promise” was made during the commission of the conspiracy; (2) the applied form of electricity used by AT & T is more akin to a service and thus is not property for purposes of the theft-by-fraud statute.⁵

¶ 12 In a published opinion, the court of appeals affirmed his conviction. Steffes, 340 Wis.2d 576, 812 N.W.2d 529. On the issue of whether a “false promise” was made during the conspiracy, Steffes argued that because no member of the conspiracy actually told the telephone company that he would pay for the services, no “false promise” was made. The court of appeals held that the theft-by-fraud statute does not require evidence of an express false promise; the statute requires only that “the offender ‘intentionally deceiv [e]’ the victim ‘with a false representation ... known to be false, made with intent to defraud.’ ” Id., ¶ 17 (quoting Wis. Stat. § 943.20(1)(d)). Here, all the false identifying information that the conspirators gave to AT & T amounted to false representations. Steffes, 340 Wis.2d 576, ¶ 17, 812 N.W.2d 529.

¶ 13 As to the second question—whether applied electricity is property under the theft-by-fraud statute—the court of appeals held that the presence of the term “electricity” in Wis. Stat. § 943.20(2)(b) is “broad enough to encompass the transmission of electricity over telephone lines.” Steffes, 340 Wis.2d 576, ¶ 23, 812 N.W.2d 529. Because the statute does not specifically distinguish between different types of electricity, the court of appeals reasoned that the legislature intended the term “electricity” to be applied...