State v. Bradshaw

2004 UT App 298, 99 P.3d 359, 508 Utah Adv. Rep. 10, 2004 Utah App. LEXIS 103, 2004 WL 2029608

• Court: Court of Appeals of Utah
• Decided: September 10, 2004
• Docket: 20020137-CA
• Status: Published

Opinions

OPINION

ORME, Judge:

{1 Defendant Brooks Bradshaw was charged with eleven counts of communications fraud, second degree felonies in violation of Utah Code Ann. § 76-10-1801 (2003), and one count of pattern of unlawful activity (racketeering), a second degree felony in violation of Utah Code Ann. § 76-10-1608 (2003). Bradshaw filed a motion to quash the bindover on the racketeering charge and to reduce the degree of offense of the communications fraud charges. The trial court denied his motion in both respects. We reverse.

BACKGROUND

2 In lieu of a preliminary hearing, which Bradshaw waived, the parties submitted a written stipulation setting forth the following facts. Over a period of several months, Bradshaw defrauded eleven persons of amounts ranging from $400 to $600 each, for a total of $5,400. Most of the victims were either attempting to refinance mortgages on their residences or in the process of foreclosure. After identifying his victims, Bradshaw falsely represented himself as the owner of various mortgage companies. Bradshaw then promised to assist the victims in obtaining refinancing or avoiding foreclosure in exchange for various fees, ostensibly to be used for appraisals, title searches, and credit checks. Brett Kennedy and William Thomas, two of Bradshaw's former coworkers in the appraisal business,¹ witnessed some of the fraudulent activity, and Bradshaw asked Thomas to falsely represent himself as an appraiser to one of the victims. Bradshaw took the victims' money, but never performed any of the promised services. Bradshaw spent the money paying his personal expenses.

T 3 The State charged Bradshaw with eleven counts of communications fraud, second degree felonies in violation of Utah Code Ann. § 76-10-1801 (20083),² and one count of pattern of unlawful activity (racketeering), a second degree felony in violation of Utah Code Ann. § 76-10-1603 (2008). Bradshaw filed a motion to quash the bindover on the racketeering charge and to reduce the degree of offense of the communications fraud charges.

T4 As to the racketeering charge, Bradshaw argued that the State failed to show probable cause that he was engaged in an "enterprise" as required by subsections (1) and (2) of section 76-10-1608. As to the communications fraud charges, Bradshaw argued that the State misconstrued the statute in charging him with eleven second degree felonies. In determining the degree of the offense, the statute allows for aggregation of "the total value of all ... money ... obtained by the scheme or artifice." Utah Code Ann. § 76-10-1801(2). In addition, the statute provides that "[eJach separate communication ... is a separate act and offense of communication fraud." Id. § 76-10-1801(5). The State first aggregated the amount taken from all of Bradshaw's victims, which amounted to $5,400, surpassing the threshold for a second degree felony. See id. § 76-10-1801(1)(d). The State then treated each communication as a separate offense and attributed the entire $5,400 to each of Bradshaw's victims, charging Bradshaw with eleven second degree felonies. Bradshaw argued that the State should not be permitted to avail itself of both charging schemes at once. In other words, under Bradshaw's view the State should be required to choose whether to aggregate the amounts taken from Bradshaw's victims, or, in the alternative, to treat each of Bradshaw's communications as separate offenses. Thus, Bradshaw contended that he should have been charged with either eleven class A misdemeanors or one second degree felony.

5 The trial court denied Bradshaw's motion, concluding, first, that the State could prove the "enterprise" element of racketeering even if Bradshaw only used the money for personal expenses, and second, that the State could legitimately charge Bradshaw with eleven second degree felonies under seetion 76-10-1801.

T6 Pursuant to a plea agreement, Bradshaw pled guilty to four counts of attempted communications fraud, third degree felonies under Utah Code Ann. § 76-4-102(8) (2008), reserving his right to appeal the trial court's denial of his motion. See generally State v. Sery, 758 P.2d 935, 939 (Utah Ct.App.1988). The trial court accepted the pleas and the remaining charges were dropped. A judgment of conviction was entered on four counts of attempted communications fraud, and Bradshaw appealed.

ISSUES AND STANDARDS OF REVIEW

T7 Bradshaw raises two issues on appeal. First, Bradshaw argues that the State's charging scheme is contrary to the language and purpose of Utah's Communications Fraud statute. Second, Bradshaw argues that the trial court erroneously denied his motion to quash the bindover on the racketeering charge because the stipulated facts do not establish that Bradshaw was engaged in an "enterprise."

T8 Both issues 'on appeal present questions of statutory interpretation. "The proper interpretation of a statute is a question of law." Rushton v. Salt Lake County, 1999 UT 36, ¶ 17, 977 P.2d 1201. Therefore, "we accord no deference to the legal conclusions of the [trial] court but review them for correctness." Id. Likewise, "[the determination of whether to bind a criminal defendant over for trial is a question of law.... [Wle review that determination without deference to the court below." State v. Clark, 2001 UT 9, ¶ 8, 20 P.3d 300.³

ANALYSIS

I. Rules of Statutory Interpretation

T9 "When interpreting statutes, our primary goal is to evince 'the true intent and purpose of the Legislature"" State ex rel. Division of Forestry, Fire & State Lands v. Tooele Co., 2002 UT 8,% 10, 44 P.8d 680 (quoting Jensen v. Intermountain Health Care, Inc., 679 P.2d 908, 906 (Utah 1984)). Generally, the " 'best evidence' of a statute's meaning [is] the plain language of the act." Id. "In reading the language of an act, moreover, we seek 'to render all parts [of the statute] relevant and meaningful, and we therefore 'presume the legislature use[d] each term advisedly and ... according to its ordinary meaning"" Id. (alterations and ellipsis in original) (citations omitted). This means that "the expression of one [term] should be interpreted as the exclusion of another ... [and that] omissions in statutory language should 'be taken note of and given effect'" Biddle v. Washington Terrace City, 1999 UT 110,114, 998 P.2d 875 (quoting Kennecott Copper Corp. v. Anderson, 30 Utah 2d 102, 514 P.2d 217, 219 (1978)).

