Utah Rico Law

A formerly convicted getaway driver in a deadly 1996 Utah motel robbery was recently arrested on felony charges of human trafficking, participating in a pattern of unlawful activity, obstruction of justice, and witness tampering.

Rettenberger Charged With Engaging in a Pattern of Unlawful Activity

Todd Jeremy Rettenberger, 37, was charged in Farmington’s 2^nd District Court with two counts each of second-degree felony human trafficking for forced sexual exploitation and aggravated exploitation of prostitution; another second-degree felony count of participating in a pattern of unlawful activity; and third-degree felony counts of obstructing justice and tampering with a witness.

Rettenberger Threatened and Assaulted Two Women, Prosecutors Say

A probable cause statement sets forth that Rettenberger had taken two women from Utah to Oregon and back, forcing each woman into prostitution.  The two women told investigators that Rettenberger was their “pimp.”  One of the women admitted to investigators that while she had become involved in prostitution to keep up with her heroin addiction, during her time with Rettenberger, he threatened her and assaulted her on several occasions in order to keep her from leaving.

The other woman told investigators that she feared Rettenberger, who she described as a man with “a scary background,” and that he “did not like to be told ‘no.’”  Specifically, the woman told investigators that Rettenberger would refer to the 1996 motel slaying in which he was convicted, and that the women “understood the defendant to mean that if she crossed him, she would be killed like the [motel] clerk.  The other woman also said that when she tried to quit prostitution, Rettenberger would “take it out” on her with “violent sex acts” that included choking.  Prosecutors say that when the two women were arrested, Rettenberger told them to delete everything from their cellphones and not to mention his name.

Rettenberger’s Involvement in 1996 Death of Motel 6 Clerk

As mentioned, in 1996, Rettenberger, then 18, acted as a lookout and getaway driver in the slaying death of a Woods Cross Motel 6 clerk during a bungled robbery attempt.  In 2002, Rettenberger agreed to plead guilty to manslaughter charges arising out of the motel clerk’s death upon the promise that he would testify against his other two co-defendants, David Valken-Leduc and Elliott Rashad Harper.  Both Valken-Leduc and Harper were convicted, but Valken-Leduc’s conviction was subsequently overturned.  Rettenberger, who at the time had already spent five years in the Davis County jail, was sentenced to probation as part of his plea.

Following his conviction for the motel clerk’s death, Valken-Leduc was sentenced to five years to life in prison.  However, in 2009, Valke-Deluc’s conviction was vacated.  Valken-Deluc entered into what is known as an Alford plea, whereby he agreed to plead to a lesser charge of second-degree felony manslaughter with three years of probation.  The Alford plea meant that Valken-Deluc could maintain his innocence while conceding that prosecutors probably had enough evidence to convict him.

Rettenberger Arrested in 2011 on Charges of Exploiting Prostitutes and Drugs

In 2011, Rettenberger was again arrested, this time on charges of exploiting prostitutes, as well as drug possession in a separate case.  In July 2012, Rettenberger was sentenced to prison for up to five years on both cases.  Rettenberger was paroled in November, 2015, and wasted no time returning to a life of crime.

Prosecutors allege that Rettenberger’s prostitution ring began in early January 2016 and extended through mid-February.  The Board of Pardons and Parole issued a warrant for Rettenberger for absconding in early February.  Rettenberger was eventually arrested in Idaho on February 26^th and booked into the Ada County Jail.  On March 4^th, Rettenberger’s parole was revoked and he was transported back to the Utah State Prison.

Criminal Charges Under the UPUAA

In order to charge an individual with engaging in a pattern of unlawful activity under the Utah Pattern of Unlawful Activity Act (“UPUAA”), the state must show that the individual engaged “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 interrelated by distinguishing characteristics.”  When taken together, “the episodes shall demonstrated continuing unlawful conduct and be related to each other or to the enterprise.”

Under the UPUAA, approximately 64 predicate offenses are listed, which amount to “unlawful activity” under the statute.  Included in those offenses are the charges for which Rettenberger was arrested.  If the State is able to have at least three episodes of Rettenberger’s unlawful activity bound over for trial, then the State will be allowed to pursue its pattern of unlawful activity charge against Rettenberger.

