District Court, Provo Department The Honorable Fred D. Howard
Clemens A. Landau, Troy L. Booher, and Freyja R. Johnson,
Attorneys for Appellant
D. Reyes and William M. Hains, Attorneys for Appellee
Jill M. Pohlman authored this Opinion, in which Judges Kate
Appleby and Diana Hagen concurred.
Lamont Boyd Squires, on behalf of his employer, convinced his
uncle (Uncle) to pledge real property as collateral for a
loan to be used as part of a larger financial transaction.
After the transaction failed and Uncle's collateral was
lost, Squires was charged with and convicted of
communications fraud and a pattern of unlawful activity.
Squires appeals, contending that his trial counsel was
constitutionally ineffective for not objecting to jury
instructions for communications fraud and for not making a
hearsay objection. He also contends that there was
insufficient evidence to convict him of engaging in a pattern
of unlawful activity. We conclude that his counsel was not
ineffective and therefore affirm his communications fraud
convictions. We reverse, however, Squires's conviction
for engaging in a pattern of unlawful activity and remand
with instructions to enter a judgment of acquittal on this
Squires was a construction manager for Fitz Roy LLC, a real
estate investment company that also built "spec"
houses.Squires oversaw the construction process,
while his boss, Stephen Anderson, lined up investors for
projects and exclusively handled the company's finances.
During the financial crisis of 2008, Anderson learned of a
"really good opportunity" to buy distressed
developments in the Teton Valley, finish them, and sell them
for a profit. To get funding to pursue this project, Anderson
contacted Dincom, a lender. Dincom was willing to loan
approximately $10 million, paid in monthly million-dollar
disbursements, but required a $660, 000 cash deposit.
Squires knew Fitz Roy did not have enough money for the cash
deposit, but he also knew that Uncle had unencumbered
property that could help secure the loan. Wanting to become a
partner in Fitz Roy, Squires told Anderson about Uncle, and
the two devised a plan. Squires subsequently contacted Uncle
early in 2008 with a proposal to use Uncle's property as
collateral for a hard money loan, which in turn would be used
as the $660, 000 deposit for the Dincom loan. Squires
promised Uncle that the first disbursement from Dincom would
be used to free his property. According to Squires, Fitz Roy
would need Uncle's property for "two to three weeks
at the most," though Squires knew that ninety days was
standard in the industry. In addition, Squires told Uncle
that Fitz Roy would pay him a fee for use of his property.
Squires and Uncle did not talk about the transaction's
possible risks. Uncle said that he needed "to get some
more information," but he wanted to help his nephew
because "[i]n [their] family [they] help each
other." He was under the impression that Fitz Roy was
"flourishing," even though it "didn't have
that much free cash," and understood that, under
Squires's proposal, the $660, 000 deposit would be kept
in escrow in case the Dincom loan did not fund and, if it
did, the "very, very first payment was supposed to . . .
free up [his] property." Squires guaranteed to Uncle
"over and over again" that there "would be
nothing to worry about."
Over the next few weeks, Uncle looked into the deal. He
contacted the escrow company handling the transaction and
also asked a neighbor experienced in international trading
about the process. Uncle, however, found himself needing to
address a pressing family concern and told Squires to use
another option to get the funding. Despite having told Uncle
that Fitz Roy had other alternatives for obtaining funding,
Squires now told Uncle that they had no other options and the
investors were threatening to back out. Uncle testified at
trial that Squires pressured him and said they "had to
make a decision quick." Uncle thought, "[W]ell,
okay, I guess I'm going to have to stay with it."
In late March, Uncle and Anderson signed the necessary
paperwork. Uncle testified that he "didn't really
have time" to look at the documents and trusted Squires
"that everything was going to be taken care of."