T10 However, if the plain language of a statute is ambiguous, "unreasonably confused, [or] inoperable," we will "seek guidance" from other sources, including "legislative history and relevant policy considerations." State Farm Mut. Auto. Ins. Co. v. Clyde, 920 P2d 1188, 1186 (Utah 1996) (internal quotations and citations omitted). Finally, "[Utah statutory] provisions and all proceedings under them are to be liberally construed with a view to effect the objects of the statutes and to promote justice." Utah Code Ann. § 68-3-2 (2000).

IIL - Communications Fraud

T11 Bradshaw argues that the State should not be permitted to aggregate the amounts taken from all of his victims while simultaneously treating each communication as a separate offense, thereby attributing the aggregated amount of $5,400 to each of Bradshaw's eleven victims.

{12 Pursuant to the rules of statutory construction outlined above, we look first to the language of the statute. The relevant provisions of Utah's Communications Fraud statute are as follows:

(1) Any person who has devised 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 who communicates directly or indirectly with any person by any means for the purpose of executing or concealing the scheme or artifice is guilty of:

(a) a class B misdemeanor when the value of the property, money or thing obtained or sought to be obtained is less than $300;

(b) a class A misdemeanor when the value of the property, money, or thing obtained or sought to be obtained is or exceeds $300 but is less than $1,000;

(c) a third degree felony when the value of the property, money, or thing obtained or sought to be obtained is or exceeds $1,000 but is less than $5,000;

(d) a second degree felony when the value of the property, money, or thing obtained or sought to be obtained is or exceeds $5,000. ...

(2) The determination of the degree of any offense under Subsection (1) shall be measured by the total value of all property, money, or things obtained or sought to be obtained by the scheme or artifice de-seribed in Subsection (1). ...

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(5) 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.

Utah Code Ann. § 76-10-1801 (2008).

1 13 In the trial court's view, the validity of the State's charging methodology hinged on the interpretation of the word "another" in subsection (1) of section 76-10-1801, which refers to "any scheme or artifice to defraud another or to obtain [money] from another . by means of false or fraudulent pretenses." Id. (emphasis added). The trial court reasoned that if "another" is interpreted in the singular, a "scheme or artifice" would appear to contemplate only one victim; but, on the other hand, if "another" is interpreted to include the plural, then "scheme or artifice" could involve multiple victims.

T14 The trial court concluded that the term "another" should be interpreted to include the plural form "others" and thus that the term "scheme or artifice" could include multiple victims. Consequently, the trial court concluded that the defrauding of all eleven of Bradshaw's victims must be treated as a single scheme or artifice under the statute.

115 The trial court's interpretation of the statute was erroneous. While it is generally true that "[the singular number includes the plural, and the plural the singular," Utah Code Ann. § 68-8-12(1)(a) (2000), the opposite is true when "such construction would be inconsistent with the manifest intent of the Legislature or repugnant to the context of the statute[.]" Id. § 68-3-12(1). See also Metropolitan Water Dist. v. Salt Lake City, 14 Utah 2d 171, 380 P.2d 721, 724 (1968) ("IIJt is quite generally held that where a sensible interpretation and application of the statute so requires the singular includes the plural and vice versa.") (emphasis added).

16 The language of the statute indicates that the "aggregation" and "separate offense" provisions apply only to a single scheme or artifice. Thus, in order to uphold the trial court, subsection (2) permits aggregation of the total value of money "obtained ... by the scheme or artifice described in Subsection (1)," Utah Code Ann. § 76-10-1801(2) (20083) (emphasis added), while subsection (5) permits "[elach separate communication made for the purpose of executing or concealing a scheme or artifice described in Subsection (1)" to be treated as separate offenses. Id. § 76-10-1801(5) (emphasis added). See State ex rel. Division of Forestry, Fire & State Lands v. Tooele Co., 2002 UT 8, ¶ 10, 44 P.3d 680 (We " 'presume the legislature use[d] each term advisedly and . according to its ordinary meaning.! ") (alteration and ellipsis in original) (citation omitted). Thus, even if "another" as used in subsection (1) should be deemed to mean "another or others," ⁴ the "others" would have to be defrauded by means of a single scheme or artifice.⁵

117 The United States Supreme Court recognized that the word "scheme" is "highly elastic" and "hardly a self-defining term." H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 241 n. 3, 109 S.Ct. 2893, 2901 n. 3, 106 LEd.2d 195 (1989). Rather, "[al 'scheme' is in the eye of the beholder, since whether a scheme exists depends on the level of generality at which criminal activity is viewed." Id. Indeed, the State acknowledges in this case that Utah trial courts have "go[ne]l both ways" in interpreting section 76-10-1608. See 2A Norman J. Singer, Statutes and Statutory Construction § 45:02, at 17 (6th ed. 2000) ("[LJegislation is ambiguous ... when well-informed persons may reasonably disagree as to its meaning.").

