District Court, Salt Lake Department The Honorable Mark S.
Kouris No. 141906717
Nathalie S. Skibine and Wojciech S. Nitecki, Attorneys for
D. Reyes and Nathan D. Anderson, Attorneys for Appellee
David N. Mortensen authored this Opinion, in which Judges
Michele M. Christiansen Forster and Kate Appleby concurred.
For many years Dee Allen Randall cheated investors out of
millions of dollars in a classic Ponzi scheme. Financial carnage
for Randall's victims followed. The ill-gotten money is
gone. On balance, the victims and their families will suffer
from the burden and effects of Randall's fraud forever.
After Randall was charged with a number of crimes, he pled
guilty to four counts of securities fraud and one count of
engaging in a pattern of unlawful activity. He was sentenced
to prison. Months later, the sentencing court held a hearing
and determined that both complete and court-ordered
restitution should be set at $10.2 million, although the
record reflected that investors may have been fleeced out of
over $36.8 million. Randall appeals the restitution
determination. We affirm.
Over about a ten-year period, Randall ran a Ponzi scheme that
defrauded more than 500 investors out of over $36.8 million.
He sold investors private placement securities in one of his
several companies (Horizon Entities). These securities (Horizon
Notes), on which Randall promised a return of nine to
seventeen percent annually, were promissory notes issued by
Horizon Entities. But the companies composing Horizon
Entities were failing; financial audits revealed that they
had been operating at a loss for years and were not expected
to survive another. To keep Horizon Entities afloat, Randall
commingled funds among his companies and used new investor
money to pay old investors. In fact, Randall admitted to
running a "legal Ponzi scheme" during his
bankruptcy proceedings. The director of the Utah Division of
Securities described Randall's scheme as "probably
one of the two or three most egregious cases of securities
fraud that [he had] seen in the state." The State
charged Randall with eighteen counts of securities fraud and
one count of a pattern of unlawful activity.
Just weeks before trial, Randall pled guilty to four counts
of securities fraud and one count of engaging in a pattern of
unlawful activity. The State dismissed the remaining counts.
The victims of the securities fraud counts to which Randall
pled guilty-two individuals and two couples-were named in the
plea agreement. The pattern of unlawful activity count to
which Randall pled guilty did not identify specific victims
but stated that "commencing on or about June 2009 and
continuing through at least April 2011, [Randall] engaged in
conduct which constituted the commission of at least three
episodes of unlawful activity" involving securities
fraud. Randall 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 a plea agreement." The plea
agreement further specified,
[Randall] agrees to an order of "complete"
restitution pertaining to all victims, whether named or
unnamed, in an amount to be determined by the Court. The
defendant acknowledges that the State will seek restitution
in the approximate amount of $36.8 million for investors
listed in the attached spreadsheet[ . . . . The State
acknowledges that the defendant may dispute restitution for
investors listed therein, and the parties agree that the
Court shall determine whether the Pattern of Unlawful
Activity statute, [Utah Code sections 76-10-1601 to -1609],
permits restitution pertaining to all such investors. . . .
[Randall's] "court-ordered" restitution shall
be determined in accordance with [Utah Code section]
At the plea hearing, Randall admitted that he
"recklessly made . . . material omissions" in
representing the investments he offered to the defrauded
investors and that he "engaged in a pattern of activity
which involved . . . paying . . . old investments with new
invested money in at least three instances."
Randall's counsel, however, noting that there was no
agreement regarding restitution, asked for a post-sentencing
At the sentencing hearing, Randall asked the court to suspend
any prison sentence and place him on probation so that he
could "work to repay what . . . he took
unlawfully." He submitted a repayment plan that
contemplated the distribution of $1.4 million to defrauded
investors over a period of fifteen years. Randall further
stated, "Look, I'm guilty. . . . I did this.
Investors lost money, because of my actions, my
omissions." He admitted that he did not disclose to
investors how poorly his businesses were doing, because
"people would not have invested" had they known the
truth. He further stated, "I am so deeply sorry for
every single investor, not only those who are sitting
here, but others that are not." (Emphasis added.)
He added, "I am committed to work every day of my life.
. . . I am determined to do whatever I can to see that they
all get as much money as they can before the day I die."
While admitting that he would be unlikely to "pay the
entire restitution," Randall noted that he could
"at least pay the restitution to begin with ...