State v. Rust , 405 P.3d 869 ( 2017 )

2017 UT App 176THE UTAH COURT OF APPEALS
STATE OF UTAH,
Appellee,
v.
ROBERT THOMAS RUST,
Appellant.
Opinion
No. 20150525-CA
Filed September 21, 2017
Third District Court, Salt Lake Department
The Honorable Paul B. Parker
No. 131901697
Samuel J. Hanseen and Alexandra S. McCallum,
Attorneys for Appellant
Sean D. Reyes and Karen A. Klucznik, Attorneys
for Appellee
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN and JILL M. POHLMAN concurred.1
ROTH, Judge:
¶1 Robert Thomas Rust appeals his convictions for one count
of money laundering, a second degree felony, see Utah Code
Ann. § 76-10-1903 (LexisNexis 2012); one count of conspiracy to
distribute a controlled substance, a third degree felony, see id.§ 58-37-8(1)(a)(ii), (1)(b)(ii); id. § 76-4-201; and two counts of
filing a false tax return, a third degree felony, id. § 76-8-
1101(1)(c)(i). We affirm.
1. Judge Stephen L. Roth participated in this case as a member of
the Utah Court of Appeals. He retired from the court before this
decision issued.
State v. Rust
BACKGROUND
¶2 In early 2012, police began surveilling Rust’s home after
receiving a tip regarding his involvement in narcotics
distribution. On two separate occasions, police observed “short
stay vehicle traffic” at Rust’s home. Police followed each vehicle
until they could make a traffic stop and ultimately discovered
methamphetamine in both vehicles.
¶3 While police were investigating Rust, they received a
report from a casino in Wendover, Nevada, “as part of a routine
reporting process of . . . suspicious gambling habits of persons
who frequent gaming establishments.” The report indicated that
Rust “had recently lost a considerable amount of money” at the
casino. Police went to the casino to gather documentation of
Rust’s gambling activities and discovered “an excessive amount
of gambling occurring at the casino on the part of . . . Rust” that
involved a loss of approximately $150,000.
¶4 Police obtained a warrant to search Rust’s vehicle, his
residence, a new residence into which Rust and his wife were
moving, and the residence of Rust’s stepson. In Rust’s vehicle,
police found a “glass pipe with some burnt white residue inside”
and “[o]we sheets . . . documenting numerical transactions,
money out, money owed.” The investigating officer testified,
based on his experience in narcotics investigations,
Owe sheets are an item used by persons involved
in the trafficking or distribution of narcotics to
keep track of drugs that are sold and those drugs
that have been paid for, the amounts they were
sold for and the amounts that are still holding, who
owes the amounts, [and] who the drugs . . . were
received by.
In searching Rust’s residences, police found more owe sheets,
wire transfer receipts, W-2G tax forms for reporting gambling
20150525-CA 2 2017 UT App 176State v. Rust
proceeds, expensive stolen property, a large quantity of cash, a
fake ID for Rust’s wife, gambling receipts, a syringe, and a
baggie with white residue. At the residence of Rust’s stepson,
officers found a bank account receipt registered to Rust’s wife
hidden inside a gaming device case behind an entertainment
center. Officers also observed surveillance equipment at one of
the residences, which the investigating officer testified is “a
common tool used by persons engaged in the activity of
narcotics distribution as a form of counter surveillance against
law enforcement.”
¶5 Rust was arrested and charged with money laundering,
conspiracy to distribute a controlled substance, and two counts
of filing a fraudulent tax return. A trial was held in April 2015.
¶6 At trial, in addition to the evidence outlined above, the
State presented testimony from the girlfriend of one of Rust’s
alleged associates (Witness). Witness agreed to testify against
Rust in exchange for a reduced sentence after she was arrested
for a drug-related charge in 2012. Witness testified that her
boyfriend sold drugs for a living and that she also participated.
