State v. Watson

• Decision Date: 21 January 2020
• Docket Number: No. 1 CA-CR 18-0838,1 CA-CR 18-0838
• Citation: 248 Ariz. 208,459 P.3d 120
• Parties: STATE of Arizona, Appellee, v. Steven WATSON, Appellant.
• Court: Arizona Court of Appeals

248 Ariz. 208

459 P.3d 120

STATE of Arizona, Appellee,

v.Steven WATSON, Appellant.

No. 1 CA-CR 18-0838

Court of Appeals of Arizona, Division 1.

FILED January 21, 2020

Attorney General’s Office, Phoenix, By Joshua C. Smith, Counsel for Appellee

Maricopa County Public Defender’s Office, Phoenix, By Carlos Daniel Carrion, Counsel for Appellant

Judge Paul J. McMurdie delivered the opinion of the Court, in which Presiding Judge Samuel A. Thumma and Judge Jennifer M. Perkins joined.

McMURDIE, Judge:

¶1 Steven Watson appeals from his convictions and sentences for one count of fraudulent schemes and artifices and seven counts of theft. We affirm Watson’s convictions but hold: (1) the superior court imposed an unlawful sentence under Arizona Revised Statutes ("A.R.S.") section 13-116 by imposing a term of probation for Watson’s fraudulent schemes and artifices conviction to be served consecutively to the sentences of imprisonment for the theft convictions resulting from the scheme; and (2) although probation is not generally considered a criminal sentence, A.R.S. § 13-116 prohibits imposing a consecutive term of probation for one offense and a term of imprisonment for another offense if they stem from the same act. As a result, we vacate Watson’s sentences and remand for resentencing.

FACTS AND PROCEDURAL BACKGROUND¹

¶2 In the summer of 2014, Watson began working as an associate financial advisor for BBVA Compass ("Compass"). Watson’s primary job responsibility was to assist customers in opening and managing investment accounts, including withdrawing funds from bank accounts and depositing them into investment accounts. Watson was not authorized to withdraw from or deposit funds into a customer’s bank account on his own. Instead, he was required to get approval from a Compass bank teller or manager to engage in any transaction involving a customer’s bank account. Contrary to the bank’s policy, during the time Watson worked at Compass, tellers and managers at the branches where Watson worked allowed financial advisors to withdraw funds on a customer’s behalf without requiring the customer to be physically present, or the advisor to show the customer’s identification for the transaction. Based on this unauthorized practice, at the request of a financial advisor like Watson, tellers would generate a cashier’s check for the withdrawn funds and memorialize the transaction in writing.

¶3 In the fall of 2014, Watson and an acquaintance, Maja Birkholz, hatched a scheme to steal money from Compass customers. First, using his access to account information, Watson would identify bank accounts whose owners had not been in contact with the bank for some time. Watson would then ask tellers to withdraw the funds from the accounts, purportedly on behalf of the account owners. He would then have the funds paid to either Birkholz directly or to accounts owned by "Millenium[sic] Planning Group," a doing business as ("DBA") designation for Watson Consulting LLC ("Watson Consulting"), a limited liability company managed solely by Watson. Acting in line with the unauthorized local practice of the branches, the tellers would approve the requests without requiring the account owners to be present or to present the owners’ identification, thereby placing the funds under Watson’s and Birkholz’s control. Through this scheme, Watson and Birkholz stole funds from several bank customers in October and November 2014.

¶4 On October 21, 2014, Watson asked the tellers to close out a checking account owned by the estate of D.G., who passed away in 2012. The tellers approved the transaction. Per Watson’s instructions, funds within the account were distributed as follows: (1) a cash withdrawal of $7607.06, of which Watson and Birkholz took an even split; (2) a cashier’s check for $7500 payable to Birkholz; and (3) a cashier’s check for $7500 payable to Karl Sheldon (an individual who was never positively identified). The tellers memorialized the transaction in a memorandum, which stated: "per customer close account[,] ok per Steve Watson—2 cashier’s checks."

¶5 Next, on October 27 and 28, 2014, Watson asked the tellers to close out three accounts owned by the estate of K.K., who passed away in 2011. The tellers approved the transactions, and the funds within the accounts were distributed as follows: (1) two cashier’s checks totaling $53,162.45 payable to Watson Consulting’s DBA designation; and (2) a cashier’s check for $35,698.47 payable to Birkholz. For this transaction, the tellers’ memoranda indicated that the owner of the account had approved the transaction "per [a] phone call" and that the "client initiated for cashier[’]s check." Three days after the theft, Birkholz transferred $27,000 of the funds she received to the accounts of Watson Consulting’s DBA designation.

