Securities Fraud,Jury Instruction,Double Jeopardy,Propensity Evidence,Theft,Sentencing.

Defendant was the sole member of SGD Timber Canyon LLC (SGD), which held an interest in 63 undeveloped lots in the Timber Ridge subdivision. The lots went into foreclosure, and in February 2010 SGD filed for bankruptcy. Defendant did not disclose these facts to the Witts, who later loaned defendant $200,000 to acquire a lot in Timber Ridge and another $200,000 for construction of a home on the lot, with the understanding that the loans would be repaid with a profit share of as much as $400,000 when the home was sold to a prequalified buyer. Later, at defendant’s urging, the Witts increased the loan to $2.4 million and converted their investment into a “bridge loan” to defendant, who represented that the proceeds would be used for continued development of Timber Ridge. The parties executed a promissory note and guarantee agreement. The promissory note was secured by defendant’s primary and secondary residences with collateral to convert the 24 lots in Timer Ridge upon closing and final purchase of Timber Ridge.

Defendant used the money on items not related to Timber Ridge and never developed the property there. Defendant defaulted on the note. He eventually repaid the Witts $70,000. Ultimately, the Witts sued defendant but did not recover any further monies from him. A jury found defendant guilty of two counts of securities fraud and one count of theft, and he was sentenced to 12 years in the custody of the Department of Corrections for each of the securities counts, to be served concurrently, and 18 years for the theft conviction, to be served consecutively to the other sentences.

On appeal, defendant claimed that the evidence was insufficient to support his securities fraud convictions because the promissory note and guarantee he provided to the Witts did not constitute a security. The “family resemblance test” applies to determine when a note is a security under the Colorado Securities Act (CSA). Under the family resemblance test, a note is presumed to be a security, but that presumption may be rebutted by a showing that the note strongly resembles other financial instruments. Here, the Witts’ investment, memorialized by the promissory note, was a transaction protected by the CSA and did not strongly resemble the family of transactions that are not securities. The evidence was sufficient to support the securities fraud convictions.

Defendant also argued that the trial court erred by tendering an inaccurate jury instruction regarding the definition of a security. Defendant did not object to the definition of security that was given to the jury, nor did he tender an alternative instruction. The law regarding the definition of a security was not well settled at the time of defendant’s trial, and thus any error in the jury instruction would not have been obvious or plain.

            Defendant also claimed that his convictions and sentences for securities fraud violated double jeopardy because they are alternative ways of committing the same offense, and therefore the two counts should be merged. Defendant failed to raise this issue before the trial court. Here, defendant was charged with and convicted of multiplicitous counts of securities fraud because the evidence showed a sale of one security to one investor based on one set of false or misleading statements. But the law was not well-settled concerning the proper unit of prosecution, so there was no plain error.  

            Defendant further contended that there was insufficient evidence to support his theft conviction. Although the funds were supposed to be used to develop Timber Ridge, defendant used the funds to pay his own attorney fees, to improve the house that his wife continued to occupy at the time of trial, and for other personal expenses. Therefore, there was sufficient evidence to support the conclusion that defendant knowingly obtained the Witts’ money by deception and intended to permanently deprive them of it.

Defendant also argued that the court erred by admitting propensity evidence that defendant had previously attempted to sell a lot in Timber Ridge that he did not own. However, the evidence was logically relevant to prove identity, motive, knowledge, and lack of mistake, and the probative value was not substantially outweighed by the danger of unfair prejudice.

Lastly, defendant argued that his sentence for theft must run concurrently with the concurrent sentences for securities fraud because the crimes are based on identical evidence. Here, different evidence supported each offense, so there was no sentencing error.

The judgment and sentence were affirmed.

Criminal Procedure,Grand Jury,Attempt to Influence a Public Servant,Jury,Predeliberation,Waiver,Evidence.

Tee was convicted of multiple charges, including two counts of attempting to influence a public servant.

On appeal, Tee contended that because the indictment received by the district court did not contain the signature of the grand jury foreperson, it did not confer jurisdiction and all charges must be dismissed. However, the signature of the foreperson need not be provided to the district court, and the court had jurisdiction.

Tee also contended that because two jurors engaged in predeliberation, he is entitled to a new trial. Here, defense counsel waived any error as to predeliberation.

Tee further argued that the two convictions for attempting to influence a public servant must be vacated because there was insufficient evidence supporting the convictions. Here, Tee was convicted of two counts of attempting to influence a public servant based on evidence that he made false reports of car accidents. The evidence was sufficient to support one count of attempting to influence a public servant where Tee provided information in person to a police officer who created a report based on what Tee had told him. However, the evidence was insufficient as to the other count where Tee filled in an accident report form on a computer terminal at a kiosk in the police department, because it did not show that Tee was attempting to influence a public servant.

Lastly, the attorney general conceded that the trial court violated Tee’s double jeopardy rights because it orally announced a 12-year sentence but the mittimus showed an 18-year sentence. The mittimus also incorrectly showed a conviction on a count that was dismissed.

The judgment was vacated as to one count and otherwise affirmed. The case was remanded to correct the mittimus.

Jury Instructions,Involuntary Intoxication,Other Acts Evidence,Merger,Colorado Sex Offender Lifetime Supervision Act.

