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finding "there was evidence of theft over a period of several months, from December 1997 until February 1998, and that [the defendant] aided and abetted in this crime" is sufficient to convict for ongoing criminal conduct
Summary of this case from State v. BanesOpinion
No. 2-980 / 01-1580
Filed March 26, 2003
Appeal from the Iowa District Court for Black Hawk County, Jon Fister and Thomas Bower, Judges.
Randy Friedley appeals his convictions for ongoing criminal conduct, six counts of theft in the first degree and two counts of theft in the second degree. AFFIRMED.
John L. Lane, Cedar Rapids, for appellant.
Thomas J. Miller, Attorney General, Martha Boesen, Assistant Attorney General, Thomas Ferguson, County Attorney, and Danielle Davis and Linda Myers, Assistant County Attorneys, for appellee.
Heard by Huitink, P.J., and Mahan and Hecht, JJ.
Randy Friedley appeals his convictions for ongoing criminal conduct, six counts of first-degree theft and two counts of second-degree theft. We affirm.
I. Background Facts and Proceedings.
Randy Friedley was formerly employed as vice president and sales manager by Friedley Saab, Inc. Friedley Saab financed its new car inventory with a line of credit at the Citizens Bank Trust Co. Citizens Bank secured its advances on Friedley Saab's credit line by taking a security interest in Friedley Saab's new car inventory. The terms of Friedley Saab's credit and security agreement required Friedley Saab to apply the proceeds of each car sold to the amount advanced to purchase the particular car sold.
In December 1997 Friedley Saab's revenue was not sufficient to meet its operating expenses. As a result, new car sales proceeds were first applied to Friedley Saab's taxes and payroll expenses instead of to its debt secured by the bank's interest in those proceeds. In January 1998 Citizens Bank loan officer, James Chizek, visited Friedley Saab's dealership to audit Friedley Saab's compliance with the terms of their security agreement. Eleven of the vehicles subject to Citizens Bank's security interest were missing. Randy Friedley assured Chizek that Friedley Saab's performance on its notes with Citizens Bank would improve the following month. Randy, however, did not tell Chizek that the missing cars had been sold.
When Chizek returned in February 1998, sixteen cars covered by the parties' security agreement could not be accounted for. Randy told Chizek the cars were being test driven when, in fact, they had been sold. As a result, Citizens Bank cancelled Friedley Saab's line of credit and declared the unpaid balance of their notes due and payable.
Randy Friedley was subsequently charged with one count of ongoing criminal conduct, in violation of Iowa Code section 706A.2 (1997), six counts of theft in the first degree, in violation of sections 714.1 and 714.2(1), and two counts of theft in the second degree, in violation of sections 714.1 and 714.2(2). The State's theory of the crime was that Randy aided and abetted Friedley Saab's theft of sales proceeds in which Citizens Bank held a security interest in violation of section 714.1(5) (a person "[t]akes, destroys, conceals or disposes of property in which someone else has a security interest, with the intent to defraud the secured party").
A jury found Randy guilty of the crimes charged. He was sentenced to a term of imprisonment not to exceed twenty-five years on the charge of ongoing criminal conduct, a term of imprisonment not to exceed ten years on each of the charges of first-degree theft, and a term of imprisonment not to exceed five years on the two charges of second-degree theft, all to be served concurrently. These sentences were suspended and Randy was placed on probation. He was also ordered to pay restitution of $62,359.87 to Citizens Bank Trust. Randy appeals.
On appeal Randy claims the trial information charging him with this offense was insufficient as a matter of law and the trial court erred by denying his motion to dismiss it. He also challenges the trial court ruling excluding evidence that Citizens Bank was repaid by a third party. Randy further claims the court improperly instructed the jury on the law of aiding and abetting and that the State's evidence was insufficient to support his convictions. Lastly, Randy claims the trial court incorrectly ordered him to pay restitution in excess of the losses Citizens Bank actually incurred.
II. Motion to Dismiss Trial Information.
We review this issue for errors of law. State v. Johnson, 528 N.W.2d 638, 640 (Iowa 1995).