She further testified her boyfriend regularly purchased drugs
from Rust. The boyfriend would communicate with Rust via text
message about Witness’s and her boyfriend’s desire to buy
drugs; then, Witness and the boyfriend would pick up the drugs
from a third party that Rust identified and send the purchase
money to Rust via wire transfer. She testified that the first time
she met Rust was when she and her boyfriend went to Rust’s
house “to get drugs.” They “got high,” and then a third party
arrived. Rust and Witness’s boyfriend “split” the
methamphetamine that she assumed they obtained from the
third party, though she did not actually see an exchange take
place. On another occasion, Witness’s boyfriend asked Rust to
meet him at a restaurant parking lot “so he could pick up a
quarter pound.” The boyfriend took $4,000 with him. Witness
observed Rust pull into the parking lot in his vehicle, but she
stayed in the car while her boyfriend got into Rust’s vehicle. The
20150525-CA 3 2017 UT App 176State v. Rust
boyfriend stayed in Rust’s vehicle for approximately ten minutes
and then returned without the money but with drugs he did not
have before he entered Rust’s vehicle. On a third occasion,
Witness and her boyfriend waited for Rust at a hotel. Her
boyfriend received a text message from Rust indicating that he
was waiting outside. Witness saw Rust outside the hotel, but she
did not observe the exchange between her boyfriend and Rust.
When her boyfriend came back from meeting with Rust, “he had
another quarter pound” that he did not have before the meeting.
Witness also testified that at the time she was arrested, she and
her boyfriend were on their way to Rust’s residence to pay
Rust’s wife $17,000 for drugs.
¶7 The State called an expert witness with expertise in
money laundering who had examined Rust’s financial records
from the sixteen-month period between January 2011 and May
2012. The expert witness explained that gambling can be used to
hide funds earned illegally: individuals “transfer money into an
account at one of the casinos” and “will then gamble at that
casino, put any winnings into that account and then transfer that
money into other accounts that they have outside of the casino to
make it look like the money that’s in those new accounts came
from winnings out of a casino.” The State asked the expert
witness whether specific hypothetical activities constituted
money laundering. The expert testified that using cash from
drug sales for a vehicle purchase, casino gambling, a wire
transfer, a prepaid debit card, or a credit union account all
constitute money laundering. The State presented evidence that
Rust had done each of those activities.
¶8 The State also entered Rust’s tax records into evidence. In
the course of their investigation, police discovered that in 2011
and 2012, Rust earned legitimate income from Panda Express
and the Rusts’ janitorial business, Jani-King. The State called a
tax expert to testify regarding Rust’s tax returns. The tax expert
testified that Rust’s tax returns for 2011 reported income from a
job at Panda Express, but failed to report any gambling losses or
20150525-CA 4 2017 UT App 176State v. Rust
winnings, illegal income earned from distributing narcotics, or
self-employment income. His 2012 tax return reported self-
employment income but neglected to report gambling losses or
winnings, illegal income, or his Panda Express income.
¶9 At the close of the State’s case-in-chief, Rust moved for a
directed verdict. The trial court denied the motion. The jury
convicted Rust on all charges. The court sentenced Rust to one to
fifteen years in prison for money laundering and zero to five
years in prison on each of the third degree felony convictions.
The court ordered the sentences for the three third degree
felonies to run concurrently with one another but consecutively
with the money laundering sentence. Rust appeals.
ISSUES AND STANDARDS OF REVIEW
¶10 Rust asserts that the evidence was insufficient to support
any of his convictions.2 We will reverse a jury verdict for
insufficient evidence only if “the evidence is sufficiently
inconclusive or inherently improbable that reasonable minds
must have entertained a reasonable doubt that the defendant
committed the crime of which he was convicted.” State v.
Shumway, 2002 UT 124, ¶ 15, 63 P.3d 94.
¶11 Rust also asserts that the trial court committed plain error
by permitting the money laundering expert to testify to legal
conclusions about what activities constituted money laundering.
2. The parties dispute whether Rust’s motion for a directed
verdict was sufficient to preserve the specific challenges he
raises on appeal. For purposes of this opinion, we assume that
the challenges were preserved. See, e.g., State v. Peterson, 2015 UT
App 129, ¶ 2 n.1, 351 P.3d 812.
20150525-CA 5 2017 UT App 176State v. Rust
To demonstrate plain error, a defendant must
establish that (i) [a]n error exists; (ii) the error
should have been obvious to the trial court; and
(iii) the error is harmful, i.e., absent the error, there
is a reasonable likelihood of a more favorable
outcome for the appellant, or phrased differently,
our confidence in the verdict is undermined.
State v. Holgate, 2000 UT 74, ¶ 13, 10 P.3d 346 (alteration in
original) (citation and internal quotation marks omitted).
