State v. Stelljes ( 2017 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STATE OF ARIZONA,
Appellee,
v.
ERIC ALAN STELLJES,
Appellant.
__________________________________
STATE OF ARIZONA,
Appellee,
v.
LAURA MARIE LEINAAR
Appellant.
No. 1 CA-CR 16-0108
1 CA-CR 16-0138
(Consolidated)
FILED 6-6-2017
Appeal from the Superior Court in Maricopa County
No. CR2014-002393-002
CR2014-002393-001
The Honorable Roland J. Steinle, Judge, Retired
AFFIRMED
COUNSEL
Arizona Attorney General's Office, Phoenix
By Adele Ponce
Counsel for Appellee
Laman Law Office, PLLC, Phoenix
By Charley L. Laman
Counsel for Appellants
MEMORANDUM DECISION
Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Patricia K. Norris and Judge Maurice Portley joined.1
J O H N S E N, Judge:
¶1 Eric Alan Stelljes and Laura Marie Leinaar appeal their
convictions and sentences for conspiracy, illegal conduct of an enterprise,
promotion of gambling, and money laundering. They contend insufficient
evidence supports their convictions, and Leinaar also argues the superior
court erred in denying her motions to sever her trial and for a bench trial.
For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 The charges against Stelljes and Leinaar all stemmed from
operation of the ESC Lounge, a Flagstaff business that purported to sell
computer time, internet access, and copying and fax services.2 Customers
also could buy cards that allowed them to play "casino-style" computer
games and win cash prizes. Each card allowed a customer to choose among
a variety of "casino-style" games such as Keno or slots. After swiping the
card, the customer could choose the number of credits or entries to play
with each round, and then could click a button to reveal whether he or she
1 The Honorable Maurice Portley, Retired Judge of the Court of
Appeals, Division One, has been authorized to sit in this matter pursuant
to Article VI, Section 3 of the Arizona Constitution.
2 We view the evidence in the light most favorable to sustaining the
verdicts. State v. Arredondo, 155 Ariz. 314, 316 (1987).
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had won. Winnings could be redeemed for cash or used to purchase more
computer time and game credits.
¶3 After an undercover operation involving the Arizona
Department of Gaming and Flagstaff police, authorities executed search
warrants at the ESC Lounge and at the homes of Stelljes, who owned the
business, and Leinaar, its manager. Officers discovered $100,000 to
$200,000 worth of equipment in Stelljes's home and guest house, including
laptop computers, hard drives, monitors, wireless routers, servers, printing
machines and "a large inventory of internet café-type of machines." Officers
found more than $11,000 in cash in Leinaar's home, along with receipts and
business records from the ESC Lounge.
¶4 Stelljes and Leinaar were charged with promotion of
gambling in violation of Arizona Revised Statutes ("A.R.S.") section 13-3303
(2017), illegal conduct of an enterprise in violation of A.R.S. § 13-2312 (2017)
and conspiracy in violation of A.R.S. § 13-1003 (2017).3 Stelljes also was
charged with money laundering in violation of A.R.S. § 13-2317(B) (2017).
¶5 Prior to trial, Leinaar served a waiver of trial by jury, a motion
to confirm a bench trial and a motion to sever her trial from that of Stelljes.
The State did not agree to a bench trial, and the superior court denied
Leinaar's motions. Leinaar did not renew her motion to sever during trial.
¶6 After the jury convicted Stelljes and Leinaar on all charges,
the court suspended Leinaar's sentences and placed her on concurrent one-
year probation terms for each conviction. The court also suspended
Stelljes's sentences and placed him on concurrent two-year probation terms
for each conviction. Stelljes and Leinaar each timely appealed. This court
has jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution,
and A.R.S. §§ 12-120.21(A)(1) (2017), 13-4031 (2017) and -4033(A)(1) (2017).
