### IN THE COURT OF CRIMI NAL AP PEALS OF TENNES SEE AT KNOXVI LLE A ssi gne d on Br ie fs N ove m be r 14, 200 6

STA TE OF TEN NES SEE v. FR AN K R AY RU TH

Appeal f romthe Cr im inal Cou rt for Ham ilton Coun ty No. 252627 Rebec ca J. Ster n, Jud ge

No. E2006-01008-CC A-R10- CD - F iled Fe bruary 5, 2007

The De fenda nt, Fr ank Ray Ruth, was indicted for thirty -seve n counts of filing false sa les tax returns and one c ount of Class C felony theft of pr operty . The district atto rn ey g ener al denied the Def endant’ s application for

pretria l diversion. The trial court rever sed, concluding that the district attorney abused his discr etion. The State obtained an interlocutory appea l from this Court pursuant to Tennesse e Rule of Appe llate Proce dure 10. F ollowing our revie w of the rec ord, the judg ment of the Hamilton County Criminal Court ordering the district attorney g ener al to g rant the D efe ndant div e rs ion is r e ve rs e d. Th is c a se is r e ma nd e d to the tr ia l c ou rt fo r f urthe r p ro c e e din g s.

Te nn. R . A pp. P . 1 0 Ex tr ao r dina r y A ppe al; Judg m e nt of t he Cr im ina l C our t R e ve r se d; Rem anded

D AVI D H. W EL L ES , J ., delivere d the opinion of the court, in which J OHN E VE R E TT W I L L I AMS and N OR MA M C G EE O G LE , J J ., joined.
H. Way ne Gr ant, Chattanoog a, Te nnessee , for the a ppellee, Frank Ray

Ruth.

Rob e rt E. Coo pe r, Jr., At torne y

Ge ne ra l a ndRe po rt e r; Da vidE. Coe n e n , As sis ta nt A tto rn e y Ge ne ra l; Bill Cox , District Attorney Gene ral; and Bates Bry an, Assis tant District Attorney Gene ral, for

the appellant, State of

Tenne ssee.

OP IN ION

The Defendant owned and operated S ports Wine & Spirit s located in Hixson. Tax Auditor TimothyKelly

perf ormed a n audit of the Defendant’s business by inspecting rec ords from De cembe r 1, 20 00 , to De c e mbe r 3 1, 20 03 . A ft e r d isc ov e ri ng po te nti a l f ra udby the De fend ant , Mr. Ke lly ref er re d the ca se to the Specia l I nvestig ation Section of the De partment of Re venue. D uring the ensuing investigation, it was discovere d that, for the e ntire audit period—thirty -seve n months—the De fe nd a nt u nd e rr e po rt e d th e a mou nt o f t a xab le sal es of the bu sin e ss b y

$5 70 ,7 44 .2 8, re su lti ng inW e no t e t hat t here are s o m e d i scr ep anci es i n t he reco rd as t o the actual am o unt ow ed

. T he f i nal repo rt of t he 1
D e pa r t me n t of Re v e n u e qu ot e s di f fe r e n t a mo u n t s

— $5 0, 19 8. 80 a n d $5 0, 25 6. 00

. T h e a mo u n t of t h e r e s t i t u t i on ch eck

wa s $50, 205. 80.
-2- $50,198.80 of sales t ax co l l ec t ed b y the Def endant but not re mitted to the St ate. In Fe bruary of 1 2005, a Ha milton C ounty g rand jury

returne d an indi ctment ag ainst the Def endant f or thirty -seve n counts of filing false sales tax re turns, Class E felonies, and one count of theft of pr operty valued at $10,000 or more but less than $60,000, a Class C felony

. See Tenn. Code Ann. §§ 39-14-103, 39- 14-105, 67-1- 1440(d).

Th e De fe nd a nt f

ile d a n a pp lic a tio n f

or pr e tr ia l di ve rs ion c on te nd ing he w as “ a prime candidate” f

or pre trial diversion. I n sup p o rt of his application, the De fendant stated that he wa s six ty -seve n y ear s old, had bee n marrie d for f orty -six y ear s, had ra ised two sons and had supported them throug h colleg e, and ha d “bee n a productive member of society all of hi s life.” He noted that he had no prior criminal history other than a speeding ticket and that he had an e x cellent e mploy ment history —working eig hteen y ear s as a supe rintendent for Concrete Fa rms until the company

went out of bu sin e ss andthe n w or

kin g e ig ht y e ars a s a

su pe ri nte nd e nt f

or Siskin S te e l un til his re tir e me nt. He e x plained that he w as ac tively involved in c ivic org anizations throug hout his lifetime, including being president of

the Civitan Cl u b ; a m em b er of the J ay Cee’s; c o-founde r and pr esident of the Ty ner Y outh Association, which involved his participation in coac hing sports; and chairman of the y outh committee for the Mounta in Shadows community . The De fendant stated that, following an of fe r f ro m “ so me a c qu a int a nc e s, ” he pu rc ha se d th e liq uo r s tor e in 1996 andthat th is w a s th e fi rs t tim e he ha d o pe rate d h is o wn bu sin e ss. Ac c or din g to the De fe nd a nt , he c oo pe rate d w ith investigators at all times during the investig ation—making “no attempt to conc eal any evidenc e,”

e xpre ssi ng “ his wi lli ng ne ss to make fu ll r e sti tut ion ,” wa vin g his ri g ht t o c ou ns e l, andop e nin g “ his