ANALYSIS
I. The Evidence Was Sufficient to Support Rust’s Convictions.
¶12 Rust challenges the sufficiency of the evidence to support
each of his convictions.
A. Conspiracy and Money Laundering
¶13 Rust first argues that the evidence was insufficient to
prove the intent elements of his conspiracy to distribute
methamphetamine and money laundering charges. The jury was
instructed that it could convict Rust of the conspiracy to
distribute a controlled substance charge if it found that he
[a]greed with one or more persons to engage in or
cause the performance of the crime of Distribution
of the Controlled Substance methamphetamine
which crime is defined by law as: (a) knowingly
and intentionally; (b) distribute the controlled
substance methamphetamine, or to agree, consent,
offer, or arrange to distribute the controlled
substance methamphetamine.
See Utah Code Ann. § 76-4-201 (LexisNexis 2012); id. § 58-37-
8(1)(a)(ii). Similarly, the money laundering charge required the
20150525-CA 6 2017 UT App 176State v. Rust
jury to find that Rust knew the money represented “the proceeds
of the distribution of a controlled substance.” See id. § 76-10-1903.
¶14 At the heart of Rust’s insufficiency claims is his assertion
that Witness’s testimony was “inherently improbable” and that
without it, the State’s evidence was insufficient to support his
convictions. “Though the court must ordinarily accept the jury’s
determination of witness credibility, when the witness’s
testimony is inherently improbable, the court may choose to
disregard it.” State v. Robbins, 2009 UT 23, ¶ 16, 210 P.3d 288.
Testimony is inherently improbable when it is “physically
impossible” or so “incredibly dubious” that it is “apparently
false.” Id. ¶¶ 16, 18. For example, “a trial judge may reevaluate
the jury’s determination of testimony credibility in cases where a
sole witness presents inherently contradictory testimony that is
equivocal or the result of coercion, . . . there is a complete lack of
circumstantial evidence of guilt,” and “the court is convinced
that the credibility of the witness is so weak that no reasonable
jury could find the defendant guilty beyond a reasonable
doubt.” Id. ¶ 18 (citations and internal quotation marks omitted).
¶15 We do not agree that Witness’s testimony should have
been disregarded as inherently improbable. Rust argues that the
testimony was inherently improbable because Witness’s
cooperation agreement with the State gave her a motive to testify
falsely, she never actually witnessed a physical exchange of
drugs, and she “was high during the majority of her encounters
with Rust.” All of these factors, however, go to the weight of
Witness’s testimony rather than demonstrating that Witness’s
testimony was “physically impossible” or “apparently false.” See
id. ¶ 16; see also State v. Pearson, 943 P.2d 1347, 1352 (Utah 1997)
(“A plea agreement requiring truthful testimony does not . . .
render the testimony inherently unreliable.”). Further, the
circumstantial evidence corroborating Witness’s testimony—e.g.,
the short-stay vehicle visits to Rust’s home and their occupants’
possession of methamphetamine; the owe sheets found in Rust’s
vehicle and residences; the wire transfer receipts for large,
20150525-CA 7 2017 UT App 176State v. Rust
irregular amounts of money from various individuals; and the
discrepancy between Rust’s legitimate income sources and the
amount of cash going into and out of his accounts—would have
made it inappropriate for the judge to take the credibility issue
out of the jury’s hands. See Robbins, 2009 UT 23, ¶ 19 (“The
existence of any additional evidence supporting the verdict
prevents the judge from reconsidering the witness’s
credibility.”).
¶16 Although Witness did not observe a physical exchange of
drugs and money between Rust and her boyfriend, she testified
that her boyfriend made a living as a drug dealer, and that she
saw her boyfriend and Rust splitting up some quantity of
methamphetamine while all three were at Rust’s house. She
further testified that on two other occasions she witnessed her
boyfriend arrange to meet Rust, saw them meet as arranged, and
saw her boyfriend return in a short time with a substantial
quantity of drugs he did not have before his encounters with
Rust. The jury could reasonably have inferred from her
testimony that exchanges of drugs took place, particularly given
the additional circumstantial evidence presented at trial. In
addition, the jury heard evidence that Witness was high on
drugs on two of these occasions and had the opportunity to
judge her reliability as an observer of the events she testified to
and her credibility as a witness. See State v. Workman, 852 P.2d
981, 984 (Utah 1993) (“[T]he jury serves as the exclusive judge of
both the credibility of witnesses and the weight to be given
particular evidence.”).
