By Eddie Wilkinson & Alex Hunn
Assistant District Attorneys in Williamson County
Anyone who has spent time in prosecution has dealt with cases involving a breached contract, a slippery contractor, and an aggrieved victim. Most such cases quickly find the “decline” pile due to the “bad businessman” defense.
The typical sleazy contractor defendant is well trained in excuses for not getting his work done: Material costs were higher than anticipated; a subcontractor failed to deliver; he fell ill or was injured; he had a relapse into drug use or alcoholism, etc. We suspect readers can fill in several more excuses they have encountered.
These excuses work because theft is a specific intent crime. At trial, prosecutors are called upon to prove not only that a contractor failed to do what he promised but that he either secured the promise with lies or he promised performance he knew he would not deliver on. Enter the “bad businessman” defense: Every lie made at the outset was a result of the defendant’s poor business sense, and every failure to deliver was a result of his hard luck and poor planning. These excuses are implausible, but even an implausible excuse may amount to reasonable doubt, so we prosecutors turn down the criminal case and advise the victims of their civil remedies, well aware that typical defendants in these cases are judgment-proof, having mastered the art of being broke at all times no matter how much they steal and how much they manage to spend on shoes, watches, and pickup trucks.
State v. Oviedo
Every once in a while, however, a good contractor theft case will appear. We tried one such case this February, a third-degree felony theft from an elderly individual, State of Texas v. Jonathan Ruiz Oviedo. It resulted in a conviction and an eight-year prison sentence.
The basic facts of the case were as follows: 80-year-old Rosemarie Merlino was not renewed in her apartment contract due to a change in income, and she needed to move all her belongings to storage while she found another apartment. Jonathan Oviedo happened to be in the area working as a mover for a major company, and he offered to move Rosemarie’s property for $400, plus $100 a month in storage fees. When the time came to move the property into her new apartment, though, Oviedo was suddenly unable to. He came up with numerous excuses: His car broke down, the timing was bad, and he needed more money for a U-haul. The bottom line was that he wouldn’t return her property nor tell her where it was unless she paid him more money.
It turned out that her property had been taken to Oviedo’s parents’ house, and by the time anything was recovered, 90 percent of it was already gone—Oviedo had trashed it after a tragic water leak had damaged it. Jewelry and similar valuables that would have survived such a leak were also missing, and pawn receipts suggested these items had been sold the day after the initial move.
This article is divided into a section on evaluating this case and others like it (written by Eddie Wilkinson from the intake division) and another section on presenting these cases to a jury on those rare occasions that they make it to trial (written by Alex Hunn).
Picking winners
Intake on consumer complaints can be tough business. Detectives assigned to property crimes often have more work than they can handle and want an agreement to prosecute before they will commit to doing the investigation required to effectively try one of these cases. Such a request is akin to asking for the final score before buying a ticket to the game. Usually when the cases show up, patrol officers have taken a statement from the complainant and little more has been investigated. I try to sift through the deluge of partially investigated cases by looking at some key indicators of predatory behavior and then request additional investigation on the ones that stand out.
First, I look for multiple complaints involving the same person or business. This can be done through a simple Google search, checking the Better Business Bureau, or querying law enforcement databases. I once Googled a contractor’s name and found a website devoted to warning others of his thievery. The better cases involve multiple complaints over a sustained time period, rather than a sudden failure with lots of complainants at the same time. A sudden failure on its own may be insufficient because some businesses operate with difficult finances for an extended period using new customers’ money to pay old debts, all the while hoping to keep their promises, yet they still end up insolvent despite their best intentions—these are the actual bad businessmen our defendants are pretending to be.
The next step is to follow the money. In cases where services or materials were paid for but not delivered, find out how the customer made payment and then determine what the suspect did with the money. If a customer paid by check, request a grand jury subpoena for the bank records where the check was deposited. If the account was overdrawn, the funds immediately were used for something personal, or the check was taken to a check cashing business, these are some good indicators of criminal intent. You may even find corroborating victims by looking at other checks deposited in the same account. Or you might find that a suspect’s other customers had no complaints, a good reason to close the case and move on to the next.
Finally, never accept a case until law enforcement has either interviewed the suspect or, failing that, documented a thorough effort to speak with him. There is always a small possibility of a confession, but the more likely result will be to lock the suspect into one excuse; in the worst case that he refuses to talk or make himself scarce, a record of the attempt will show the jury that he was given an opportunity to correct the record before being formally accused. All these possibilities will be foreclosed as soon as the case is charged and the defendant lawyers up.
