State v. Mehling

115 P.3d 771, 34 Kan. App. 2d 122, 2005 Kan. App. LEXIS 690
CourtCourt of Appeals of Kansas
DecidedJuly 15, 2005
DocketNo. 92,125
StatusPublished
Cited by1 cases

This text of 115 P.3d 771 (State v. Mehling) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Mehling, 115 P.3d 771, 34 Kan. App. 2d 122, 2005 Kan. App. LEXIS 690 (kanctapp 2005).

Opinion

McAnany, J.:

Elizabeth A. Mehling appeals from her convictions for three counts of unlawful acts in connection with the offer, sale, or purchase of securities in violation of K.S.A. 2004 Supp. 17-1253. We affirm.

Elizabeth, a financial planner from Scotland, met Michael Mehling while he was stationed in the United States military in Germany. They married in September 1992.

In June 1994, the Mehlings were stationed in El Paso, Texas, where Elizabeth was involved in a multi-level marketing company known as Jewelry International. They were transferred to Leavenworth, Kansas, in January 1995 where Michael served until his retirement from the military in July 1996.

The Mehlings became involved in Investors International, apparently another multi-level marketing operation, where they learned about a program that claimed to give individuals the opportunity to pool their funds with others in order to invest in overseas bank debentures for very high returns in a very short period of time. The Mehlings began selling these overseas investments. They set up a partnership named Dunromin and opened a bank account for the partnership at the Ft. Leavenworth Credit Union. Both of the Mehlings were listed as owners of the account.

In 1995 Elizabeth met and befriended Inge Cochran, a Leavenworth real estate agent. She told Cochran about the Dunromin business and that she was a financial broker. The Mehlings sold Cochran Investor International materials and helped her make some sales. They also explained to her the European investment program. Michael told Cochran that their overseas investments were guaranteed safe and lucrative. The Mehlings told her that she would not lose her money and that they had invested in the program themselves. They provided documents to her that indicated that the investment was risk-free. They told Cochran that if she invested $15,000, she would receive $1,000,000 in 2 months.

[124]*124Based on these outlandish representations, Cochran withdrew $15,000 from her IRA account on November 19, 1996, and gave Michael a cashier s check made payable to Dunromin. Cochran’s $15,000 investment was deposited into the Dunromin account on November 21, 1996. On the same date, $13,000 was transferred into the Mehlings’ personal account. The remaining $2,000 was withdrawn as cash on November 26, 1996.

Cochran later asked Elizabeth whether the people she was dealing with were honest. Elizabeth assured Cochran that they were.

Abdul Ghafoor also invested with the Mehlings in November 1996. The Mehlings told him he could double a $5,000 investment in 3 or 4 months. He gave the Mehlings $5,000 to invest in the form of money orders paid to tire order of Dunromin. Ghafoor’s $5,000 was deposited in the Dunromin account on November 20, 1996. The funds were immediately transferred to the Mehlings’ personal account that same day and then immediately withdrawn as follows: $1,800 in cash plus three money orders totaling $3,000. Two of the money orders were made payable to Investors International. The other was made to a travel agency. Ghafoor’s entire $5,000 investment was expended on the day it was deposited.

Several months after making his investment, Ghafoor began a series of almost daily telephone calls demanding his money. The Mehlings ultimately returned Ghafoor’s original $5,000 investment in July 1998 by means of a check drawn on their personal account.

By January 20, 1997, 2 months after her investment, Cochran had received neither the return of her $15,000 nor her $1 million. The Mehlings told Cochran that she would eventually receive her money. From 1997 through the early part of 1999 Cochran made numerous phone calls to the Mehlings regarding her investment. Cochran was continually assured that her investment would pay off.

In August 1998, Juli Rhame, a real estate agent in South Carolina, met the Mehlings when they came to South Carolina to look for a house. The Mehlings had been referred to Rhame by Cochran. Michael told Rhame that they sold debentures overseas. The Mehlings told her about the overseas debenture program and made the modest claim that she could invest from $1,000 to $50,000 and [125]*125would receive from 10% to 1,000% on her investment in approximately 10 international banking days. Both Elizabeth and Michael told her that the investment was risk-free.

In January 1999, Rhame participated in a conference call with tire Mehlings. Michael told her that Cochran had invested $100,000 in the program and done well. Rhame later spoke to Cochran who told her that she had only invested $15,000 and had not received back her original investment, let alone any profit. Rhame decided not to invest with the Mehlings.

Cochran eventually complained to the Kansas Attorney General, and the matter was referred to the Office of the Securities Commissioner, which led to an investigation and charges being filed against the Mehlings in November 2000.

Elizabeth was charged with four counts of unlawful acts in connection with the offer, sale, or purchase of securities in violation of K.S.A. 2004 Supp. 17-1253. Michael negotiated a plea agreement with the State. He pled no contest to one count of conspiracy to commit securities fraud. Elizabeth was identified as his coconspirator. John Runnberg, an investigator with the Kansas Securities Commissioner s office, analyzed the Mehlings’ financial records and tracked the money in both the Dunromin account and the Mehlings’ personal account. He testified that it appeared all of Ghafoor and Cochran’s investments were used to pay the Mehlings’ personal expenses and that none was pooled with other funds for investment as promised. Elizabeth was found guilty of the three counts involving Ghafoor, Cochran, and Rhame. She was sentenced to 60 months’ probation. She now appeals.

Jury Instructions

Elizabeth claims the district court erred in instructing the jury. Our task is to consider the instructions as a whole, and not to focus on any one instruction, in order to determine if they properly and fairly state the law that applies to the facts of the case. We must then determine if the jury could reasonably have been misled by them. If they accurately state the law and could not reasonably have misled the jury, we will not reverse even if they are in some [126]*126way erroneous. State v. Mays, 277 Kan. 359, 378-79, 85 P.3d 1208 (2004).

Specific Intent

Elizabeth claims the district court erred in instructing the jury that specific intent was not required to prove a violation of the Kansas Securities Act. The district court instructed the jury, over Elizabeth’s objection, “No specific intent is required where one violates the Kansas Securities Act, except the intent to do the act denounced by statute.”

Notwithstanding the holdings in various Kansas cases to the contrary, Elizabeth claims that securities fraud under K.S.A. 2004 Supp. 17-1253 is a specific intent crime. The rule in State v. Hodge, 204 Kan. 98, 107, 460 P.2d 596

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. Atteberry
239 P.3d 857 (Court of Appeals of Kansas, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
115 P.3d 771, 34 Kan. App. 2d 122, 2005 Kan. App. LEXIS 690, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-mehling-kanctapp-2005.