rec ords to complete disclosure .” The Def endant noted that he told the investigators that cre dit card

sa le s w e re ha nd le d d if

fe re ntl y than c a sh re c e ipt s. He c la ime d th a t hi s c on du c t c on sti tut e d a “ sin g le

a c t” a ndthat he wa s “ in e ve ry re sp e c t r e pe ntant, c onfes si ng andfo r w hic h h e is m akin g fu ll restitution and shoul d be considered a s if the taking took place on one return f or one month for

the

acc umulated amount s et forth in the i ndictment.” Finally , the Defenda nt asserted t hat t here was “ no likelihood” that he would be a “re peat offende r” because he was no longe r re sponsible for re porting the monthly

sales tax for the business and ha d turned a ll manag ement of the store over to his son; he also e x presse d a “w illingness to discontinue working at the store onc e his son c[ould] o b t ai n a liquor license.”

Attache d to the application wa s an af fidavit of the De fe n d an t , t hree letters of

rec ommen d a ti o n , a n d a

c o p y o f a D e p ar tm e n t o f

Re v e n u e d o c u me n t t it le d “ M e mo r a n d u m f o r the File,” which provided details of an interview with the Defenda nt on Dec ember 15, 2004. Acc ording to the memorandum, the D efe ndant explained that “he may not have r eporte d all of the c redit ca rd sales bec ause the y

wer e handle d differ ently .” He further stated that “the cre dit card sa les had indee d been de posited in the same bank a s the ca sh rec eipts an d h e had acc ess to the money .” The Def endant a lso could not provide an e x planation as to why the s ales of the bus iness reported on t he fede ral re turns did not match the s ales reported on the s tate returns but stated t hat hi s son prepa red-3-

the fe dera l returns while he prepare d t h e s t ate returns. He asserted that “he alway s did what he thought wa s rig ht and neve r intentionally underr eporte d his sales.”

The De fenda nt later a mended the a pplication. The a mendment was a copy of a chec k made pay able to the De partment of Re venue e videncing restitution of the sales tax owed.

On J uly 15, 2005, the district attorney g ener al denied the Def

endant’ s reque st for pre trial div e rs ion . In th e le tte r, the a ssi sta nt d ist ri c t a tto rn e y

g a ve the fo llo wi ng re a so ns fo r d e nia l:

The De fendant’s Personal B ackg round T h e d e f e n d a n ti s a

s i x t y- s e v e n ye ar o l d m a l e w h o h a s b e e n m arr i e d f o r f o r t ysix y ear s. He ha s worke d h i s en t i re life holding jobs with signif icant amounts of responsibility and providing well for his family

. He has been an active me mber of his c ommun ity a nd ha s dev ote d a sig nif ic a nt amou nt o f h is l if

e to c ivi c a ndc ha

ri ta ble

wo rk s.

C r i m i n a l H i s t o r y T h e d e f e n d a n th a s n o p r i o r

c r i m i n a l h i s t o r y.

The Case at Hand The fa cts of this case are particula rly described in the attac hed “Investig ative report.”

An a ly sis This case is not a case wher e someone “slipped up” one day , o r had a brief moral lapse, or exhibi ted the type of non-c hara cteristic although illeg al ac tivitythat the pre -trial diver sion statutes are intende d t o address. This case involved the

c on t i n u o u s f

i l i n g o f f a l s e t a x r e p o r t i n g f

o r m s f o r t h e e n t i r e 3 7 m o n t h s o f t he a ud it period, whic h repr esents only 3 y ear s of t he seven y ear s that the def endant ope rate d the bu sin e ss, a lth ou g h the pr ob abil ity that the fr a ud ule nt a c tiv ity pr e c e de d th e a ud it pe ri odis g re a t. A ft e r o r d uring the a ud it thede fe nd ant was un truth fu l w ith investigators. The de fenda nt’s crime involved theft from the c itiz ens of Te nnessee

. Our tax sy stem is based l ar gel y on self re porting and depe nds upon deterr ence for

assure d compliance

.
As a result of t he Defendant’s long term, sustained, intentional violation of the la w, his la c k of h on e sty wh e n b e ing int e rv ie we d, a ndthe ne e d f or de te rr e nc e in order to enforc e the tax laws the def endant’ s reque st for diversion is denied.

Attache d to the district attorney ’s letter was t he final investigative report of the De partment of Re ve nu e . T he re po rt

pr ov ide d a

su mma ry of the De fe nd a nt’ s June 24 , 2 00 4 in te rv ie w w ith-4-

investigators. During t he intervie w, the De fendant stated that he used a “point of sale” computer sy stem, that the s oftwar e automatically char g ed sales tax, that the computer kept t rac k of inventory and sale s, an d t h at t h e computer produce d reports for ea ch day , month, and y ear . The De fendant
a dmi tte d that he pr e pa

re d the state re turns a ndc la ime d th a t he us e d th e bu sin e ss’ ba nk de po sit s to pr e pa re his mon thl y re turns

