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State v. Hamilton

Court of Appeals of Utah

October 25, 2018

State of Utah, Appellee,
Dean Hamilton, Appellant.

          Second District Court, Ogden Department The Honorable Ernest W. Jones No. 151902046

          Herschel Bullen, Attorney for Appellant

          Sean D. Reyes and William M. Hains, Attorneys for Appellee.

          Judge Kate A. Toomey authored this Opinion, in which Judges David N. Mortensen and Diana Hagen concurred.


          TOOMEY, Judge

         ¶1 Dean Hamilton pleaded guilty to one count of attempted securities fraud. As part of the plea agreement, the State agreed to dismiss the remaining charges and to stipulate to complete and court-ordered restitution in the amount of $38, 000. The district court accepted Hamilton's plea but did not accept the amount of restitution stipulated to by the parties. Instead, the court ordered Hamilton to pay $382, 085 in complete and court-ordered restitution. Hamilton appeals the restitution order, contending the court abused its discretion in departing from the parties' stipulation and failing to consider his ability to pay and the rehabilitative effect of the restitution amount. Hamilton further contends the court violated his constitutional right "to be free from the imposition of excessive fines." We conclude Hamilton has inadequately briefed his constitutional argument and therefore do not address the merits of that claim. We further conclude the district court was not bound by the parties' stipulated restitution agreement and did not exceed its authority when it ordered Hamilton to pay restitution for criminal offenses for which he admitted guilt. Accordingly, we affirm.


         ¶2 For nearly two years, Hamilton sold securities for a company called Galileo Financial LLC (Galileo). Hamilton was a licensed insurance agent, but he was not licensed to sell securities for most of the time he worked as an independent contractor for Galileo. Hamilton sold securities in the form of promissory notes, purporting to "offer private placement securities investments in commercial and residential property development and rentals, as well as an automobile loan business for individuals with poor credit." These promissory notes were issued by various companies "owned and operated by Dee Allen Randall." Randall operated these various companies as a Ponzi scheme, [1] "comingling investor funds and transferring them among [the companies], using investor funds to pay interest to prior investors or to pay commissions, and using investor funds for private use." Randall eventually declared bankruptcy, but "he continued to raise capital for [the companies] . . . through agents such as Hamilton."

         ¶3 Between 2009 and early 2011, Hamilton sold the securities to four investors, who lost a total of $512, 242. Hamilton did not know that Randall was running a Ponzi scheme and, according to the State, "had [nothing] to do with comingling funds or with using new investor money to pay old investors back." But Hamilton was dishonest about his qualifications and misrepresented to the investors that he was a financial advisor who was properly licensed to sell securities. He also represented that the "investment companies were sound with a 15 year history" and that there was "next to no risk."

         ¶4 Following an investigation into Randall, his companies, and Hamilton, the State charged Hamilton with three counts of securities fraud, three counts of transacting business as an unlicensed broker-dealer or agent, three counts of sale of an unregistered security, and one count of pattern of unlawful activity.

         ¶5 Based in large part on Hamilton's cooperation with the State's investigation of Randall, the State offered Hamilton a plea deal. In exchange for pleading guilty to one count of attempted securities fraud, a class A misdemeanor, the State agreed to dismiss all remaining charges and recommend that Hamilton not serve a jail sentence but instead be placed on probation for thirty-six months and pay restitution. Hamilton admitted in his plea statement that he "attempted to make untrue statements of material facts or omitted to state material facts necessary in order to make the statements made . . . misleading" and that these statements or omissions were made "in connection with the offer or sale of a security, directly or indirectly," to one explicitly named victim (Victim) "and othe[r]s." Hamilton agreed "that the acts described in the applicable sections of the Affidavit of Probable Cause describe [his] conduct for which [he is] criminally liable." He acknowledged that he "may be ordered to make restitution to any victim or victims of [his] crimes, including any restitution that may be owed on charges that are dismissed as part of [the] plea agreement." He further acknowledged that "any charge or sentencing concession or recommendation of probation or suspended sentence . . . made or sought by either defense counsel or the prosecuting attorney are not binding on the judge."

