2016 UT App 90



### T HE 

### U TAH 

### C OURT O F 

### A PPEALS

S TATE OF U TAH , Appell ee ,

v. G REGORY K ENT H OWELL , Appell ant

.

Memorandum Decision
N o. 20120204

- CA
Filed April 28, 2016

Third District Court, Salt Lake Department The Honorable Judith S.H. Atherton

No. 091902210

B. Kent Morgan and Benjamin R. Dyer, Attorney s

for Appellant
Sean D. Reyes and Karen A. Klucznik

, Attorney s

for Appellee

J UDGE G REGORY K. O RME authored th is Memorandum Decision

, in which J UDGE S TEPHEN L. R OTH and S ENIOR J UDGE P AMELA T.

G REENWOOD concurred

. 1

ORME

, Judge :

¶1 Gregory Kent Howell (Defendant) appeals his conviction and sentence on three counts of sec urities fraud and one count of pattern of unlawful activity

, for which the trial court sentenced him to four concurrent prison terms of one to fifteen years. We affirm.

1 . Senior Judge Pamela T. Greenwood sat by special assignment as authorized by law. See generally Utah R. Jud. Admin. 11

- 201(6).State v. Howell

20120204

- CA 2 2016 UT App 90 ¶2 In 2006, Defendant and his former colleague ( Codefendant ) sought to buy and complete a large residential development known as the Fruitland Project. They solicited
inve stors by overstating their experience and understating the risk, and Codefendant funneled investor funds to a n undisclosed side project called Alpha Bay. After the Fruitland P roject failed and investors complained , the State investigated and ultimately charged both Defendant and Codefendant

. Codefendant entered
into a plea agreement which, among other things, required him to testify against Defendant in exchange for a reduced sentence. After a jury trial in which Codefendant testified against him

, Defend ant was convicted. Defendant now argues that the trial court erred in convicting him under Utah’s Pattern of Unlawful Activity Act, that he received ineffective assistance from his trial counsel, that the State failed to show that he acted willfully and
th erefore did not prove every element of securities fraud, that the prosecution withheld material evidence, and that his sentence was unconstitutionally disproportionate to that of Codefendant

. 2 Each of Defendant’s five arguments fails.

2 . Defendant articulated a sixth argument: a challenge to the definition of ‚ security ‛ as used in this case. But De fendant has not developed that argument. Instead, Defendant addressed the issue in one sentence, without citing any authority, in his statement of the issues. While ‚adequate briefing

. . . is not a

‘ hard

- and

- fast default notion, ’ ‛ State v. Roberts , 2015 U T 24, ¶ 18, 345 P.3d 1226 (quoting State v. Nielsen , 2014 UT 10, ¶ 40, 326 P.3d
645 ) , rule 24 of the Utah Rules of Appellate Procedure sets out substantive requirements that parties must satisfy or risk having their briefs ‚disregarded or stricken, ‛ Utah R . App. P. 24(k). An opening brief ‚shall contain the contentions and reasons of the appellant with respect to the issues presented . . . with citations to the authorities, statutes, and parts of the record relied on.‛ Id.
R. 24(a)(9). ‚ [ A ] ppellants who fail to follow [those ] requirements will likely fail to persuade the court of the validity of their ( continued...)State v. Howell

20120204

- CA 3 2016 UT App 90 ¶3 Defendant’s first arg ument is that his conduct did not fall within Utah’s Pattern of Unlawful Activity Act

. Defendant claims that criminal conduct spanning only a few weeks or months, with no threat of future criminal conduct, ‚do*es+ not constitute a pat tern of unlawful activ ity .‛ He argues that the relevant events occurred in the span of about one month, which he contends was too short to constitute a ‚ pattern ‛ under the statute. We do not reach the merits of Defendant’s claim, however, because he has not complied with our pr eservation requirement. See Utah R. App. P. 24(a)(5) (requiring all opening briefs to include a ‚ citation to the record showing that the issue

w as preserved in the trial court . . . or

. . . a statement of grounds for seeking review of an issue not preserved in the trial court‛)

. Defendant’s opening brief provides no preservation citation for
this issue. O nly after the State pointed out his lack of preservation did Defendant , in his reply bri ef, claim that the plain error exception to our preservation rule applies

.

¶4 But dealing with preservation in the reply brief is t oo late.