118 However, the United States Supreme Court has directed that " 'ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity'" Simpson v. United States, 435 U.S. 6, 14, 98 S.Ct. 909, 914, 55 L.Ed.2d 70 (1978) (quoting United States v. Bass, 404 U.S. 336, 347, 92 S.Ct. 515, 522, 30 L.Ed.2d 488 (1971)). Accord United States v. Turkette, 452 U.S. 576, 587 n. 10, 101 S.Ct. 2524, 2531 n. 10, 69 L.Ed.2d 246 (1981) (recognizing that the "rule of lenity," as a "guide to statutory construction ... serves as an aid for resolving an ambiguity"). Thus, " 'Twlhen there are two rational readings of a criminal statute, one harsher than the other, we are to choose the harsher only when [the Legislature! has spoken in clear and definite language." Scheidler v. NOW, Inc., 537 U.S. 393, 123 S.Ct. 1057, 1068, 154 L.Ed.2d 991 (2003) (quoting McNally v. United States, 483 U.S. 350, 359-60, 107 S.Ct. 2875, 2881, 97 L.Ed.2d 292 (1987)). Utah courts have also recognized the concept of lenity. See State v. Barker, 624 P.2d 694, 696 (Utah 1981) ("[It is] the presupposition of our law to resolve doubts in the enforcement of the penal code against the imposition of a harsher punishment.").

19 In addition, "relevant policy considerations" may be taken into account in construing an ambiguous statute. State Farm Mut. Auto. Ins. Co. v. Clyde, 920 P.2d 1183, 1186 (Utah 1996) (internal quotations and citations omitted). As Bradshaw points out in his brief, charging him with eleven second degree felonies, each carrying a prison sentence of one to fifteen years, see Utah Code Ann. § 76-3-208(2) (1999),⁶ subjects him to as much as a 165-year prison term for taking a total of $5,400 because he took it from eleven people. Such a charging system is repugnant to notions of traditional fairness and, additionally, does not comport with a stated purpose of the Utah Criminal Code, which is to "[plrescribe penalties which are proportionate to the seriousness of offenses." Utah Code Ann. $ 76-1-104(8) (2008). See also Utah Code Ann. § 76-1-106 (2008) ("All provisions of this code and offenses defined by the laws of this state shall be construed according to the fair import of their terms to promote justice and to effect the objects of the law and general purposes of [the Utah Criminal Code.]"); 2A Norman J. Singer, Statutes and Statutory Construction § 45:12, at 81-82 (6th ed. 2000) ("It [is] a golden rule of statutory interpretation that, when one of several possible interpretations produces an unreasonable result, that is a reason for rejecting that interpretation in favor of another which would produce a reasonable result.").

€20 In the instant case, the stipulation establishes multiple schemes, not a single scheme with multiple victims. See supra note 5. The victims were deceived at different times, in different places, by different stories, and through different methods. The victims were approached in different cities, including Salt Lake City, West Jordan, South Jordan, Tooele, and Draper. The victims were also promised different combinations of services, including title searches, credit reports, and property appraisals. Only some of the victims were facing imminent foreclosure. Although most of the victims were interested in refinancing their residences, Bradshaw offered to arrange the purchase of one victim's store and offered to help another victim with a "real estate project he was attempting to complete." On some of the occagions, Bradshaw was accompanied by at least one former coworker. Bradshaw approached some of the victims as couples and other times approached them individually. The State attempts to generalize this series of schemes into a single scheme. See H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 241 n. 3, 109 S.Ct. 2893, 2901 n. 3, 106 L.Ed.2d 195 (1989) ("[Wlhether a scheme exists depends on the level of generality at which criminal activity is viewed."). However, such disparate cireumstances simply cannot fairly be characterized as one "scheme or artifice" under section 76-10-1608.⁷

121 The State argues that "it is the prerogative of the legislature to define crimes and punishments" and that it "may impose harsher penalties on certain crimes even if logic does not compel them to do so." The point is well made. However, in this case, the Legislature's obvious policy to "get tough" on communications fraud is aptly served under the interpretation of section 76-10-1801 embraced here. As previously noted, the statute allows the State to treat each communication in furtherance of a scheme or artifice as a separate offense and may, in appropriate cases, allow the State to aggregate money taken from each individual victim of a single, coherent scheme for purposes of making the crimes second degree felonies-stern enforcement by any standard. Absent explicit direction from the Legislature, however, we will not read the statute as additionally allowing the State to attribute the losses from each victim of multiple schemes to all other victims. See Jensen v. Intermountain Health Care, Inc., 679 P.2d 903, 906-07 (Utah 1984) ("The meaning of a part of an act should harmonize with the purpose of the whole act.... The Legislature can hardly have intended that a construction should be placed on [one section] that would result in harsh and unfair results in applying the remainder of the Act."). As stated by our Supreme Court:

It is not always possible to foresee and prescribe ... all situations to which [a statute] might apply. Attempts to give [a statute] universal and literal application frequently lead to incongruous results which were never intended. When it is obvious that this is so, the statute should ... be considered in the light of its background and ... purposel[,] together with other aspects of the law which have a bearing on the problem involved.

Snyder v. Clume, 15 Utah 2d 254, 390 P.2d 915, 916 (1964).