¶17 Based on the totality of the evidence the jury received, we
are not convinced “that reasonable minds must have entertained
a reasonable doubt” that Rust knowingly accepted money from
Witness’s boyfriend in exchange for large quantities of drugs so
that her boyfriend could sell the drugs to others. See State v.
Shumway, 2002 UT 124, ¶ 15, 63 P.3d 94. Accordingly, Rust’s
conviction for conspiracy to distribute methamphetamine is
supported by sufficient evidence.
20150525-CA 8 2017 UT App 176State v. Rust
¶18 We also conclude that the evidence sufficiently supported
the money laundering conviction. Rust contends that the
evidence “failed to demonstrate that [he] knew the money and
property constituted proceeds of unlawful activity.” He also
contends that even if “the source of the money was the sale of
drugs,” the evidence suggests that Rust’s wife, not Rust himself,
dealt the drugs, and that he “lacked knowledge that the money
represented the proceeds of drug dealing.” He further argues
that the “evidence suggests that the money/property were the
proceeds of lawful gambling,” not drug distribution.
¶19 However, because there was sufficient evidence to
support Rust’s conspiracy to distribute drugs conviction, the
same evidence reasonably supports a conclusion that Rust knew
any proceeds he might have received therefrom represented
proceeds of an “unlawful activity” rather than a lawful activity,
such as gambling. If Rust intentionally and knowingly
distributed drugs, he also had firsthand knowledge that the
proceeds received therefrom were the result of drug distribution,
an unlawful activity. See Utah Code Ann. § 76-10-1903(1)
(LexisNexis 2012).
¶20 And, importantly, there was evidence from which the jury
could reasonably have concluded that Rust received,
transported, or acquired proceeds as a result of his conspiracy to
distribute drugs. See id. For example, Witness testified that it was
common practice for her boyfriend to wire transfer money to
Rust in exchange for drugs, and police found wire transfer
receipts in Rust’s residences. Witness also testified that on one
occasion she was present when her boyfriend met Rust in a
parking lot and exchanged $4,000 for drugs. The State presented
evidence that the police found numerous owe sheets
“documenting numerical transactions, money out, money owed”
in Rust’s vehicle and his residences, which the investigating
officer indicated are often “used by persons involved in the . . .
distribution of narcotics to keep track of drugs that are sold and
those drugs that have been paid for, the amounts they were sold
20150525-CA 9 2017 UT App 176State v. Rust
for and the amounts that are still holding.” Further, the jury
could reasonably have concluded from the evidence at trial that
the large quantities of money at Rust’s disposal for gambling
and vehicle purchases—money that seemed to far exceed the
income available to Rust through legitimate business and
employment—resulted from his distribution of drugs rather
than his gambling. Cf. Workman, 852 P.2d at 984 (“When the
evidence presented is conflicting or disputed, the jury serves as
the exclusive judge of both the credibility of witnesses and the
weight to be given particular evidence.”).
¶21 Accordingly, we conclude that the State presented
sufficient evidence at trial to not only support Rust’s conspiracy
conviction but also the money laundering conviction.
B. Filing a False Tax Return
¶22 Rust also asserts that the evidence was insufficient to
support the two charges of filing a false tax return because the
State did not establish that his failure to report his earnings was
done with the intent to evade paying taxes. See Utah Code Ann.
§ 76-8-1101(1)(c)(i) (LexisNexis 2012). According to Rust, “the
evidence shows that any income earned constituted the proceeds
of lawful employment and gambling.” He asserts that he could
have believed in good faith that he did not need to report his
gambling winnings because they were offset by his losses and
that he did not need to report “nominal income amounts”
earned from Panda Express and Jani-King.
¶23 “It is well established that intent can be proven by
circumstantial evidence” where “the inferences that can be
drawn from that evidence have a basis in logic and reasonable
human experience sufficient to prove that [the defendant]
possessed the requisite intent.” State v. Holgate, 2000 UT 74, ¶ 21,
10 P.3d 346 (citations and internal quotation marks omitted).
Given the evidence that Rust had significant cash income from
the sale of methamphetamine and that he was moving the
20150525-CA 10 2017 UT App 176State v. Rust
money around in an effort to conceal it, the jury could
reasonably have inferred that Rust’s failure to report his
earnings was done with the intent to evade paying taxes.