. He state d tha t the “ a mou nt of the de po sit sli ps fo r ea c h mo nthsh ou ld equal his g ross sales a mount on the sales tax re t u rns.” How ever , it was noted that, af ter a comparison of bank deposits with the amount of taxable sales r eporte d on the sales tax returns, the

re su lts c on fl ic te d wi th the De fe nd a nt’ s state me nt that de po sit s sh ou ld e qu a l the a mou nt o f t a xab le sales re ported a nd the amount of the e x cess de posits s u p p o rt ed the taxable sale s as computed by investigators for c riminal purposes. The Def endant was asked if he eve r collec ted sales tax that he did not remit to the St ate, a nd he re plied “proba b l y , b u t n o t knowing ly

or intentionally ” and any dif fe re nc e wa s o nly

a mis take . T he re po rt

no te d th e fo llo wi ng fa c ts r e la te d to int e nt:

1. The “ Point o f S al e” computer sy stem’s sales re ports showed [the Def endan t ] had underre ported the business’ sales on ea ch of the thirty -seve n (37) sales tax returns during the period of the investig ation. The a mount underrr eporte d

eac h month was consistent throug hout the period.
2. [The D efe ndant] stated he used the ba nk deposits to prepar e the sa les tax

re turns fo r S po rt s Win e & Spi ri ts ea c h month. I n fa c t, a c omp ari so n o f b a nk de po sit s ($3,22 5,747.00) to sales tax returns (2,579,363.00) showed [the Def endant] g ave mis le a din g state me nts wh e n in te rv ie we d b y Spe c ia l I nv e sti g a tor s.

3. When computing the sales tax liabili ty for e ach month, it was discove red that the amounts underr

reported were usually

rounded amounts, most ly $1,000. The

c on si st e nt l ia

bil ity e a c h mo nthde mon str ate d [th e De fe nd a nt] w a s b a c kin g int o ta xab le sa le s to arrive a t a sa le s tax a mou nt h e faile d to re mit . T he fo llo wi ng ta ble shows the rounde d amounts for the y ear 2002. This was ve ry consistent for the e ntire criminal period.
[T ab le o mi tt e d ].
4. [The Defe ndant] int entionally filed fa lse and fr audulent sale s tax returns to the State, while re porting corr ectly on the Fe dera l I ncome Ta x Returns.

I t w a s a lso no te d th a t th e De fe nd a nt w a s u na ble to e xpla in the dif

fe re nc e be tw e e n th e ba nk

de po sit s and the a mount of sales that he r eporte d to the State. The investig ators conc luded,

[The Defe ndant] blatantlyand bra zenly underr eporte d the t ax ab l e sales by

co nsistent rounded eve n dollar ($1,000, $1,500, & $2,000) amounts ea ch month, which re sulted in lowering his sales tax l iability to the S tate. To ac complish this he decide d how much he w anted to stea l (usually $1,000). Then he reduc ed his sales tax-5-

c oll e c te d b y

that a mou nt andro un de d it to the ne are st wh ole do lla r an d r e po rt e d th is as the sale s tax paid. He broke dow n the total sales tax paid by the state a nd local amounts

. [ T h e Defenda nt] then had to re duce thetaxable sales by the amount

e qu iva le nt t o th e ta x on th e a mou nt h e wa s ste a lin g . Prio r t o July 20 02 wh e n th e rate was 8.25%, f

or $1,000 this amount was ab o u t $ 1 2,121. After J uly 2002 when the rate jumped to 9.25%, for $1,000 this amount was a bout $10,811. In J uly

2002 the tax rate cha ng ed during the month, b u t [ t he De fendant] was still able to make the calc ulation to reduce h i s liabilit y by $1,000—even. It doesn’t appe ar that [ the Def endant] used any

complex formula he just g uessed at the taxable sa les until he got it close enoug h.

On July 28 , 2 00 5, the De fe nd a nt f ile d a pe tit ion fo r writ of

c e rt ior ari a nda

me mor a nd um i n support of that petition, contending that the district attorney g ener al abuse d his discretion by deny ing pretria l diversion. The De fenda nt arg ued that the district attorne y failed to c onsider his lack of a criminal re cord, a g e, fa vorabl e s o ci al hi story , and “obvious” amena bilityto corre ction and,

moreove r, that the district attorney did not articulate or

state why the fa ctors conside red outwe ighe d the other r eleva nt fac tors. The trial c ourt g rante d the Def endant’ s petition on S eptember 26, 2005, and re manded the matter to the di strict attorney for reconsider ation. The trial c ourt rea soned that the district attorney

did not address the D efe ndant’s amenability to corre ction, full restitution, or “withdra wal fr om prepa

ration of sa les tax returns for an d m an age ment of the business” and, there fore , “ea sily ” found a n abuse of discretion for

failing to consider a ll releva nt fac tors.

The district attorne y

ag ain denied pretria l dive rsion by written letter dated Octobe r 13, 2005. Th e dis tr ic t a tto rn e y

re a so ne d a s f

oll ow s: The Judge ha s issued an orde r re manding the pre -trial diver sion application back to us to consider

sev er al ad d i t i onal fa ctors, which the court fe lt we did not

c o n s i d e r p r e v i o u s l y. The orig inal letter of de nial addre ssed:
(1) The circ umstances of

the offe nse; ( 2 ) T h e d e f

e n d a n t ’ s p r i o r

h i s t o r y; (3 ) T he de te rrent e ff

e c t of pu nis hme nt u po n o the r c ri min a l a c tiv ity and; (4) The likelihood that pre-tria l diversion would serve the ends of justice.