In his motion to dismiss the State's charges against him Randy alleged, "No minutes of testimony were filed with the trial information as required by Rule 5(3) I.R.Crim.P." Iowa Rule of Criminal Procedure 5(3) (now 2.5(3)) provides:
Witnesses' names and minutes. The prosecuting attorney shall, at the time of filing such Information, also file the Minutes of Evidence of the witnesses, which shall consist of a notice in writing stating the name, place of residence, and occupation of each witness upon whose expected testimony the Information is based, and a full and fair statement of the witness's expected testimony.
One purpose of the rule is to provide the judicial officer to whom the trial information is presented with information essential to making the requisite probable cause determination. State v. Shank, 276 N.W.2d 791, 792 (Iowa 1980). Minutes of testimony also eliminate claims of foul play and provide the accused with information necessary to prepare a defense. State v. Walker, 281 N.W.2d 612, 613 (Iowa 1979).
On November 8, 2000, the State filed a trial information charging Randy with one count of ongoing criminal conduct, two counts of fraudulent practice in the first degree, and seven counts of theft in the first degree. There was no separate attachment to the trial information denominated as minutes of testimony. The State instead attached a copy of the Department of Transportation's (DOT) "Investigation Report" concerning the DOT's investigation of a complaint against Friedley Saab. The report included the DOT's conclusions that Randy committed multiple thefts of secured property. The report also included summaries of interviews with Randy, his father Herald Friedley, James Swarbrick, Ronald Elderkin, and James Chizek. The State subsequently filed an amended trial information with additional minutes of testimony identifying eleven witnesses by name and address with a brief description of each witness's testimony. Without exception, the statement of each witness's expected testimony incorporated a cross-reference to either the witness's deposition testimony and/or minutes of testimony in a prior failed prosecution of Randy on similar charges. The following minutes are illustrative:
James Chizek, 100 Eddystone Drive, P.O. Box 842, Hudson, Iowa, 50643. Employed: Citizens Bank and Trust, Hudson, Iowa.
This witness will testify in accordance with the police reports/statements which were attached to the original trial information, the deposition taken under Case No. FECR089196, the Minutes of Testimony filed under Case No. FECR08196, and the trial testimony given in Case No. FECR089196. This witness will testify to any statements or admissions made by the Defendant. This witness will testify to any other facts or circumstances surrounding this case.
Phyllis Lyndgaard, 613 Home acres, Evansdale, Iowa.
This witness will testify in accordance with the Minutes of Testimony filed in Case No. FECR089196.
The trial court denied Randy's motion to dismiss, stating:
The Court finds that the defense has been fully and fairly advised of the testimony and witnesses which will be potentially called against the Defendants. It appears as though in an abundance of caution the State, on December 1, 2000, filed additional Minutes of Testimony, which sets forth the address of each of the witnesses the State intends to call.
As a result, the Court finds that no prejudice has resulted from the manner in which the Trial Information or additional Minutes of Testimony on each of the State's witnesses, but the defense has actually been given the entire investigative file for purposes of preparing a defense.
Randy argues the minutes as amended fail to accomplish any of the purposes cited. He specifically cites the absences of the requisite current occupations of two witnesses and addresses of five others. Randy also claims the minutes as amended were insufficient for the court to make its required probable cause determination. We disagree.
The State correctly notes Randy's familiarity with all of the witnesses, their occupations, and prior testimony in related proceedings. We, like the trial court, conclude Randy cannot make a credible claim that the trial information and attached minutes were insufficient to provide him with a full and fair statement of the witnesses' expected testimony against him. We also find the investigative report contained sufficient facts upon which the trial court could make the necessary probable cause determination. We affirm on this issue.
III. Sufficiency of the Evidence.
Randy contends the State did not present sufficient evidence to support his convictions. A jury's verdict is binding if it is supported by substantial evidence. State v. Hopkins, 576 N.W.2d 374, 377 (Iowa 1998). Substantial evidence means evidence that could convince a rational trier of fact the defendant is guilty beyond a reasonable doubt. State v. Maghee, 573 N.W.2d 1, 10 (Iowa 1997).
