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State v. Johnson
Citation: 2023 UT App 145Docket: 20210838-CA
Court: Court of Appeals of Utah; November 24, 2023; Utah; State Appellate Court
Original Court Document: View Document
Stacey Austin Johnson was found guilty of communications fraud and pattern of unlawful activity after convincing borrowers to deposit millions into his accounts, including his attorney trust account, under the false pretense of securing large business loans. Following the suspension of his law license for unprofessional conduct in June 2015, Johnson continued to receive funds without notifying the borrowers, misrepresenting that their money would be held in trust until the loans funded. Instead, he forwarded their deposits to a purported lender. Johnson raised several arguments on appeal: he contended that the jury instructions amended his charges, misapplied the required mens rea, incorrectly addressed the timing of order effectiveness, lacked substantial evidence for his convictions, and claimed the district court imposed excessive restitution. The court rejected all of his arguments, affirming both his convictions and the restitution order. An investigation by the FBI revealed Johnson's involvement in the fraudulent scheme, including a recorded meeting with an undercover agent posing as a borrower. Agent 1 met with attorney Johnson, who detailed a loan program involving a group of Middle Eastern investors with high-value financial instruments. Johnson proposed that clients deposit $500,000 into his attorney trust account to secure a $50 million loan, claiming the funds would be available within 48 hours after processing a $10,000 fee. Between November 2014 and August 2016, Johnson accepted approximately $2.9 million from multiple borrowers into his accounts, including after his law license was suspended, without informing them of his status. He repeatedly solicited additional funds from borrowers, claiming these were necessary to facilitate the loan process; however, the loans did not materialize as promised. One borrower reported the situation to law enforcement, leading to an investigation that resulted in Johnson facing charges of communications fraud and a pattern of unlawful activity in Utah's Third Judicial District Court. The fraud charges were linked to various victims, with claims that while Johnson sent $2.8 million to the lender, he retained approximately $100,000 as a fee for assisting in loan applications. Johnson contended that no money was directly paid to him by the victims, as he intended to collect his fees upon loan funding. During the trial in September 2021, victims testified they were misled by Johnson, who did not disclose his suspended license and assured them their funds would be secure, with refunds available if loans failed to fund. Additionally, an FBI agent recounted an interview with Johnson, where he admitted to his license suspension but maintained confusion about his attorney trust account status, claiming it transitioned to a regular bank account after he ceased practicing law. Agent 3 testified at trial about his review of Johnson’s bank records, revealing twelve deposits into Johnson’s attorney trust account between July 15, 2015, and November 16, 2015. During cross-examination, Agent 3 acknowledged that he did not independently verify the date of Johnson's law license suspension and was unaware if his partner, Agent 2, had done so. Counsel provided Agent 3 a report indicating that Johnson's law license was suspended around June 15, 2015, with the suspension effective October 16, 2015. Following this, the State admitted multiple documents related to Johnson's disciplinary proceedings, including court orders regarding his suspension. Agent 4, a forensic accountant, testified about his examination of financial records, noting that several exhibits showed deposits made into Johnson’s trust account after the suspension date. After the State rested its case, Counsel moved for a directed verdict on count one, arguing a lack of connection between Johnson and the alleged victim. Counsel claimed that the wiring instructions indicated the funds were to go directly to a Lender and not involve Johnson. However, the State countered that the alleged victim identified Johnson as the "gatekeeper" for the funds, which were meant to be held in escrow until a loan was funded. The court denied the motion for a directed verdict, stating there was sufficient evidence to establish a prima facie case, particularly based on the victim’s testimony and Agent 4’s findings. Johnson presented his defense by testifying and calling his wife and an accountant as witnesses. On appeal, he did not provide transcripts of his or his wife's testimonies and did not renew his motion for a directed verdict after presenting his case. The court confirmed with both Counsel and the prosecutor that they had reviewed the draft jury instructions and discussed the elements of communications fraud. Notably, the instructions omitted the requirement that Johnson devised a scheme "to defraud another," instead stating he aimed to "obtain from another money, property, or anything of value." The court referenced a prior appellate decision which indicated that specific intent to defraud was not necessary under the second type of communications fraud, a point that the State accepted without objection from Counsel. The court also addressed the mens rea instruction, which required the jury to find that Johnson acted intentionally, knowingly, or recklessly regarding each offense element. The court modified the State's proposed instruction to apply to all seven charges, with the State's concurrence and no objection from Counsel. Further discussions involved the pattern of unlawful activity instruction, which Counsel did not contest. The State sought an additional jury instruction regarding the timing of an order of suspension, citing existing case law as relevant to the