State v. Swift
| Decision Date | 20 January 1993 |
| Docket Number | No. 92-2278-CR,92-2278-CR |
| Citation | 496 N.W.2d 713,173 Wis.2d 870 |
| Parties | , Blue Sky L. Rep. P 73,806, RICO Bus.Disp.Guide 8226 STATE of Wisconsin, Plaintiff-Respondent, v. Donnal K. SWIFT, Defendant-Appellant. d |
| Court | Wisconsin Court of Appeals |
For the plaintiff-respondent the cause was submitted on the brief of James E. Doyle, Atty. Gen., and William C. Wolford, Asst. Atty. Gen.
Before CANE, P.J., and LaROCQUE and MYSE, JJ.
Donnal Swift appeals a portion of a judgment convicting him of six counts of securities fraud, in violation of sec. 551.41(3), Stats., five counts of embezzlement in violation of sec. 943.20(1)(b), Stats., and one count of racketeering in violation of sec. 946.83(3), Stats. Swift argues that (1) the evidence is insufficient to convict him of three counts each of securities fraud and embezzlement concerning personal income agreements he entered into with Mary Benotch, James Palmer 1 and Carol Kaiser, (2) because the evidence is sufficient to convict him of only two counts of securities fraud and not three, the evidence is insufficient to convict him of racketeering, and (3) the state illegally searched and seized bank records from Swift's personal business account. Because we conclude that the evidence sufficiently supports the securities fraud, embezzlement and racketeering convictions, and the bank records relating to the K & S Administration account were properly subpoenaed, the judgment is affirmed.
Because Swift appeals only a portion of his conviction, we set forth only the facts relevant to the Benotch, Palmer and Kaiser transactions. Each transaction involved monies paid to Swift under personal income agreements that were written promises to repay with interest a principal amount that Swift would invest on the parties' behalf. Swift and another individual did business as K & S Administration.
In February 1989, Benotch gave Swift checks totaling $14,992.62. Benotch testified that she assumed the money would be used for investments relating to high-tech office equipment, because she and Swift had discussed this investment during a previous conversation concerning a previous personal income agreement and in contemplation of the second agreement. The personal income agreement was not a personal or business loan to Swift. Benotch did not receive payments as promised.
In May 1989, Palmer entered into a $31,370.07 personal income agreement with Swift with the understanding that it would be used to purchase an annuity. Palmer's widow, Bernice, was present during the meetings between Swift and Palmer. She testified that Swift said the annuity would be purchased from American Life. The personal income agreement was not a personal or business loan to Swift. Palmer did not receive payments as promised.
In July 1989, Kaiser entered into a $22,381.98 personal income agreement with Swift with the understanding that it would be used to purchase an annuity. Kaiser testified that Swift had indicated to her that the annuity would be with Life USA, similar to other investments Swift had handled for her. The personal income agreement was not a personal or business loan to Swift. Kaiser did not receive payments as promised.
In January 1990, the Palmers stopped receiving the promised payments and contacted officer Mark Moderson of the Appleton Police Department. Based on Moderson's affidavit detailing the Palmers' statement expressing their concerns about the money they had given Swift for investment purposes, the trial court issued a subpoena to the First National Bank of Menasha. The subpoena ordered the production of "[all] records of the ... K & S Administration Moderson presented the subpoena to the bank and the requested records were delivered over a period of one or two months. The bank delivered additional records involving K & S Administration accounts other than the Palmers' account, including the Benotch and Kaiser accounts, during the time period specified on the subpoena. Moderson recognized that Benotch and Kaiser were also potential victims and contacted them at a later date.
... cash transactions and credit transactions and loan transactions and balance statements [regarding] the account of [173 Wis.2d 877] James F. Palmer and ... Bernice C. Palmer ... from May 1989 to [April 1990]."
