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People v. Lawrence

Court of Appeals of Colorado, Sixth Division

May 30, 2019

The People of the State of Colorado, Plaintiff-Appellee,
Shaun David Keller Lawrence, Defendant-Appellant.

          Jefferson County District Court No. 15CR463 Honorable Todd L. Vriesman, Judge

          Philip J. Weiser, Attorney General, Brittany L. Limes, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee

          Megan A. Ring, Colorado State Public Defender, Jessica A. Pitts, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant


          WELLING, JUDGE

         ¶ 1 A jury found defendant, Shaun David Keller Lawrence, guilty of theft for stealing items valued at $1000 or more but less than $20, 000. When he committed the crime, that theft was a class 4 felony. § 18-4-401(2)(c), C.R.S. 2012. But before trial the theft statute was amended. See Ch. 373, sec. 1, 2013 Colo. Sess. Laws 2195-97. Under the amended statute, that same range could be a class 1 misdemeanor up to a class 5 felony, depending on the value of the items stolen. § 18-4-401(2)(e)-(g), C.R.S. 2018.

         ¶ 2 While this appeal was pending, the supreme court decided that a defendant whose conviction was not final is entitled to have his or her conviction reclassified based on the value of the item stolen under the amended theft statute. People v. Stellabotte, 2018 CO 66. But Stellabotte left unanswered the question we must answer here: When the evidence related to the value is disputed, how do we reclassify the crime under the amended statute?

         ¶ 3 We conclude that when the value of the items stolen is disputed, further proceedings are necessary to determine the classification of the theft, but that the prosecution may elect to request that a theft conviction enter for the lowest amount supported by the jury's verdict. Accordingly, we remand the case for further proceedings.

         ¶ 4 The remand, however, only involves Lawrence's theft conviction. He also appeals convictions he received for two counts of securities fraud. We affirm those convictions.

         I. Background

         ¶ 5 Lawrence was at a casino when he met D.B., who worked there as a cashier. During their conversation, Lawrence told D.B. that he ran his own security and surveillance company. D.B. asked Lawrence if he was hiring. Lawrence responded that she couldn't work for him until she was properly trained, but that he was seeking investors so that he could expand his business.

         ¶ 6 The two began negotiating and, a few weeks later, agreed that D.B. could purchase twenty percent of the company for $6000. D.B. later purchased an additional ten percent of the company for another $3000. Both times, D.B. followed Lawrence's instructions and deposited money directly into his personal bank account.

         ¶ 7 Lawrence rented an office, registered the company with the Secretary of State, and began creating a website. During this time, D.B. repeatedly asked Lawrence to begin the training so that she could become an employee with the company. Lawrence let D.B. do one service of process job, and routinely scheduled trainings for D.B., only to cancel them at the last minute. Occasionally, D.B. would visit the office, but within a few months, Lawrence stopped responding to D.B.'s calls altogether. At one point, D.B. visited the office and found it empty except for one computer.

         ¶ 8 D.B. filed a complaint with the Colorado Division of Securities (Division). The Division's investigation into Lawrence's bank account showed that his account had a negative balance the day D.B. made her initial investment and that he spent all $9000 on personal expenses, gambling, and entertainment within one month of D.B.'s deposits.

         ¶ 9 The Division referred the case to the prosecutor's office, and Lawrence was subsequently charged with two counts of securities fraud and one count of theft. A jury convicted him of all three charges.

         II. Analysis

         ¶ 10 Lawrence raises five arguments on appeal. First, he argues that the evidence supporting his convictions is insufficient. Second, he contends that the trial court failed to instruct the jury on the mental state required to convict him of securities fraud. Third, he argues that the trial court erred by admitting the expert testimony of Colorado's Securities and Exchange Commissioner. Fourth, he argues that the trial court erred by excluding evidence that he contends was exculpatory. Finally, he argues that he is entitled to the maximum ameliorative benefit under an amendment to the theft statute. We address each contention in turn.