[ 22 In light of the language and relevant policy underlying Utah's Communications Fraud statute, the State may not attribute the aggregated amount of $5,400 to each individual victim of Bradshaw's entire course of fraudulent activity. Therefore, at least on the basis of the facts stipulated to by the State, Bradshaw's motion to reduce the degree of the charged offenses on the communications fraud counts should have been granted.

III. Racketeering

128 Bradshaw argues that the State failed to establish probable cause that he was engaged in an "enterprise" as required by Utah's Pattern of Unlawful Activity Act (UPUAA). See Utah Code Ann. § 76-10-1608(1), (2) (2003). Bradshaw is correct that "[to bind a defendant over for trial, the State must show (probable cause' at a preliminary hearing" by producing evidence sufficient "to support a reasonable belief that an offense has been committed and that the defendant committed it."⁸ State v. Clark, 2001 UT 9,14 10,16, 20 P.3d 300 (citations omitted). Accord State v. Robinson, 2003 UT App 1,15, 63 P.3d 105. This means that the State must produce " 'believable evidence of all the elements of the crime charged, " Clark, 2001 UT 9 at T 15, 20 P.3d 300 (citations omitted), i.e., "that (1) [Brad-

shaw was] engaged in a pattern of unlawful activity and (2) [Bradshaw was] involved in an enterprise." Holbrook v. Master Prot. Corp., 883 P.2d 295, 802 (Utah Ct.App.1994). Accord State v. McGrath, 749 P.2d 631, 636 (1988) (holding State must prove both elements to prevail on racketeering charge).

924 Bradshaw essentially concedes that the State demonstrated the required probable cause on the "pattern of unlawful activity" element of racketeering. Therefore, we address only the second prong of the racketeering charge, i.e., whether the stipulation contained facts showing that Bradshaw was involved in an "enterprise" as required by subsections (1) and (2) of section 76-10-1603.⁹ It clearly did not.

1 25 While the stipulation ably detailed the facts relative to the communications fraud charges, allowing for meaningful evaluation of those counts, it all but ignored the racketeering count. Neither the criminal information nor the stipulated facts set forth any cognizable theory of an enterprise. This approach was rejected in State v. Bell, TTO P.2d 100 (Utah 1988),¹⁰ where the Utah Supreme Court explained that "[the existence of an 'enterprise' is essential for the crimes defined by [UPUAA]" because the UPUAA crime "is more than just the substantive offense constituting the racketeering activity; it consists of a particular relationship between the racketeering activity and an enterprise.... Thus, proof of the existence of an enterprise and its relationship to the racketeering activity is essential for a conviction under [UPUAA]J." Id. at 108 n. 2. See also Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 645-46 (ith Cir.1995) (dismissing RICO complaint because "a nebulous, open-ended description of the enterprise does not sufficiently identify this essential element of the RICO offense"); Gore v. Eichholz, No. CV-491-084, 1992 WL 96316, *2, 1992 U.S. Dist. LEXIS 5998, at **7, 18 (8.D.Ga. April 24, 1992) (dismissing RICO claim where complaint failed to "identify [an] enterprise precisely, describe its structure, or explain the [dJefendants' role in the pattern of racketeering activity associated with the enterprise").

126 The facts of Bell are illustrative. In that case, the defendant, who owned a convenience store, was convicted of racketeering "by means of drug trafficking" in his store. Bell, 770 P.2d at 101. The defendant appealed, claiming that the State's bill of particulars "was not adequately detailed to put him on notice of the alleged factual basis for the element of an enterprise." Id. at 105. Regarding the enterprise element, the State's bill of particulars recited: "[The eInterprise consists of the trafficking [sic] in controlled substances and investing the proceeds." Id. (second alteration in original). The Court responded: "By no stretch of the imagination could this] single enigmatic sentence ... be construed as containing sufficient factual information to describe the State's actual theories of [the enterprise] element of the crime, much less to permit [defendant] to prepare his defense on this element." Id. Thus, the Court reversed the defendant's convictions and remanded for a new trial. See id. at 111.

127 While admittedly in a different procedural posture than the instant case,¹¹ the Court's observations in Bell are applicable here. The State's information merely parrots the language of UPUAA and offers no insight into the State's theory of the alleged enterprise. Likewise, the stipulation nowhere mentions the word "enterprise." On appeal, the State postulates that its theory of an enterprise is an "association in fact" between Bradshaw and his two former coworkers. An "association in fact" enterprise "is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." State v. Hutchings, 950 P.2d 425, 481 (Utah Ct.App.1997). The stipulation's vague references to the fact that two of Bradshaw's acquaintances witnessed some of the misrepresentations and may have participated on one occasion is not suggestive of an "ongoing organization" or that Bradshaw and his so-called accomplices "function[ed] as a continuing unit." Id. See Clark, 2001 UT 9 at 15, 20 P.3d 300 (holding that to satisfy probable cause standard at preliminary hearing, State must produce " 'believable evidence of all the elements of the crime charged' ") (citations omitted). See also State v. Rael, 127 NM. 347, 981 P.2d 280, 284 (Ct.App.1999) ("Sporadic, temporary criminal alliances do not constitute an enterprise within the meaning of the [state RICO] act."), cert. demied, 127 NM. 390, 981 P.2d 1208 (1999). Cf, eg., United States v. Phillips, 289 F.3d 829, 844 (7th Cir.) (affirming the existence of an enterprise when detailed evidence showed "a long-established street gang" that was "involved in the sale of illegal drugs" and was "an ongoing organization with members who functioned as a continuing unit" with "a definite structure with a distinct ranking of members"), cert. denied, 534 U.S. 884, 122 S.Ct. 191, 151 L.Ed.2d 1834 (2001); State v. McGrath, 749 P.2d 681, 6837 (Utah 1988) (finding sufficient evidence to support the existence of an enterprise where defendant and accomplice "had an ongoing association in fact for the purpose of making money from the sale of controlled substances"; "[djefendant regularly "fronted drugs to [his accomplice], who in turn sold them to individual users"; and defendant and his accomplice "ke[pt] written accounts of their numerous transactions [which] showed seventy-four transactions between [the two}").

