Sep 13 2013, 5:17 am
FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
ROBERT W. HAMMERLE GREGORY F. ZOELLER KATHRYN DINARDO Attorney General of Indiana Hammerle Law Office Indianapolis, Indiana ELLEN H. MEILAENDER Deputy Attorney General VICTORIA L. BAILEY Indianapolis, Indiana Beech Grove, Indiana
IN THE COURT OF APPEALS OF INDIANA
JERRY A. SMITH, ) ) Appellant-Defendant, ) ) vs. ) No. 15A05-1208-CR-411 ) STATE OF INDIANA, ) ) Appellee-Plaintiff. )
INTERLOCUTORY APPEAL FROM THE DEARBORN SUPERIOR COURT The Honorable Jonathan N. Cleary, Judge Cause No. 15D01-1106-FC-54
September 13, 2013
OPINION - FOR PUBLICATION
KIRSCH, Judge Jerry A. Smith (“Smith”) brings this interlocutory appeal from the trial court’s order
denying his motion to dismiss the charges against him. Smith contends that further
prosecution in state court after his plea of guilty to charges of federal conspiracy to commit
mail and wire fraud is barred by statutory double jeopardy principles.
We affirm in part, reverse in part and remand.
FACTS AND PROCEDURAL HISTORY
The factual background of this appeal largely mirrors the facts we have set forth in
another case against Smith, which we also dispose of today. See Smith v. State, No. 24A01-
1210-CR-469 (Ind. Ct. App. Sept. 13, 2013).
Between 2004 and 2010, Smith and Jasen Snelling (“Snelling”) ran a Ponzi scheme
out of CityFund Advisory (“CityFund”) and Dunhill Investment Advisors Ltd. (“Dunhill”).
Snelling was listed as the President of CityFund, and Smith was listed as the
Secretary/Treasurer. CityFund’s investment advisor license with the U.S. Securities and
Exchange Commission (“SEC”) was withdrawn in 2004, and Dunhill’s registered trust with
the SEC was withdrawn in 2002. Smith has not been registered to sell securities since May
of 2008 and was never registered to sell securities through CityFund or Dunhill. Of the
securities sold through CityFund and Dunhill, none was registered as required by law. A
total of approximately seventy-two investors in Ohio, Kentucky, and Indiana collectively lost
over $8,900,000.00 in this investment scheme.
Smith entered a guilty plea to the three federal charges against him on June 12, 2012.
Smith signed an agreed statement of facts acknowledging the Ponzi day trading scheme in
2 which he and Snelling falsely represented that they were licensed to sell securities when they
were not and the investors’ money was never invested. Smith acknowledged that he and
Snelling performed the specific overt acts set forth in the indictment.
At roughly the same time, Smith was also facing the Dearborn County charges. The
Dearborn County charges alleged that Smith and Snelling operated a Ponzi scheme in which
they solicited over $4,000,000.00 in “investments” to their businesses, CityFund and Dunhill,
from over thirty known investors. The charges alleged that Smith and Snelling used most of
the money for their personal enrichment without investing the money. The Dearborn County
charges similarly stated that CityFund’s investment advisor license with the SEC was
withdrawn in 2004, and Dunhill’s registered trust with the SEC was withdrawn in 2002.
Smith has not been registered to sell securities since May of 2008, and was never registered
to sell securities through CityFund or Dunhill. Further, none of the securities sold through
those businesses were registered as required by law. The victims identified in the Dearborn
County charges are Paul V. Klee III (“Klee”), Paul V. Klee II, also known as Paul V. Klee,
Jr. (“Klee Jr.”), and Todd Hinsky (“Hinsky”).
After pleading guilty to the federal charges, Smith filed a motion to dismiss the
Dearborn County charges, contending that further prosecution was barred by statutory double
jeopardy. The trial court denied Smith’s motion to dismiss, and Smith now appeals.
DISCUSSION AND DECISION
Smith claims that the trial court erred by denying his motion to dismiss the state-court
charges against him. The defendant bears the burden of proving, by a preponderance of the
3 evidence, those facts necessary to support a motion to dismiss. Swenson v. State, 868 N.E.2d
540, 541-42 (Ind. Ct. App. 2007). The clearly erroneous standard of review depends upon
whether the party is appealing a negative judgment or an adverse judgment. Baird v. ASA
Collections, 910 N.E.2d 780, 785 (Ind. Ct. App. 2009). Where the party bearing the burden
of proof at trial appeals from the trial court’s ruling, he appeals from a negative judgment and
will prevail only upon establishing that the judgment is contrary to law. Id. The judgment is
contrary to law when the evidence is without conflict and all reasonable inferences drawn
from the evidence lead to one conclusion, but the trial court reached a different one. Id.
Here, Smith asserts that Klee Jr. and Hinsky are specifically mentioned in the federal
charges, and argues that the State has acknowledged that the federal charges addressed the
same victims as those named in the Dearborn County charges. The federal charges
specifically identify two of the victims as “V.K.” and “T.H.” Dearborn App. at 103-05. At
the hearing on Smith’s motion to dismiss, the following exchange occurred between the trial
court and the State:
THE COURT: Now the US District Court in Cincinnati does that involve any of the victims that are filed here in Dearborn County? THE STATE: Those are the same victims your honor. THE COURT: Same acts, same victims? THE STATE: Not, not the same acts. THE COURT: Same money? THE STATE: Same money.
