State v. Stringham

Decision Date23 April 1998
Docket NumberNo. 960426-CA,960426-CA
Citation957 P.2d 602
Parties341 Utah Adv. Rep. 14 STATE of Utah, Plaintiff and Appellee, v. Robert W. STRINGHAM, Defendant and Appellant.
CourtUtah Court of Appeals

Jerome H. Mooney and Wendy M. Lewis, Salt Lake City, for Appellant.

Jan Graham and Barnard N. Madsen, Salt Lake City, for Appellee.

Before DAVIS, P.J., WILKINS, Associate P.J., and ORME, J.

OPINION

ORME, Judge.

Defendant Robert W. Stringham appeals from convictions of one count of engaging in a pattern of unlawful activity, a second degree felony, in violation of Utah Code Ann. § 76-10-1602 (Supp.1997); three counts of communications fraud, second degree felonies, in violation of Utah Code Ann. § 76-10-1801 (Supp.1997); and twelve counts of theft, of which six were second degree felonies, five were third degree felonies, and one was a Class A misdemeanor, in violation of Utah Code Ann. §§ 76-6-404 (1995) and -412 (Supp.1997). 1 We reverse the communications fraud convictions and remand for a new trial. Otherwise, we affirm.

FACTS

Even though defendant sees the facts much differently, and there is evidence in the record that, in varying degrees, supports his view, we are obligated to consider "the facts in the light most favorable to the jury's verdict." State v. Cosey, 873 P.2d 1177, 1178 (Utah Ct.App.), cert. denied, 883 P.2d 1359 (Utah 1994).

The charges against defendant arose out of activities which occurred between 1990 and 1992 while defendant was employed by Assessment and Psychotherapy Associates (APA). In May 1989, APA employed defendant and his wife to open a satellite office in Utah County. Defendant and his wife both had training and experience as drug and alcohol counselors. APA hired defendant as a part-time employee to manage the office and to provide limited counseling services for which he was to be paid a total salary of $400 per month. Defendant's wife was hired to provide clinical counseling services for which she was to be paid $25 an hour. Both defendant and his wife received paychecks in their own names from APA. In addition, APA also made monthly and other payments to defendant and his wife with checks payable to "GS Consulting," 2 although APA never contracted directly with "GS Consulting."

A. Communications Fraud

Defendant received a regular pension as a former employee of United States Steel. Under the pension plan, if he earned less than $5500 per year, defendant could qualify for an annual pension supplement of $4800. If he earned more than $5500 per year, defendant could still qualify for a supplement, but it would be significantly less than $4800. To qualify for a supplement, the pension fund required defendant to submit a report each year recording his actual income for the past year, with a copy of his W-2 or other proof of earnings, and an estimate of his income for the upcoming year.

Because APA made additional payments to defendant, primarily through GS Consulting, defendant's W-2 did not reflect all of his actual 1990, 1991, and 1992 income. The State alleges that defendant omitted a total of $47,225.75 in annual reports of his income to the pension fund over three years. As a result, he received a total of $13,475 in low income pension supplements to which he was not entitled. Thus, defendant was charged with three counts of communications fraud, one count for each year. See Utah Code Ann. § 76-10-1801 (Supp.1997); infra note 17 (quoting relevant portions of § 76-10-1801).

1. 1990

In 1990, defendant's APA salary was $400 per month; thus, his W-2 reflected his annual income as $4800. Defendant recorded this amount on the report of his actual income to the pension fund and attached a copy of his W-2. The report also required defendant to "[w]rite in other earned income," and defendant entered "0" and listed his "[t]otal income" as "$4800.00." However, by oral agreement, 3 APA also paid defendant, in addition to his salary, $600 per month for eight months and $800 per month for four months as draws against revenues that defendant was expected to bring into APA. These amounts were paid to GS Consulting at defendant's request, although they were meant to compensate defendant. Defendant did not include these amounts in the report of his actual income to the pension fund. 4 Defendant also failed to include a check for $912.75 made payable directly to defendant for "additional money[ ] that he felt was owing in [May]."

In sum, defendant's actual income for 1990 was $13,712.75. Thus, defendant failed to report nearly $9000 to the pension fund.