¶6 Finally, on November 14, 2014, Watson requested that the tellers close out a savings account owned by S.S., a Texas resident. S.S. was alive at the time the theft occurred but passed away shortly afterward. The tellers approved the transaction, and the funds within the account totaling $80,667.31 were withdrawn via a cashier’s check made payable to Watson Consulting’s DBA designation. The memorandum for this transaction stated: "purchase cashier[’]s check per Steve Watson."

¶7 Between October and December 2014, Watson spent all the funds he had stolen from D.G.’s, K.K.’s, and S.S.’s accounts on several purchases, including a motorcycle, a car titled in his wife’s name, and airfare for himself, his wife, and his child. Compass was first alerted to the thefts in January 2015, when the beneficiary of two of K.K.’s accounts contacted Compass to request that the funds within the emptied accounts be liquidated. A senior fraud investigator for Compass examined the circumstances surrounding the missing funds and discovered the other thefts. During the investigation, the fraud investigator interviewed Watson, who denied any knowledge of D.G. or the circumstances surrounding D.G.’s account closure, denied any knowledge of Watson Consulting’s DBA designation, and downplayed his relationship with Birkholz. The day after the interview, Watson did not return to work and did not answer any of the fraud investigator’s subsequent calls. After completing her investigation, the fraud investigator reported the thefts to law enforcement.

¶8 Ultimately, the State charged Watson with: (1) one count of fraudulent schemes and artifices, encompassing every theft that occurred between October and November 2014; (2) three counts of theft of property for the withdrawals from D.G.’s account; (3) three counts of theft for the withdrawals from K.K.’s account; and (4) one count of theft for the withdrawal from S.S.’s account.² After an eight-day trial, during which Watson testified in his defense, the jury found Watson guilty as charged on the fraudulent schemes and artifices count and the theft counts arising from the withdrawals from K.K.’s and S.S.’s accounts. Concerning the charges related to D.G.’s account, the jury found Watson guilty of three misdemeanor counts of theft of property of a value of less than $1000.

¶9 The superior court subsequently sentenced Watson to serve concurrent prison terms totaling six years’ imprisonment on the felony theft counts, with 65 days’ presentence incarceration credit and time served on the three misdemeanor theft counts. Concerning the fraudulent schemes and artifices count, the court suspended the imposition of Watson’s sentence and imposed a consecutive seven-year term of probation to begin upon his release from prison. Watson appealed, and we have jurisdiction under A.R.S. §§ 12-120.21(A)(1), 13-4031, and -4033(A)(1).

DISCUSSION

A. The Evidence Supports Watson’s Conviction for Fraudulent Schemes and Artifices.

¶10 Watson argues there was insufficient evidence to support his conviction for fraudulent schemes and artifices because he "made no false representations or pretense to acquire the money from" D.G.’s, K.K.’s, and S.S.’s accounts.

¶11 We review de novo whether substantial evidence was presented to support a conviction. State v. Burns , 237 Ariz. 1, 20, ¶ 72, 344 P.3d 303, 322 (2015). " ‘Substantial evidence’ to support a conviction exists when ‘reasonable persons could accept [it] as adequate and sufficient to support a conclusion of [a] defendant’s guilt beyond a reasonable doubt.’ " Id. at 20–21, ¶ 72, 344 P.3d at 322-23 (first alteration in original) (quoting State v. West , 226 Ariz. 559, 562, ¶ 15, 250 P.3d 1188, 1191 (2011) ). In reviewing the sufficiency of the evidence, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." West , 226 Ariz. at 562, ¶ 16, 250 P.3d at 1191 (quoting State v. Mathers , 165 Ariz. 64, 66, 796 P.2d 866, 868 (1990) ). "Both direct and circumstantial evidence should be considered in determining whether substantial evidence supports a conviction." Id. ¶12 To support a conviction for fraudulent schemes and artifices, the State was required to prove that (1) pursuant to a scheme or artifice to defraud, (2) Watson knowingly obtained any benefit (3) by means of false or fraudulent pretenses, representations, promises, or material omissions. A.R.S. § 13-2310(A) ; see also State v. Haas , 138 Ariz. 413, 418–24, 675 P.2d 673, 678-84 (1983) (discussing statutory elements of fraudulent schemes and artifices and their definitions under a prior version of the statute). Because Watson only challenges whether the State produced sufficient evidence for a jury to conclude beyond a reasonable doubt that he obtained the money from D.G.’s, K.K.’s, and S.S.’s accounts by means of false or fraudulent pretenses, representations, promises, or material omissions—and because sufficient evidence was presented concerning the other elements—we only address that element.

¶13 The fraudulent schemes and artifices ...