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The unauthorized practice of law: woman posing as lawyer sentenced to jail and banned from legal profession

lawyer2n-2-webIn late December 2014, a woman was arrested in Summit County on allegations that she had been impersonating a Utah attorney and handling cases in court, representing actual clients under another attorney’s name.  The woman, identified as Karla Carbo, then 29 and residing in South Jordan, was arrested and booked into the Summit County Jail on suspicion of felony fraud, forgery and identity theft.

Carbo Held Self Out as an Attorney, Using Real Attorney’s Bar Information

Investigators said that Carbo had held herself out as an attorney in several jurisdictions, including impersonating an attorney at least times in the six months before her arrest.  Carbo was arrested within a week negotiating felony counts down to misdemeanors on behalf of her client in Summit County.  In fact it was that exact plea deal that garnered the attention of the Utah Bar Association.  The Bar told police that Carbo had been using a legitimate attorney’s name and bar number to represent clients without a license.

Police said that Carbo had represented to the courts that her name was Karla Stirling Fierro, but that the bar number Carbo gave as her own actually belonged to Utah attorney Karla Stirling.  In an interview, Stirling said, “It’s been shocking to hear that there’s been somebody else whose doing this with my name and my bar number.  I mean, who would take it that far to full-on impersonate someone and use a legitimate bar number?”

Stirling Was Completely Unaware Carbo Was Posing as Her

Stirling said that she found out about Carbo’s impersonation of her when she was contacted by the Draper City Justice Court about a pending hearing.  Stirling told the court she had no idea what they were talking about, and that she did not even practice criminal law.  “I said, ‘I don’t know what this is. There must be some mistake.’ And they went back and checked and said, ‘Oh no, this is no mistake,'” Stirling said.

“I don’t do any criminal work. I’ve never done any criminal work or immigration or personal injury. I’ve done business contracts, real estate,” Stirling said.  “I have not done any litigation matters in Utah.  There shouldn’t be any court files with my name or my bar number in Utah whatsoever.”

Soon after the court contacted Stirling, the Summit County Attorney’s Office got a call from the Utah State Bar telling them “that Fierro was not an attorney.”

Utah AG’s Office Takes Over Prosecution

In April 2015, the Utah Attorney General’s Office took over the prosecution of Carbo’s case.  That meant that Summit County prosecutor’s agreed to dismiss the charges pending against Carbo there, while new charges would be filed by the State in 3rd District Court.  The State charged Carbo with 12 felony counts, including one count each of second-degree felony engaging in a pattern of unlawful activity and identity fraud, along with five counts of second-degree felony communications fraud.  The charges also include five counts of third-degree felony forgery, court records show.

Carbo Pleads Guilty to Felony Counts, Including UPUAA Count

In July 2015, Carbo accepted a plea deal from State prosecutors, which required her to plead guilty to second-degree felony counts of pattern of unlawful activity, identity fraud, communication fraud, and one third-degree felony count of forgery.  In exchange for Carbo’s pleas, prosecutors dismissed eight other counts.  As part of the plea deal, Carbo agreed to pay more than $7,000 in restitution – money she earned as legal fees for her misrepresented services.  As it related to sentencing, prosecutors told Judge Keith Kelly at the plea hearing that they would be asking the court to impose a 90-day jail sentence with probation to follow that.

Carbo Sentenced to 62 Days in Jail, Ordered to Pay Restitution, and Banished From Legal Profession

At the sentencing hearing in September 2015, Judge Kelly sentenced Carbo to 62 days in jail.  Judge Kelly suspended potential prison terms of up to 15 years and, per a plea agreement negotiated by attorneys, ordered her to serve 90 days in jail, but gave her credit for 28 days already served.  Judge Kelly also imposed 36 months of probation, which required Carbo to complete 75 hours of community service, as well as obtain treatment to address theft issues.  Carbo was also ordered to pay approximately $7,274 in restitution to five clients wo paid for her fraudulent legal services.  Finally, Judge Kelly ordered that Carbo not engage in any legal-related employment.

Carbo’s attorney said of the sentence, “She understands she has harmed these people. She understands she has harmed the legal system.”  “She’s a hardworking mother and she just wants to put this behind her,” her attorney added.

