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State v. Sevastopoulos

Court of Appeals of Utah

January 3, 2020

State of Utah, Appellee,
v.
Kathleen Sevastopoulos, Appellant.

          Third District Court, Salt Lake Department The Honorable James T. Blanch No. 161904929

          Nathalie S. Skibine, Attorney for Appellant

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

          Judge David N. Mortensen authored this Opinion, in which Judges Gregory K. Orme and Diana Hagen concurred.

          MORTENSEN, JUDGE.

         ¶1 After Kathleen Sevastopoulos's parents (Parents) confronted her for making unauthorized transfers from their bank account, they noticed a slew of additional suspicious transactions. Parents ultimately discovered that Sevastopoulos had stolen over $246, 000 from them through over 200 unauthorized transfers to pay her credit card bills. After criminal charges were brought against her, Sevastopoulos pled guilty to two counts: theft and theft by deception. As a condition of Sevastopoulos's probation, the district court entered a restitution order. Sevastopoulos appeals this order, arguing that the district court made various errors in calculating restitution and that her counsel was constitutionally ineffective. Because we conclude that the only reversible error was the district court's inclusion of two of the numerous transfers in the restitution order, we affirm in part, reverse in part, and remand this matter for entry of an amended restitution order consistent with our opinion.

         BACKGROUND

         ¶2 When Parents noticed suspicious transactions on their bank statements, Sevastopoulos's mother (Mother) asked Sevastopoulos about the transactions. Sevastopoulos admitted to making the transactions. After their discussion, Mother thought they "had it all cleared up." But unexplained charges continued to appear on Parents' bank statements. Parents noticed payments for credit cards they did not own. This prompted Mother to send Sevastopoulos a letter with an attached bank statement. On the bank statement, Mother indicated that she had authorized two of the transactions-totaling $657.43-but that seven of the transactions were a mystery to her. Although Mother had given Sevastopoulos money in the past, she had always done so through handwritten checks. Parents would later testify that they always used paper checks and that they did not know how to effectuate electronic transfers. These suspicious transactions were processed as automated clearing house transfers, which are electronic payments made using an account number, routing number, and often-but not invariably-a check number. The suspicious transactions were all payments made to Sevastopoulos's credit card accounts with American Express, Bank of America, Nordstrom, Chase, and U.S. Bank (Credit Card Companies).

         The Lawsuits

         ¶3 Parents hired an attorney, who in turn hired a forensic accountant (Accountant) to assist the attorney with looking into the unexplained payments. The attorney contacted the Credit Card Companies to obtain refunds, but most of them were "extremely difficult" to work with. The attorney then filed lawsuits against all the Credit Card Companies but one, which was "easier to work with." Most of the Credit Card Companies settled the lawsuits by refunding Parents a portion of the unauthorized transfers. However, the attorney dropped the lawsuit against U.S. Bank after it produced authorized, handwritten checks for the disputed transfers. But after further review, the Accountant identified unauthorized electronic transfers involving U.S. Bank, totaling $9, 390. During the lawsuits against the Credit Card Companies, the Accountant identified numerous unauthorized electronic transfers to the Credit Card Companies, amounting to a grand total of $246, 937.90. In all, Parents were able to recover $131, 701.63 from the Credit Card Companies. The attorney and accountant fees associated with recouping the unauthorized transfers initiated by Sevastopoulos were $40, 000.

         The Criminal Investigation

         ¶4 The situation was brought to the attention of law enforcement, and a detecitve (Detective) began to investigate. During the investigation, Detective reviewed statements from the Credit Card Companies-some by way of subpoena-and matched the unauthorized transfers from Parents' bank account with the transfers on the statements from the Credit Card Companies. Detective also interviewed Sevastopoulos on several occasions. In these interviews, Sevastopoulos admitted to making approximately 200 transfers from Parents' account to the Credit Card Companies, but she claimed she had permission to do so. To substantiate her claim, she showed Detective the letter Mother had sent her. The letter included Mother's writing: "I'm totally confused about [some] charges which were not made by me." Later, Detective testified that the letter did not appear to give Sevastopoulos permission to make the transfers, stating, "[W]hen I read through this document . . . it didn't seem as though . . . there was really consent given." Based on Detective's investigation, Sevastopoulos was arrested.

         ¶5 The State initially charged Sevastopoulos with one count of felony theft and two counts of exploitation of a vulnerable adult, but Sevastopoulos ultimately pled guilty to theft and theft by deception, both misdemeanors. The plea agreement listed the basis for both charges as happening "[o]n or about January 17, 2015." It also stated that Sevastopoulos pled guilty to counts one and two, and the amended information listed the offenses as occurring "on or about July 01, 2013, to January 17, 2015." The plea agreement also included a provision that Sevastopoulos would pay "any restitution that may be owed on charges that are dismissed as part of [the] plea agreement." Sevastopoulos also acknowledged, when questioned by the court, that there could be a legal obligation for her to pay restitution to the victims in the case for their financial loss. On August 30, 2017, the court sentenced Sevastopoulos to serve 180 days in jail and placed her on probation, with restitution being a condition thereof. The court reserved the amount of restitution for later determination.

         The Restitution Order

         ¶6 The State subsequently filed a motion for restitution. Sevastopoulos objected, claiming that (1) she "never agreed to pay any amount of restitution as part of her plea," (2) she rightfully used the funds, and (3) the matter was at the time a subject of civil litigation involving a family trust, and thus "[r]estitution would be inappropriate under these circumstances." The district court rejected Sevastopoulos's objection, explaining that under State v. Ogden, 2018 UT 8, 416 P.3d 1132, there was "nothing about the pending civil action that prevent[ed] th[e] court from going forward and having a restitution hearing." The court then set a restitution hearing for March 20, 2018. On the day of the hearing, Sevastopoulos moved for a continuance, which the court granted. The court also ordered the parties to exchange financial declarations, witness lists, and exhibit lists, which the parties did.

         ¶7 On April 26, 2018, the court held a full-day evidentiary hearing in which the State presented its evidence, including testimony from Parents, Parents' attorney, the Accountant, and Detective, as well as substantial documentary evidence. The witnesses testified as to their roles in discovering and identifying the fraudulent transfers. Based on the evidence, the district court concluded that Sevastopoulos had proximately caused Parents' financial losses and ordered Sevastopoulos to pay $148, 243.27 in restitution. The court arrived at that number by determining that Sevastopoulos stole $246, 937.90 from Parents, which it offset by the $131, 701.63 that Parents recovered from the Credit Card Companies, equaling $108, 243.27 plus the costs of the attorney fees ($38, 000) and the accountant fees ($2, 000). In its calculation, ...


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