‚ [ W ] e have consistently refused to consider arguments of plain error raised for the first time in an appellant’s reply brief, even if the plain error argument is in response to a dispute over preservation raised for the firs t time in the appellee’s brief. ‛ Marcroft v. Labor Comm’n , 2015 UT App 174, ¶ 4, 356 P.3d 164 ( citation and internal quotation marks omitted ). Because Defendant made no mention of the plain error exception until the reply brief, we will not consider whether t his alleged error was plain. See id.

(...continued) position.‛ Roberts , 2015 UT 24, ¶ 18. Because this potential sixth issue is inadequately briefed, we are wholly unpersuaded and simply assume for purpo ses of this appeal that the transactions in question involved securities.State v. Howell

20120204

- CA 4 2016 UT App 90 ¶5 Defendant ’s second argument is that he received ineffective assistance from his trial counsel

. A defendant cla iming ineffective assistance of counsel must show both ‚that counsel’s performance was deficient‛ and ‚that the deficient performance prejudiced the defense.‛ Strickland v. Washington

, 466 U.S. 668, 687 (1984). S ee also State v. Hards , 2015 UT App 42, ¶ 18 , 345 P.3d 769 (‚*F+ailure to prove either element defeats the claim.‛). ‚Performance is deficient when it falls below an objective standard of reasonableness.

. . . A defendant suffers prejudice when, absent the deficiencies of counsel’s performance, ther e is a reasonable likelihood that the defendant would have received a more favorable result at trial.‛ Hards

, 2015 UT App 42, ¶ 18. To determine if prejudice occurred, we ‚must consider the totality of the evidence‛ and ask if the alleged error ‚had a pervasive ‛ or ‚an isolated, trivial effect.‛ Strickland , 466 U.S. at 695

– 96.

¶6 Defendant claims that trial counsel’s performance was deficient because counsel did not impeach Codefendant ’s testimony during cross

- examination by asking about the terms of Codef endant ’s plea agreement, which failure Defendant says

wa s prejudicial given the importance of Codefendant ’s testimony to the State’s case. But even assuming that counsel’s performance was objectively deficient, Defendant has not shown that any such deficie ncy prejudiced the defense. Trial counsel’s decision not to impeach Codefendant did not deprive Defendant of a fair trial when Codefendant would have testified that the only plea agreement in effect at that time called for him to plead guilty and testify a gainst Defendant

, when that plea and ensuing
conviction would put Codefendant at risk of deportation

, and that no subsequent , more favorable deal had been finalized as of that time

.

¶7 Further, the totality of the evidence would weigh in favor of guilt even i f Defendant’s trial counsel had successfully impeached Codefendant’s testimony by highlighting his plea agreement because of the investors ’ testimony regardingState v. Howell

20120204

- CA 5 2016 UT App 90 Defendant’s deceptive statements and Defendant’s own admissions

. Thus, we conclude that Defendan t’s trial counsel did not render constitutionally ineffective assistance by failing to question Codefendant about the terms of his plea agreement because Defendant has not demonstrated that any errors in this regard prejudice d him

.

¶8 Defendant’s third argument is that the State did not prove every element of securities fraud because it did not prove willfulness. When reviewing the sufficiency of evidence following a jury trial , ‚we review the evidence and all inferences which may reasonably be drawn fr om it in the light most favorable to the verdict.‛ State v. Shumway , 2002 UT 124, ¶ 15, 63 P.3d 94. And we will reverse ‚only when the evidence is sufficiently inconclusive or inherently improbable that reasonable minds must have entertained a reasonable d oubt‛ as

to D efendant’s guilt. Id.

¶9 The requisite mental state for securities fraud is willfulness, see Utah Code Ann. § 61

- 1

- 21 (LexisNexis 2011)

, 3 which requires proof that a defendant ‚desire [ d ] to engage in the conduct or cause the result,‛ i d. § 76

- 2

- 1 03 (2012) , and ‚act*ed ] deliberately and purposefully, as distinguished from merel y accidentally or inadvertently, ‛ State v. Larsen , 865 P.2d 1355, 1358 n.3 (Utah 1993). ‚Willful does not require an intent to violate the law or to injure another or acquire any advantage.‛ Id.