Carbo Victims Offered “Do-Over”

As it relates to the plea deal Carbo negotiated just prior to her arrest, Summit County attorney Matthew Bates said, “This is a very serious matter because we know of at least one person out there now who has pled guilty to a crime without having a competent attorney.”  Further, Bates said that the judge in that case had sent a notice to the defendant telling him what had happened and scheduled a new court date, at which time the defendant will be allowed to be appointed a real attorney as well as withdraw his guilty plea if he wants to, and that Bates’ office would not object to a “do-over.”

“Legally, he has pretty solid grounds to withdraw his plea if he wanted to because the plea was essentially uncounseled and an uncounseled plea is a violation of the Constitution,” Bates said.

While, Carbo’s criminal matter may have been resolved, the Utah Pattern of Unlawful Activity Act (“UPUAA”) allows persons harmed by a pattern of unlawful activity to file a civil suit against the wrongdoer.  That portion of the UPUAA allows a person injured through a pattern of unlawful activity to recover “twice the damages” he or she “sustains,” as well as “the costs of suit, including reasonable attorney fees” if they prevail.  A civil action under the UPUAA must be commenced “within three years after the conduct prohibited by Section 76-10-1603 terminates or the cause of action accrues, whichever is later.”

Contact Our UPUAA Team Today

To date it does not appear that any of Carbo’s victims have filed suit against her under the civil prong of the UPUAA, but they still have time.  If you or someone you know has been a victim of a pattern of unlawful activity, do not hesitate to call our UPUAA attorney team for a consultation.  Conversely, if you have been arrested and charged with a violation of the UPUAA, which is a second-degree felony, please contact our UPUAA attorneys for a consultation as well.  Our UPUAA attorneys can be reached by telephone at (801) 323-5000 or by email at Karra.Porter@chisjen.com.

* Photo Cred.: nydailynews.com

C&J appeals UPUAA conviction arising out of alleged theft by check scheme

dt.common.streams.StreamServerChristensen & Jensen (“C&J”) appellate attorney Karra Porter has appealed her client’s conviction of 12 counts of theft and one count of engaging in a pattern of unlawful activity arising out of an alleged theft by check scheme.  The State alleged that C&J’s client, a manager in a limited liability company, in connection with his co-defendant wrote 28 bad checks from the LLC’s bank account to the alleged victims.

Jury Finds Defendants Guilty of 12 Counts of Theft and One Count of a Pattern f Unlawful Activity

In the charging documents, the State charged C&J’s client and his codefendant with 28 counts of theft in connection with the 28 bad checks he and his co-defendant allegedly wrote from their LLC’s account, and one count of engaging in a pattern of unlawful activity.

During the trial, the defendants moved to dismiss the State’s case at the end of the State’s evidence, but that motion was denied.  However, the State voluntarily dismissed two counts against defendants on its own during the trial.  Of the remaining counts, the jury found the defendants guilty on 12 counts of theft, and a single count of engaging in a pattern of unlawful activity.

The trial court sentenced C&J’s client to prison, but suspended the sentence in favor of probation.  As part of that probation, the court ordered C&J’s client to serve one-year in the Salt Lake County Jail.  Additionally, the trial court also ordered C&J’s client to pay restitution to the alleged victims in the amount of approximately $190,000.  C&J’s client appealed both his convictions and the restitution award separately, which the Utah Court of Appeals consolidated into a single appeal.

C&J Asserts that Court Erred in Jury Instructions

As it relates to the UPUAA conviction, C&J’s client argues that the UPUAA count should be dismissed, and/or his conviction reversed, based on the trial court’s failure to instruct the jury on all the required elements of the Utah Pattern of Unlawful Activity Act (“UPUAA”), and because “wrongful appropriation” is not a predicate offense for purposes of the UPUAA.

Under the UPUAA, the State must allege and prove, among other things, that the defendant engaged in a “pattern of unlawful activity.”  In this case, the State submitted a proposed jury instruction on that element, to which C&J’s client’s trial counsel did not object.  The instruction read in pertinent part:

“Pattern of Unlawful Activity” means engaging in conduct which constitutes the commission of at least three episodes of unlawful activity, which episodes are not isolated, but have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics. Taken together, the episodes shall demonstrate continuing unlawful conduct and be related either to each other or to the enterprise. The most recent act constituting part of a pattern of unlawful activity as defined shall have occurred within 5 years of the commission of the next preceeding [sic] act alleged as part of the pattern.