A UPUAA charge is a second-degree felony, which carries a potential penalty of one to 15 years in prison and up to a $5,000 fine.  In addition to the aforementioned punishments, a person convicted under the UPUAA may be ordered to pay the state, if the case was brought by the attorney general, or to the county, if the county attorney or district attorney brought case, “the costs of investigating and prosecuting the offense and the costs of securing the forfeitures provided for” by the statute.  In lieu of any fine otherwise authorized by law, a defendant may not be fined more than twice the amount of the net proceeds the defendant received from his or her unlawful activity.  A court may also: 1) order restitution; 2) order the person to divest him or herself of any interest or control in any enterprise (as defined by the statute); 3) impose reasonable restrictions on the future activities of the person; and 4) order dissolution or reorganization of any enterprise.

UPUAA Provides Civil Remedies for Victims of a Pattern of Unlawful Activity

Beyond the criminal penalties for violating the UPUAA, the statute also provides a civil remedy for persons injured by a pattern of unlawful activity.  Such a claim allows a victim to recover double damages against a UPUAA defendant, and must be brought within three years.  The civil portion of the UPUAA also allows a prevailing party to recover “the cost of suit, including reasonable attorney fees.”  However, a victim must set forth their claims with particularity, and prove those claims by clear and convincing evidence.

Contact Our UPUAA Team Today

If you or someone you know has been charged under the UPUAA, please contact our Utah Rico attorneys for a consultation.  Your potential criminal, as well as civil exposure, under the UPUAA is serious, and requires the assistance of attorneys well-versed in criminal and civil law.  Our UPUAA attorneys can be reached by telephone at (801) 323-5000 or by email at Karra.Porter@chisjen.com or Mary.Corporon@chrisjen.com.

* Photo Cred.: sltrib.com

Copyright 2016

On April 1, 2016, Davis County resident, Dwight Shane Baldwin, who previously ran a string of Salt Lake City venture-capital, private-equity and real estate companies, pleaded guilty to four counts of securities fraud, one count of theft, and one count of engaging in a pattern of unlawful activity.  Each of the counts is a second-degree felony, punishable by one to 15 years in prison.  As part of the plea bargain with Baldwin, the State agreed to drop other charges in light of his guilty plea.

Baldwin Bilked Investors Money and Used it for Unrelated/Personal Expenses

According to the charging documents filed against Baldwin, from 2010 to 2013, Baldwin solicited funds from persons for purported real estate-based ventures for Baldwin’s company.  Specifically, the charging documents allege that Baldwin swindled investors by promising huge returns and making other bogus statements that persuaded them to pour $200,000 into a California toy company.  However, instead, more than half of that $200,000 was used for unrelated expenses that went to other Baldwin companies and for personal expenses.

Keith Woodwell, director of the Utah Division of Securities said of Baldwin, “I think this case boils down to not being honest with investors.  If you tell investors that their money is going to be used for one purpose and you use it for something else, you’ve committed securities fraud.”

The Utah Attorney General’s Office described Baldwin’s scheme this way:

Typically, Baldwin promised investors large returns within short periods of time with little to no risk.  In connection with the offer and sale of these investments, Baldwin made numerous material misrepresentations and omissions including the risks associated with the investment, how the investment funds would be spent, and Baldwin’s ability to close the promised real estate transactions.

Baldwin Takes Investors for a Ride

More specifically, during a three month period in December 2007, the State said Baldwin urged Nicole Lindley and Matthew Lee to put money in Silver Leaf Capital Partners 1, or SLCP1, (a company owned by Baldwin).  Court documents said the Lindleys wanted to invest in toy maker GarageCo, which SLCP1 was to won 80 percent of.

As part of the investment pitch, Baldwin proposed to invest $1 million into SLCP1, a California-based company.  According to court documents, if Lindley and Lee each invested $100,000, each would own 10 percent of SLCP1, a shell company, and Silver Leaf would fund the remaining $800,000.

Baldwin told Lindley her money would be invested for three to five months, at most.  Afterward, she would receive her investment, plus about $300,000 in profit, according to the documents.

Lee claims he was told his $100,000 would be repaid in four months and that he and Lindley each would be allowed to own about 17 percent of SLCP1.

Lindley became worried when Baldwin and an employee failed to provide her with weekly updates.  She said Lee told her he had been to the company’s office to look at its books and found that half of their investments had been used to pay expenses incurred by some of Baldwin’s other Silver Leaf companies.

Court documents show money was spent for personal expenses, restaurants, advertising and insurance for Silver Leaf Development.  About $37,500 paid for a party in Park City during the 2008 Sundance Film Festival. Another $6,600 was taken out in cash.

