In Hill v. Estate of Allred, the Utah Supreme Court articulated what it determined to be the proper test for determining whether there was a pattern of unlawful activity under the UPUAA. After moving to Utah from Michigan, Ms. Hill met the leader of a small religious group, Mr. Shugart. Ms. Hill asked Mr. Shugart to help her purchase the Desert Inn Ranch, which was listed for $1.5 million. A friend of Mr. Shugart’s, Mr. Matthews and a former real estate agent, Mr. Putvin agreed to help Ms. Hill purchase the property. Mr. Shugart delivered $1 million in cash, belonging to Ms. Hill, to Mr. Putvin and Mr. Matthews and directed them to proceed with the purchase of the ranch. In addition to the $1 million, Ms. Hill provided another $500,000 for the purchase of the ranch and paid Mr. Putvin $40,000 for his services. However, Mr. Putvin and Mr. Matthews never delivered the ranch or repaid any of the money.
Ms. Hill filed suit to recover her lost money alleging claims of civil conspiracy, constructive fraud, conversion, unjust enrichment, money laundering, fraudulent misrepresentation, racketeering (pattern of unlawful activity), and intentional infliction of emotional distress. Following a bench trial, the district court determined that the defendants had engaged in a civil conspiracy to deprive Ms. Hill of her money, the defendants had converted Ms. Hill’s money, and that they had made false representations to Ms. Hill as well. However, the court found that Ms. Hill did not meet her burden of proof on her claims of racketeering and intentional infliction of emotional distress. Ms. Hill appealed, arguing among other things that the trial court erred in holding that she did not meet her burden of proving a pattern of unlawful activity under her racketeering claim. Defendants cross-appealed.
On appeal, Ms. Hill argued that each unlawful act by defendants in furtherance of the conversion of her money constitutes an episode of unlawful activity and therefore a pattern exists. Defendants argued that the conversion of Ms. Hill’s money, though not accomplished in one single act, was only one episode of criminal activity and, therefore, did not constitute a pattern of unlawful activity. The district court agreed with defendants and held that their actions did not constitute a pattern of unlawful activity because there was only one episode of criminal activity, the conversion of Ms. Hill’s money.
“Over a Substantial Period of Time”
However, the Utah Supreme Court disagreed, and reversed the district court’s holding on Ms. Hill’s pattern of unlawful activity claim. According to the Utah Supreme Court, the proper test for determining a pattern of unlawful activity is the “continuity plus relationship” test articulated in H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (1989). “The 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.” (emphasis added). As a result, in order to sustain allegations of a pattern of unlawful activity, a prosecutor or civil plaintiff must prove that the defendant(s) engaged in a series of related predicates over a substantial period of time. In Hill v. Estate of Allred, the Utah Supreme Court found that a period of five years was enough to satisfy this requirement. But there is no bright line rule as to what constitutes such a “substantial period of time.” Nevertheless, the substantial period of time requirement imposed in Hill v. Estate of Allred is an element of the offense, and juries should be instructed accordingly. The test adopted in Hill v. Estate of Allred may require previous cases to be reexamined, and will undoubtedly impact UPUAA cases going forward.