The documents provided that repayment of the hard money loan
for $660, 000 would be due in ninety days-not two to three
weeks as Uncle had been told. The documents also provided
that in exchange for the use of Uncle's property as
collateral, Fitz Roy would pay Uncle $100, 000, with 25% paid
immediately and the rest due in ninety days. Fitz Roy also
agreed to provide Uncle with a construction loan so that he
could construct a new building on his property. After signing
the papers with Anderson, Uncle was again promised, this time
by Dincom representatives, that it would "only take two
weeks" for the loan to fund.
After three weeks and still no word from Squires, Uncle
called Squires "to see if everything was done."
Squires told Uncle that Dincom could not finance the whole
loan, so Fitz Roy was securing other options to get the total
amount of money it needed. In fact, the day before
Dincom's first disbursement was due, a Dincom employee
called Anderson with a request to change the loan's
terms. After first demanding a return of the $660, 000 in
escrow, Anderson renegotiated the loan, accepting an initial
disbursement of roughly half the original agreed-upon amount.
Squires knew that Anderson was working with Dincom and
"that there was a hiccup" in funding the loan. In a
conversation with Uncle, Squires told Uncle that
"it's taking a little longer [than expected] but
everything's fine." He did not tell Uncle that they
had received a disbursement from Dincom or that the amount of
the disbursement was less than originally anticipated.
Anderson did not put any of the partial disbursement toward
repaying the hard money loan secured by Uncle's property.
Because there were "other obligations that [he] had to
pay," and because he had ninety days to pay the hard
money loan, Anderson's plan was to conduct business as
usual. He made payments for, among other things, credit
cards, business materials, and Squires's salary, and also
transferred funds to "personal accounts."
By this time, Uncle had started construction on his new
building, and Squires helped him with the engineering. Uncle
frequently called Squires about construction, but the
discussion often turned to the loan. Squires told Uncle that
"everything's fine, it's moving along,"
assuring him that "things were going just exactly like
[Squires and Anderson] promised."
In May, Fitz Roy continued looking for additional funding,
and it used some of the Dincom money for investment
opportunities. Anderson wired $200, 000 to an investment
trader to obtain more money, and another $104, 000 to the
escrow company on the Dincom loan to obtain a loan from
investors in Seattle. Fitz Roy lost the $104, 000, and most
of the $200, 000 was returned by the trader and sent to
Dincom "to stimulate Dincom into fulfilling" the
loan agreement. Also during this time, Anderson "talked
extensively" with Dincom trying to convince it to fund
the loan. Dincom made no disbursement in May or June. Squires
knew that Anderson was pursuing other funding and that Dincom
did not disburse funds in June, though he thought Dincom made
a disbursement in May.
Construction on Uncle's building proceeded, and Uncle was
ready to order trusses. Uncle had money on a line of credit
he was saving "just in case they didn't get the
money" from Dincom, but he also needed to order the
trusses so they would arrive on time. He asked Squires
whether he needed to save that money or whether he could
order the trusses, and Squires told him, "[G]o ahead and
keep spending the money." Uncle was "constantly
contacting" Squires about the loan, and Squires
responded that "everything's fine." Squires
also told Uncle that the hard money lender was cooperating
and not charging extra fees because it "kn[ew] the
situation" they were in.
By July, now several months out from entering the loan,
"the story was getting a little more complicated."
Dincom informed Anderson that it could not fund the loan and
sent $290, 000 to Fitz Roy and told Anderson to treat it as a
return of escrow. Anderson protested, but there was nothing
he could do because "Dincom was going under." In an
attempt to salvage what he could, Anderson used $250, 000 to
acquire a loan from another investment company. That loan
"ended up being [a] scam," and Anderson lost the
Squires knew that Dincom had returned some of the escrow
money and had discussed the potential loan with Anderson.
Around this time, Squires told Uncle that Fitz Roy had $5
million in a bank account but that it was
"complicated." Squires, at Anderson's
direction, presented a letter to Uncle showing that there was
$5 million in the bank account, but Squires later learned
that the letter was forged. After the ninety days to repay
the hard money lenders had passed, Squires "realized
that something was really going wrong." As things got
more complicated, Squires told Uncle to talk directly with
Anderson. Through August, Uncle and Squires did not talk.