Baldwin, Long the Subject of Investigation

Baldwin has long been a subject of investigation by regulators. At the same time he was soliciting Lindley and Lee, Baldwin was also trying to persuade the securities division to approve his company’s application for an investment adviser license.

The application was denied. Securities division investigators determined the request contained false and misleading information. Baldwin incorrectly represented himself and the company as being licensed before and during the application process, division officials said.

Lindley and Lee Were Not Baldwin’s Only Victims

Lindley and Lee were just some of Baldwin’s victims.  Other victims of Baldwin include:

• Multiple civil lawsuits Baldwin is facing as a result of the “chaos” he created with his alleged frauds.
• A criminal case filed in early April alleging he offered “essentially worthless” notes as collateral for a $500,000 loan he solicited in March. That came after he had entered into a plea in abeyance in 2010 and promised to make restitution of $200,000 to investors.
• He provided a $10,000 check to 1st Out Bail Bonds to cover his fee on a $100,000 bail from an account he allegedly knew did not have sufficient funds.
• A second case in late April charged him with two other counts of communications fraud and theft stemming from the bounced bail check.
• Upheaval in his personal life, which was followed by his seeking mental-health treatment, according to charging documents.

Baldwin will be sentenced on May 26, 2016, but what Baldwin owes the bilked investors in terms of restitution will be determined after sentencing.

* Photo Cred.: silverleafutah.blogspot.com

Christensen & 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

In order to sustain a charge under the Utah Pattern of Unlawful Activity Act (“UPUAA”), the State must prove that a defendant engaged in “at least three episodes of unlawful activity.”  The UPUAA includes “communications fraud” within its definition of “unlawful activity” for purposes of the statute.

In a recent case before the Utah Court of Appeals, the appellate court affirmed the conviction of Clair Rulon Hawkins for communications fraud arising out of a fraud scheme related to real property near Park City, Utah.  Mr. Hawkins was initially charged with three counts of communications fraud and one count of engaging in a pattern of unlawful activity, but only the two counts of communications fraud went forward to trial.  As a result, the State could not sustain its UPUAA charge against Mr. Hawkins.

A jury acquitted Mr. Hawkins on the first count of communications fraud, but convicted him on the second.  The second count alleged that the victim owned a business in Colorado, which was ultimately sold, realizing approximately $1 million in profit.  The victim spoke with Ms. Chapple, VP and a Director of Empire Homes, over the phone and arranged a time where he could come to Utah to meet with Empire.

When he met with the victim, Mr. Hawkins provided certain assurances regarding the victim’s potential investment in the development.  Upon these assurances, the victim decided to purchase two lots in the development, putting approximately $423,000 down on each lot.  However, nothing went as promised, and the victim lost his investment.

Following the trial, Mr. Hawkins appealed his conviction.  On appeal, Mr. Hawkins, among other things, argued that the trial court erred in its determination that sufficient evidence established that he “devised” the alleged fraudulent scheme, because, as he put it, the district court equated “participation” in a scheme to having “devised” the scheme.

In its opinion, the Court of Appeals explained that “the trial evidence showed that Hawkins devised a scheme to entice the victim to buy property based on a promise that Empire Homes would take care of everything.”  “In furtherance of that scheme,” Mr. Hawkins made a number of representations to the victim that were simply not true, including that utilities were not a problem, funding was not a problem, and Empire Homes had an insurance policy that would cover any loss should the home they built sell for less than promised.

To further persuade the victim, the court found that Mr. Hawkins represented to the victim that the developer would treat the victim and his family to a cruise when in fact the victim’s money was used to pay for the cruise.  Lastly, after the victim had purchased one of the lots, Mr. Hawkins created and had the victim sign a risk disclosure statement, which effectively revoked every promise Mr. Hawkins made to the victim.

Upon the foregoing evidence, the Court of Appeals concluded:

From the evidence, the jury could reasonably conclude that Hawkins knew that no private trust existed to fund the Deer Canyon Development but that he nevertheless affirmatively represented the existence of such a trust; that Hawkins knew that utilities presented a problem, but affirmatively represented they did not; that Hawkins knew that the developer would not pay for a Disney cruise, but represented that it would; that Hawkins knew that no insurance policy guaranteed the sale price of the homes; and that Hawkins knew the falsity of everything he promised, but promised it all anyway and then conceived a risk disclosure statement repudiating his promises in an effort to shield himself from liability. Moreover, from evidence of Hawkins’s role in every stage of the scheme, the jury could reasonably conclude that he not only acted to execute someone else’s scheme, but that he also had a hand in devising it.