128 Likewise, the State misunderstands UPUAA insofar as it suggests it need only point to the existence of an “individual” to satisfy the “enterprise” element. It is true that a criminal defendant may be both an “individual”¹² and an “enterprise” under subsections (1) and (2) of section 76-10-1602. See State v. Hutchings, 950 P.2d at 433, 435 (holding that “ ‘the liable “person” and the “enterprise” can be the same entity¹ ” under subsections (1) and (2) of section 76-10-1603) (quoting United States v. DiCaro, 772 F.2d 1314, 1320 (7th Cir.1985), cert, denied, 475 U.S. 1081, 106 S.Ct. 1458, 89 L.Ed.2d 716 (1986)). However, the State cites no authority suggesting that a criminal defendant’s status as an “individual,” without more, establishes a violation of UPUAA. See Bell, 770 P.2d at 103 n. 2 (“An enterprise may consist of an individual, corporation, or other business entity, or any de facto association, and may be either a legal or an illicit entity.”) (emphasis added). Because most criminal defendants are also “individuals,” the State’s apparent view would essentially collapse the “enterprise” and “pattern of unlawful activity” elements into one and would extend the scope of antiracketeering laws to virtually all substantive criminal offenses. Courts have universally rejected such efforts “to dress a garden-variety fraud and deceit case in RICO clothing.” Condict v. Condict, 826 F.2d 923, 929 (10th Cir.1987).¹³

¶ 29 The stipulation submitted in this case suffers from an additional fatal defect in that it fails to include any facts suggesting Bradshaw used the proceeds from his fraudulent activity to invest or gain an interest in an enterprise as required by section 76-10-1603(1). Instead, the stipulation states that Bradshaw used the money to pay his “personal bills.”¹⁴ The trial court nevertheless deemed the stipulation sufficient in this respect, finding that, as a matter of law, using the proceeds from a pattern of unlawful activity to pay one’s personal bills “qualif[ies as] racketeering.”¹⁵ We disagree.

1 30 The language of UPUAA is clear that the defendant must "use or invest" the proceeds from the unlawful activity in the proscribed manner, namely the "acquisition," "establishment," or "operation of" an "enterprise." Utah Code Ann. § 76-10-1608(1). See Bell, TIO P.2d at 108 n. 2 ("[UPUAA] makes it a crime to use the profits of racketeering activity to acquire or maintain an interest in an enterprise."). Accord Hutch-ings, 950 P.2d at 480 (" 'A [RICO] violation occurs not when the defendant engages in the predicate acts, but only when he uses or invests the proceeds of that activity in an enterprise." ") (citation omitted).

131 Similarly, in Grider v. Texas Oil & Gas Corp., 868 F.2d 1147 (10th Cir.), cert. denied, 498 U.S. 820, 110 S.Ct. 76, 107 L.Ed.2d 48 (1989), the court stated: "Significantly, the [RICO] statute does not state that it is unlawful to receive racketeering income; rather, as the ... language underscores, the statute prohibits a person who has received such income from using or investing it in the proscribed manner." Id. at 1149 (emphasis in original). Thus, in federal RICO prosecutions, showing that the defendant used the fraudulently obtained income in the pro-seribed manner is part of the government's prima facie case. See Vicom, Inc. v. Har-bridge Merch. Servs., Inc., 20 F.3d T7l, TTS (7th Cir.1994) ("A [RICO] violation ... requires 'the receipt of income from a pattern of racketeering activity, and the use of that income in the operation of an enterprise. ") (citation omitted); Umited States v. Cauble, 706 F.2d 1822, 1831 (5th Cir.19883) ("The government establishes a [RICO] violation by proving the existence of an enterprise, the defendant's derivation of income from a pattern of racketeering activity, and the use of any part of that income in acquiring an interest in or operating the enterprise."), cert. denied, 465 U.S. 1005, 104 S.Ct. 996, 79 LEd.2d 229 (1984); Allen v. New World Coffee, Inc., No. 00 Civ. 2610(AGS), 2002 WL 432685, "4, 2002 U.S. Dist. LEXIS 4624, at **8 (S.D.N.Y.2002) ("The 'essence of a [RICO] violation ... is not commission of predicate acts but investment of racketeering income.' ") (quoting Discon, Inc. v. NYNEX Corp., 98 F.3d 1055, 1068 (2d Cir.1996), rev'd on other grounds, 525 U.S. 128, 119 S.Ct. 493, 142 L.Ed.2d 510 (1998)); ¹⁶ Barker v. EF. Hutton & Co., No. C-89-1840 EFL, 1990 WL 257288, *2, 1990 U.S. Dist. LEXIS 19089, at *6 (N.D.Cal. July 6, 1990) (holding that "section 1962(a) is not violated where the RICO defendant merely profits from a pattern of racketeering activity but does not otherwise invest this money in a RICO enterprise").