Sabell and his girlfriend, the victim, got into an argument one night. When the victim returned to the couple’s home that evening after running errands, Sabell accused her of cheating on him and physically assaulted her. The victim then began audio recording the altercation on her cell phone. Sabell then forced the victim to perform oral sex on him and later broke down her bedroom door after she had locked herself inside. A jury found Sabell guilty of sexual assault, unlawful sexual contact, third degree assault, and criminal mischief.

On appeal, Sabell contended that the trial court erroneously instructed the jury on his affirmative defense of involuntary intoxication and that this lessened the prosecution’s burden of proof. Before trial, the victim admitted that she had put Seroquel, a drug she had been prescribed, in Sabell’s wine after the sexual assault in an attempt to sedate him. Sabell testified that the victim had put the Seroquel in his drink before the recording began and that he had no memory of any of the recorded events. Although the involuntary intoxication instruction was erroneous because it effectively told the jury not to consider the People’s burden of proof until after it first decided whether Sabell’s intoxication was self-induced, it was not plain error.

            Sabell also contended that the trial court gave an erroneous instruction limiting the jury’s consideration of other acts evidence. At trial, the victim, along with the victim’s friend and police officers, testified about four other incidents in which Sabell had been violent toward her or had forced her to have sex. The other acts evidence was relevant as to whether Sabell acted knowingly and voluntarily, and the court properly gave limiting instructions to the jury. There was no error.

            Sabell’s contention that the Colorado Sex Offender Lifetime Supervision Act is unconstitutional on its face and as applied to him was without merit.

            Sabell further argued, and the People conceded, that his unlawful sexual contact conviction should have merged with the sexual assault conviction at sentencing because they were based on the same conduct. The trial court plainly erred in entering both the sexual assault and unlawful sexual contact convictions.

            Sabell also argued, and the People conceded, that the trial court erred in imposing a crime against a child surcharge of $500. The victim here was not a child, and the trial court plainly erred.

            The unlawful sexual contact conviction and the crime against a child surcharge were vacated. The case was remanded for the trial court to correct the mittimus. The judgment and sentence were affirmed in all other respects.

Property Tax,Residential Property.

The Hogans own three connected and contiguous parcels of land in Summit County (the County). Lot 1 has a home built on it. The Hogans built a deck extending from their home across the boundary line onto Lot 2. Lot 3 is located in a subdivision and has an underground sewer line and an unpaved driveway installed by the original developer of the subdivision, but otherwise remains undeveloped. The Summit County Assessor denied the Hogans’ request to reclassify Lot 3 as residential, determining it to be vacant land for purposes of taxation. The Hogans appealed, and the Board of County Commissioners of Summit County (Board) upheld the Assessor’s classification. The Hogans appealed to the Board of Assessment Appeals (BAA), which upheld the Assessor’s classification.

On appeal, the Hogans asserted that the BAA erred in determining that Lot 3 was not “used as a unit in conjunction with the residential improvements.” The primary factor for determining property classification for property tax purposes is the property’s actual use on the relevant assessment date. Here, the BAA considered the likelihood of the parcel being conveyed separately, whether the parcel’s use was necessary or essential to qualify as integral, and whether the use of the parcel was active as opposed to passive. The BAA misapplied the law by relying on the possible future conveyance of Lot 3 as a separate unit without reference to how that possibility related to the Hogans’ current use of the parcel. The BAA further erred in interpreting the statute to require that the parcel’s use be a necessary or essential part of the residence. Finally, the use of the contiguous parcel need not be “active” as opposed to “passive.” Here, there is no evidence in the record that Lot 3 was used for a nonresidential purpose.

Lastly, the Court of Appeals rejected the BAA’s and the County’s arguments that the case could be affirmed on different grounds. 

The BAA’s order was reversed and the case was remanded.

Municipal Law,Eminent Domain,Public Use Purpose,Necessity,Bad Faith.

Lafayette is a home rule municipality, and Erie is a statutory town. Erie annexed Nine Mile Corner, entered into a disposition and development agreement, and identified King Soopers as a potential tenant. Thereafter, Lafayette determined it would condemn 22 acres of the southern portion of Nine Mile Corner to create an open space community buffer and leave the remaining 23 acres of Nine Mile Corner for Erie. Lafayette filed a petition in condemnation, and Erie responded by filing a motion to dismiss, arguing that Lafayette’s condemnation lacked a proper public purpose, thereby depriving the court of jurisdiction. The district court granted Erie’s motion.

On appeal, Lafayette argued that its condemnation had a proper public purpose and that no bad faith motivated its condemnation decision. A municipality may condemn a statutory town’s property because an open space community buffer could be a valid public purpose. Here, Erie met its burden of showing that Lafayette’s condemnation decision was motivated by bad faith, and the district court properly examined Lafayette’s finding of necessity. The district court indicated that Lafayette was motivated to keep King Soopers and its tax revenue within Lafayette and determined that Lafayette’s primary interest in the property was to interfere with Erie’s proposed commercial development. The record supported the determination that the taking for an open space community buffer was pretextual and was not a lawful public purpose.

The judgment was affirmed.