Court Opinion

ID: 4168967
Source: CourtListenerOpinion
Date Created: 2017-05-17 15:11:33.617991+00
Date Added: 2024-06-11T14:38:43.455248
License: Public Domain

FILED
                                                                    May 17 2017, 9:50 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court

      ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
      Thomas W. Farlow                                          Curtis T. Hill, Jr.
      Darren A. Craig                                           Attorney General of Indiana
      Jenai M. Brackett
      Indianapolis, Indiana                                     James B. Martin
                                                                Deputy Attorney General
                                                                Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Peter T. Dvorak,                                          May 17, 2017
      Appellant-Defendant,                                      Court of Appeals Case No.
                                                                53A01-1604-CR-923
              v.                                                Appeal from the Monroe Circuit
                                                                Court
      State of Indiana,                                         The Honorable Marc R. Kellams,
      Appellee-Plaintiff.                                       Judge
                                                                Trial Court Cause No.
                                                                53C02-1506-FC-540

      Barnes, Judge.

                                              Case Summary
[1]   Peter Dvorak appeals the trial court’s denial of his motion to dismiss charges of

      Class C felony offer or sale of an unregistered security and Class C felony acting

      as an unregistered agent. We reverse and remand.

      Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017                   Page 1 of 11
                                                      Issue
[2]   Dvorak raises one issue, which we restate as whether the trial court properly

      denied his motion to dismiss charges based on the statute of limitations.

                                                      Facts
[3]   In June 2015, the State charged Dvorak with Count I, Class C felony offer or

      sale of an unregistered security, and Count II, Class C felony acting as an

      unregistered agent. The State alleged:

                                                    Count I:

              [O]n or about July 9, 2007 in Monroe County, State of Indiana,
              Peter T. Dvorak did knowingly offer or sell a security that was
              not registered, was not exempt under I.C. 23-19-2-1 and I.C. 23-
              19-2-2 of the Indiana Securities Act, or was not a federal covered
              security, to-wit: Peter T. Dvorak offered or sold a Promissory
              Note and an Agreement to Lend and Borrow Money to Todd
              Wahl that were not registered with the Indiana Secretary of
              State’s Office, Securities Division, as required by law. I.C. 23-2-
              1-3 (2007) and I.C. 23-2-1-18.1 (2007).

              Additionally, Peter T. Dvorak concealed his true actions from
              Todd Wahl by structuring the Promissory Note and Agreement
              to Lend and Borrow Money so that they did not mature until
              July 9, 2010; therefore, Todd Wahl would not know that the
              investment was not valid until July 9, 2010. Further, Dvorak
              concealed his actions from the State of Indiana by offering and
              selling the security while not registered with the Indiana
              Secretary of State. Because the security was not registered and
              because Dvorak was not registered to offer or sell securities, he
              kept himself out of the purview of both law enforcement and
              industry regulators. These offenses could not have been

      Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017       Page 2 of 11
              discovered by the State of Indiana until after Todd Wahl made
              his complaint to the Indiana Secretary of State, Securities
              Division on September 1, 2011.

                                                   Count II:

              [O]n or about July 9, 2007 in Monroe County, State of Indiana,
              Peter T. Dvorak did knowingly transact business as an agent
              without being registered with the Indiana Secretary of State,
              Securities Division, to-wit: Peter T. Dvorak offered or sold a
              Promissory Note and an Agreement to Lend and Borrow Money,
              both securities, to Todd Wahl, without being registered. I.C. 23-
              2-1-8 (2007) and I.C. 23-2-1-18.1 (2007).

              Additionally, Peter T. Dvorak concealed his true actions from
              Todd Wahl by structuring the Promissory Note and Agreement
              to Lend and Borrow Money so that they did not mature until
              July 9, 2010; therefore, Todd Wahl would not know that the
              investment was not valid until July 9, 2010. Further, Dvorak
              concealed his actions from the State of Indiana by offering and
              selling the security while not registered with the Indiana
              Secretary of State. Because the security was not registered and
              because Dvorak was not registered to offer or sell securities, he
              kept himself out of the purview of both law enforcement and
              industry regulators. These offenses could not have been
              discovered by the State of Indiana until after Todd Wahl made
              his complaint to the Indiana Secretary of State, Securities
              Division on September 1, 2011.

      Appellant’s App. Vol. II pp. 18-19.

[4]   Dvorak filed a motion to dismiss the charges and argued that the charges were

      barred by the statute of limitations. Dvorak claimed that the five-year statute of

      limitations began running when the alleged offenses occurred in July 2007. He

      Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017       Page 3 of 11
      contended that the statute of limitations was not tolled because the “State

      fail[ed] to allege any facts demonstrating that Dvorak did any positive act that

      constitute[d] concealment.” Id. at 24. The State responded that Dvorak

      concealed the offenses by structuring the securities to mature three years later,

      resulting in Wahl having no reason to believe that a crime occurred until those

      securities matured.