I n reg ard to the r emaining issues cited by the c o u rt , t h e st ate f

inds that the De fe n d ant’s attitude and post-a udit behavior wa s poor at best. The re w as no off er to pay restitution until well af

ter indictment; in fac t, i t wa s afte r the de fendant’s application for

pre- trial diversion wa s filed.-6- I n we ighin g a ll o f the fa c tor s in vo lve d in makin g a de te rm inatio n, the state finds that the payment of re stitut ion only afte r indictment and afte r an a pplication for pre- trial diversion and afte r the defe ndant’s counsel had revie wed the di scovery materia ls and it w as blazingly clea r that the case ag ainst the def endant wa s solid was only an acc eptanc e of the inevitable and not some thing that denotes a n yp o s i t ive

c ha ra c te r tr a it o n th e pa

rt of the de fe nd a nt, a nd , th e re fo re , th is f a c tor c arrie s li ttl e if any weig ht for the de fenda nt’s position; further , if the def end an t actually

had any

remorse or desire to satisfy a g uiltyconscie nce he would g o back and look at the pre

audit period a nd pay

restitution f

or those y ear s as well; further , it be ars pointing out that the amount involved her e was sales tax ac tually collecte d by

the def endant f rom customers but stolen by

the def endant prior to returns be ing f iled with the state.

The c ourt has dire cted that the state addr ess t he amenability of the de fendant to corre ction. As previously stated in the denia l letter, the de fendant was untruthful with investigators, which goes directly to that issue. The Te nnessee Depa rtment of Revenue on November 23, 2004, informed the defe ndant of the re commendation for criminal prose cution. On Dec ember 15, 2004, the def endant e x plained that the use d bank deposits to fill out his re t u rn s ea ch month, however , $3.3 milli on dollars had been de posited but only $2.6 milli on had been reported to the state; further the sa les reported to the state we re $638,000.00 le ss than the sales r eporte d to the fede ral g overnme nt. I n short g iven this type of re action by the def endant to the investig ation

a ndhis c on tin ua l “ sto ne wa lli ng ” a s in dic a te d b y the inv e sti g a tiv e re po rt

a tta c he d to the denial letter , showed a clea r intent by

the def endant to co n tinue to hide any wrong doings on his part. The state f urther r elied upon the e ntire investig ative re port incl ud ing the ma ny

do c ume nts makin g theapp ro xima te ly 50 0 p a g e s o f e xhibi ts which show with some deta il how for y ear s the defe ndant stole the tax money which he had collecte d and how he attempted to c ontinue to f ool the investigators once he

was c aug ht.

Th e de fe nd a nt c la ims that he ha s tr a ns fe rr e d ma na g e me nt to his so n; the state fi nd s th is t o b e ar l itt le or

no we ig ht.

After car eful c onsideration and w ei gh i n g all of the re levant fa ctors, the consideration of the defe ndant’s bac kg round, social history , all the fa cts and circ umstances of

the ca se, the c rime itself, the ne ed for deter renc e, the e nds of justice, and the historica l evaluation of pre- trial diversion, it is clear that the weig ht of the de cision is heavily

for the de nial of pre -trial dive rs ion; this is not to say that the def endant doe s not have some issues which we igh in his fa vor only that they are outweig hed by

the neg ative fa ctors. Pre- trial diversion is denied.P arent heses i nd i cat e a f act o r t o whi ch t he p rosecut o r gi ves l i t t l e o r no weight

. ( fo o t no t e i n ori gi nal ). 2

-7- The De fenda nt then filed a “ Suppleme n ta l Re sponse and Reply

to Action of District Attorney Re fu sin g Di ve rs ion on Re ma ndby Cou rt ,” wh ic h the tr ia l c ou rt tr e a te d a s a se c on d p e tit ion fo r w ri t of ce rtiorari. The De fenda nt a g ain contende d that the district attorney g ener al abuse d his discretion by deny ing his re quest for pr etrial diver sion because the district attorne y had not “ consider[ed] and articulate[d] all the re levant fa ctors” and had failed to “ provide the r elative we ight of eac h fac tor . . . .”

On Marc h 6, 2006, the trial c o u rt g rante d the Def endant’ s petition and order ed the district

a tto rn e y to g rant theDe fe nd a nt’ s a pp licatio n f

or pr e tr ia l di ve rs ion . T he tr ia l c ou rt e xpla ine d it s de c isi on that di stric t a tto rn e y abu se d h is d isc re tio n a s f oll ow s: Tog ether , the prosec utor’s letters of denial re flec t c o n s id e r ati o no f all re levant fa c tor s. Th e Cou rt

su mma ri zes the fi nd ing s se t f

orth the re in a s f

oll ow s: Factors that support appl ication

L ack of a criminal recor d Pe rs on a l hi sto ry , in c lud ing marria g e a ndfamil y Occ upational history Social history , including le ader ship roles in communityorg anizations and

c ha ri ta ble a c ts Reputation (Restitution) 2 (Withdrawal fr om prepa

ration of sa l es t ax returns f or and ma nag ement of bu sin e ss)
Factors that support denial of application

