State v. Beck

2016 Ohio 8122
CourtOhio Court of Appeals
DecidedDecember 14, 2016
DocketC-150539
StatusPublished
Cited by6 cases

This text of 2016 Ohio 8122 (State v. Beck) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Beck, 2016 Ohio 8122 (Ohio Ct. App. 2016).

Opinion

[Cite as State v. Beck, 2016-Ohio-8122.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

STATE OF OHIO, : APPEAL NO. C-150539 TRIAL NO. B-1304320A Plaintiff-Appellee, : O P I N I O N. vs. :

PETER BECK, :

Defendant-Appellant. :

Criminal Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause Remanded

Date of Judgment Entry on Appeal: December 14, 2016

Michael DeWine, Ohio Attorney General, Katherine Mullin, Jocelyn K. Lowe and Daniel Kasaris, Assistant Attorneys General, for Plaintiff-Appellee,

Squire Patton Boggs (US) LLP, Pierre Bergeron, Lauren Kuley and Jeffrey DeBeer, for Defendant-Appellant. OHIO FIRST DISTRICT COURT OF APPEALS

Per Curiam.

{¶1} Peter Beck was indicted on over 30 charges related to his involvement

in influencing investors to make capital contributions to a start-up technology firm,

Christopher Technologies (“CTech”). Following a ten-week bench trial, Beck was

found guilty of three counts of theft, three counts of securities violations, and seven

counts of perjury. He was acquitted of the remaining charges. The trial court

imposed an aggregate prison sentence of four years. Beck now appeals, arguing,

among other things, that his convictions for the securities violations and theft should

be reversed because they were based on actions that occurred outside the applicable

statute of limitations, and that his perjury convictions should be overturned because

the record does not demonstrate that his testimony was false. Finding merit to some

of Beck’s arguments, we reverse the convictions for the securities violations as well as

all seven perjury convictions. In all other respects, we affirm the trial court’s

judgment.

{¶2} In 2006, John Fussner and Mark Woods formed CTech to develop and

sell a safety product called “Account4Me.” Fussner then reached out to Beck, a

certified public accountant, to discuss how CTech could begin raising money to

support its operations. Beck referred Fussner to Tom Lysaght, the owner of TML

Consulting, LLC, (“TML”). CTech eventually contracted with TML to raise capital for

CTech. Beck’s accounting firm worked for CTech preparing financial statements and

advising its bookkeeper. In the summer of 2007, Fussner asked Beck to become the

chief financial officer (“CFO”) for CTech. Beck obtained business cards with the CFO

title and held himself out to potential investors as the CFO of CTech.

2 OHIO FIRST DISTRICT COURT OF APPEALS

Wells Fargo Investors

{¶3} CTech secured capital through TML’s efforts. But more money was

necessary by the end of 2007 to keep the company afloat. In early December 2007,

Beck and Fussner met with P.J. Boland, Corey Jordan and Robert Sprangley, three

financial advisors who worked at Wells Fargo, in an effort to persuade them to

personally invest in CTech. At this meeting, Beck held himself out as the CFO of

CTech and discussed the financial condition of the firm. All three advisors testified

that Beck told them that he was not receiving any compensation from CTech except

for “sweat equity,” the firm had little or no outstanding debt, CTech was at the end of

private offering and was only selling three more shares in the firm, the projected loss

for 2007 was between $600,000 and $650,000, the monthly “burn rate” was

between $40,000 and $50,000, and the three financial advisors’ investment would

be used toward product development. The three advisors were also told at this

meeting that CTech was in the process of finalizing a deal with a major corporation

that would bring significant revenue. The three advisors all testified that based on

this information, they thought that CTech would be profitable by the latter part of

2008.

{¶4} Each investment advisor also testified that as a result of his

conversation with Beck he decided to invest in CTech. The three advisors pooled

their money, each personally contributing $50,000, to invest in one share of CTech.

Each advisor wired his money to CTech on or around December 21, 2007. Sprangley

testified that the wiring instructions were provided to them by Beck.

{¶5} The three advisors attended their first CTech board meeting in April

2008, where they received a copy of CTech’s financial statement dated December 31,

3 OHIO FIRST DISTRICT COURT OF APPEALS

2007. After reviewing that statement, the three advisors realized that they had

received inaccurate information about the finances of CTech. The advisors learned

that Beck was receiving compensation from CTech; that despite being told that

CTech had no outstanding debt, the financial statement showed that CTech had over

$800,000 in loans from 2006 and 2007; that the burn rate was actually $150,000

per month instead of $50,000 per month; that CTech was operating at a loss of 1.5

million dollars, which was $900,000 more than the three advisors had been led to

believe; that the three advisors’ investment was not used toward product

development, but instead was used to pay salaries; and that CTech was selling three

more shares, even though the investors had already purchased one of the allegedly

last three shares in the firm.

The Walters’ Investment

{¶6} In July 2008, Beck met with Tom and Tina Walter at the request of

Tom Lysaght, who owned TML. Tom Walter testified that this meeting occurred on

either July 8 or July 10, 2008. Walter testified that at that meeting Beck had given

him a business card, which indicated that Beck was the CFO of CTech and that he

was a certified public accountant. Although CTech was struggling financially at this

point, Walter testified that when he had asked Beck about the financial solvency of

CTech, Beck’s responses had indicated that CTech was a solvent company—it had

ongoing bills but no significant debt. Walter also testified that during this meeting

he was led to believe that CTech’s product would be on the market soon and that

CTech already had a buyer that would result in significant revenue. Because of this

information, the Walters invested $150,000 in CTech. Walter wired $50,000 to

CTech on July 16, 2008, and the remaining $100,000 investment on July 20, 2008.

4 OHIO FIRST DISTRICT COURT OF APPEALS

{¶7} In 2010, Walter had a telephone conversation with Lysaght that

caused Walter to suspect that his investment in CTech was part of a “ponzi scheme.”

Lysaght died shortly thereafter, so Walter began seeking TML’s business records.

Unable to obtain the business records from Lysaght’s widow, Walter contacted Beck,

who obtained the records from Lysaght’s home and brought them to Walter. Walter

reviewed the records and realized that he had been defrauded. Walter notified the

Ohio Division of Securities, which began an investigation. As part of that

investigation, Beck gave testimony under oath in a “Rule 23” hearing about his work

at CTech and his involvement with investors.

{¶8} On July 19, 2013, Beck was indicted for multiple counts of theft and

securities fraud. The theft offenses pertaining to the investments made by the three

financial advisors alleged that the thefts had occurred in July 2008 and August

2008. The securities-violation offenses related to Tom and Tina Walter alleged that

they had occurred on July 22, 2008.

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2016 Ohio 8122, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-beck-ohioctapp-2016.