State v. Stewart, 061218 UTSC, 20160484
|Opinion Judge:||Pearce Justice.|
|Party Name:||State of Utah, Appellant, v. Scott Richard Stewart, Appellee.|
|Attorney:||Sean D. Reyes, Att'y Gen., John J. Nielsen, Asst. Solic. Gen., Jacob S. Taylor, Asst. Att'y Gen., Salt Lake City, for appellant J. Morgan Philpot, Alpine, for appellee.|
|Judge Panel:||Justice Pearce authored the opinion of the Court in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Justice Petersen joined|
|Case Date:||June 12, 2018|
|Court:||Supreme Court of Utah|
On Appeal of Interlocutory Order
Third District, Salt Lake The Honorable Judge Randall N. Skanchy No. 131911542
Sean D. Reyes, Att'y Gen., John J. Nielsen, Asst. Solic. Gen., Jacob S. Taylor, Asst. Att'y Gen., Salt Lake City, for appellant
J. Morgan Philpot, Alpine, for appellee.
Justice Pearce authored the opinion of the Court in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Justice Petersen joined
¶1 The State charged Scott Richard Stewart with, among other crimes, one count of participating in a pattern of unlawful activity. The State also alleged that Stewart had committed securities fraud and that some of those crimes were part of his pattern of unlawful activity. Because the statute of limitations had run on a number of the alleged acts, Stewart moved to exclude them. Stewart argued that a pattern of unlawful activity cannot be based on crimes that the State could not separately charge because the statute of limitations had run. The district court agreed and granted Stewart's motion. The State seeks interlocutory review of that decision. This requires us to interpret the Pattern of Unlawful Activity Act, Utah Code sections 76-10-1601 to 1609. We conclude that the statute does not prevent the State from using evidence of acts on which the statute of limitations has expired to prove a pattern of unlawful activity. We reverse the district court's order and remand.
¶2 In 2013, the State charged Stewart with, among other things, thirteen counts of securities fraud or, in the alternative, thirteen counts of communications fraud. The State also charged Stewart with one count of a pattern of unlawful activity. After the court bound Stewart over for trial, we decided State v. Taylor, 2015 UT 42, 349 P.3d 696, and State v. Kay, 2015 UT 43, 349 P.3d 690. Those cases concluded that securities fraud and communications fraud are not continuing offenses.2 Taylor, 2015 UT 42, ¶ 24; Kay, 2015 UT 43, ¶ 23. These rulings undercut the State's prosecution because the State relied on the theory that some of the counts of securities fraud and communications fraud were continuing offenses. In response, the State filed an amended information to exclude several of the charges on which the statute of limitations had expired. The amended information charged two counts of securities fraud, one count of sale of an unregistered security, one count of unlicensed investment advisor activity, and one count of a pattern of unlawful activity.
¶3 The State indicated that it planned to call twelve of Stewart's investors to testify about the investments they made on Stewart's advice-investments they claim Stewart had defrauded them into making. In other words, the State intended to call witnesses to testify concerning the untimely charges of securities fraud that the State had voluntarily dismissed in response to Kay and Taylor. The State represented that it planned to use the investor testimony to prove the pattern of unlawful activity charge. Stewart moved to exclude that testimony arguing that time-barred offenses cannot support a pattern of unlawful activity.
¶4 The district court excluded the evidence. The district court explained, "Kay clarifies that securities fraud is not a continuing offense, and a claim for pattern of unlawful activity must be predicated on acts that, themselves, would be chargeable." The district court quoted Kay's conclusion that "if the actual communication falls outside the statute of limitations, the State cannot rely on the presence of a predicate scheme to extend the limitations period." (Quoting Kay, 2015 UT 43, ¶ 18). The district court concluded that "[b]ecause the predicate acts relied on by the State regarding [the original victims] are outside the statute of limitations for a communications fraud claim, they may not be used to prove the pattern of unlawful activity charge." We granted the State's petition for interlocutory appeal to review that conclusion.
ISSUE AND STANDARD OF REVIEW
¶5 The State contends that the trial court erred by excluding evidence of predicate acts that were part of the alleged pattern of unlawful activity. The State's challenge requires us to interpret Utah's Pattern of Unlawful Activity Act. Specifically, we must determine whether the prosecution may establish a pattern of unlawful activity using evidence of individual acts that are time barred under the relevant statute of limitations. See Utah Code § 76-10-1602(2). "We review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions." Marion Energy, Inc. v. KFJ Ranch P'ship, 2011 UT 50, ¶ 12, 267 P.3d 863 (citation omitted).
Utah's Pattern of Unlawful Activity Act
¶6 Utah's Pattern of Unlawful Activity Act (Act) criminalizes certain acts involving a pattern of unlawful activity. The Act proscribes a principal of a pattern of unlawful activity from using or investing the income derived from the unlawful activities. Utah Code § 76-10-1603(1). It also penalizes the acquisition or maintenance of an interest in or control of any enterprise that undertakes a pattern of unlawful activity. Id. § 76-10-1603(2)...
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