DISCUSSION
A. Sufficiency of the Evidence.
¶7 A question of sufficiency of the evidence is one of law, subject
to de novo review. State v. West, 226 Ariz. 559, 562, ¶ 15 (2011). "We review
the sufficiency of evidence presented at trial only to determine whether
substantial evidence supports the jury's verdict." State v. Cox, 217 Ariz. 353,
3 Absent material revision after the date of an alleged offense, we cite
a statute's current version.
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357, ¶ 22 (2007). We will not set aside a jury verdict if, "after viewing the
evidence in the light most favorable to the prosecution, any rational trier of
fact could have found the essential elements of the crime beyond a
reasonable doubt." Id. (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)).
1. Gambling.
¶8 Stelljes and Leinaar argue the computer games at the ESC
Lounge were sweepstakes conducted as a "marketing tool," not gambling
as defined in A.R.S. § 13-3301(4) (2017) and prohibited by A.R.S. § 13-
3303(A).
¶9 Under Arizona law, gambling is the "act of risking or giving
something of value for the opportunity to obtain a benefit from a game or
contest of chance or skill or a future contingent event." A.R.S. § 13-3301(4).
A charge of promotion of gambling requires evidence the defendant
knowingly conducted, organized, managed, directed, supervised or
financed gambling for a benefit; or furnished advice or assistance for the
conduct, organization, management, direction, supervision or financing of
gambling for a benefit. A.R.S. § 13-3303(A).
¶10 There is sufficient evidence in the record to support both
convictions for promotion of gambling. Two law enforcement officers
testified about their undercover visits to the ESC Lounge. The first officer
testified an employee told him he needed to purchase a card to obtain a
"free entry" to play a game. For $20, the officer bought a card entitling him
to approximately 2,000 sweepstakes entries and 90 minutes of internet time.
He "played down" most of the card, redeeming his winnings to continue to
play. The second officer testified he made a $30 purchase, which allowed
him 3,001 sweepstakes plays. He testified he won a total of $13.20, which
he accepted as a cash payout.
¶11 Stelljes and Leinaar argue the sweepstakes plays did not
involve chance because the outcome of each play was predetermined. But
whether any particular "play" loaded onto a customer's game card was
predetermined to win was pure chance, from the perspective of the
customer. "A game of chance is a contest wherein chance predominates
over skill." Boies v. Bartell, 82 Ariz. 217, 221 (1957); see also Engle v. State, 53
Ariz. 458, 469 (1939) ("It is the character of the game and not the skill or
want of skill of the individual player which determines whether the game
is one of chance or skill."). At trial, a defense expert testified that
sweepstakes prizes, such as those available at the ESC Lounge, "are
awarded by chance, luck. Not by skill."
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¶12 Stelljes and Leinaar also argue the ESC Lounge was not
selling game entries, but instead was selling computer time that happened
to come with game entries. The State, however, presented sufficient
evidence for the jury to conclude that customers were buying game entries,
not internet time. See City of Cleveland v. Thorne, 987 N.E.2d 731, 735 (Ohio
App. 2013) (receipt of sweepstakes points for every dollar spent to purchase
internet time was gambling when customers' primary purpose was to
participate in sweepstakes). According to the record, customers with large
balances of internet time on their cards continued to buy additional cards
entitling them to game entries. For example, the jury saw copies of receipts
showing redemption of sweepstakes entries by customers who already had
internet balances of 1,533 minutes, 22,172 minutes, 1,595 minutes, 744
minutes and 952 minutes. Leinaar even acknowledged some customers
carried balances of tens of thousands of unused minutes.
¶13 Stelljes and Leinaar further argue the ESC Lounge offered
sweepstakes plays for free, thereby eliminating the requisite element of
consideration. See A.R.S. § 13-3301(4) (gambling requires "risking or giving
something of value" for the chance to win). In Benevolent & Protective Order
of Elks v. State Department of Liquor Licenses & Control, 239 Ariz. 121, 122, ¶¶
1-2 (App. 2016), the court affirmed a gambling fine imposed on an
organization that offered sweepstakes entries to raise money for charity.