132 Like its RICO cousin, UPUAA is a fairly intricate criminal statute, and the stipulation in this case, focused as it was on facts pertinent to other crimes, ie., to "a garden-variety fraud and deceit case," Condict v. Condict, 826 F.2d 9283, 929 (10th Cir.1987), is wholly insufficient to demonstrate probable cause to support a bindover on the racketeering charge. See Dempsey v. Sanders, 182 F.Supp.2d 222, 226 (S.D.N.Y.2001) (" [Because the RICO statute] is an unusually potent weapon-the litigation equivalent of a thermonuclear device ... courts must always be on the lookout for the putative RICO case that is really nothing more than an ordinary fraud case clothed in the Emperor's trendy garb." ") (quoting Schmidt v. Fleet Bank, 16 F.Supp.2d 340, $46 (S.D.N.Y.1998)); State v. Huynh, 519 NW.2d 191, 195 (Minn.1994) ("Clearly, our statute is not limited to drug 'kingpins' or major crime syndicates, but nei-

ther do we think our Act is intended to make a racketeer out of every criminal offender.").

CONCLUSION

183 Pursuant to the language 'and policy underlying Utah's Communications Fraud statute, the State should not be permitted to attribute the aggregated amount of $5,400 to each individual victim of each scheme perpetrated by. Bradshaw in the course of his fraudulent activity. Additionally, the State failed to demonstrate probable cause that Bradshaw was engaged in an "enterprise" as required by subsections (1) and (2) of section 76-10-1608. Accordingly, the trial court's order is reversed and the case remanded with instructions to grant Bradshaw's motion to reduce the degree of the charged offenses on the communications fraud counts and to quash the racketeering charge against him, and for such other proceedings as may now be appropriate. ‘

€ 34 I CONCUR: JUDITH M. BILLINGS, Presiding Judge.

1 . Based on complaints unrelated to those at issue in this case, the Department of Commerce had earlier revoked Bradshaw's appraiser's license due to Bradshaw's practice of fraudulently inflating property values.

2 . As a convenience to the reader, and because there have been no significant amendments, we cite to the current version of the Viah Code rather than the version in effect when Bradshaw was charged, except as otherwise noted.

3 . The dissenting opinion, in its footnote 1, relies on Clark, among other cases, in criticizing "the bindover standard applied by the majority." Specifically, the dissent discusses at some length the notion that at a preliminary hearing, " ' "the magistrate must view all evidence in the light most favorable to the prosecution and must draw all reasonable inferences in favor of the prosecution." '" Clark, 2001 UT 9 at ¶ 10, 20 P.3d 300 (citations omitted). Ordinarily in reviewing bindover determinations, "we are," as stated by the dissent "required to draw all reasonable evi-dentiary inferences in the state's favor."

The problem in this case-and it is rather unique in our experience-is that there was no preliminary hearing and there was no evidence introduced from which inferences may be drawn. Instead, the State agreed to submit a written stipulation of facts on the basis of which the propriety of the charges was to be evaluated. While this procedure no doubt saved the State the trouble of calling witnesses and presenting evidence, the decision to bind Bradshaw over must be evaluated with reference to the facts recited within the four corners of the stipulation. Having forgone the option of presenting evidence, the State is necessarily not in a position to benefit from evidentiary inferences. The State opted for the peculiar procedure employed in this case, and it is not entitled to be rescued from the factual limitations resulting from its reliance on a written stipulation instead of evidence presented at a normal preliminary hearing.

4 . When the Legislature wished to be clear that it intended multiple-rather than singular-implications, it was able to say so quite clearly. Thus, in subsection (5), it clearly stated that if multiple communications are made, even if in furtherance of a single scheme or artifice, "[elach separate communication"" constitutes a distinct communications fraud offense. Utah Code Ann. § 76-10-1801(5) (2003).

5 . Selectively adhering to the notion that the "singular includes the plural," the State agrees with the trial court that "another"" as used in subsection (1) should be construed to mean "another or others" and thus that the losses of multiple victims of a single scheme can be aggregated. In contrast, the trial court did not suggest, and the State does not argue on appeal, that the term "scheme or artifice" as used in subsections (1), (2), and (5) is similarly intended to mean "scheme or schemes or artifice or artifices " rather than a single "scheme or artifice." Perhaps the State is merely reserving this argument for a case where such a view would allow it to apply the aggregation and "separate offense" provisions to a criminal defendant who, for example, perpetrates a stock fraud, a real estate swindle, and a pyramid scheme all in the same general time period. There is no obvious bar to such an approach if the singular invariably includes the plural.

6 . Although section 76-3-203 has recently been amended, this particular provision remains unchanged. See Utah Code Ann. § 76-3-203(2) (2003).

7 . In contrast, a single scheme with multiple victims would likely be established by the facts of the following scenario. Suppose that a defendant holds an "investment seminar" at a retirement home, where he gathers a dozen residents together, presents a slide show, and distributes brochures, etc., falsely detailing the financial rewards of a nonexistent "investment opportunity." The defendant then gathers $1,000 checks from each of the residents attending the seminar. While the investment scam just described involved more than one victim, we think it could nevertheless be characterized as one "scheme" under section 76-10-1603. Although involving multiple victims, the circumstances in such a scenario suggest a single scheme: each victim was deceived at the same time, in the same place, and with the same fraudulent representations as all the other victims.