Getting to the “yes” at intake
None of the usual indicators were present in this case, which is one reason I initially declined prosecution against Jonathan Oviedo. I had concerns with the initial agreement between Oviedo and Rosemarie, as it seemed vague, and I anticipated that the defendant could fairly argue that more money was owed under the agreed-upon terms. Further, I could not easily demonstrate what deception occurred during the appropriation without having a detailed agreement to reference. Most of the complaint came from Rosemarie’s adult daughter, Pamela, who was not present when the deal was made.
However, a few weeks later she called me to discuss the case. These calls from disappointed victims are uncomfortable, but as I listened to her account of the events, several details piqued my interest.
The first thing that stood out was how incredibly heartbreaking the situation was for the victim. Like many of us, I have a soft spot for grandmothers, and 80-year-old Rosemarie had literally lost everything she owned but for a single overnight bag. Her daughter described to me how she sat alone in an apartment with nothing while the suspect had possession of the entire contents of her home and would not return them. She thought Rosemarie was so sad she might just give up and die sitting in her empty apartment. While the crushing impact of a victim’s loss may not be relevant to legal elements of the crime, its emotional impact on the jury is still a major factor in making the case winnable at trial.
Pamela then described her repeated attempts to retrieve the property from Oviedo and the repeated excuses she received in return. These communications made it clear that he was not conducting business but simply trying to extort the maximum amount of payment. He had texted her pictures of Rosemarie’s belongings to prove he still had them, and he was demanding more money before he would return the items. It was clear that the boxes were being stored in a residence and that the boxes had been opened and the contents rummaged through.
With this new information I had some evidence of deceit based on the defendant lying that he planned to store Rosemarie’s property in a legitimate storage facility. It was also apparent that he was not running the sort of legitimate moving business he implied when he made the agreement. The rummaged-through boxes provided evidence of intent to deprive. Penal Code §31.01(2)(B) includes deprivation when the defendant offers “to restore property only upon payment of reward or other compensation,” a definition tailor-made for a case like this one in which the suspect was holding property for ransom.
I requested follow-up from the detective and thought about the case for a few days. I couldn’t stop thinking about Rosemarie sitting in her empty apartment. Eventually, my overly analytical mind gave up and decided we needed to try our best to prosecute the case.
Trying the case
It took two years to get the case to trial, and during this time Rosemarie held onto the hope that her treasured items would be returned. The missing items included irreplaceable family photos, mementos from a deceased child, and innumerable beautiful decorations she had accum- ulated through her life, from a set of Hummel figurines to a taxidermied owl she brought with her to America when she first left Germany in the 1960s. She had replaced few of her items because she continued to hope they would be returned, and meanwhile she lived in a sad, empty apartment. By taking all her property, Oviedo stole an enormous portion of the joyful retirement she had worked so hard to earn.
Despite months of trying, the defendant rejected my final two-year prison offer, and we went to trial.
While I often disagree with the adage that trials are won in voir dire, in this type of case voir dire is a critical opportunity to make the jury start caring about a “petty” theft case. A portion of voir dire should therefore be dedicated to getting the panel thinking about why this crime matters, and in a theft case that means thinking about the victim. The victim in my case, Rosemarie, grew up in a small town in rural Germany during the 1940s. She was a trusting woman living a simple life in her retirement. She was clearly targeted because of her vulnerability. To get the panel empathizing with my victim, I asked the following two questions:
1) Why did the legislature make it a more serious offense to steal from people 65 or older? and
2) Has anyone here had an elderly relative fall victim to a scam?
Of course, I struck a few people who fought me on the concept of elderly people being more vulnerable or 65 being the proper cutoff, but the major dividend of this strategy was getting half the panel to raise their hands and start telling me the sad stories of victimization that happened to someone they loved. We live in an era of scams, and these scammers ruthlessly target more trusting, technologically inept elders. In my panel, I not only had many potential jurors relaying stories of how their beloved parent or grandparent was taken advantage of, sometimes to the tune of more than $10,000, but one juror even volunteered how they themselves had been victimized. And those who didn’t raise a hand would at least now be thinking about their own aging loved ones.
A case’s specific facts will vary, of course. Victims of these scams may not be elderly, but they are likely vulnerable in some way that allowed them to be victimized. Maybe they speak English as a second language, maybe the defendant occupied a position of trust such as a relative or friend, or perhaps the victim was in dire financial straits. Maybe they were simply unfamiliar with a topic and relying on the defendant’s purported expertise. (Most of us know someone who has been grievously upsold by an unscrupulous mechanic!)