Members could purchase a card, place money on the card and run the card
through a kiosk to win cash prizes. Id. at ¶¶ 3-5. Members received one
free play per day, and could obtain unlimited free plays by mail. Id. at 123,
¶¶ 7-8. Over the course of the sweepstakes, however, only a tenth of the
plays were free plays, and no mail-in requests for free plays were ever
received. Id. Under Elks, and based on evidence showing that 90 percent
of the sweepstakes plays here were sold, not given away, the record was
sufficient to support the determination that the sweepstakes was gambling
under A.R.S. § 13-3301(4). Elks, 239 Ariz. at 124-25, ¶¶ 20-23; see also Barber
v. Jefferson County Racing Ass'n, 960 So. 2d 599, 612-15 (Ala. 2006)
(availability of free plays on slot machines did not negate element of
consideration for gambling charge).
2. Money laundering.
¶14 Stelljes argues there was "a complete lack of . . . evidence" that
he committed money laundering. He argues he "never got anything out of"
the business because it did not make much money to begin with and
because the State confiscated its proceeds.
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¶15 Money laundering in the second degree requires proof the
defendant acquired or maintained an interest in, transacted, transferred,
transported, received or concealed "the existence or nature of racketeering
proceeds knowing or having reason to know that they are the proceeds of
an offense." A.R.S. § 13-2317(B)(1). "Racketeering" is defined as any act
"that is chargeable or indictable . . . and that would be punishable by
imprisonment for more than one year," including gambling, "if committed
for financial gain." A.R.S. § 13-2301(D)(4)(b)(vii) (2017). Contrary to
Stelljes's argument, the State need not prove the defendant made money,
only that the defendant had a financial objective. See State ex rel. Horne v.
Campos, 226 Ariz. 424, 434, ¶ 41 (App. 2011).
¶16 The jury heard evidence that Leinaar held money the business
took in for Stelljes, who owned the ESC Lounge, and that both Stelljes and
Leinaar would come to the business to pick up its receipts. The State also
offered evidence of Stelljes's business plan for the company, money it made,
and communications between Stelljes and Leinaar about whether the
business was making money. As noted above, the State also presented
evidence Stelljes knew or should have known the ESC Lounge was a
gambling operation. The evidence presented is sufficient to support the
jury's conviction of Stelljes for money laundering.
B. Right to Bench Trial.
¶17 Leinaar appeals the superior court's denial of her motion for
a bench trial; she argues she had a constitutional right to waive a jury trial
in favor of a trial to the court. Whether a defendant is entitled to a bench
trial is a matter of law, which we review de novo. See Stoudamire v. Simon,
213 Ariz. 296, 297, ¶ 3 (App. 2006).
¶18 Leinaar's argument that the U.S. and Arizona Constitutions
guarantee her a right to a bench trial is unavailing. Singer v. United States,
380 U.S. 24, 34-36 (1965) (no such right in U.S. Constitution); State v. Webb,
19 Ariz. App. 73, 75 (1973) (no such right in Arizona Constitution). More
generally, "[i]t is well established that the right to a jury trial may be waived
when the accused is aware of this right and voluntarily and intelligently
relinquishes it." State v. Durham, 111 Ariz. 19, 20 (1974). But an accused
does not have the right to a trial by the court instead of a jury. See id. As
stated in A.R.S. § 13-3983 (2017), "[a] trial by jury may be waived in criminal
actions by the consent of both parties expressed in open court and entered
on its minutes." See also Phoenix City Prosecutor's Office v. Ybarra, 218 Ariz.
232, 234, ¶ 12 (2008) (the statute "plainly requires, in all criminal cases, the
consent of the prosecutor before a defendant may forgo a jury trial").
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STATE v. STELLJES
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¶19 Because the State did not consent to a waiver of a jury, the
superior court did not err in denying Leinaar's motion for a bench trial.