Pattern of Unlawful Activity Must be Over a “Substantial Period of Time”

In her appeal brief, Karra argues that “[w]hile the instruction is a quote from part of the Act … it fails to require the jury to find a required element of a pattern under UPUAA, i.e., that the required predicate acts occurred over a ‘substantial period of time.’”  The reference to “substantial period of time” refers to what is known as the “continuity” element under the UPUAA, which was added to the statutory definition of a pattern of unlawful activity by the Utah Supreme Court following the U.S. Supreme Court’s decision in Sedima, S.P.R.L. v. Imrex.

In H.J. Inc. v. Northwestern Bell Telephone Co., the U.S. Supreme Court clarified that continuity must be shown in order to sustain a conviction under federal RICO.  There the Court said, “[c]ontinuity may be demonstrated over a closed period by proving a series of related predicates extending over a substantial period of time[.]”

Similarly, in Hill v. Estate of Allred, the Utah Supreme Court adopted a similar interpretation of the UPUAA’s pattern requirement.  The Supreme Court in Hill held that “[t]he proper test for determining whether there was a pattern of unlawful activity, is whether there was a ‘series of related predicates extending over a substantial period of time’ or a demonstrated threat of continuing unlawful activity and not whether there were multiple schemes.”

Karra argues that in light of the holding in Hill, “[t]he State’s instruction given by the trial court omitted the key requirement that the related predicates extend over a ‘substantial period of time.’” Karra says while the Utah Supreme Court has not had occasion to determine what constitutes a “substantial period of time” under Hill, the court has consistently looked to federal law in interpreting Utah’s UPUAA.  Under federal law, courts have “overwhelmingly” held “that a period of less than one year is insufficient – as a matter of law – to constitute a ‘substantial period of time’ under RICO,” Karra’s brief sets forth.

In the present case, Karra states that “11 of the 12 checks were written in a single three-and-one-half month period, plainly not a ‘substantial period of time.’”  Furthermore, even if the outlying check was added to the alleged pattern, it would still only constitute nine months, again insufficient for purposes of establishing continuity for purposes of the UPUAA, Karra argues.

“Wrongful Appropriation” is Not a Predicate Offense for Purposes of the UPUAA

Aside from the “continuity” issue, Karra asserts that the State’s alleged predicate act of “wrongful appropriation” is not one of the recognized predicates acts under the UPUAA.  The UPUAA lists approximately 64 predicate acts which qualify as “unlawful activity,” but wrongful appropriation is not among those.  Therefore, Karra has argued that if her client’s “convictions are reversed in order to address wrongful appropriation,” then “the UPUAA conviction must also be reversed.”

The instant appeal highlights the importance of jury instructions, and how one essential missing element in an instruction can lead to a conviction.  It also shows how the UPUAA is intertwined with federal RICO, and as a result, how the Utah Supreme Court interprets the UPUAA within the broader federal RICO context.  Furthermore, it underscores the importance of ensuring that the charging documents include a proper predicate offense for purposes of a UPUAA charge.

Karra will argue her client’s case to the Utah Court of Appeals on May 26, 2016.  If you or someone you know has been charged with engaging in a pattern of unlawful activity, please call C&J’s UPUAA attorneys at (801) 323-5000, or email Karra directly at Karra.Porter@chrisjen.com.

* Photo Cred.: avvo.com

Ex-Utah County Commissioner charged with communications fraud and engaging in a pattern of unlawful activity after he allegedly posed as LDS Church leader

1661897Former Utah County Commissioner Gary Jay Anderson and businessman Alan McKee have been charged with three counts of communications fraud and one count of engaging in a pattern of unlawful activity for allegedly posing as LDS Church leaders in an attempt to defraud a construction company out of $1.2 million.

All four charges filed against Mr. Anderson and Mr. McKee in 3rd District Court by the Utah Attorney General’s Office are second-degree felonies, which carry the potential penalties of one to 15 years in prison.

Anderson and McKee Posed as LDS Church Officials From 2011 to 2015

According to an article from the Salt Lake Tribune, investigators wrote in the charging documents that Mr. Anderson and Mr. McKee impersonated LDS Church officials from 2011 to 2015 in order to attract investors to what the pair said was a plan to establish a rail line and an industrial park on LDS Church land in Elberta, Utah.