II. The Money Laundering Expert Witness’s Ultimate-Issue
Testimony Did Not Prejudice Rust.
¶24 Conceding that the issue was unpreserved, Rust next
argues that it was plain error for the court to permit the money
laundering expert to offer testimony on an ultimate issue in the
case by opining that hypothetical conduct mirroring the State’s
allegations against Rust constituted money laundering. To
demonstrate plain error, Rust must establish that permitting the
ultimate-issue testimony constituted obvious, prejudicial error.
See id. ¶ 13. Because we conclude Rust cannot establish that the
alleged error was prejudicial, we reject this argument.
¶25 Although there is no absolute ban on expert testimony
that embraces an ultimate issue, see Utah R. Evid. 704, expert
“opinions that tell the jury what result to reach or give legal
conclusions” are “impermissible,” State v. Davis, 2007 UT App
13, ¶ 15, 155 P.3d 909 (citation and internal quotation marks
omitted). In particular, expert testimony that “hypothetical
[actions] consisting of the exact actions of which [the] defendant
was accused” meet the requirements of a criminal statute has
been held to be impermissible under rules 701 and 704 of the
Utah Rules of Evidence. See State v. Stringham, 957 P.2d 602, 607–
08 (Utah Ct. App. 1998) (explaining that such testimony could
“easily” mislead a jury); see also Davis, 2007 UT App 13, ¶ 17
(holding that the testimony of an expert who “tie[d] [his]
opinions to the requirements of Utah law . . . should have been
excluded because it was an answer to a specific question
[that] . . . appear[ed] on the verdict form” (alterations and second
omission in original) (citations and internal quotation marks
omitted)).
20150525-CA 11 2017 UT App 176State v. Rust
¶26 Even assuming, without deciding, that the money
laundering expert testified to improper legal conclusions and
that such a flaw should have been obvious to the trial court, Rust
cannot demonstrate that he was harmed by the testimony. See
Holgate, 2000 UT 74, ¶ 13. Rust argues that the expert’s testimony
prejudiced him because the expert implied “that money
laundering could be committed without a culpable mental
state.” To convict Rust of money laundering, the jury was
required to find that Rust knew the money represented “the
proceeds of the distribution of a controlled substance.” See Utah
Code Ann. § 76-10-1903 (LexisNexis 2012). Because the evidence
of Rust’s participation in drug distribution was largely
circumstantial, Rust asserts that there was a high likelihood that
the money laundering expert’s testimony improperly influenced
the jury’s verdict.
¶27 However, the fact that the jury convicted Rust on the drug
distribution conspiracy charge relieves any doubt we may have
had about improper influence on the outcome from the money
laundering expert’s testimony. As discussed above, the
conspiracy charge required the jury to find that Rust
[a]greed with one or more persons to engage in or
cause the performance of the crime of Distribution
of the Controlled Substance methamphetamine
which crime is defined by law as: (a) knowingly
and intentionally; (b) distribute the controlled
substance methamphetamine, or to agree, consent,
offer, or arrange to distribute the controlled
substance methamphetamine.
See id. § 76-4-201; id. § 58-37-8(1)(a)(ii). Because the jury
convicted Rust on the conspiracy to distribute charge, it clearly
believed that he was knowingly or intentionally involved in the
distribution of methamphetamine. If the jury believed that Rust
knowingly or intentionally sold drugs, then there was little
likelihood that the jury would have found that Rust did not
20150525-CA 12 2017 UT App 176State v. Rust
know the money he received from distributing drugs
represented “the proceeds of the distribution of a controlled
substance,” even in the absence of the money laundering
expert’s testimony. And, as discussed above, supra ¶¶ 13–21,
there was sufficient evidence—apart from the expert’s
testimony—to support both the conspiracy to distribute drugs
and the money laundering convictions. As a result, any error in
admitting that testimony was harmless.
CONCLUSION
¶28 For these reasons, we conclude that the evidence was
sufficient to support Rust’s convictions and that any error in
admitting the money laundering expert’s ultimate-issue
testimony was harmless. Accordingly, we affirm Rust’s
convictions.
20150525-CA 13 2017 UT App 176