The State proceeded on a theory that Randy aided and abetted Friedley Saab in disposing of property in which Citizens Bank had a security interest, with the intent to defraud the bank. See State v. Watt, 389 N.W.2d 408, 408 (Iowa Ct.App. 1986). Aiding and abetting in a crime occurs when a person assents to or lends countenance and approval to another's criminal act either by active participation or by encouraging it in some manner prior to or at the time of its commission. State v. Wedebrand, 602 N.W.2d 186, 189 (Iowa Ct.App. 1999). Knowledge of the criminal act at or before its commission is essential. State v. Johnson, 534 N.W.2d 118, 123 (Iowa Ct.App. 1995). Under section 703.1, an aider and abettor is held liable for the same crime as the principal would be. State v. Satern, 516 N.W.2d 839, 843 (Iowa 1994).
When a defendant is accused of aiding and abetting in the commission of a crime in which intent is an element, there must be substantial evidence the defendant either participated with the intent himself or with knowledge the principal had the required intent. State v. Salkil, 441 N.W.2d 386, 387 (Iowa Ct.App. 1989). Section 714.1(5) requires an intent to defraud. Under section 703.5, a corporation, such as Friedley Saab, may have specific intent. See State v. Barnholtz, 613 N.W.2d 218, 225 (Iowa 2000).
A. Theft.
The elements of theft of property with a security interest are:
(1) defendant gave the victim an instrument resulting in the victim having a security interest in property held by the defendant;
(2) the defendant owed the victim a balance under the terms of the instrument;
(3) the defendant destroyed, hid, took, or disposed of the property subject to the security interest; and
(4) the defendant did so with the specific intent to defraud the victim. Iowa Code § 714.1(5). The State alleged Friedley Saab was the principal, because Citizens Bank held a security interest in property held by the car dealership and it was Friedley Saab that owed money to the bank. As noted above, the State alleged Randy aided and abetted Friedley Saab in committing the crime outlined here.
Concerning the theft charges, Randy asserts there is insufficient evidence he knew the car sale proceeds would not be paid to the bank. He claims he did not aid and abet Friedley Saab in violating section 714.1(5), and that, if anything, he was an accessory after the fact. An accused may not be convicted as a principal on the theory of aiding and abetting for conduct that only supports a conviction as an accessory after the fact under section 703.3. State v. Barnes, 204 N.W.2d 827, 829 (Iowa 1972). An accessory after the fact is a person "who, with knowledge of the other's guilt, renders assistance to a felon in the effort to hinder his detection, arrest, trial, or punishment." State v. Kittelson, 164 N.W.2d 157, 165 (Iowa 1969).
As noted above, it is essential that an aider and abettor have knowledge of the perpetrator's criminal activity prior to its commission. Johnson, 534 N.W.2d at 123. Knowledge is a state of mind seldom capable of direct proof, and may be inferred from the circumstances. State v. Gordon, 531 N.W.2d 134, 137 (Iowa Ct.App. 1995). An aider and abettor is not required to have knowledge of the particular crime committed by the perpetrator. State v. Hustead, 538 N.W.2d 867, 870 (Iowa Ct.App. 1995). "The important inquiry is whether the aider and abettor had knowledge that an act which is criminal was intended, and participated in some way with the intent to encourage the criminal act." Id.
In this case, there is sufficient circumstantial evidence to show Randy had knowledge Friedley Saab was engaged in criminal activities. Randy lied to Chizek about the whereabouts of several vehicles in January and February 1998. Randy appeared "quite nervous" and "upset." The evidence shows that at least by January 1998, Randy had guilty knowledge about the proceeds of the cars, which caused him to lie to Chizek. Randy continued to sell cars for Friedley Saab, which allowed the corporation to continue to misapply the proceeds from the sales. We also consider that Randy was the vice-president of Friedley Saab, and the son of Herald, who put this scheme in place. Taken together these facts are sufficient to support the jury's finding that Randy had knowledge Friedley Saab intended to commit theft and that he aided and abetted the corporation.
B. Ongoing Criminal Conduct.
Randy claims that because the State did not prove he engaged in theft, there was insufficient evidence he engaged in ongoing criminal conduct. The State alleged Randy engaged in acts of specified unlawful activity, in violation of section 706A.2(4). Specified unlawful activity is defined as:
[a]ny act, including any preparatory or completed offense, committed for financial gain on a continuing basis, that is punishable as an indictable offense under the laws of the state in which it occurred and under the laws of this state.