         ¶6 Attached to Hamilton's plea statement was the plea agreement, which included the parties' stipulation for restitution. The stipulation required Hamilton to pay $38, 000 in "'complete' and 'court ordered' restitution" during his thirty-six month probationary period. The stipulation included that Hamilton would pay $5, 000 at the time he entered his plea and would pay $500 per month for thirty-six months with a "balloon payment for any balance remaining" at the end of his probation. The plea agreement also provided that Hamilton "agree[d] to abide by any other terms and conditions as may be imposed upon him by the [district court]."

         ¶7 At a preliminary hearing, the State and Hamilton asked the court to accept Hamilton's guilty plea. In reciting the facts supporting the plea, the State described Hamilton's conduct toward the named Victim only, without reference to the other investors. The State said that Hamilton met with Victim "several times, reviewed her financial situation and documents, and recommended an investment" that he was not authorized to sell, and that he misrepresented that he had "researched the investment and found it to be a solid company and a safe investment." The district court accepted his guilty plea, finding that it was knowing and voluntary. But the court concluded it would need a presentence report before it could determine Hamilton's sentence and restitution obligation.

         ¶8 Adult Probation and Parole (AP&P) prepared a presentence report, which recounted that Hamilton sold securities without a license while working for Galileo, but that he represented that he had all necessary qualifications. Hamilton met with four individuals at credit unions, and they invested a total of $512, 242. He "used the credit union platform to gain the trust and confidence of credit union members to sell the [securities] in order to make a commission." Hamilton earned $33, 000 in commissions from his securities sales. The State requested Hamilton pay the amount he earned in commissions for those sales, with an additional $5, 000 to be paid to Randall's Bankruptcy Trustee for the fees incurred while handling the bankruptcy proceedings related to Galileo. AP&P recommended that Hamilton serve "15 days in jail with work release" and pay the stipulated amount of restitution consistent with the plea agreement. It also recommended, consistent with the plea agreement, that Hamilton "not work in securities."

         ¶9 At the sentencing hearing, Hamilton stated he did not agree with the presentence report's statement that he "represented himself to investors as a financial advisor properly licensed and trained to sell the securities." But he did "agree with . . . the basic big picture . . . that [he] worked in credit unions and he did sell products that [Randall] was advertising and selling." Hamilton stated, "There hasn't been a day in the last five years that I haven't fallen asleep thinking about the people that have been hurt by my actions."

         ¶10 The prosecutor spoke next and stated, "The State stands by its recommendation as set forth in the plea agreement that [Hamilton] not be incarcerated, but that he be placed on court probation for 36 months. During which time he'll make payments for restitution in the total amount of $33, 000." Hamilton had paid $6, 000 toward restitution by the time of the hearing.

         ¶11 The prosecutor asked if he "could just add some context" to the State's recommendation. He explained that Hamilton's cooperation in the civil investigation against Randall was "helpful" in reaching a resolution and that "one of the purposes of filing charges against [Hamilton] was possibly obtaining his cooperation against [Randall]." The State was "not asserting that [Hamilton] had anything to do with comingling funds or with using new investor money to pay old investors back . . . . That really [fell] more on [Randall]." The State further stated that Hamilton's testimony at Randall's trial that Randall's "instruction [to] some of his subordinates to destroy paperwork that could be incriminating . . . was really one of the key pieces of evidence that . . . resulted in [Randall] deciding . . . [to] plead guilty." The State also explained that, after considering Hamilton's ability to pay, it "certainly wanted the victims to get something back rather than nothing. There is . . . somebody who is going to pay a price for this, and that's [Randall]. A very heavy price." Randall was "the more culpable party."

         ¶12 The district court was not persuaded by either parties' statements. It stated that Hamilton "took the money from the victims," in an amount greater than $500, 000, and that "[w]hether [Hamilton] was working for somebody else, it doesn't make any difference." The court explained that, if it followed the State's recommendation, there would be "no punishment here." Instead, the court determined it would sentence Hamilton to 365 days in jail, and would suspend that sentence and place him on court probation for thirty-six months, but only after he served 250 days in jail on work release. The ...

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