matter. The State argued that clarity on appellate case law would prevent juror confusion. Counsel opposed this, claiming it was cumulative and potentially confusing. The court acknowledged the importance of providing legal context to the jury but expressed uncertainty about the specific language of the proposed instruction, indicating it would review the citations and consider an appropriate instruction. The court inquired about any further discussion on instructions or the verdict form, to which counsel did not object. The State sought to add an alleged victim to count two, but counsel objected, and the court did not amend the charge. After a recess to review a proposed jury instruction concerning the timing of Johnson’s suspension, the court deemed the instruction appropriate and unaltered, prompting counsel to renew his objection. The jury acquitted Johnson of communications fraud (count two) but convicted him on the remaining charges. Johnson received concurrent prison terms, which the court suspended, instead ordering jail time and a three-year probation. Following a restitution hearing, the court ordered Johnson to pay $1,541,000 in restitution, for which he did not provide a transcript. Johnson is appealing both his convictions and the restitution order. Johnson raises multiple issues for appeal: (1) he claims constructive amendment of the Information due to jury instructions, acknowledging no trial objection, thus invoking a plain error review standard; (2) he argues that the jury was improperly instructed on mens rea, also unpreserved for appeal, asserting egregiousness warranting plain error relief; (3) he challenges the jury instruction regarding the timing of his suspension, with unpreserved claims reviewed under plain error or related doctrines; (4) he contends that the convictions lacked substantial evidence, with the review focused on whether the evidence could reasonably support the jury's verdict; and (5) he asserts that the district court erred in its restitution order, which will not be disturbed unless the court exceeded its legal authority or abused its discretion. Johnson contends that the jury instructions constructively amended the Information, infringing upon his constitutional rights to be informed of the charges and to a fair trial. He references federal case law indicating that a constructive amendment occurs when trial evidence and jury instructions alter the indictment to charge a different offense. Johnson acknowledges that he did not raise his objection to constructive amendment at trial, suggesting a plain error review, while arguing that constitutional violations constitute structural defects exempt from harmless error analysis. He specifically argues that the omission of the phrase "to defraud another" from the jury instructions for communications fraud counts constituted a constructive amendment. The Information included this phrase, asserting Johnson devised a scheme "to defraud another or to obtain from another money, property, or anything of value." The jury instructions, however, required the jury to find only that he devised a scheme "to obtain from another money, property, or anything of value." The document clarifies that removing one basis for a charge narrows rather than broadens it; thus, Johnson was not convicted of a different crime than originally charged. Johnson also claims a constructive amendment due to the inclusion of "reckless disregard for the truth" in the jury instructions, which he argues was not referenced in the charging documents. However, the court notes that this language is derived directly from the relevant statute, which states that a conviction requires proof of intentional, knowing, or reckless conduct regarding the misleading statements. Since the Information cited this statute, the jury instructions did not amend the Information by incorporating language from the statute itself. Johnson argues that the jury instruction regarding a pattern of unlawful activity was improperly amended, failing to specify that the charge required finding three episodes of unlawful activity as mandated by statute (Utah Code § 76-10-1602) and did not clarify that the unlawful acts involved three or more episodes of communications fraud. This argument is rejected because the instructions required the jury to find that Johnson engaged in a pattern of unlawful activity, defined as at least three episodes. The only conduct charged was multiple counts of communications fraud, making it unreasonable to interpret the instructions differently from the Information, which specified three or more acts of communications fraud. Additionally, Johnson claims that these modifications constructively amended the Information by eliminating the requirement for the jury to find specific intent to defraud. However, prior case law indicates that the communications fraud statute does not explicitly require such intent, and the issue remains unsettled under Utah and federal law. Consequently, Johnson cannot establish plain error regarding the alleged constructive amendment. Johnson also questions the definition of "scheme" in the jury instructions, but since the Information did not define this term, the instruction could not have altered its meaning constructively. Furthermore, Johnson contends that the court erred by allowing a mens rea of recklessness for conviction; however, this argument fails due to the doctrine of invited error, as Johnson's counsel did not object to the jury instruction at trial. The appellate court will not review the instruction due to this principle, which aims to prevent parties from benefiting from errors they have contributed to at trial. Johnson invited any potential errors regarding jury instructions on recklessness, with defense counsel confirming he reviewed and had no objections to the draft instructions presented by the court. The court explained various aspects of the instructions, including the omission of "to defraud another" from