Natur e of the of fe ns e s Untruthfulness with investig ators Nee d for de terre nce About the finding s that support the appl i ca t i o n o r at lea st do not support denial of the application, ther e is no dispute. Furthermore , as the orde r re manding the application for re consideration indicates, the Court doe s not think that two of the three fac tors that support denial of the application, the nature of t he offenses a nd the need f or deter renc e, by themselves, outweig h the fa ctors that support the a pplication. Thus, the only

issues that the denial of t h e appli cation now pr esents is whethe r
s u b s t a n t i a l e v i d e n c e s u p p o r t s t h e f i n d i n g th a tt h e d e f

e n d a n tw a s u n tru t h f

u l w i th in v e s ti g a to r s a n d , if it d o e s , w h e th e r s u b s tan ti a l e v id e n c e s u p p o r ts th e f in ding tha t that circ umstance outwe ighs a ll the fac tors that support the application.T h e S ta te so u g h t ap p lica tio n fo r p e rm issio n to a p p e a l f ro m the trial c o u rt u n d e r T e n n e sse e R u le o f A p p e llate 3
Proc edu r e 9 , w h i c h t h e t r i a l c o u r t d e n i e d

. Th e S t a t e t h e r e a f t e r a p p l i e d t o t h i s Co u r t fo r e x t r a o r d i n a r y a p p ea l by p erm i ss i o n pursuant t o T enness ee A p p el l at e P roce d ure R ul e 1 0 , and we grant ed t he ap p l i cat i o n.
-8- . . . I n the abse nce of evide nce of some unintentional mistake, the assertion is not credible. The Court theref ore f inds that substantial evidence sup p o rt s the pr os e c uto r’ s f

ind ing that th e de fe nd a nt w a s, a t le a st i n p art , u ntr uth fu l w ith inv e sti g a tor s.

. . . I n this c a se , the state ’s c a se be ing str on g , th e de fe nd a nt’ s u ntr uth fu lne ss with investigators weig hs ag ainst him.

Ne ve rthe le ss, de sp ite the str e ng th o f the state ’s c a se , th e Cou rt re sp e c tf ull y dis a g re e s w ith the pr os e c uto r’ s f ind ing that th e de fe nd a nt’ s u ntr uth fu lne ss w ith investigators justifies denial of the a pplication for pr e-tria l diversion. . . . F urthe rm or e , ev en thou g h h e wa s u ntr uth fu l w ith inv e sti g a tor s in on e re sp e c t, i n others, he w as truthful, admitting that total sa les and sale s tax returns should ag ree and that he may

not have r eporte d all cre dit sales, i.e

. , m ak i n g admissions inc on sis te nt w ith his a sse rt ionof inn oc e nc e of

int e nti on a l mi sta

ke . F or the se
rea sons, the Court finds the defe ndant, on the whole, amena ble t o corr ection and, a s
a conse quence , denial of the application unnec essarily harsh.

(i nte rn a l foo tno te omi tte d)

. Pur su a nt to Te nn e sse e Rul e of Ap pe llate Pr oc e du re 10 , it is f ro m th is de te rm inatio n th a t th e Sta te no w a pp e a ls. 3

AN AL YSI S The pre trial diversion statute allows a district attorney g ener al to suspe nd the prosec ution of an elig ible defe ndant for a period not to exceed two y ear s. S ee T enn. Code Ann. § 40- 15- 10 5( a )( 1) (A ). I n ord e r to qua lif y fo r pr e tr ia l dive rs ion , a def e nd a nt mus t not h a ve be e n p re vio us ly g rante d pretria l or judicial diversion; must not have a prior misdemeanor c onviction for which the defe ndant serve d a sente nce of confine men t o r a prior felony conviction within a five- y ear period afte r completing t h e s en t en ce or probationary period for

the prior c onviction; and must not be seeking diversion for a

Class A or B felony , certain Class C felonies (not involved in this case), a sexual offense, driving unde r the influenc e, or ve hicular a ssault. I d. § 40-15-105( a)( 1)(B )(i)( a)- (c)

.
There is no presumption that a person eligible for pre trial diversion is entitled to diversion. State v. Yanc ey , 69 S.W .3d 553, 557 (Tenn. 2002) ; State v. Curry , 988 S.W .2d 153, 157 (Tenn. 19 99 ). Th e “ de fe nd a nt b e ars the bu rd e n o f e sta bli sh ing that pr e tr ia l div e rs ion is a pp ro pria te a ndin the intere st of justice”; there fore, i t i s t he re sponsibili ty of the de fendant to provide “substantial favor able e vidence for the district attorney g ener al’s consideration.” State v. Be ll, 69 S.W .3d 171, 179 (Tenn. 2002) . To ca rry the burde n, an appl i ca n t s h o u l d provide the pr osecutor w ith “as-9-

complete a n application as the circ umstances wa rra nt.” State v. Winsett, 882 S .W.2d 8 0 6 , 810 (Tenn. Crim. App. 1993)

.
The de cision to gr ant or deny an application for pretrial diversion rests within the discretion of the district attorne y

g ener al. Tenn. Code A nn. § 40-15-105( b)(3)

. The district attorney ’s dec ision is viewed a s “pre sumptively corr ect” and will not be set aside unless there is a finding of g ross and patent abuse of discre tion. St ate v. Hammersley , 650 S.W .2d 352, 356 (Tenn. 1983)