C. Motion to Sever.
¶20 Charges against multiple defendants may be joined for trial
"when each defendant is charged with each offense included, or when the
several offenses are part of a common conspiracy, scheme or plan or are
otherwise so closely connected that it would be difficult to separate proof
of one from proof of the others." Ariz. R. Crim. P. 13.3(b). "Despite the
possibility of confusion from joinder, joint trials are favored in the interest
of judicial economy." State v. Gutierrez, 240 Ariz. 460, 464, ¶ 11 (App. 2016).
¶21 Nevertheless, the superior court must grant a defendant's
motion for severance when "necessary to promote a fair determination of
the guilt or innocence of any defendant of any offense[s]." Ariz. R. Crim. P.
13.4(a). The court, therefore, should grant severance if it "detects the
presence or absence of unusual features of the crime or cases that might
prejudice the defendant," such as:
when (1) evidence admitted against one defendant is facially
incriminating to the other defendant, (2) evidence admitted
against one defendant has a harmful rub-off effect on the
other defendant, (3) there is significant disparity in the
amount of evidence introduced against the defendants, or (4)
co-defendants present antagonistic, mutually exclusive
defenses or a defense that is harmful to the co-defendant.
State v. Murray, 184 Ariz. 9, 25 (1995). "Sometimes, however, a curative jury
instruction is sufficient to alleviate any risk of prejudice that might result
from a joint trial." State v. Grannis, 183 Ariz. 52, 58 (1995).
¶22 We review the denial of a motion to sever for an abuse of
discretion. Murray, 184 Ariz. at 25. "To establish an abuse of discretion, a
defendant must show that at the time [s]he moved to sever, [s]he had
proved [her] defense would be prejudiced absent severance." Gutierrez, 240
Ariz. at 464, ¶ 12. The defendant is required to renew her motion to sever
at trial; failure to do so results in waiver of severance. Ariz. R. Crim. P.
13.4(c); Gutierrez, 240 Ariz. at 464, ¶ 12. Because Leinaar did not renew her
pretrial motion to sever, we review the court's decision for fundamental
error. State v. Flythe, 219 Ariz. 117, 119, ¶ 4 (App. 2008).
¶23 Leinaar asserts the "vast majority of trial time" was dedicated
to presenting evidence that Stelljes set up and owned the business and the
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equipment that was seized; she argues this disparity unfairly "rubbed off"
on her. When a significant disparity of trial evidence exists, "severance is
required only if 'the jury is unable to "compartmentalize the evidence as it
relates to separate defendants."'" Grannis, 183 Ariz. at 59 (quoting Singer v.
United States, 732 F.2d 631, 635 (8th Cir. 1984)). Leinaar does not explain
why the jury was unable to compartmentalize the evidence as it related to
her and Stelljes.
¶24 Leinaar also argues the court should have granted her motion
for severance because she was a "mere employee" of the ESC Lounge, but
she fails to explain how that defense is antagonistic to Stelljes's defense – or
vice versa. A defendant seeking severance based on antagonistic defenses
"must demonstrate that his or her defense is so antagonistic to the co-
defendants that the defenses are mutually exclusive," that is, "in order to
believe the core of the evidence offered on behalf of one defendant, [the
jury] must disbelieve the core of the evidence offered on behalf of the co-
defendant." State v. Cruz, 137 Ariz. 541, 545 (1983). The defenses Leinaar
and Stelljes each advanced did not require severance. Stelljes's defense was
that the ESC Lounge was operating a legitimate sweepstakes rather than a
gambling operation, a defense on which Leinaar also relied. The jury did
not need to disbelieve Leinaar was merely an employee to believe the ESC
Lounge was operating a legitimate business.
¶25 For these reasons, the superior court did not commit
fundamental error in denying Leinaar's motion for severance.
CONCLUSION
¶26 For the foregoing reasons, we affirm Stelljes's and Leinaar's
convictions and sentences.
AMY M. WOOD • Clerk of the Court
FILED: AA
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