¶10 Defendant contends that he could not have acted willfully because he did not know at the outset about Codefendant’s plan to funnel money away from the Fruitland Project and into Alpha Bay and because he was never a signatory on the acc ounts or an

3

. Although various statutes at issue in this case have been amended or renumbered since 2006, the changes are inconsequential in the context of this case. Therefore, for ease of ref erence, we cite the most recent codification of these statutes.State v. Howell

20120204

- CA 6 2016 UT App 90 active participant in th e scheme that ultimately defrauded the investors. The fraudulent conduct , however, did not consist only of Codefendant ’s diversion of the funds but also included Defendant’s withholding information regarding the diversio n from the investors. Codefendant told Defendant of his plan to divert some funds away from the Fruitland Project and to temporarily use that money to fund Alpha Bay before Defendant began soliciting investor funds. Instead of informing potential
investors about the Alpha Bay plan, however, Defendant expressed concern to Codefendant about the plan . B ut Codefendant apparently convinced Defendant that the transfer would be sho rt term and might actually benefit the Fruitland Project

. In any event, Defendant failed to notify the investors of Codefendant ’s expressed plan and his own misgivings about it

. 4

¶11 Furthermore, the investors testified to several instances in which Defendant made fraudulent statements : (1) Defendant falsely represented that he and Codefendant had been involved in ‚projects,‛ causing investor s to believe that Defendant ‚had been involved in several large

- scale commercial proje cts ‛; ( 2 ) Defendant told one inves tor that ‚fifty percent of the lots were already under contract,‛ but failed to disclose that the se ‚contracts‛ were not legally binding and instead represented only reservations of particular lots; and ( 3 ) Defendant told other
investors that lots in the d evelopment already had deposits on them, totaling $12 million, when in fact there were no such

4 . Defendant contends that the only evidence of his dishonesty comes from Codefendant’s testimony

, in violation of Utah law. See State v. Christean , 533 P.2d 872, 876 (Utah 1975) (conviction may not rest solely on testimony of accomplice) . But as explained above, see infra ¶ 11, Codefendant’s testimony is not the only evidence that Defendant willfully misled the investors. See id. (‚Although a conviction may not rest solely upon t he testimony of an accomplice, all of the circumstances may be viewed together to determine the facts.‛)

.State v. Howell

20120204

- CA 7 2016 UT App 90 deposits. Investors also testified that Defendant never clarified that neither Defendant nor Codefendant had previously participated in a large real estate devel opment project. Evidence of each of these statements and omission s was before the jury, and the evidence shows that the jury’s conclusion that Defendant acted willfully in misleading the investors is not inconclusive or inherently improbable such that reasonable minds would necessarily have entertain ed reasonable doubts about Defendant’s guilt

.

¶12 Defendant’s fourth argument is that the State failed to turn over material evidence that would have affected the outcome if De fendant had known about it

. He claims that the State failed to timely disclose that Codefendant was a Cana dian citizen facing deportation and that the State would eventually agree to a further reduced sentence to help Codefendant avoid deportation. 5 At the time of trial, Codefendant ’ s plea deal had not changed , but Defendant alleges that th e fact of Codefendant’s Canadian citizenship made it inevitable that the State would offer Codefendant a new , improved deal to limit the risk of his deportation. Thus, De fendant argues that the State’s withholding of that evidence necessitates a new trial under Brady v. Maryland , 373 U.S. 83 (1963), and its progeny, especially Giglio v. United States , 405 U.S. 150 (1972). But Defendant has not shown that he properly preser ve d this issue

, and he has not shown that the plain error doctrine applies and warrants our review of the issue.

¶13 ‚To preserve an issue, counsel must raise the issue in the trial court ‘in such a way that the trial court has an opportunity

5 . At Defendant’s trial, Codefendant testified that there had been no promises other than those made in the first plea agreement. Defendant’s argument assumes that the State must surely have known what it would eventually do and that he was entitled to have that knowledge shared with him before trial.State v. Howell

20120204

- CA 8 2016 UT App 90 to rule on that issue.’‛ State v. Bird , 2015 UT 7, ¶ 10, 345 P.3d 1141 (quoting Pratt v. Nelson , 2007 UT 41, ¶ 15, 164 P.3d 366). We consider whether the issue was raised in a timely and specific manner along with ‚supporting evidence or relevant legal

aut hority‛ in assessing whether the trial court had a legally sufficient opportunity to rule on the issue. Pratt , 2007 UT 4 1 , ¶ 15 (citation and internal quotation marks omitted)

. Defendant
argues that he preserved the issue in his r ule 60(b) motion for a

new trial. As the State notes, however, Defendant failed to timely file for a new trial , and the trial court dismissed the motion on jurisdictional grounds. 6 Therefore, the r ule 60(b) motion did not provide the trial court with a n opportunity to rule on the m erits of the Brady issue so as to preserv e it for appeal