Countering the defense
Once you establish why the case and victim are important, the next critical issue to address is the focus of this article—the bad businessman defense. This defense negates either of two elements: consent or intent. The theft statute articulates several facts which make consent ineffective. While a few are listed, the most common way to show this is deception, namely by:
(A) creating or confirming by words or conduct a false impression of law or fact that is likely to affect the judgment of another in the transaction, and that the actor does not believe to be true;
(B) failing to correct a false impression of law or fact that is likely to affect the judgment of another in the transaction, that the actor previously created or confirmed by words or conduct, and that the actor does not now believe to be true;
(C) preventing another from acquiring information likely to affect his judgment in the transaction;
(D) selling or otherwise transferring or encumbering property without disclosing a lien, security interest, adverse claim, or other legal impediment to the enjoyment of the property, whether the lien, security interest, claim, or impediment is or is not valid, or is or is not a matter of official record; or
(E) promising performance that is likely to affect the judgment of another in the transaction and that the actor does not intend to perform or knows will not be performed, except that failure to perform the promise in issue without other evidence of intent or knowledge is not sufficient proof that the actor did not intend to perform or knew the promise would not be performed.[1]
I discussed with the panel hypotheticals to articulate each of these means, which were present in my case. I used the example of a computer repairman who was unable to fix a paying client’s computer, and then added facts one by one. What if the “repairman” lied about his credentials? What if, after being unable to repair the computer, he demanded additional payment before returning it? What if he refused to identify the location where the computer was being stored? These hypotheticals placed my potential jurors on a continuum identifying how much bad faith I would need to prove for them to believe a crime was committed.
In addition to hypotheticals, I identified several potential jurors who worked in various contracting roles and had them explain the importance of being honest and transparent in business dealings. On my panel, I had an auto mechanic who was happy to explain that when a client declines work after being presented with an estimate, that client is entitled to have her vehicle returned. Every professional will have a standard order of business to reduce ambiguity and to ensure fair dealing with customers—let those people tell the panel all about the right way to do business.
Presenting the evidence
Once you’ve provided the jury with what to look for, presenting the case is as simple as delivering on that expectation. They expect to hear from the victim. They expect the details of the original agreement and what work was actually performed.
Proving deception will do the heavy lifting in proving intent. This type of thief will never admit to having ill intent. Everything that goes wrong will be hung on sob stories of his personal misfortunes, deflections criticizing some aspect of the victim’s behavior, and at worst his own honest mistakes. Each individual deception or broken promise the prosecutor proves will chip away at the possibility of good faith on the part of the defendant. Make him claim each and every excuse until it defies credibility.
You will want to put on evidence ahead of the excuses you anticipate to take advantage of primacy bias. If this case made it past intake, it’s because there was good evidence of intent. For my case it was the attempts by law enforcement to get the defendant to return the property. The detective had told Oviedo point blank that he could not keep Rosemarie’s belongings regardless of whether he thought she owed him money or any other contractual reason, and the officer said she would charge the defendant with theft if he failed to do so. In spite of this, the defendant not only refused to return the property but also refused to say where he was holding it.
Aside from addressing the primary issues of intent and deception, be diligent in proving the value element. If the jury is sympathetic to the victim, they will most likely accept the valuation the State proposes, but we still need to get that evidence into the record to assuage the concerns of any skeptical jurors and to protect the verdict from a sufficiency objection on appeal. Value can be surprisingly persnickety in a theft case like this one in which the defendant has stolen many items of different values. The elderly victim had almost everything she owned stolen, and common sense dictated that the replacement value was well over the $2,500 I needed to prove. Most of the items had not yet been replaced, however, and my evidence was speculative. (“Have you looked at how much a replacement might cost?”) Worse still, Rosemarie was hard of hearing and unable to answer complicated questions about valuation. I would have been wise to spend more time with my star witness, the victim’s adult daughter, going through Home Depot or Amazon’s online catalog to nail down replacement costs before trial. Good thing for me that the defendant had stolen a hearing aid that had cost $3,000 to purchase—this item alone covered for our value case.
Ultimately, these three issues are what any “bad businessman” defense will boil down to: that there was no deception, there was no intent, and as a last resort, the items stolen are being overvalued. If you can check off these three issues, you’ll be well on your way to victory.
Conclusion
In a felony office, offenses can be more damaging to the individual victims, few affect as broad a swath of our communities as thefts do. Pick a single jury on such a case, and the panel will quickly remind us just how much they care about these crimes. Bad actors use plausible deniability to make a profit at the expense of the most vulnerable members of the community and fall back on the “bad businessman” defense when confronted on their grifts. By carefully identifying the winning cases, addressing the issue head-on at voir dire, and calling out every excuse at trial, we can expose them for the thieves they are.
Endnote
[1] Tex. Penal Code §31.01(1).