Apparently, employees of the LDS Church’s land management corporation have acknowledged that they discussed a potential rail service with Mr. McKee, but that the proposal stalled in 2013 after Mr. McKee failed to follow through.  Mr. McKee had been introduced to the Church’s officials by several Utah County commissioners, including Mr. Anderson.

McKee and Anderson Defraud Ames Construction

During the same time Mr. McKee was in talks with the LDS Church, he was also corresponding with Ames Construction.  According to investigators, Mr. McKee sent Ames letters on LDS Church letterhead, which purported to be from people connected to the Church and its land management corporation.  The letters allegedly discussed the industrial park and showed support for Mr. McKee’s involvement in the project, even going so far as to praise Mr. McKee’s earlier work on the project.

As part of the correspondence with Ames was a 2013 email from a Yahoo account that Mr. McKee claimed belonged to “Eric Peling,” who supposedly worked for the Church’s land management company.  The email apologized that the substance of the communication was not on official letterhead, but that the LDS Church was “making financial payouts” in connection to the rail line and set meetings to finalize a $4 million payout from the Church to Ames Construction and Mr. McKee.

Ames’ regional vice president, Mark Brennan, met with Mr. McKee and someone who identified himself as “Mr. Peling,” but LDS Church officials later said there is no church employee by that name, investigators claimed.

While Mr. McKee was trying to garner Ames participation in the rail line and industrial park, Mr. McKee was also speaking with Mr. Brennan about a personal business deal to purchase the LDS Church’s surplus farm equipment at a discount.  Mr. McKee claimed to be a “preferred buyer” for the Church’s equipment and said he could act as a go-between for Mr. Brennan and the Church.  Mr. Brennan paid Mr. McKee $110,000 for the equipment, but it was never delivered.

Throughout the negotiations with Mr. McKee, Mr. Brennan received numerous phone calls from a man identifying himself as “Stevenson,” which continually reassured Mr. Brennan that the Church was committed to the pending rail line project and the equipment deal.  However, after listening to two of the recorded conversations between Mr. Brennan and “Stevenson,” investigators determined that the voice of the caller was actually Mr. Anderson.

Anderson and McKee Defraud McKee’s Friend and Fellow Churchgoer

In addition to defrauding Ames, investigators claim that Mr. McKee also defrauded a fellow churchgoer out of $750,000 after Mr. McKee claimed to be a “preferred buyer” of foreclosed farm and construction equipment.  However, the business that Mr. McKee said he could buy the equipment from never existed.  Even still, someone claiming to be the president of the company called Mr. McKee’s friend and sent him numerous text messages regarding the purchase of the equipment.  Again, investigators determined that the purported president was in fact Mr. Anderson.

Investigators seized the cellphones of Mr. McKee and Mr. Anderson and found text messages between them, coordinating communications with the alleged victims.  Mr. Anderson at times told the victims he was Mr. McKee’s attorney; he later told investigators he was not Mr. McKee’s attorney, but received $10,000 per month from Mr. McKee for “consulting” services.

Investigators reviewed Mr. McKee and Mr. Anderson’s finances and found several transactions between them.  They found that Mr. McKee was shifting money around his accounts and accounts to his business, Ophir Minerals and Aggregate, LLC.  The company was named by the Utah County Commission as “business of the year” in 2011, while Mr.  Anderson was serving on the Utah County Commission.

LDS Church Releases Statement on Charges

LDS Church spokesman Eric Hawkins released a prepared statement Monday regarding the charges.

“Two individuals have been charged with fraud for claiming to be or represent (former) Bishop Gary E. Stevenson during their business dealings.  Elder Stevenson was serving as the presiding bishop of the church at that time.  He does not know these individuals, has never spoken with them, and was completely unaware of their activities,” Hawkins said in the statement.  “The church alerted authorities as soon as it learned of the matter, and Elder Stevenson has provided a statement to prosecutors confirming he was not involved in this brazen scheme, which attempted to misuse the good name of the church and the office of the presiding bishop,” Hawkins said.