.
Ev e n thou g h the de fe nd a nt ha s the bu rd e n to dem on str a te his or he r el ig ibi lit y a ndsu ita bil ity for pr etrial diver sion, the prosec utor has specific obligations, e specia lly when he or she de nies the application. Curry , 988 S.W .2d at 157. Our appellate courts have forge d the foll owing g uidelines for pr osecutors’ use whe n considering applications for pretria l diversion:
(1) The prosec utor should focus on the defendant’s amena bilityto corre ction. [C urry , 988 S.W .2d at 156.]
(2) The prosec utor must consider (a ) the c ircumstance s of the off ense, ( b) the defe ndant’s criminal recor d, (c) the defendant’s social history , (d) the phy sical and mental condition of the de fendant where appropriate, and ( e) the likelihood that pretria l diversion will serve the e nds of justice and the b es t interests of both the public and the de fenda nt. I d.; Hamm ersley , 650 S.W .2d at 355; see a lso St ate v. Washington, 866 S.W.2d 950, 951 (Tenn. 1993).
(3) “[T] he circ umstances of the offe nse and the nee d for de terre nce may alone justify a denia l of diversion, but only i f [ (a )] al l o f the re levant fa ctors have been considere d as well,” Curry , 988 S.W .2d at 158, and (b) only when the c ircumstance s
are of such ove rwhe lming sig nificanc e that they nece ssarily

o utweig h all other fac tors, Washington, 866 S.W.2d at 951.
(4) Although this c ourt has aff irmed the denial of pretria l diversion wher e the failure to admit the crime a nd/o r express remorse reve aled that the de fendant had been le s s th a n tr

u th f u l w ith th e c o u r t, s e e St a te v

. K ar e n Su e K e ls e y , N o. 03C01-9603-CC-00117, slip op. at 7 (Tenn. Crim. App., Knoxville, Oct. 29, 1997), perm. a pp. denied ( Tenn. 1998) ; State v. Martha Jean Frasier , No. 01C01-9601-CC-00012, slip op. at 12-13 (Tenn. Crim. App., Na shv i l l e, Dec . 13, 19 96 ); Sta te v. Ne a se , 7 13 S.W. 2d90 , 9 2 ( Te nn . Crim . App . 198 6) , re mor se pe r s e is not a fac tor in determining suitabilit y for pr etrial diver sion, see State v. S t o ney Gene Golden, No. 88- 146-I I I , slip op. at 3 (Tenn. C ri m. App., Nashville, Apr. 12, 19 89 ), pe rm . a

pp

. de nie d (T e nn

. 19 89 ), a nd the failu re of the de fe nd a nt t o a dmi t g uil t i s n o t , i n a n d o f

i t s e l f, a p r o p e r b a s i s f o r d e n y i n g d i v e r s i o n , s e e S t a t e v

. D e w e y L. Cla rk , No

. 03 C01 -9 70 6- CR- 00 22 7, sli p op

. a t 7 (T e nn

. Cr im. Ap p. , Kn oxvil le , July 16, 1998); State v. Christie Q uick, No. 01C01-9510-CC-00323, slip op. at 5-6 (Te nn. Crim. App., Nashville, Fe b. 20, 1997); cf. State v. King, 640 S.W .2d 30, 33 (Tenn.-10-

Crim. App. 1982) (pre trial diversion cannot be c o n d itioned upon e ntry of g uiltyplea) , ov e rr ule d o n o the r g ro un ds by Sta te v. Sut ton , 6 68 S.W. 2d 67 8, 68 0 ( Te nn . Crim. App. 1984).
(5) A de nial of the application (a) must be in writing and (b) must contain not only an enumer ation of the evidenc e the pr osecutor c onsidered but a lso a discussion of the weig ht g iven to e ach fac tor, State v. Pinkham, 955 S.W .2 d 9 5 6 , 9 6 0 (Tenn. 1997); see Curry , 988 S.W .2d at 157 (e x plaining impo rt an ce o f deta iled, written d en i al ); W i n s et t , 8 8 2 S

. W

. 2 d at 8 1 0 , an d o f w h y u n fa v o ra b l e f

ac t o rs o u t we i gh favor able one s, [S tate v.] Herr on, 767 S.W .2d [151,] 156 [(Tenn. 1989), over ruled in p ar t b y Y a n c y , 6 9 S. W. 3 d a t 5 5 9 ].
(6) “ I n addition to the fore g oing items which the prosec utor should include in a written re cord, he or she should a lso ide ntify ‘any fac tual disputes be tween the evidenc e re lied upon and the pe titioner’s appli ca t i o n .’” Pinkham, 955 S.W.2d at 960; see Winsett, 882 S.W .2d at 810.

I f the a pplication is denied, the de fendant may seek a writ of ce rtiorari in the tr ia l c ou rt . T e nn . Co de An n. § 4 0- 15 -1 05 (b )( 3) (2 00 3)

. Th e Cod e a ndthe app e llate courts have presc ribed the pr ocedur e for the petitioner to follow:
(1) The compiled re cord should be attached to the p et i t i o n. Wins ett, 882 S.W .2d at 810.
(2) I n the petit ion, the defendant should identify any disputed fac ts which the prosec uto r h as not identified. State v. L ane, 56 S.W.3d 20, 26 (Tenn. Crim. App. 2000).
(3) The defe ndant has the burden of proving that the district attorney abused his or h e r d is c r e ti o n in d e n y in g d iv e r s io n , St a te v

