One Utah bail bond company has been charged under Utah’s Pattern of Unlawful Activity Act (“UPUAA”) in connection with the handling of property from clients as a fiduciary. UPUAA is the state version of the Racketeering Influenced and Corrupt Organizations Act (better known as “RICO”) which Utah prosecutors have used creatively in their cases, albeit with varying success.
UPUAA charges against bail bond companies must show a ‘pattern’
Court records reported by KSL charge the owner(s) of Rebel Bail Bonds in Duschene Utah, stating:
Bail bond agencies that accept collateral act in a fiduciary capacity and are required to keep the collateral separate and apart from any other funds or assets of the licensee. Bail bond agencies are required to deposit collateral into a trust account. Once a bond is exonerated by the courts, bail bond agencies have 10 days to return the collateral to the depositor after it is requested.
Darren Brady, owner of Rebel Bail Bonds was charged last week in Third District Court in West Jordan with engaging in a pattern of unlawful activity, two counts of unlawful dealing with property by a fiduciary and issuing a bad check and failing to make good on a payment, second-degree felonies; six counts of unlawful dealing with property by a fiduciary, a third-degree felony; five counts of unlawful dealing with property by a fiduciary, a class A misdemeanor; and unlawful dealing with property by a fiduciary, a class B misdemeanor.
UPUAA crimes must prove bail bond company had a ‘pattern’ of related predicate offenses
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.”
Bail bond businesses must also be an ‘entity’ apart from the defendant
Under Utah law in order to sustain a conviction under subsection (3) of UPUAA, the State must prove the existence of an “enterprise” that is distinct from the defendant themselves. In State v. Hutchings, the Utah Court of Appeals determined that as it related to the sole proprietorship at issue in in the case, “the man and the proprietorship really are the same entity in law and fact.” As a result, the State had failed to pass the distinction test.
While the Utah Supreme Court has declined to require a distinction between the individual and the entity under subsections (1) and (2), it does require the state to prove the existence of more than a one-man show under subsection (3). Defendants facing charges under the UPUAA need to be cognizant of this fact and must take steps to ensure their counsel argues that point to the court, and that the jury is properly instructed on the issue at trial.