District Court, Salt Lake Department The Honorable Vernice S.
Trease No. 151902943
M. Nelson, Attorney for Appellant
D. Reyes and William M. Hains, Attorneys for Appellee
Michele M. Christiansen Forster authored this Opinion, in
which Judges Gregory K. Orme and Diana Hagen concurred.
CHRISTIANSEN FORSTER, JUDGE
Tonia Schnae Brown appeals her convictions on three counts of
securities fraud, second-degree felonies. We affirm.
Two Utah residents, Victim and Friend, were introduced to
Brown by a mutual friend (Advisor). Brown had informed
Advisor that she had made a substantial amount of money as a
commercial real estate broker prior to the financial crisis
of 2008 but had moved her funds to offshore accounts at that
time because she was concerned about the United States'
financial system. She claimed to have just under $50 million
in an account at InterBank, a bank operating out of Saint
Vincent and the Grenadines, as well as $300, 000 in an
account with the Bank of China in Hong Kong. Brown
represented that she owed $59, 500 in value added taxes (VAT)
to the Hong Kong government and that her accounts were frozen
until she paid the money.
Brown signed a promissory note stating that she would pay
Victim $1 million when her accounts were unfrozen if Victim
would send Brown the $59, 500 for the VAT. Brown assured
Victim that "there was no risk" and she could
return her money "at any time." Victim took out a
home equity loan in the amount of $59, 500 and wired the
money as directed by Brown.
Instead of delivering the promised $1 million, Brown
delivered a letter to Victim, purportedly from the Bank of
China, stating that the VAT had increased and that an
additional $80, 500 was needed to pay the VAT. Brown signed a
new promissory note in which she committed to deliver $2
million in exchange for the total $140, 000 needed to pay the
VAT, and Friend loaned Brown the additional $80, 500.
Once again, Victim and Friend received a letter, purportedly
from the Bank of China, informing them that an additional
$210, 000 was needed to release the frozen funds. Brown urged
Victim and Friend to provide the additional funds, but
instead Victim contacted the Federal Bureau of Investigation,
the Securities and Exchange Commission, and a private
attorney to report that she and Friend may have been
defrauded by Brown. Victim and Friend made various attempts
to recover the funds from Brown but were unsuccessful.
Victim also made her own inquiries, reaching out to the Hong
Kong Monetary Authority (HKMA) and government authorities in
Saint Vincent and the Grenadines, as well as hiring attorneys
in Hong Kong to look into the validity of Brown's claims.
She learned that Hong Kong does not have a VAT and that the
documentation Brown had provided from both the Bank of China
and the HKMA were likely not authentic. Victim also
discovered that there was no record of InterBank in Saint
Vincent and the Grenadines and that the address on
InterBank's letterhead-appearing on a document provided
by Brown-was invalid.
The State charged Brown with three counts of securities fraud
in connection with this incident, all second-degree felonies.
Brown elected to represent herself in the criminal case. But
before the trial court allowed Brown to proceed pro se, it
conducted a full colloquy regarding Brown's education,
her understanding of the charges, her understanding of the
law, and her constitutional right to have counsel appointed.
The court "strongly urge[d]" Brown not to represent
herself, but she elected to do so anyway. The court then
accepted Brown's waiver of counsel, finding that it was
knowing, voluntary, and intelligent.
The State called a securities expert, Bryan Allen, to testify
at trial. Allen testified that "securities laws impose a
requirement on . . . sellers of securities, to provide full
and fair disclosure." He explained that disclosure is
fraudulent if the seller fails to provide an investor with
"all material facts related to the investment" or
"omit[s] . . . any information that would make the
statements . . . misleading." Allen further defined
"material" as "any[thing] that a reasonable
investor would find important in deciding to purchase . . .
or sell the security."
During his testimony, Allen provided a list of "examples
of what might be considered material facts or information in
the securities industry," including (1) relevant
information about the seller's business or industry; (2)
information about the parties involved in the transaction,
including their experience and education as well as any
negative information about them, such as prior convictions,
judgments against them, or prior bankruptcies; (3) how the
money would be used and how it would be expected to generate
a return for the investor; and (4) the risks involved in the
When asked about his experience, Allen acknowledged that he
was not an international lawyer and was not an expert in Hong
Kong law. However, he asserted that he knew "enough
about international finance" to recognize ...