Opinion ID: 2790370
Heading Depth: 2
Heading Rank: 1

Heading: the district court correctly dismissed kay i

Text: ¶11 The State argues that the district court erred when it held that the charges against Mr. Kay were time barred. It contends that communications fraud is a continuing offense and that, by concealing his fraudulent scheme, Mr. Kay continued to commit communications fraud. The State argues this prevented the statute of limitations from beginning to run until March 2008 when Mr. Kay admitted his fraudulent conduct. Specifically, the State points to the fact that Mr. Kay continued with the construction of the Fowleses’ home through 2007, thereby concealing his misappropriation of the funds. The State further alleges that Mr. Kay acted to conceal the fraud when he solicited an additional $30,000, purportedly to complete work on the home, in late 2007.1 A. Communications Fraud is Not a Continuing Offense ¶12 In cases involving a continuing offense, the statute of limitations does not begin to run so long as the offense continues. Here, and in a companion case issued today, State v. Taylor, 2015 UT 42, ___ P.3d ___, we address an issue of first impression: when does a criminal offense qualify as continuing, thereby delaying the commencement of the limitations period. 1 The State did not argue below that Mr. Kay’s ongoing work on the home and request for an additional $30,000 continued the alleged fraud. On appeal, the State acknowledges this, but nonetheless asserts that it may rely on that argument here because it is entitled to raise new authority to support the argument it did assert below—that the fraud was continuing. The State’s argument misapprehends our preservation requirement. Though a party is entitled to rely on new legal authority on appeal, see Torian v. Craig, 2012 UT 63, ¶ 20, 289 P.3d 479, it may not raise new factual theories for the first time on appeal. We will not reverse the district court on the basis of facts that were never presented to it. 4 Cite as: 2015 UT 43 Opinion of the Court ¶13 We begin with an overview of our statute-of-limitations law. Section 76-1-302(1)(a) of the Utah Code provides that a felony prosecution “shall be commenced within four years after it is committed.” A crime is committed when every element of the statutory definition is satisfied. See Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 20, 108 P.3d 741 (“[A] statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action.” (internal quotation marks omitted)). ¶14 Many crimes are complete at the moment of a single, discrete act. For example, the crime of assault is complete when a perpetrator commits an act “with unlawful force or violence[] that causes bodily injury to another.” UTAH CODE § 76-5-102(1)(c). Other crimes, however, are continuing. When a crime is continuing, the statute of limitations does not begin to run until the criminal conduct ceases. A classic example of a continuing offense is possession. See State v. Lawrence, 312 N.W.2d 251, 253 (Minn. 1981). ¶15 To determine whether an offense is continuing, we turn first to the operative statute,2 which in this case is the communications fraud statute. See UTAH CODE § 76-10-1801. As with any question of statutory interpretation, our primary goal is to effectuate the intent of the Legislature. State v. Watkins, 2013 UT 28, ¶ 18, 309 P.3d 209. The best evidence of the Legislature’s intent is the statute’s plain language. Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50, ¶ 14, 267 P.3d 863. Further, “we interpret[] statutes to give meaning to all parts, and avoid[] rendering portions of the statute superfluous.” Watkins, 2013 UT 28, ¶ 23 (alterations in original) (internal quotation marks omitted). ¶16 Utah’s communications fraud statute makes it a crime to devise[] any scheme or artifice to defraud another or to obtain from another money, property, or anything of value by means of false or fraudulent pretenses, representations, promises, or material omissions, and . . . communicate[] directly or indirectly with any person by any means for the purpose of executing or 2 This approach to statutory construction is generally consistent with the approach adopted by the United States Supreme Court and other courts in determining whether a criminal statute creates a continuing offense. See Toussie v. United States, 397 U.S. 112, 114–15 (1970); State v. Taylor, 2015 UT 42, ¶ 13, ___ P.3d ___; People v. Thoro Prods. Co., 70 P.3d 1188, 1193–94 (Colo. 2003) 5 STATE v. KAY Opinion of the Court concealing the scheme or artifice. UTAH CODE § 76-10-1801(1). The language of the statute is unambiguous: communications fraud is complete the moment a perpetrator “communicates directly or indirectly with any person by any means for the purpose of executing or concealing” a devised fraudulent scheme. Id. The crime is complete when the communication is made. ¶17 Moreover, even if the elements of the crime did not sufficiently define when communications fraud is complete, the Legislature has conclusively answered the question. Subsection (5) of the communications fraud statute provides, “Each separate communication made for the purpose of executing or concealing a scheme or artifice described in Subsection (1) is a separate act and offense of communication fraud.” Id. § 76-10-1801(5). This provision explicitly states the Legislature’s intent that each separate act of communications fraud is a distinct, complete crime. ¶18 The State argues that subsection (1)’s reference to “scheme or artifice” compels the conclusion that communications fraud is a continuing offense inasmuch as “schemes continue as long as they are in operation.” But the State’s argument ignores the requirement that a perpetrator commit both elements of communications fraud. The first element speaks in terms of planning the offense and the second in terms of executing it. And the formulation of a scheme to defraud does not extend the crime once the scheme has been executed. While the scheme speaks to the