2. 1991

In 1991, defendant again reported to the pension fund that his actual annual income was $4800, thus qualifying him for the maximum low income pension supplement of $4800, which he received. APA continued to pay defendant his $400 per month for 1991. However, APA also paid defendant draws of $800 for one month and $900 a month for six more months, but defendant failed to include these amounts in the 1991 report to the pension fund. At defendant's request, these amounts were paid to GS Consulting.

In August 1991, APA and defendant came to an agreement whereby APA put defendant in charge of payroll. Both APA's administrator, Art Marshall, and Marie Jackson, an APA administrative assistant, testified as to the agreement's terms. Defendant was to receive his regular salary of $400 per month, plus $700 per month--made payable to GS Consulting, at his request--for his additional bookkeeping responsibilities. 5 Defendant failed to include the payments for bookkeeping in his report to the pension fund. The agreement also provided that defendant would only be paid the $1100 per month and not receive additional compensation for any other services. 6

Under this August agreement, defendant also received $5000 (also made payable to GS Consulting) for additional work he performed on a Domestic Violence Treatment Program. Again, this payment was made payable to GS Consulting, and defendant failed to include this amount in his 1991 report to the pension fund. 7

APA contends that a written memorandum documenting this agreement existed, but was stolen, along with the floppy disk on which the memorandum was stored, in a break-in at APA in September 1992. Defendant and his wife, however, assert that no agreement was ever reduced to writing. In any event, during the remainder of 1991, defendant received an additional $5100 from APA, made payable to GS Consulting, which he failed to report to the pension fund. See also infra notes 9, 10.

In sum, defendant's actual income for 1991 was about $24,600. Thus, had he reported the entire amount to the pension fund, he would not have been eligible for the low income supplement of $4800 that he received.

3. 1992

Defendant and his wife resigned from APA in August 1992, and thus, defendant received his $400 paycheck only through July 1992. 8 Consequently, defendant reported to the pension fund that his annual income for 1992 was $3200 and qualified him for the low income pension supplement of $4800, which the fund paid defendant for 1992.

However, APA had made additional payments for the benefit of defendant, namely $700 per month to GS Consulting for bookkeeping and payroll services he provided. Defendant did not include this $4900 in the report to the pension fund. Also, defendant received an additional $9,813 from APA, through GS Consulting, which he failed to report to the pension fund. See also infra notes 9, 10. Defendant's actual income for 1992 was $17,513, or $14,313 more than he reported to the pension fund. Thus, by reason of his under-reporting, defendant again qualified for and received the low income supplement from the pension fund.

4. IRS Agent

At trial, the State called an agent from the Internal Revenue Service to answer hypothetical questions regarding the legality of assigning income. The only relevance of the IRS expert's testimony would have been to establish that assigning income to GS Consulting was illegal for the purposes of defendant's pension. However, the expert only testified as to what would be illegal for federal income tax purposes, which was not at issue. Defense counsel objected to the agent being qualified as an expert and to his testimony in general. The trial court, however, overruled the objection.

B. Theft

The State contends that, after APA gave defendant control of the company's bookkeeping in August 1991, defendant employed two schemes to cause APA to overpay GS Consulting by nearly $15,000 for the months of August 1991 through July 1992. First, defendant "double-charged" for his counseling hours by assigning them to his wife and billing APA at her hourly rate, while at the same time receiving his salary. 9 Second, defendant "padded" his hours by adding varying amounts to monthly compensation checks from APA to GS Consulting for work that neither he nor his wife performed. 10 APA did not notice the over-billing until its administrator, Art Marshall, took back payroll and check-writing responsibilities from defendant in August 1992. While computing the July payroll, Marshall noticed that the amount of money payable to defendant and GS Consulting was substantially less than what APA had routinely paid during the previous months. 11 Although Marshall testified he signed checks for these prior payments because he had trusted defendant and assumed that the work had been done, none of these overpayments was authorized by APA. Defendant, however, argues that the apparent overpayments were contemplated by the parties' various agreements and were for work performed by GS Consulting.

C. Pattern of Unlawful Activity

The jury found that the three episodes of communications fraud were interrelated and had the same purpose, result, participants, victims, and methods of commission. The jury also found that the twelve episodes of theft were likewise interrelated. Thus, defendant was also convicted of engaging in a "pattern of unlawful activity." 12

ISSUES

Defendant presents...

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