[5]   After a hearing, the trial court denied Dvorak’s motion to dismiss. The trial

      court found that “[t]he statute of limitations was tolled because Defendant’s

      structuring of the security was a positive act by the defendant that was

      calculated to conceal the fact that a crime had been committed.” Id. at 10. The

      trial court found the case to be similar to State v. Chrzan, 693 N.E.2d 566 (Ind.

      Ct. App. 1998). The trial court noted “it only became evident that a crime was

      committed when the security matured.” Id. at 11. Further, the trial court

      noted: “If the ruling were otherwise, illegal securities could always be structured

      to mature after the statute of limitations had passed, and the State would be

      prevented from ever knowing of its illegality until after it was too late.” Id. At

      Dvorak’s request, the trial court certified the order for interlocutory appeal, and

      we accepted jurisdiction pursuant to Indiana Appellate Rule 14(B).

                                                   Analysis
[6]   Dvorak appeals the trial court’s denial of his motion to dismiss. “We review a

      trial court’s denial of a motion to dismiss for an abuse of discretion.” Lebo v.

      State, 977 N.E.2d 1031, 1035 (Ind. Ct. App. 2012). We will reverse only where

      Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017      Page 4 of 11
      the decision is clearly against the logic and effect of the facts and circumstances.

      Id. When a defendant files a motion to dismiss an information, we take the

      facts alleged in the information as true. Id. “Questions of fact to be decided at

      trial or facts constituting a defense are not properly raised by a motion to

      dismiss.” Id.

[7]   Indiana Code Section 35-41-4-2(a) provides that the prosecution for a Class C

      felony is barred unless it is commenced within five years after the commission

      of the offense. However, Indiana Code Section 35-41-4-2(h)(2) provides that

      “[t]he period within which a prosecution must be commenced does not include

      any period in which . . . the accused person conceals evidence of the offense,

      and evidence sufficient to charge the person with that offense is unknown to the

      prosecuting authority and could not have been discovered by that authority by

      exercise of due diligence . . . .”

[8]   Indiana Code Section 35-41-4-2 protects “defendants from the prejudice that a

      delay in prosecution could bring, such as fading memories and stale evidence.”

      Lebo, 977 N.E.2d at 1036 (quoting Sloan v. State, 947 N.E.2d 917, 920 (Ind.

      2011)). “[It] also ‘strike[s] a balance between an individual’s interest in repose

      and the State’s interest in having sufficient time to investigate and build its

      case.’” Id. (quoting Sloan, 947 N.E.2d 920). “‘[A]n information alleging a time

      outside the statute of limitations which does not allege facts sufficient to

      constitute an exception to the statute is subject to a motion to dismiss.’” Id.

      (quoting Reeves v. State, 938 N.E.2d 10, 16 (Ind. Ct. App. 2010), trans. denied).

      “[W]hen the State relies on this exception, it must plead the circumstances of

      Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017      Page 5 of 11
       the concealment exception in the information so that the ‘defendant is apprised

       of the facts upon which the State intends to rely and may be prepared to meet

       that proof at trial.’” Id. (quoting Reeves, 938 N.E.2d at 17).

[9]    In support of his argument that the concealment tolling provisions do not apply

       here, Dvorak relies on Study v. State, 24 N.E.3d 947 (Ind. 2015), cert. denied, and

       Kifer v. State, 740 N.E.2d 586 (Ind. Ct. App. 2000). In Study, the State charged

       the defendant with two bank robberies in 2007. In 2012, the State added

       charges related to other bank robberies that also had occurred in 2006 and 2007.

       On appeal, the defendant argued that the trial court erred by allowing the

       charging information to be amended to add the charges in 2012 because the

       charges were filed outside of the statute of limitations.

[10]   Our supreme court held that the concealment provisions do not refer to “any

       evidence about the offense or who committed the offense”; rather, it specifically

       requires “that the concealed evidence be related to the existence of the offense.”

       Study, 24 N.E.3d at 952. The concealment provisions apply only where

       “positive acts that conceal that an offense has been committed” exist. Id. The

       charging information in Study alleged that the “concealment occurred when

       Study concealed his identity by wearing a mask, and concealed the getaway car,

       clothes worn during the crime, items taken from a victim, the weapon used, and

       evidence linking the robbery to other robberies.” Id. at 954. However, “[n]one

       of these actions would serve to prevent law enforcement from discovering that a

       bank had been robbed.” Id. The law enforcement officials had discovered the

       robbery and began investigating immediately. The court concluded that the

       Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017     Page 6 of 11
       defendant “did not engage in any positive act calculated to conceal the fact that

       a robbery occurred on March 21, 2006.” Id. at 957-58. Consequently, the

       statute of limitations was not tolled, and the court dismissed the charge related

       to that robbery.