. And w hile the trial court noted that Defendant had filed a timely appeal, such knowledge would ordinarily reflect, at most, that the trial court knew of Defendant’s dissatisfaction with the verdict against him, not that it had the opportunity to rule on any particular issue

. 7

6 . ‚If the trial court refuses to address the merits of the newly advanced argument, the issue remains unpreserved for appellate review and may be addressed only if the challenging party can show plain error or exceptional circumstances.‛ State v. Pinder

, 2005 UT 15, ¶ 46, 114 P.3d 551.

7 . This case is in a somewhat unique posture. The parties and the
tria l court engaged in an extensive discussion of the alleged Brady violation during oral argument on Defendant’s rule 27 motion to stay the sentence pending appeal. Rule 27 of the Utah Rules of Criminal Procedure requires a d efendant who is seeking to avoid i ncarceration pending appeal to ‚file a written motion ‛ and memorandum with the trial court that, among other things,

‚ identif[ies] the issues to be presented on appeal and support [s] the defendant’s position that those issues raise a substantial question o f law or fact reasonably likely to result in a reversal.‛ Utah R. Crim. P. 27(b)(2)(A). The trial court then determines whether to issue a certificate of probable cause. See id. ( continued...)State v. Howell

20120204

- CA 9 2016 UT App 90 Because the motion was not timely and the trial court was not legally bound to address the merits, including the Brady issue, Defendant’s Brady claim is not preserved.

¶14 Therefore , our review of Defendant’s Brady claim is limited to the review for plain error alternatively sought by Defendant

. See State v. Gailey , 2015 UT App 249, ¶ 7, 360 P.3d
805

. P lain error applies only when an appellant shows that ‚(i) [a] n error exists; (ii) the error should have been obvious to the trial court; and (iii) the error is harmful, i.e., absent the error, there is a reasonable likelihood of a more favorable outcome for the appellant, or phrased differently, our confidence in th e verdict is undermined.‛ State v. Dunn , 850 P.2d 1201, 1208

– 09 (Utah 1993). Even a ssuming Defendant has met the first two elements of plain error

— and it is difficult to see how the requirement of obviousness to the trial court would have been

met

— he canno t prove that the State’s failure to provide evidence of Codefendant ’s Canadian citizenship (and the possible deportation implications) was a harmful error such that it undermines our confidence in the jury verdict. The mere possibility of a more favorable deal for Codefendant would not substantially affect Codefendant ’s credibility as a witness. Indeed, if counsel had questioned Codefendant on the issue and he had testified truthfully, he would have said that the only deal then agreed upon was Codefendant’s initial plea agreement, which ultimately may have bolstered Codefendant ’s credibility because he was willing to testify against Defendant even though the guilty plea ent ailed the risk of deportation. Thus, even if this

(...continued)
R. 27(b)(1)(A)

– (b)(3)(B). Although the Brady issue was addressed in this conte xt, the court only had authority to assess the strength o f Defendant’s issues for appeal in the process of deciding whether Defendant should rem ain incarcerated during appeal

— not to rule on whether to grant a new trial. ( The trial court denied Defendant’s Rule 27 motion. )State v. Howell

20120204

- CA 10 2016 UT App 90 was an error and even if the error w as plain , Defendant has not shown that the State’s failure to turn over this information was prejudicial

. Because Defendant has not established prejudice , we cannot conclude that the plain error exception to preservation applies.

¶15 Defendant ’s final argument is that his sentence violates the ban on ‚cruel and unusual punishment‛ set forth in Article 1, sec tion 9 of the Utah Constitution. 8 We determine whether a sentence is unconstitutionally cruel and unusual by asking if ‚the sentence imposed in proportion t o the offense committed is such as to shock the moral sense of all reasonable men as to what is right and proper under the circumstances.‛ State v. Nance , 438 P.2d 542, 544 (Utah 1968). Accord Monson v. Carver , 928 P.2d 1017, 1024 (Utah 1996). Defendant , i n contrast, asserts that his sentence

was cruel and unusual because it was disproportionate to Codefendant ’ s sentence

. And he argues, based on the Utah Supreme Court’s plurality opinion in State v. Gardner , 947 P.2d 630 (Utah 1997), that the trial court sh ould have considered the proportionality of his sentence to Codefendant ’s sentence as well as to the severity of the crime itself . But in Gardner , a majority of