the communications fraud elements and the mens rea instruction, to which counsel also did not object. After discussing instructions related to a suspension order, the court asked if there were any further objections, and counsel replied negatively, indicating approval of the instructions. Consequently, Johnson is precluded from claiming relief based on manifest injustice due to counsel's affirmative representations. Furthermore, Johnson argued that the jury instruction concerning the timing of his suspension was erroneous and prejudicial, but this claim was rejected. He raised the exceptional circumstances doctrine for the first time in his reply brief, which the court deemed forfeited since it deprived the appellee of an opportunity to respond. The specific jury instruction stated that a judgment is complete when signed and recorded, and that an appeal does not stay the judgment unless ordered by the court. Johnson contended the instruction misrepresented the law by implying his suspension began on June 15, 2015; however, the court clarified that the instruction accurately reflected the date the court's order was entered, distinguishing it from the effective date of his suspension. Thus, the instruction did not misstate the law. An appeal or motion seeking relief from a judgment does not automatically stay the judgment unless the court explicitly orders it. Johnson argues for a stay of his attorney disciplinary sanction until his motion is decided, citing a previous case where the Supreme Court indicated that a disbarred lawyer may be entitled to a stay pending appeal. However, the court emphasized that it is within the discretion of the district court to grant a stay, and without such discretion being exercised, no stay exists. Johnson's argument that his suspension is not a final order is countered by this discretion requirement. Additionally, Johnson's reliance on Utah Rule of Civil Procedure 62 is misplaced, as it similarly states that a stay is discretionary, not automatic. Regarding the evidence supporting Johnson's guilty verdicts, he contends these verdicts lack substantial evidence. However, he invited any alleged error concerning counts three through seven by asserting there was sufficient evidence for the jury, thus barring his appeal on those counts due to the doctrine of invited error. For count one, the State argues that Johnson has not preserved this issue for appeal, which requires proper presentation to the trial court for a ruling. The court agrees, noting that an issue must be specifically raised for it to be preserved. Counsel argued for a directed verdict, asserting that count one should be dismissed due to a lack of "nexus" between Johnson and the alleged victim, pointing to evidence indicating that any money involved was directly sent to Lender and that the related promissory note and loan agreement did not include Johnson. This argument diverges from Johnson's appeal claims, where he presents several reasons for insufficient evidence, including that he did not falsely promise to hold borrowers' money, refund it, or misrepresent the conditions under which he would receive payment or the timeline for loan disbursement. However, these points do not relate to the original nexus argument raised in the district court, meaning the issue was not adequately presented for the court's consideration. Even if plain error review applied due to the unpreserved issue, Johnson's argument fails because he did not include critical evidence in the appellate record, undermining his claim of prejudice. The absence of a trial transcript for both Johnson and his wife is significant, as their testimonies are crucial, and the appellate court presumes the regularity of the trial proceedings in the absence of such evidence. Johnson contends this omission is not critical since his testimony was sufficiently conveyed through other witnesses; however, the court emphasizes the importance of the defendant's direct testimony compared to extrajudicial recordings. The lack of a comparison between Johnson's testimony and that of FBI agents further complicates the assessment of evidence alignment. The State anticipates Johnson may argue that the sufficiency inquiry should only consider evidence from its case-in-chief, referencing Utah's "waiver rule." A defendant who moves for a directed verdict after the State's case-in-chief and subsequently presents his own case waives any limitations on the appellate court's review of the evidence before the jury. The State references several cases, including State v. Stockton and State v. McCallie, to support this position. Johnson does not argue the admissibility of his and his wife's testimonies for appellate review but claims his testimony was adequately presented through transcripts. Because crucial evidence is missing from the record, it is presumed to support the jury's decision, and Johnson cannot demonstrate prejudice or that his convictions lack substantial evidence. Regarding restitution, Johnson contends that the district court abused its discretion by awarding excessive restitution. However, he failed to provide a transcript of the restitution hearing, which is critical for his appeal. Without this transcript, the proceedings are presumed regular, and the court's decisions are supported. The available hearing minutes indicate that the State presented evidence and arguments, which Johnson's claims do not adequately counter. Consequently, the appellate court cannot question the district court's restitution order. In conclusion, all of Johnson's arguments are rejected: he incorrectly claims that jury instructions altered his charges, invited errors related to mens rea instructions, misinterprets the jury instruction on order effectiveness, fails to prove his evidence sufficiency claims, and cannot challenge the restitution award due to the lack of a hearing transcript. As a result, Johnson's convictions and the restitution order are affirmed.