Tr. at 4-5. (Emphasis added.)
As we decided in the appeal involving Smith’s Franklin County charges, we conclude
that the trial court erred by denying Smith’s motion to dismiss and incorporate by reference
4 our discussion of the issue here. In this appeal, the victims specifically named in the
Dearborn County charges are among the victims specifically named in the federal indictment,
and the State conceded to the trial court that the federal charges involved the same victims.
Both the federal indictment and the state charges arise from the same overarching
Ponzi scheme involving numerous victims in multiple states who were harmed by the actions
of Smith and Snelling. The Ponzi scheme was a single scheme to defraud multiple victims
including those identified in the Dearborn County charges. The Ponzi scheme resulted in
combined investment losses by the victims in excess of $8,900,00.00 including the losses
sustained by the Dearborn County victims.
The federal court’s judgment included all of the victims and all of the losses identified
in the Dearborn County indictment. The federal court’s judgment ordered the Smith to pay
restitution of $5,000,000.00. Specifically included in the federal restitution order were each
of the victims identified in the Dearborn County prosecution.
Indiana Code section 35-41-4-5 provides that a former prosecution in any other
jurisdiction is a bar to a subsequent prosecution for the same conduct in Indiana if the former
prosecution resulted a conviction of the defendant. Here, the conduct for which Smith was
prosecuted in the federal proceeding was the overarching Ponzi scheme. That scheme also
formed the basis of the federal charges and those brought by Dearborn County. Accordingly,
Free access — add to your briefcase to read the full text and ask questions with AI
Sep 13 2013, 5:17 am
FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
ROBERT W. HAMMERLE GREGORY F. ZOELLER KATHRYN DINARDO Attorney General of Indiana Hammerle Law Office Indianapolis, Indiana ELLEN H. MEILAENDER Deputy Attorney General VICTORIA L. BAILEY Indianapolis, Indiana Beech Grove, Indiana
IN THE COURT OF APPEALS OF INDIANA
JERRY A. SMITH, ) ) Appellant-Defendant, ) ) vs. ) No. 15A05-1208-CR-411 ) STATE OF INDIANA, ) ) Appellee-Plaintiff. )
INTERLOCUTORY APPEAL FROM THE DEARBORN SUPERIOR COURT The Honorable Jonathan N. Cleary, Judge Cause No. 15D01-1106-FC-54
September 13, 2013
OPINION - FOR PUBLICATION
KIRSCH, Judge Jerry A. Smith (“Smith”) brings this interlocutory appeal from the trial court’s order
denying his motion to dismiss the charges against him. Smith contends that further
prosecution in state court after his plea of guilty to charges of federal conspiracy to commit
mail and wire fraud is barred by statutory double jeopardy principles.
We affirm in part, reverse in part and remand.
FACTS AND PROCEDURAL HISTORY
The factual background of this appeal largely mirrors the facts we have set forth in
another case against Smith, which we also dispose of today. See Smith v. State, No. 24A01-
1210-CR-469 (Ind. Ct. App. Sept. 13, 2013).
Between 2004 and 2010, Smith and Jasen Snelling (“Snelling”) ran a Ponzi scheme
out of CityFund Advisory (“CityFund”) and Dunhill Investment Advisors Ltd. (“Dunhill”).
Snelling was listed as the President of CityFund, and Smith was listed as the
Secretary/Treasurer. CityFund’s investment advisor license with the U.S. Securities and
Exchange Commission (“SEC”) was withdrawn in 2004, and Dunhill’s registered trust with
the SEC was withdrawn in 2002. Smith has not been registered to sell securities since May
of 2008 and was never registered to sell securities through CityFund or Dunhill. Of the
securities sold through CityFund and Dunhill, none was registered as required by law. A
total of approximately seventy-two investors in Ohio, Kentucky, and Indiana collectively lost
over $8,900,000.00 in this investment scheme.
Smith entered a guilty plea to the three federal charges against him on June 12, 2012.
Smith signed an agreed statement of facts acknowledging the Ponzi day trading scheme in
2 which he and Snelling falsely represented that they were licensed to sell securities when they
were not and the investors’ money was never invested. Smith acknowledged that he and
Snelling performed the specific overt acts set forth in the indictment.
At roughly the same time, Smith was also facing the Dearborn County charges. The
Dearborn County charges alleged that Smith and Snelling operated a Ponzi scheme in which
they solicited over $4,000,000.00 in “investments” to their businesses, CityFund and Dunhill,
from over thirty known investors. The charges alleged that Smith and Snelling used most of
the money for their personal enrichment without investing the money. The Dearborn County
charges similarly stated that CityFund’s investment advisor license with the SEC was
withdrawn in 2004, and Dunhill’s registered trust with the SEC was withdrawn in 2002.