8 . Defendant cited only the Utah Constitution in his opening brief, but he referenced the Eighth Amendment to the United States Constitution in his reply brief. Although we focus our analysis on the Utah Constitution because that is how t he issue

was framed for us in Defendant’s opening brief

, see supra ¶ 4, we note that the outcome would be no different under the U.S.
Constitution. See State v. Houston , 2015 UT 40, ¶ 145, 353 P.3d 55 (Lee, J., concurring) (‚ [N] o majority of [the Utah Supr eme Court] has ever adopted an independent standard of proportionality under article 1, section 9 of the Utah Constitution. For the most part we have simply conflated the state and federal standards and treated them as indistinguishable

. . . . And the sole exception to that rule is Gardner , in which a majority of the court refused to embrace any independent state standard.‛).State v. Howell

20120204

- CA 11 2016 UT App 90 the Court compared the defendant’s sentence only to the defendant’s offense, which is the tradi tional method of assessing proportionality. See id. at 652. Further, the Utah Supreme Court has expressly rejected arguments that proportionality review includes comparing a defendant’s sentence to that of a defendant in an already decided case who was con victed of the same crime.
State v. Carter , 888 P.2d 629, 656 (Utah 1995)

, superseded by statute on other grounds as recognized by Archuleta v. Galetka , 2011 UT 73, ¶ 70, 267 P.3d 232

.

¶16 Given the Utah Supreme Court’s refusal to compare for proportionality th e sentences of defendants in different cases who are guilty of the same crime, we see no obvious reason why a different rule would apply in the case of codefendants. And Defendant has not persuaded us otherwise. 9 It is true that

9 . Indeed, disparate sentences among codefendants are not

uncommon in our jurisprudence, and they have been upheld by other appellate courts. See, e.g.

, United States v. Kuhrt , 788 F.3d
403 , 408, 424

– 25 (5th Cir. 2015) (affirming defendant’s disparate sentence even though defendant was merely an employee of his coconspirator who orchestrated a multi

- billion

- dollar Ponzi scheme when defe ndant’s sentence fel l within the federal guidelines and the coconspirator ‚plead*ed+ guilty, accept*ed+ responsibility and testif*ied+ at multiple trials‛); U nited States v. McKinney , 53 F.3d 664 , 678 (5th Cir. 1995) (affirming defendant’s disparate senten ce when defendant’s sentence was within the federal sentencing guidelines and his only challenge was based on the lesser sentence of his more

culpable codefendant); U nited States v. Rackstraw , 7 F.3d 1476

, 1482 (10th Cir. 1993) (holding ‚that the sentencin g disparity [did] not violate the Eighth Amendment‛ when coconspirators in the transport of crack cocaine received roughly equal sentences despite one coconspirator transpo rting 1,040 ounces during a two

- year period while the other transported ‚ only
sixtee n

- and

- one

- half

. . . ounces on one occasion ‛ ).State v. Howell

20120204

- CA 12 2016 UT App 90 Defendant faces between one and fifteen years in prison in addition to his obligation to pay restitution to the investors while Codefendant, who testified against him but arguably played a more important role in the scam, is obligated only to serve probati on and pay restitution. Although these sentences are disparate, Defendant ’s only challenge to the legality of his

sentence is to point out the disparity of the two sentences and Codefendant’s greater culpability . And as explained above, proportionality rev iew does not turn on such a comparison. 10

¶17 Affirm ed

.

10 . Defendant also argues on appeal that the trial court improperly considered his refusal to admit guilt as a factor in its sentencing decision, an argument he supports by alleging, without record citations, t hat the State raised his refusal to admit guilt during sentencing. Even assuming that the State made an improper remark about Defendant’s refusal to admit guilt in support of its argument for incarceration, ‚the trial court is presumed to have disregarded the prosecutor’s commentary.‛ State v. Phillips , 2012 UT App 286, ¶ 25, 288 P.3d 310. Thus

, ‚‘there will not be a reversal unless it affirmatively appears that the court was misled or improperly influenced by such remarks.’‛ Id. (quoting People v. Myatt

, 384 N.E.2d 85, 88 (Ill. App. Ct. 1978)). Defendant has pointed to no affirmative evidence that the trial court considered the State’s alleged improper remark. Thus, we will not disturb the sentence the trial court imposed on that ground

.