         A. Sufficiency of the Evidence

         ¶ 11 Lawrence first contends that there was insufficient evidence to support his convictions. We review de novo whether the evidence at trial was sufficient in quantity and quality to sustain a conviction. Clark v. People, 232 P.3d 1287, 1291 (Colo. 2010). In doing so, we must determine "whether the relevant evidence, both direct and circumstantial, when viewed as a whole and in the light most favorable to the prosecution, is substantial and sufficient to support a conclusion by a reasonable mind that the defendant is guilty of the charge beyond a reasonable doubt." Id. (quoting People v. Bennett, 183 Colo. 125, 130, 515 P.2d 466, 469 (1973)). We also must give the People the benefit of every reasonable inference that may be drawn from the evidence. Id. at 1292.

         ¶ 12 Lawrence first contends that there is insufficient evidence to support the convictions for securities fraud because the transaction did not involve a security. Second, he argues that there is insufficient evidence to support the theft conviction because there is no evidence that he intended to permanently deprive D.B. of her property. We reject both contentions.

         1. Evidence of a Security

         ¶ 13 To convict Lawrence for securities fraud, the prosecution needed to prove that he made a false or misleading statement "in connection with the offer, sale, or purchase of any security." § 11-51-501(1), C.R.S. 2018.

         ¶ 14 An "investment contract" is a security. See § 11-51-201(17), C.R.S. 2018. But a contract is an "investment contract" only if it is (1) a contract whereby a person invests his or her money (2) in a common enterprise and (3) is led "to expect profits solely from the efforts of the promoter or a third party." Sec. & Exch. Comm'n v. W. J. Howey Co., 328 U.S. 293, 298-99 (1946); Rome v. HEI Res., Inc., 2014 COA 160, ¶ 21 (applying Howey analysis to definition of "investment contract" under the Colorado Securities Act). Lawrence contends that the evidence at trial failed to establish that D.B. expected to profit "solely" from Lawrence's efforts because she did some work for the company. The term "solely" in this context, however, is not to be construed literally. Rome, ¶ 21. Instead, the question is whether "the investor was 'led to expect profits derived from the entrepreneurial or managerial efforts of others.'" Id. (quoting Toothman v. Freeborn & Peters, 80 P.3d 804, 811 (Colo.App. 2002)).

         ¶ 15 The evidence at trial, when viewed in the light most favorable to the prosecution, showed that D.B. was working as a cashier at a casino when Lawrence came into the casino to gamble. The two began talking, and Lawrence said that he was thinking of starting a surveillance business. At the time, D.B. was expecting to receive a few thousand dollars from a legal settlement and was looking to invest that money. During their initial discussions, Lawrence told D.B. that working for him would be possible but that she would have to complete hundreds of hours of unpaid training before he would hire her to work for the company.

         ¶ 16 Despite knowing that it would be a long time before she was able to work for the company, D.B. purchased thirty percent of the company for $9000. D.B. believed that her money would be used as a down payment for the purchase of ankle monitors, which would allow the company to start providing ankle monitoring services. Lawrence told D.B. that he had experience in ankle monitoring, and there is no indication from the record that D.B. had any similar experience.

         ¶ 17 This evidence was sufficient for the jury to have concluded that D.B. expected to profit solely from Lawrence's efforts. Throughout the transaction, D.B. believed that her investment and her potential employment were separate. Lawrence told her that she would have to provide hundreds of hours of free labor if she wanted to become an employee in addition to her investment, but she invested anyway. And while she visited the office a few times, D.B. said that Lawrence made all of the decisions related to the company and he did not consider her opinions. The record, when viewed in the light most favorable to the prosecution, shows that D.B. expected to profit solely from Lawrence's efforts.

         ¶ 18 True, D.B. tried to work for the company. But the only work she ever performed was a single service of process. She was not paid for this work, and the record isn't even clear whether Lawrence counted this toward her training requirement. Even if paid for the one task, that an investor exerts some effort does not automatically preclude a finding that a transaction is an investment contract. Williamson v. Tucker, 645 F.2d 404, 418 (5th Cir. 1981); Sec. & Exch. Comm'n v. Glenn W. Turner Enters., Inc., 474 F.2d 476, 482 (9th Cir. 1973) ...

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