* Photo cred.: deseretnews.com

Apple stock scheme lands Utah man in prison

wall-street-HPursuant to the Utah Pattern of Unlawful Activity Act (“UPUAA”), the state must prove that an individual engaged in a “pattern of unlawful activity.”  As defined by the statute, a “‘[p]attern of unlawful activity’ means engaging in conduct which constitutes the commission of at least three episodes of unlawful activity.”  The UPUAA lists approximately 64 violations of Utah law that constitute unlawful activity for purposes of the UPUAA.  A Violation of the Utah Uniform Securities Act is included within the offenses that constitute “unlawful activity” under the UPUAA.

In a case that has involved an investigation and lawsuit by the Securities and Exchange Commission (“SEC”), a federal prosecution for obstruction of justice and providing false information, and state charges for securities fraud and engaging in a pattern of unlawful activity, Third District Judge Elizabeth Hruby-Mills recently sentenced Roger S. Bliss to a minimum of four years in the Utah State Prison.  Mr. Bliss’ sentence follows his guilty plea to four counts of communications fraud and one count of engaging in a pattern of unlawful activity.  Judge Hruby-Mills said that Mr. Bliss’ four year sentence will run consecutively with his one-year prison term imposed from federal court as it relates to the charges of obstruction of justice and providing false information.

SEC Files Suit

In February 2015, the SEC sued Mr. Bliss in Utah federal court.  In its complaint, the SEC alleged Mr. Bliss solicited investors by offering them a membership in purported investment club.  Mr. Bliss communicated to potential investors that he could day trade (speculation in securities) Apple stock for annual returns of 100 to 300 percent and that he had not lost money on a day trade in the last six years, the SEC said.

In order to further entice investors, Mr. Bliss told them that he was trading more than $300 million in assets.  However, the SEC has said that Mr. Bliss’ brokerage account actually showed losses of at least $3 million over a three year period, with an ending balance of only $32,000.

According to court papers filed by the SEC, Mr. Bliss allegedly structured the scheme as an investment club following a meeting with attorneys, whereby the attorneys told him that structuring the scheme as an investment club would keep him from having to register as an investment adviser or a broker-dealer.

SEC Obtains TRO and Asset Freeze

On the same day the SEC lawsuit was filed, a Utah federal court also entered a temporary restraining order and asset freeze against Mr. Bliss.  In July 2015, the SEC filed a motion for an order to show cause, claiming that Mr. Bliss had violated the court’s asset freeze when he failed to disclose ownership of a catamaran and had the boat removed from his property five days after the asset freeze was entered.  In response to the SEC’s motion, Mr. Bliss said in a sworn declaration that his brother-in-law, Kevin Fortney, who had not been named in the SEC’s lawsuit, owned the boat but stored it at his house in Bear Lake during the off-season.

Mr. Bliss Held in Contempt

Following the statements in Mr. Bliss’ sworn declaration, U.S. District Judge Robert J. Shelby held Mr. Bliss in civil contempt.  Judge Shelby stayed any sanctions against Mr. Bliss, and, instead, referred the matter to the U.S. Attorney’s Office for the District of Utah for a consideration of whether criminal charges should be brought against Mr. Shelby for criminal contempt.

Mr. Bliss and Mr. Fortney Indicted in Utah Federal Court

In August 2015, Mr. Bliss and Mr. Fortney were indicted by a federal grand jury for allegedly lying about the ownership of the catamaran during the SEC’s investigation.  Mr. Bliss ultimately pled guilty to the federal charges, and was sentenced to a one-year prison term.

As previously noted, State charges were also filed against Mr. Bliss in connection with his alleged Apple investment scheme, including four counts of securities fraud and one count of engaging in a pattern of unlawful activity.  The State was able to include a charge for engaging in a pattern of unlawful because they had alleged four “episodes” of securities fraud attributable to Mr. Bliss.  A charge under the UPUAA is a second degree felony, but also carries the potential penalties of cost of suit, restitution, disgorgement, or other reasonable restrictions that may be placed on the future activities or investments of the individual, including ordering the dissolution or reorganization of any enterprise as defined by the UPUAA.

Mr. Bliss Ordered to Pay Restitution in Addition to Prison Time

Mr. Bliss ultimately pled guilty to the State charges, which led to the court imposing a four-year sentence against him.  In addition to sentencing Mr. Bliss to prison, the court also ordered him to pay approximately $21 million in restitution to the victims of his securities scheme.