8 . As previously noted, for better or worse the parties stipulated to the pertinent facts in lieu of a preliminary hearing. In the absence of a preliminary hearing, and in light of the fact that the parties anticipated and invited the court to rule on Bradshaw's motion to quash the bindover based on the stipulated facts, the State was required to satisfy its probable cause burden via the stipulation. See supra note 3.

9 . Those subsections provide:

(1) It is unlawful for any person who has received any proceeds derived, whether directly or indirectly, from a pattern of unlawful activity in which the person has participated as a principal, to use or invest, directly or indirectly, any part of that income, or the proceeds of the income, or the proceeds derived from the investment or use of those proceeds, in the acquisition of any interest in, or the establishment or operation of, any enterprise.

(2) It is unlawful for any person through a pattern of unlawful activity to acquire or maintain, directly or indirectly, any interest in or control of any enterprise.

Utah Code Ann. § 76-10-1603 (2003). '

Because UPUAA was modeled after, and its provisions are nearly identical to, the Federal Racketeer Influenced and Corrupt Organizations Act (RICO), "we look to ... federal case law for guidance on these issues." Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941, 947 n. 5 (Utah 1996). See also State v. Bell, 770 P.2d 100, 101 n. 1 (Utah 1988) ("The Utah Act and similar provisions in other states have been referred to as 'Little RICO' Acts because they were modeled after the federal 'RICO' statute[.]").

The RICO analogs to subsections (1) and (2) of UPUAA provide:

(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce....

(b) It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.

18 U.S.C.A. § 1962 (West 2000).

As defined in UPUAA, " '[eJuterprise' means any individual, sole proprietorship, partnership, corporation, business trust, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity, and includes illicit as well as licit entities." Utah Code Ann. § 76-10-1602(1) (1999).

The RICO definition of "enterprise" is almost identical to its UPUAA counterpart, and provides: " '[Eluterprise' includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C.A. § 1961(4) (West 2000).

10 . - Several of the cases referred to in this opinion were decided under Utah's former antiracketeer-ing statute, known as the "Racketeering Influences and Criminal Enterprise Act," or "RICE." See State v. Thompson, T51 P.2d 805, 815 n. 3 (Utah CtApp.1988) (noting that RICE was amended in 1987 and renamed the "Pattern of Unlawful Activity Act"), rev'd on other grounds, 810 P.2d 415 (Utah 1991). The provisions at issue in the instant case are substantially the same as they were under RICE, and thus the authority cited that refers to RICE applies with equal force here.

11 . The State is done no disservice here by analogizing to Bell. The Court in Bell was called upon to decide whether the defendant was "given sufficiently detailed notice of the charges against him to enable him to prepare a defense," Bel/, 770 P.2d at 101, whereas here we must determine whether the State set forth in the stipulation sufficient facts to support a reasonable belief that Bradshaw was engaged in an enterprise. See State v. Clark, 2001 UT 10,16, 20 P.3d 300. If vague, summary allegations regarding the existence of an enterprise are insufficient to put a defendant on notice of the charges against him, they are necessarily insufficient to meet the higher threshold of probable cause.

12 . "The RICO person in a civil or criminal RICO action is the defendant.” Crowe v. Henry, 43 F.3d 198, 204 (5th Cir.1995). A "person” under UPUAA is “any individual or entity capable of holding a legal or beneficial interest in property[.]" Utah Code Ann. § 76-10-1602(3) (1999). Accord 18 U.S.C.A. § 1961(3) (West 2000) (A " ‘person’ includes any individual or entity capable of holding a legal or beneficial interest in property!)]").

13 . In State v. McGrath, 749 P.2d 631 (Utah 1988), the Utah Supreme Court explained: "To avoid running afoul of constitutional prohibitions against double jeopardy, the federal courts have held under the federal [RICO] Act that the government must prove at least one element beyond the pattern of racketeering activity. That additional element is the existence of an 'enterprise.' ” Id. at 636.

Similarly, the United States Supreme Court stated:

That a wholly criminal enterprise comes within the ambit of the statute does not mean that a "pattern of racketeering activity” is an "enterprise.” In order to secure a conviction under RICO, the Government must prove, both the existence of an "enterprise" and the connected "pattern of racketeering activity.”.... While the proof used to establish these separate elements may in particular cases coalesce, proof of one does not necessarily establish the other. The “enterprise” is not the “pattern of racketeering activity”; it is an entity separate and apart from the pattern of activity in which it engages. The existence of an enterprise at all times remains a separate element which must be proved by the Government.

United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-29, 69 L.Ed.2d 246 (1981) (emphasis added). See also Ouaknine v. MacFarlane, 897 F.2d 75, 82 (2d Cir.1990) ("Under the plain language of [RICO] ... the violation is not established by mere participation in predicate acts of • racketeering.”); State v. Thompson, 751 P.2d 805, 816 (Utah Ct.App.1988) ("[UPUAA] does not simply punish multiple violations of statutes prohibiting the acts enumerated in section 76-10-1602(1). Instead, [UPUAA] punishes participation in a pattern of racketeering activity bearing the required relationship to an enterprise.”).

14 . Recognizing that the stipulation is deficient in this respect, the State urges us on appeal to "assume that some of [Bradshawls personal] bills covered defendant’s vehicle expenses in traveling and telephone expenses in contacting the various victims.” We decline to make this assumption. See generally Rivera v. State Farm Mut. Auto. Ins. Co., 2000 UT 36,¶ 11, 1 P.3d 539 ("A stipulation ... 'may not be disregarded or set aside at will.’ ") (citation omitted); supra note 3.