Smith has not been registered to sell securities since May of 2008, and was never registered
to sell securities through CityFund or Dunhill. Further, none of the securities sold through
those businesses were registered as required by law. The victims identified in the Dearborn
County charges are Paul V. Klee III (“Klee”), Paul V. Klee II, also known as Paul V. Klee,
Jr. (“Klee Jr.”), and Todd Hinsky (“Hinsky”).
After pleading guilty to the federal charges, Smith filed a motion to dismiss the
Dearborn County charges, contending that further prosecution was barred by statutory double
jeopardy. The trial court denied Smith’s motion to dismiss, and Smith now appeals.
DISCUSSION AND DECISION
Smith claims that the trial court erred by denying his motion to dismiss the state-court
charges against him. The defendant bears the burden of proving, by a preponderance of the
3 evidence, those facts necessary to support a motion to dismiss. Swenson v. State, 868 N.E.2d
540, 541-42 (Ind. Ct. App. 2007). The clearly erroneous standard of review depends upon
whether the party is appealing a negative judgment or an adverse judgment. Baird v. ASA
Collections, 910 N.E.2d 780, 785 (Ind. Ct. App. 2009). Where the party bearing the burden
of proof at trial appeals from the trial court’s ruling, he appeals from a negative judgment and
will prevail only upon establishing that the judgment is contrary to law. Id. The judgment is
contrary to law when the evidence is without conflict and all reasonable inferences drawn
from the evidence lead to one conclusion, but the trial court reached a different one. Id.
Here, Smith asserts that Klee Jr. and Hinsky are specifically mentioned in the federal
charges, and argues that the State has acknowledged that the federal charges addressed the
same victims as those named in the Dearborn County charges. The federal charges
specifically identify two of the victims as “V.K.” and “T.H.” Dearborn App. at 103-05. At
the hearing on Smith’s motion to dismiss, the following exchange occurred between the trial
court and the State:
THE COURT: Now the US District Court in Cincinnati does that involve any of the victims that are filed here in Dearborn County? THE STATE: Those are the same victims your honor. THE COURT: Same acts, same victims? THE STATE: Not, not the same acts. THE COURT: Same money? THE STATE: Same money.
Tr. at 4-5. (Emphasis added.)
As we decided in the appeal involving Smith’s Franklin County charges, we conclude
that the trial court erred by denying Smith’s motion to dismiss and incorporate by reference
4 our discussion of the issue here. In this appeal, the victims specifically named in the
Dearborn County charges are among the victims specifically named in the federal indictment,
and the State conceded to the trial court that the federal charges involved the same victims.
Both the federal indictment and the state charges arise from the same overarching
Ponzi scheme involving numerous victims in multiple states who were harmed by the actions
of Smith and Snelling. The Ponzi scheme was a single scheme to defraud multiple victims
including those identified in the Dearborn County charges. The Ponzi scheme resulted in
combined investment losses by the victims in excess of $8,900,00.00 including the losses
sustained by the Dearborn County victims.
The federal court’s judgment included all of the victims and all of the losses identified
in the Dearborn County indictment. The federal court’s judgment ordered the Smith to pay
restitution of $5,000,000.00. Specifically included in the federal restitution order were each
of the victims identified in the Dearborn County prosecution.
Indiana Code section 35-41-4-5 provides that a former prosecution in any other
jurisdiction is a bar to a subsequent prosecution for the same conduct in Indiana if the former
prosecution resulted a conviction of the defendant. Here, the conduct for which Smith was
prosecuted in the federal proceeding was the overarching Ponzi scheme. That scheme also
formed the basis of the federal charges and those brought by Dearborn County. Accordingly,
we conclude that Dearborn County prosecution of Smith is for the same conduct as that
included in his federal conviction.
5 Furthermore, as we held in Smith’s appeal from the Franklin County charges, we
conclude that the allegations that Smith transacted business as a broker-dealer without having
registered with the Indiana Secretary of State, Securities Division as required by law, and
without being exempt from registration, involve different conduct from that which formed
the basis of Smith’s federal conviction for devising and participating in the Ponzi scheme to
defraud investors. We incorporate the analysis from Smith’s Franklin County appeal here
and adopt it.
Therefore, we reverse the trial court’s ruling denying Smith’s motion to dismiss
Counts 1 through 3 and Counts 7 through 18. However, we affirm the trial court’s ruling
denying Smith’s motion to dismiss Counts 4 through 6, and remand this matter to the trial
court.
Affirmed in part, reversed in part, and remanded.
PYLE, J., concurs.
VAIDIK, J., concurs in part and dissents in part with separate opinion.
6 ______________________________________________________
JERRY A. SMITH, ) ) Appellant-Defendant, ) ) vs. ) No. 15A05-1208-CR-411 ) STATE OF INDIANA, ) ) Appellee-Plaintiff. ) )
VAIDIK, Judge, concurring in part and dissenting in part.
For the reasons set forth in my dissent in Smith v. State, No. 24A01-1210-CR-469
(Ind. Ct. App. Sept. 13, 2013), I do not agree that Counts 4-6 can stand. I believe those
charges, which allege that Smith knowingly transacted business as a broker-dealer without
being registered to do so, are also barred by double jeopardy. I therefore dissent as to these
charges.