. Watkin s , 6 0 7 S. W. 2 d 4 8 6, 488 (Tenn. Crim. App. 1980) , a proc ess that may entail showing an abse nce of any substantial e vidence in the rec ord to support the prosec utor’s denial o f pretrial diversion, L ane, 56 S.W.3d at 26; see State v. Houston, 900 S.W .2d 712, 714 (Tenn. Crim. App. 1995).
Upon re ceiving a petition for c ertiora ri filed by

an ag g rieve d applicant f or pretria l diversion, the trial court must t hen follow a presc ribed proc edure :
(1) The trial court li mits its consideration to the evidence which wa s befor e the pr os e c uto r an d to the re a so ns g ive n by the pr os e c uto r i n d e nying div e rs ion . St a te
v

. Br own, 700 S.W.2d 568, 570 (Tenn. Crim. App. 1985); Wi nsett, 882 S.W .2d at 809.I n i t s order r emandi ng t he cas e t o t he di s t r i ct at t orn ey for r econs i dera t i on, t he t r i al cour t ci t es t o St at e v. B r i an 4
M

. M i noux , N o. 01C 01

- 95 09

- C R

- 00 30 9, 199 7 W L 13 74 21 (T enn

. C r i m. Ap p. , N as hv i l l e, M ar

. 27, 199 7), not i ng t hat “a b u sin e ss o w n e r w a s g ra n te d p re -trial d ive rs io n o f t w e n ty co u n ts o f v io la tio n o f T e n n . C o d e A n n . § 6 7 -1 -1 4 4 0 (d ).” H o w e v e r, the o p inio n in M ino u x d o e s n o t d e sc rib e in d e ta il the c irc u m sta n c e s su rr o u n d ing the o ff e n se s o r th e d e fen d a n t’s

(c o n tinu e d ...)
-11- (2) The trial court may

conduct a hearing only to r esolve any fac tual disputes raised by the prosec utor or the de fendant; the court m ay not hear additional evidenc e. Curry , 988 S.W .2d at 157-58.
(3) The trial court must also adhe re to the sa me ca se-by -ca se ba l an cing proce dure that is im posed upon the prose cutor. He rron, 767 S.W.2d at 156.
(4) The trial court must state its findings in writing. I d.

State v. Kristi Dance Oake s, No. E2005-0 1 6 6 8 -C C A-R10-CD, 2006 WL 176550, at *2-4 (T enn. Crim. App., Knox ville, J an. 23, 2006).

For purposes of our

revie w, this Court is “bound by the fa ctual finding s made by the trial court unless the e vidence preponde rate s ag ainst them.” B ell, 69 S.W .3d at 177. “How ever , if the evidenc e of recor d is undisputed and calls for no finding of fact t o resolve the issue, a trial c ourt’s dete rm i n at i o n s constitute conclusions of law to whic h an appe llate court is not bound.” St ate v. Carr , 8 61 S.W. 2d85 0, 85 6 ( Te nn . Crim. Ap p. 19 93 ) ( c itatio ns omi tte d)

. Th e re fo re , whe n th e fa c ts
are undisputed, the underlying issue that this Court must determine on appe al re mains whether , as a matter of law, the district attorney g ener al abused his or he r discre tion in deny ing pr etrial diver sion. I d.; State v. Brooks, 943 S.W.2d 411, 413 (Tenn. Crim. App. 1997); State v. There sa Ha llsford, No. M2002-00959-CCA-R3-CD, 2002 WL 31852858, at *2 (Te nn. Crim. App., Na s h ville, Dec. 20, 2002).

I n th e or de r g ranti ng the pe tit ionfo r w ri t of c e rt ior ari a ndor de ri ng the dis tr ic t a tto rn e y to g rant the D efe ndant’s re quest for pr etrial diver sion, the trial co u rt acknow ledg ed that the district

a tto rn e y c on sid e re d a ll r e le va nt f

a c tor s b ut “ re sp e c tf

ull y dis a g re e [d]” wi th the dis tr ic t a tto rn e y a s to the weig ht assigne d the factors. Howeve r, i n determining whe ther a defe ndant is entitled to pretrial diversion, the trial judg e “may not re-w eig h the evidenc e or substitute its view for that of the district attorney g ener al.” B ell, 69 S.W .3d at 179. “It is critical to emphasize that the discre tion to grant or deny pretria l diversion rests with the district attorney g ener al, not the trial court.” I d.

The a ssistant dist rict attorne y g ener al noted in his J uly

15, 2005 response that the Def endant

w a s s i xt y

- s e v e n y e ar s o l d , h a d b e e n m arr i e d f o r f o r t y

- s i x y e ar s , a n d h a d p r o v i d e d “ we ll f orhis family .” The district attorney also ac knowledg ed that the Def endant ha d no prior criminal hist ory and that he posse ssed a positive occupational and socia l history . The district attorne y then desc ribed the circ umstances of the offe nse, stating that this is “not a case wher e someone ‘slipped up’” one 4(

. . . con t i n u ed) 4
beh av i or du r i n g t h e i n v es t i g at i on

. M or eov er , t h e di s t r i ct a t t or n ey a g r ee d t o pr et r i al di v er s i on i n t h at c as e, a n d t h e opi n i on di d n ot a dd r e s s t h e de f e n da n t ’ s s u i t a bi l i t y for t h e pr og r a m.
-12- day but that the case involved the continuous filing of false r eturns over a thirty -seve n-month period. The district attorne y

opined that “the pr obabilit y th at the fraudulent activity prec eded the audit period is gr eat.” The district attorney also ref err ed to the Def

endant’ s untruthfulness with inve stigators and to the Def endant’ s “long term, sus tained, int entional vi olation of t he law . . . .” Fina lly , the district attorney cited the need for deter

renc e because the t ax sy stem is based la rg ely on self-r eporting and noted that the De fenda nt’s crime involved the ft from the c itiz ens of this State.

