Appeal of Interlocutory Order
District, Salt Lake The Honorable Judge Randall N. Skanchy
D. Reyes, Att'y Gen., John J. Nielsen, Asst. Solic. Gen.,
Jacob S. Taylor, Asst. Att'y Gen., Salt Lake City, for
Morgan Philpot, Alpine, for appellee.
Justice Pearce authored the opinion of the Court in which
Chief Justice Durrant, Associate Chief Justice Lee, Justice
Himonas, and Justice Petersen joined
The State charged Scott Richard Stewart with, among other
crimes, one count of participating in a pattern of unlawful
activity. The State also alleged that Stewart had committed
securities fraud and that some of those crimes were part of
his pattern of unlawful activity. Because the statute of
limitations had run on a number of the alleged acts, Stewart
moved to exclude them. Stewart argued that a pattern of
unlawful activity cannot be based on crimes that the State
could not separately charge because the statute of
limitations had run. The district court agreed and granted
Stewart's motion. The State seeks interlocutory review of
that decision. This requires us to interpret the Pattern of
Unlawful Activity Act, Utah Code sections 76-10-1601 to 1609.
We conclude that the statute does not prevent the State from
using evidence of acts on which the statute of limitations
has expired to prove a pattern of unlawful activity. We
reverse the district court's order and remand.
In 2013, the State charged Stewart with, among other things,
thirteen counts of securities fraud or, in the alternative,
thirteen counts of communications fraud. The State also
charged Stewart with one count of a pattern of unlawful
activity. After the court bound Stewart over for trial, we
decided State v. Taylor, 2015 UT 42, 349 P.3d 696,
and State v. Kay, 2015 UT 43, 349 P.3d 690. Those
cases concluded that securities fraud and communications
fraud are not continuing offenses. Taylor, 2015 UT 42,
¶ 24; Kay, 2015 UT 43, ¶ 23. These rulings
undercut the State's prosecution because the State relied
on the theory that some of the counts of securities fraud and
communications fraud were continuing offenses. In response,
the State filed an amended information to exclude several of
the charges on which the statute of limitations had expired.
The amended information charged two counts of securities
fraud, one count of sale of an unregistered security, one
count of unlicensed investment advisor activity, and one
count of a pattern of unlawful activity.
The State indicated that it planned to call twelve of
Stewart's investors to testify about the investments they
made on Stewart's advice-investments they claim Stewart
had defrauded them into making. In other words, the State
intended to call witnesses to testify concerning the untimely
charges of securities fraud that the State had voluntarily
dismissed in response to Kay and Taylor.
The State represented that it planned to use the investor
testimony to prove the pattern of unlawful activity charge.
Stewart moved to exclude that testimony arguing that
time-barred offenses cannot support a pattern of unlawful
The district court excluded the evidence. The district court
explained, "Kay clarifies that securities fraud
is not a continuing offense, and a claim for pattern of
unlawful activity must be predicated on acts that,
themselves, would be chargeable." The district
court quoted Kay's conclusion that "if the
actual communication falls outside the statute of
limitations, the State cannot rely on the presence of a
predicate scheme to extend the limitations period."
(Quoting Kay, 2015 UT 43, ¶ 18). The district
court concluded that "[b]ecause the predicate acts
relied on by the State regarding [the original victims] are
outside the statute of limitations for a communications fraud
claim, they may not be used to prove the pattern of unlawful
activity charge." We granted the State's petition
for interlocutory appeal to review that conclusion.
AND STANDARD OF REVIEW
The State contends that the trial court erred by excluding
evidence of predicate acts that were part of the alleged
pattern of unlawful activity. The State's challenge
requires us to interpret Utah's Pattern of Unlawful
Activity Act. Specifically, we must determine whether the
prosecution may establish a pattern of unlawful activity
using evidence of individual acts that are time barred under
the relevant statute of limitations. See Utah Code
§ 76-10-1602(2). "We review questions of statutory
interpretation for correctness, affording no deference to ...