planning or “overall design to defraud,” State v. Bradshaw, 2006 UT 87, ¶ 12, 152 P.3d 288, it is the overt act of communicating that is the “gist of the offense.” United States v. Blosser, 440 F.2d 697, 699 (10th Cir. 1971). Without the overt act of communicating, the mere formulation of a scheme cannot be the basis of a communications fraud charge against the perpetrator. In short, if the actual communication falls outside the statute of limitations, the State cannot rely on the presence of a predicate scheme to extend the limitations period.3 3 Utah’s communications fraud statute borrowed the term “scheme or artifice” from the federal mail fraud statute. State v. Bradshaw, 2006 UT 87, ¶ 11, 152 P.3d 288. Federal courts’ interpretations of that term are therefore helpful, and the vast majority of federal appellate courts have held that the limitations period for mail fraud begins on the date of mailing, not when the scheme ends. See, (continued...) 6 Cite as: 2015 UT 43 Opinion of the Court ¶19 Ample authority recognizes that an ongoing criminal design or scheme is not the same as a continuing offense. Each are specific terms of art, the meaning of which does not depend on “everyday notion[s]” or “ordinary meaning.” United States v. McGoff, 831 F.2d 1071, 1078 (D.C. Cir. 1987). A scheme is a predetermined plan comprising “a series of separate fraudulent acts” linked by a common design. Bradshaw, 2006 UT 87, ¶ 17 (emphasis added). Thus, although a scheme may contemplate multiple criminal acts, each separate crime is separately chargeable. The specific criminal act may be complete, even if the fraudulent scheme is not. And any additional conduct in furtherance of the scheme does not extend the statute of limitations for an already completed offense; rather, the additional conduct constitutes an additional chargeable offense. ¶20 The State acknowledges that a single scheme may result in multiple counts of communications fraud. But it nevertheless asks us to characterize these multiple counts as a continuing crime. This position is inconsistent with the continuing offense doctrine. A continuing offense is one that is “charged and punished as one crime from beginning to end”; it involves an indivisible, unlawful practice. United States v. Kubick, 205 F.3d 1117, 1129 (9th Cir. 1999). If communications fraud were a continuing offense, Mr. Kay could be charged with only a single count of the crime after all the fraudulent conduct had ceased. But that is not how the State charged the conduct and that is not what the statutory language dictates. The statutory language defines each fraudulent communication as a separate, complete offense and the State’s information charged Mr. Kay with multiple counts of communications fraud.4 3 (...continued) e.g., United States v. Bennett, 765 F.3d 887, 894 (8th Cir. 2014); United States v. Siddons, 660 F.3d 699, 705 (3d Cir. 2011); United States v. Gray, 367 F.3d 1263, 1269–70 (11th Cir. 2004); United State v. Crossley, 224 F.3d 847, 859 (6th Cir. 2000); United States v. Kimler, 167 F.3d 889, 894 n.6 (5th Cir. 1999); United States v. Barger, 178 F.3d 844, 847 (7th Cir. 1999); United States v. United Med. & Surgical Supply Corp., 989 F.2d 1390, 1398 (4th Cir. 1993); United States v. Eisen, 974 F.2d 246, 263–64 (2d Cir. 1992); United States v. Niven, 952 F.2d 289, 293 (9th Cir. 1991); United States v. Blosser, 440 F.2d 697, 699 (10th Cir. 1971). 4 Although the State charged Mr. Kay with multiple counts of communications fraud, it sought to cast the separate charges as continuing offenses by alleging that the fraudulent communications (continued...) 7 STATE v. KAY Opinion of the Court ¶21 The State further argues that by continuing construction of the Fowleses’ home and making false excuses for not meeting to close on the home, Mr. Kay concealed his fraud. According to the State, these acts of concealment extended the statute of limitations. But whether the crime is continuing depends not on the specifics of Mr. Kay’s conduct, but on the elements of the statutory offense. So, even if building the home or avoiding contact with the Fowleses were part of the scheme, that would not extend the limitations period. ¶22 The State expresses concern over situations where the concealment of a fraudulent scheme prevents victims from becoming aware that they have been harmed. But the Legislature has addressed this concern in another statute. The State may bring charges for concealed fraud crimes “within one year after a report of the offense has been filed.” UTAH CODE § 76-1-303(1). This statute ameliorates concerns about fraudsters concealing their crimes and lulling their victims into a sense of security until the statute of limitations has run. In this case, however, the State cannot claim the benefit of this statute because the Fowleses reported Mr. Kay to the Perry Police Department in July 2008, but the State did not file charges until June 2011. ¶23 We conclude that communications fraud is complete when a fraudulent communication is made. Accordingly, communications fraud is not a continuing offense. The district court correctly dismissed the charges against Mr. Kay on the grounds that they were barred by the statute of limitations. Mr. Kay allegedly committed the four counts of communications fraud between June and November 2006, but the State did not commence prosecution until July 2011, almost a year after the expiration of the four-year limitations period. And because the pattern of unlawful activity charge was predicated on the four charges of communications fraud, the district court correctly dismissed all of the charges in Kay I. 4 (...continued) commenced “on or about June 6, 2006 and continu[ed] through June 18, 2008.” But whether a crime is continuing depends solely on the statutory language, not “the conduct charged by the prosecutor [or] the language of the [information] in a particular case.” United States v. Yashar, 166 F.3d 873, 877 (7th Cir. 1999). 8 Cite as: 2015 UT 43 Opinion of the Court