[11]   In Kifer, the defendant left the scene of an accident in 1987 after striking and

       killing a jogger. Kifer, 740 N.E.2d at 586-87. After the accident, the defendant

       removed his license plates and headlight rings and sold the car to a salvage

       yard. The State learned that the defendant had struck the jogger and charged

       the defendant in 1999. The defendant filed a motion to dismiss the charges

       based on the statute of limitations, but the trial court denied the motion. On

       appeal, this court rejected the State’s argument that the statute of limitations

       was tolled by concealment. This court held the defendant’s alteration and

       disposal of his car did not amount to concealment of the fact that a crime had

       been committed but was only concealment of his guilt. “It is well settled that

       concealment of guilt is not concealment of the fact that an offense has been

       committed.” Id. at 588. We noted that “there must be a positive act performed

       by the defendant calculated to prevent discovery of the fact that a crime has

       been committed.” Id. However, the commission of the offense was “fully

       known in 1987,” and the prosecution twelve years later was barred by the

       statute of limitations. Id.

[12]   The State, on the other hand, relies on State v. Chrzan, 693 N.E.2d 566 (Ind. Ct.

       App. 1998). There, during his employment as manager of a grain elevator, the

       defendant “secreted $12,000 to $15,000 for use in the event he was fired as

       Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017     Page 7 of 11
       manager.” Chrzan, 693 N.E.2d at 567. He resigned in January 1994, and two

       years and three days later, the State charged him with misappropriation of

       funds and the knowing use of a false measure. The trial court dismissed the

       charges, and on appeal, the State argued that the two-year statute of limitations

       was tolled by the defendant’s concealment of his offense. We agreed that the

       defendant’s “manipulation of financial records” and the writing of two checks

       to the employer shortly after his resignation were “positive acts on the part of

       the perpetrator to conceal the fact that a crime had been committed.” Id.

       Consequently, we reversed the dismissal of the charges.

[13]   Here, Dvorak argues that there are no allegations of any positive act that he

       committed to conceal the fact that an offense had been committed. The State

       argues that Dvorak’s “structuring of the unregistered security included the

       selection of a maturity date that would cause his illegal activity to fly under the

       radar for three years after the illegal sale.” Appellee’s Brief p. 10. Dvorak

       points out, however, that whether he was registered to offer or sell securities

       and whether the security was registered were matters of public records on the

       date of the alleged offenses. Wahl could have determined those facts at the

       time he entered into the agreements. The maturity date of the agreements did

       not prevent Wahl from determining that Dvorak and the securities were

       unregistered.

[14]   The State also notes that failing to disclose that a security is not registered and

       that a seller is not registered as a broker-dealer has been found to be a material

       omission on the part of the seller. See Manns v. Skolnik, 666 N.E.2d 1236, 1249

       Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017      Page 8 of 11
       (Ind. Ct. App. 1996). In Manns, the Indiana Securities Commissioner filed an

       administrative complaint against the defendant for violating Indiana securities

       laws by failing to register herself and a security with the securities division.

       After the commissioner found that she had violated several state securities laws,

       the defendant appealed to the trial court, which affirmed the commissioner’s

       order.

[15]   On appeal, the defendant challenged, among other things, the commissioner’s

       determination that she committed fraud under Indiana Code Section 23-2-1-12,

       which at the time provided:1

                  It is unlawful for any person in connection with the offer, sale or
                  purchase of any security, either directly or indirectly, (1) to
                  employ any device, scheme or artifice to defraud, or (2) to make
                  any untrue statements of a material fact or to omit to state a
                  material fact necessary in order to make the statements made in
                  the light of circumstances under which they are made, not
                  misleading, or (3) to engage in any act, practice or course of
                  business which operates or would operate as a fraud or deceit
                  upon any person.

       The defendant challenged the determination that she omitted a material fact by

       failing to disclose that the security was not registered and that she was not a

       registered broker-dealer. This court held:

                  A reasonable investor would consider the broker’s registration
                  with the division important in making the investment decision

       1
           Repealed by Pub. L. No. 27-2007, § 37 (eff. July 1, 2008).

       Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017            Page 9 of 11
               because the registration serves as a means to verify the
               experience, legitimacy, and veracity of the broker. In addition,
               the fact that the security was not registered with the division
               would reflect on the validity of the transaction. Accordingly, this
               information was material and the omission, therefore, constitutes
               a violation of the statute.

       Manns, 666 N.E.2d at 1249.

[16]   The Manns decision, however, is unpersuasive here. Manns dealt with fraud

       allegations against the defendant in the context of an administrative complaint,

       and the omission was relevant to the fraud determination. In the context of

       concealment tolling the statute of limitations in a criminal case, our courts have

       held that a “positive act” to conceal the fact that an offense has been committed

       is required. Study, 24 N.E.3d at 952. The omission discussed in Manns is not,

       however, a “positive act,” which is necessary to toll the statute of limitations.

[17]   We conclude that Dvorak did not engage in any positive act calculated to

       conceal the fact that he was not registered and the security was not registered

       with the Secretary of State. Consequently, we conclude that the trial court

       erred by denying Dvorak’s motion to dismiss. We reverse and remand for

       proceedings consistent with this opinion.

                                                  Conclusion
[18]   The trial court erred by denying Dvorak’s motion to dismiss. We reverse and

       remand.

[19]   Reversed and remanded.

       Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017    Page 10 of 11
Kirsch, J., and Robb, J., concur.

Court of Appeals of Indiana | Opinion 53A01-1604-CR-923| May 17, 2017   Page 11 of 11