Things changed in September when the hard money lender called
Uncle and told him it was foreclosing on his property.
According to Uncle's trial testimony, the hard money
lender informed Uncle that Squires had not "been
communicating with [it]" and that Squires had
"spent the money back in May and [had not] been telling
the truth." Uncle asked Squires about his conversation
with the lender, and Squires got "pretty angry" and
told him, "[E]verything's okay, everything's
safe and secure and it's just a bunch of lies."
Squires said that "people go bankrupt all the time"
and made Uncle feel that Squires "was chewing [him] out
for not being a man." Uncle apologized.
Uncle and his family eventually sat down with Squires and
Anderson to talk about what had happened. Uncle believed the
"deposit was still supposed to be safe and secure,"
so he asked Squires about it. Squires told him that Fitz Roy
spent the money on "cabinets and carpet."
Uncle lost his property. He was forced to sign it over to his
brother and another nephew, who purchased the property to
save it from foreclosure. Uncle also had to sell his house
because of a $300, 000 debt on his line of credit that he
could not afford. The deal was "exactly opposite of
everything that [Squires] had promised."
The State charged Squires with five counts of communications
fraud and one count of a pattern of unlawful
activity. See Utah Code Ann. §
76-10-1801 (LexisNexis 2017) (communications fraud);
id. § 76-10-1603 (pattern of unlawful
activity). A jury convicted Squires on four of the five
communications fraud counts and on the pattern of unlawful
activity count. The court sentenced Squires to a prison term
not to exceed fifteen years on each count, suspended the
sentence, and placed him on probation. It also ordered
Squires to pay court-ordered restitution of $30, 000, though
Squires stipulated that the complete restitution amount was
Squires filed a motion to arrest judgment and a motion for a
new trial, both of which challenged the jury instructions and
the sufficiency of the evidence. The trial court denied the
As for the jury instructions, the court rejected
Squires's argument that communications fraud requires
specific intent to defraud. The court noted that the statute
itself "specifies the mens rea required-a person may be
convicted for communications fraud if 'the pretenses,
representations, promises, or material omissions made or
omitted were made or omitted intentionally, knowingly, or
with a reckless disregard for the truth.'" (Quoting
Utah Code section 76-10-1801(7).) Reasoning that the statute
recognizes "knowingly" and "recklessly"
as mental states, the court determined that Squires
"mistakenly concludes [c]ommunications [f]raud to be a
specific intent crime." The court also rejected the
argument that the word "devise" in the statute
"connotes a specific intent to defraud." It
concluded that "it is possible for a person to knowingly
or recklessly form, plan, invent, or calculate a scheme or
artifice to obtain money, property, etc., from another
without having specific intent to defraud." So
concluding, and having examined the jury instructions as a
whole, the court determined that the jury was properly
As for the sufficiency of the evidence on the pattern of
unlawful activity charge, the trial court noted that the
statute requires "'three episodes of unlawful
activity, which episodes are not isolated, but have the same
or similar . . . characteristics.'" (Quoting Utah
Code section 76-10-1602(2).) Relying on the four
communications fraud counts on which Squires was convicted,
the court concluded Squires "engaged in at least three
separate but related episodes of unlawful activity."
See Utah Code Ann. § 76-10-1602(4)(hhhh)
(listing communications fraud as an example of unlawful
activity). The court also concluded that there was
"sufficient evidence at trial that [Squires] was engaged
in an enterprise," as required by the statute. It noted
that Squires worked for Fitz Roy, communicated to Uncle in
his capacity as Fitz Roy's construction manager, and made
"repeated misrepresentations" to obtain Uncle's
property on Fitz Roy's behalf. The court also rejected
Squires's assertion that an enterprise "must be an
ongoing association for the purpose of engaging in a