Szilagyi v. State, s. 88-1670

• Citation: 564 So.2d 644
• Decision Date: 08 August 1990
• Docket Number: 88-1671,Nos. 88-1670,s. 88-1670
• Parties: 15 Fla. L. Weekly D2023 Joseph SZILAGYI and Julius Kluger, Appellants, v. STATE of Florida, Appellee.
• Court: Court of Appeal of Florida (US)

Page 644

564 So.2d 644

15 Fla. L. Weekly D2023

Joseph SZILAGYI and Julius Kluger, Appellants, v. STATE of Florida, Appellee.

Nos. 88-1670, 88-1671.

District Court of Appeal of Florida Fourth District.

Aug. 8, 1990.

Lewis A. Fishman of Lewis A. Fishman, P.A., and Thomas E. Cazel, P.A., Fort Lauderdale, for appellants.

Robert A. Butterworth, Atty. Gen., Tallahassee, Georgina Jimenez-Orosa and David D. McLauchlin, Asst. Attys. Gen., West Palm Beach, for appellee.

PER CURIAM.

In this consolidated appeal, appellants were convicted of five counts each of grand theft in the first degree, in violation of section 812.014(1)(a), Florida Statutes (1987), and five counts each of grand theft in violation of section 812.014, Florida Statutes (1987). The defendants were sentenced to three years' imprisonment, and ordered to pay restitution in the amount of $190,304.08.

Appellants were charged in a fourteen-count indictment with organized fraud and grand theft between July 9, 1986, and April 3, 1987. The state proceeded on the theory that appellants were engaged in a "bust-out" operation. According to the state's expert witness, Robert Lawson, who testified over defense objection, a bust-out operation is generally characterized by the following factors:

(1) Nonpayment of creditors;

(2) Principals raiding assets;

(3) Sale of the business to a strawman;

(4) Business passing bad checks;

(5) The strawman disappearing;

(6) No notice to creditors or landlord;

(7) Inventory disappearing.

According to witness Lawson, such an operation can last from three weeks to ten years.

Appellants were principals in the jewelry manufacturing firm of Goldex, Inc. In 1986 Goldex fell behind in its payments to ten creditors owing a total of $190,304.08. The criminal investigation began when Fort Lauderdale police fraud detective Koloian received several complaints from supply businesses concerning Goldex, Inc. After receiving the complaints, the detective went to the business and to appellants' residences and found no one. The detective then contacted appellants' resident agent, Attorney Brian Kimber, who informed him that appellants were in Europe. When the detective could not find appellants and learned that Goldex owed different creditors money, he concluded that this was a "bust out" and went to the state attorney's office and obtained an arrest warrant for appellants.

Detective Koloian had had no prior experience with a jewelry bust-out operation. Each creditor testified that appellants ordered merchandise from them based on credit extended to them and then either never got paid for it or returned it. Robert Lawson, after setting forth the elements of a bust-out operation as noted above, testified that most of these factors were not present in this case. Neither was there any evidence that appellants took any merchandise for their own benefit. Lawson admitted that most of what "bust-out" operators do is also done by legitimate businesses, i.e., paying bills to establish a credit rating, seeking references, increasing orders in business as expansion warrants. Nonetheless, Lawson opined that the appellants were engaged in a "bust out." At the close of the state's case, appellants moved for a directed verdict. The trial court denied appellants' motions, stating that while state's evidence was not strong, it just barely survived the motion. We reverse.

To sustain a conviction under section 812.014, Florida Statutes (1987), the state had to prove that appellants knowingly...