15 . The dialogue that took place between Bradshaw's counsel and the trial court at the hearing on Bradshaw's motion to quash the bindover is illustrative:

DEFENSE COUNSEL: It’s my contention that in order to meet the elements of [UPUAA], [the State has] to show [the proceeds were] invested somehow towards furthering the scheme; so him using the proceeds for himself, to buy himself some Star[b]ucks Coffee or take himself to the movie or put gas in his car for whatever purpose, wouldn’t meet that. If he uses the proceeds to print out business cards to help further his communication fraud scheme, arguably, that would.... I don't believe the State has any evidence that these were used for anything other than him and bis just normal living expenses.

THE COURT: Well, and that's what I'm-I'm finding, that I respectfully disagree; that using the proceeds for himself, if you will, or not towards furthering the scheme does qualify under that element in the racketeering.

16 . The federal RICO statute "creates a civil cause of action under section 1964(c) against those injured by violations of section 1962(a)-(d)." Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F.2d 241, 242 n. 1 (5th Cir.1988), cert. denied, 489 U.S. 1079, 109 S.Ct. 1531, 103 L.Ed.2d 836 (1989). Since " 'Congress ... intended civil RICO plaintiffs to prove the same elements which the Government must prove in a criminal case,"" Slattery v. Costello, 586 F.Supp. 162, 164 (D.D.C.1983) (citation omitted), civil RICO cases are illustrative of the required elements for a prima facie case of racketeering.

1 . In 2001, the Utah Supreme Court clarified the quantum of evidence necessary to bind a defendant over on charges. See State v. Clark, 2001 UT 9, 1110-16, 20 P.3d 300. After discussing the existing precedent, which was the source of a great deal of confusion, the court formulated the following standard as the standard applicable to all bindover challenges:

To bind a defendant over for trial, the State must show "probable cause" at a preliminary hearing by "present[ing] sufficient evidence to establish that the 'crime charged has been committed and that the defendant has committed it.'" At this stage of the proceeding, "the evidence required [to show probable cause] ... is relatively low because the assumption is that the prosecution's case will only get stronger as the investigation continues." - Accordingly, "[when faced with conflicting evidence, the magistrate may not sift or weigh the evidence ... but must leave those tasks 'to the fact finder at trial'" Instead, "[the magistrate must view all evidence in the light most favorable to the prosecution and must draw all reasonable inferences in favor of the prosecution."

Id. at T 10 (alterations in original) (citations omitted).

The supreme court further stated that there exists "no principled basis ... to maintain a distinction between the arrest warrant probable cause standard and the preliminary hearing probable cause standard." Id. at 116. Consequently, if the State presents the court with sufficient information to issue an arrest warrant, a defendant's motion to quash a bindover should not be granted.

In application, the facts of Clark gave "rise to two alternate [and reasonable] inferences." Id. at 120. However, the court established earlier in its opinion that our duty is to view " 'all evidence in the light most favorable to the prosecution' " and draw " 'all reasonable inferences in favor of the prosecution.'" Id. at 110 (citations omitted) (emphasis added). Thus, although the court conceded that the evidence could be interpreted to suggest that the defendants were nothing more than innocent victims, it concluded that the trial court erred in quashing the charges.

In State v. Schroyer, 2002 UT 26, 44 P.3d 730, and State v. Hawatmeh, 2001 UT 51, 26 P.3d 223, the court was again required to apply the standard that it had adopted in Clark. In Hawatmeh, the trial court had refused to bind the defendants over on aggravated kidnaping charges. See Ha-watmeh, 2001 UT 51 at 12, 26 P.3d 223. On appeal, the supreme court reiterated the bind-over standard. See id. at 114-15. The court then, after setting forth both the State's and the defendants' theories, stated "(allthough defendants' characterizations of the facts may ... be plausibly inferred from the evidence, there are clearly factual issues that must be resolved at trial, and the facts do not negate the reasonable inferences presented by the State." Id. at 120. The court therefore reversed the trial court's decision and reinstated the aggravated kidnaping charges. See id. at 121.

In Schroyer, the defendant challenged the trial court's denial of his motion to quash intentional homicide charges. Schroyer, 2002 UT 26 at M 9-12, 44 P.3d 730. On appeal, the supreme court reaffirmed its position that "[the evidence must be viewed 'in a light most favorable to the prosecution' with all inferences resolved in the prosecution's favor." Id. at 110. More importantly, the court stated "[the defendant should be bound over for trial 'unless the evidence is wholly lacking and incapable of reasonable inference to prove some issue which supports the prosecution's claim[.]'" Id. (alterations omitted) (quoting State v. Talbot, 972 P.2d 435, 437 (Utah 1998)). Furthermore, the court clarified the State's burden at the bindover stage, stating "(alt this stage of the proceedings, all that the State must do is establish that its theory of [the crime charged] is reasonable." Id. at T12. Consequently, after examining the evidence, the court affirmed the trial court's decision to deny the defendant's motion. See id.

In the instant case, the bindover standard applied by the majority opinion is insufficient. Under Clark and its progeny, we are required to draw all reasonable evidentiary inferences in the state's favor. The majority opinion, instead, draws its inferences in Bradshaw's favor, with predictable results. Although I agree that this case's facts, as presented at the bindover hearing, are insufficient to support a conviction of Bradshaw, they are similar in sufficiency to the evidence presented in Schroyer, Hawatmeh, and Clark. As such, the State presented sufficient evidence to bind Bradshaw over on the racketeering charge.