Shortly thereafter, a second subpoena was issued based upon Moderson's affidavit detailing the Palmers' and Kaiser's concerns about missing investment money. The trial court issued a subpoena ordering the production of "[all] records of the ... K & S Administration ... cash transactions and credit transactions and loan transactions and balance statements [regarding] the account of James F. Palmer and ... Bernice C. Palmer ... from May 1, 1988 to May 1, 1989."
The bank again delivered the requested records over a period of time. Moderson examined the records and concluded that there were indeed other victims and eventually contacted them. As a result of the investigations, Swift was charged with multiple counts of securities fraud, embezzlement and racketeering.
At the motion to suppress the bank records, Moderson testified that he believed both subpoenas authorized him to look at all the records in the K & S Administration account, including the records that did not pertain to the Palmer transaction, even though they specifically referenced only the Palmer transaction. He also testified that he told the bank he was authorized to look at, and in fact requested, other records relating to the K & S Administration account.
The trial court denied Swift's motion to suppress the evidence contained in the bank records relating to the K & S Administration account. It concluded that neither the fourth amendment to the United States Constitution nor the Wisconsin Constitution provides for privacy rights in bank accounts, especially business bank accounts. The court also concluded that although the subpoenaed documents were not returned to the court, this technical violation of sec. 968.135, Stats., did not require suppression. Finally, the court concluded that the subpoenas themselves were ambiguous and Moderson's interpretation of what documents the subpoenas authorized him to examine was reasonable.
When reviewing the sufficiency of evidence to support a criminal conviction, the evidence is viewed most favorably to the state and in support of the conviction. State v. Poellinger, 153 Wis.2d 493, 501, 451 N.W.2d 752, 755 (1990). "[A]n appellate court may not reverse a conviction unless the evidence, viewed most favorably to the state and the conviction, is so insufficient in probative value and force that it can be said as a matter of law that no trier of fact, acting reasonably, could have found guilt beyond a reasonable doubt." Id.
One element of the offense of theft by fraud is that the defendant knowingly made false representations with the intent to defraud. See Wis J I--Criminal 1453. Section 551.41, Stats., makes it unlawful to defraud a person in connection with the sale of any security by making untrue statements of material fact or omitting a material fact.
Swift first contends that there was insufficient evidence to support the convictions for securities fraud based upon the lack of evidence that he made any specific representations as to the type of investment that would be made with their funds. He argues that Benotch's, Palmer's and Kaiser's testimony at trial that they assumed he would use their money in a particular fashion does not establish that he knowingly made false representations to procure their money. We do not agree.
Swift had two personal income agreements with Benotch that both arose out of the same conversation. He concedes that this conversation, which involved a proposed investment in high-tech office equipment, is sufficient to support the conviction of securities fraud relating to the first personal income agreement. Benotch testified that at the time of the conversation she expected to receive additional funds that would be available for an additional investment. While Swift made no specific representations concerning how he would use the money upon the receipt of these additional funds, the only investment the parties discussed at the time of the first investment and in anticipation of the second investment involved high-tech office equipment. A reasonable jury could conclude either that Swift deliberately created the impression that the funds would be used for investments relating to high-tech office equipment or that he knowingly omitted material facts, that is, how he intended to use the money. This representation or omission was for the purpose of defrauding Benotch by deceiving her into thinking that the funds would be used for investments relating to high-tech office equipment as in previous personal income agreements.
While Swift made no specific representation of how he intended to use James Palmer's money, Bernice Palmer was present during a conversation between Swift and his associate, during which Swift advised his associate that the funds would be used to purchase an annuity from "American." This conversation took place in circumstances where it was clear that the reference was to American Life, a life insurance company represented by Swift. A reasonable jury could conclude that Swift thereby represented to the Palmers that he would place their investment in American Life, and that he thereby knowingly misrepresented how he intended to use the money.
Swift's conversation with the Kaisers was limited to a discussion of an investment in annuities. While Swift did not identify a specific investment, Kaiser testified that Swift had indicated that the money would be used as it had in the...
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