I n his October 13, 2005 le tter, the district attorne y complied with the order of the trial c ourt and conside red the Def

endant’ s “ame nability

to c orre ction, full restitution, [and] withdra wal fr om prepa ration of sa les tax returns for a nd manag ement of the business.” The district attorney observe d that the Def

endant did not offe r to pay restitution until afte r he w as indi ct ed and that, if the Def endant wa s truly

remorse ful, he would pa y re s t i t u t i o n for y ear s prior to the audit period. The district attorney pointed out that “the amount involved here was sales tax actua lly collecte d by

the defe ndant from c ustomers but stolen by the def endant prior to returns be ing f iled wit h t he state.” I n addre ssing the D efe ndant’s ame nability to corr ection, the district attorne y noted the De fenda nt’s untruthfulness with investigators and chara cterized the Defenda nt’s rea ction to the investigation as “continual ‘ stonewalling .’” The district attorney ref err ed to the fina l report of t h e De p ar tment of Revenue , stating that the report show ed “how f or y ear s the defe ndant stole the tax money which he had collec ted and how he attempted to continue to fool the inve stigator s once he was c aug ht.” F ina lly , th e dis tr ic t a tto rn e y inf e rr e d tha t the De fe nd a nt fa ile d to supp ly e vid e nc e in s up po rt of his claim t h at h e had tr ansfe rre d manag ement of the business to his son. The district attorney then conclude d that “the we ight of the dec ision is heavily

for the de nial of pre trial diversion . . . .”

The Te nnessee Supreme Court stated in Curry that “the circ umstances of the offe nse and the need f or deterre nce may alone justify a denia l of diversion, but only if all of the r eleva nt fac tors have been c onsidered as we l l

. ” 988 S.W.2d at 158. Here , the district attorney also stated that the De fe nd a nt w a s n ot ame na ble to c or

re c tion, c iti ng his un truth fu lne ss w ith inv e sti g a tor s a ndhis behavior during the investig ation. The De partment of Re venue’ s report, particular ly the sec tion which discusses the f

acts re lated to the De fendant’s intent, support the district attorney ’s conc lusions about the De fenda nt’s actions. Moreove r, as noted by the t rial court, the Def endant f ailed to provide any evidenc e in support of his claim that his ac ts were unintentional.

I n th is c a se, the re we re no fa c tua l di sp ute s to be re so lve d b y the tr ia l c ou rt . T he iss ue is primarily whether , as a matter of law, the prosec utor abused his discretion by deny ing the Def endant pretria l diversi o n

. See Carr , 861 S.W .2d at 856. I n a close case wher e the pr osecutor c ould have leg it im a te ly g r a n te d o r d e n ie d th e ap p li c a ti o n , th e tria l c o u r t mu s t d e f e r to th e ju d g me n t of theO bvi ous l y , i f t he t r i al judge di s agr ees wi t h t he di s t r i ct at t orn ey ’ s deci s i on t o deny pre t r i al di ver s i on, t he t r i al 5 judge co ul d grant judi ci al d i vers i o n und er T enness ee C o d e A nno t at ed sect i o n 4 0

- 3 5

- 3 1 3 a f t er a gui l t y plea or a f

i nd i ng
o f guil t

. Ju d i cial d i ve rsi o n, i f suc ce ssf ul, ha s a si m i l ar e f

fec t as p retri al d i ve rsi o n, result i ng i n a d i sm i ssal of t he ch arg es. Se e T en n

. Code An n

. § 40- 35- 313.
-13- prosec utor. Hallsford, 2002 WL 31852858, at *2 (citing Carr, 861 S.W .2d at 856). Her e, the trial

5

cour t fo u n d that the prosec utor had c onsidered a ll releva nt fac tors. Howeve r, the trial c ourt disag ree d with the prosec utor’s conc lusion that the factor s considere d ag ainst diversion outweig hed the fa ctors conside red in fa vor of diversion. I n our vi ew, the trial court impermissively substitut ed its judgment for

the judg ment of the prose cutor.

We conclude that the district attorney did not abuse his discretion by denying the Def

endant’ s application for pretria l diversion. Whil e he considere d rele vant fa ctors in fa vor of diver sion, such as the De fenda nt’s lack of a prior c riminal history and his g ood family

and socia l history , he conclude d that they wer e outweig hed by the leng th of time and manner in w hich the Defenda nt de fr a ud e d th e Sta te , th e ne e d f or de te rr e nc e in t a x re po rt ing , a nd the De fe nd a nt’ s po or a me na bil ity to corre ction. Such a dec ision was within his di scre ti o n

. See, e.g ., id.; St ate v. Ka ren K ay Shrewsbury , No. 01C01-9308-CC-00264, 1994 WL 390453 (Tenn. Crim. App., Na shville, J uly 28, 1994).

CO NC LU SION The judg ment of the trial c ourt ordering the as s i s t an tdistrict attorney g ener al to g rant the Def e n d a n t p r e tria l d iv e r s io n is r e v e r s e d

. T h is c a s e is r e man d e d to th e tria l c o u r t f o r f u r th er pr oc e e din g s.

______________________________ DAVID H. WELLES, J UDGE