The alleged indictable offense in this case was theft, in violation of section 714.1(5). Multiple acts of theft may constitute ongoing criminal conduct. State v. Olson, 618 N.W.2d 346, 351 (Iowa 2000). Here, there was evidence of theft over a period of several months, from December 1997 until February 1998, and that Randy aided and abetted in this crime. We determine there was sufficient evidence to support Randy's conviction for ongoing criminal conduct.
IV. Jury Instructions.
Randy claims the district court improperly instructed the jury that he aided and abetted the corporation in committing a crime. He points out that Friedley Saab was not charged with a crime. Randy asserts the jury should have been instructed as though he were the principal, because there was insufficient evidence he aided and abetted the corporation.
We first note that under section 703.1, the guilt of a person who aids and abets the commission of a crime must be determined upon the facts which show the part the person had in it, and does not depend upon the degree of another person's guilt. State v. Speaks, 576 N.W.2d 629, 632 (Iowa Ct.App. 1998). Thus, the fact Friedley Saab was not charged is irrelevant. In addition, there is no requirement that a person be charged with aiding and abetting as opposed to being charged as a principal. See Satern, 516 N.W.2d at 843. We find no error in the fact Randy was charged as a principal, but the jury was instructed on a theory of aiding and abetting.
V. Witness Testimony.
Randy sought to present the testimony of David Lorenson to rebut Chizek's testimony Citizens Bank had not received payment for the vehicles. Lorenson purchased Friedley Saab's promissory notes from the bank for $75,000. The district court did not admit the evidence, finding it was irrelevant.
Determinations of relevance of evidence rests within the sound discretion of the trial court and will be reversed only upon a showing that such discretion has been abused. State v. Taggert, 525 N.W.2d 877, 881 (Iowa Ct.App. 1994). We find no abuse of discretion in the district court's decision. Whether the bank was subsequently repaid by a third party is irrelevant to whether Randy committed ongoing criminal conduct and theft.
VI. Restitution.
Randy contends he was ordered to pay an excessive amount of restitution. The district court ordered him to pay $62,359.87. Randy states Citizens Bank's loss was $89,141.06. Randy was acquitted in an earlier case involving different vehicles, which were worth $75,580. He asserts he should only be responsible for the difference in these two amounts, $17,561.06.
Our review of a restitution order is for correction of errors at law. State v. Watts, 587 N.W.2d 750, 751 (Iowa 1998). The trial court's findings of fact have the effect of a special verdict. Id. When reviewing a restitution order, we determine whether the district court's findings lack substantial evidentiary support, or whether the court has not properly applied the law. State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001).
We will affirm a restitution award if it is within the reasonable range of the evidence. Watts, 587 N.W.2d at 752. A restitution order should have a reasonable basis in the evidence, and be neither speculative nor imaginary. Id. A restitution order is not excessive if it bears a reasonable relationship to the damage caused by the defendant's criminal act. Bonstetter, 637 N.W.2d at 165.
The restitution award is within the reasonable range of the evidence. The district court found the amount of the bank's loss was actually $128,669. The bank recovered the net amount of $110,515.22. Sixty percent, or $66,309.13, of the amount recovered was attributed to the vehicles involved in this case. Randy was ordered to pay the difference between $128,699 and $66,309.13, which was $62,359.87.
Citizen Bank recovered the total amount of $122,781.80. This amount was reduced by $8764.88 for accrued interest on Friedley Saab's promissory notes through July 15, 1998, and $3501.70 for the bank's attorney fees involved in liquidating the dealership's assets. We find these were permissible costs the bank could recover through restitution. See State v. Taylor, 506 N.W.2d 767, 769 (Iowa 1993) (finding cost of audit could be included in restitution amount); State v. Idhe, 532 N.W.2d 827, 830 (Iowa Ct.App. 1995) (finding restitution amount may include lost profits).
After considering all the issues raised in this appeal, we affirm Randy's conviction and sentence.