When does communications fraud require specific intent to defraud? State v. Squires Explained

The Utah Court of Appeals addressed important questions about communications fraud jury instructions and pattern of unlawful activity prosecutions in State v. Squires, providing guidance for practitioners defending white-collar criminal cases.

Background and Facts

Defendant Squires, working for real estate company Fitz Roy LLC, convinced his uncle to pledge property as collateral for a $660,000 deposit needed for a larger loan. Squires promised the uncle his property would be freed within “two to three weeks,” but the actual loan documents provided ninety days for repayment. When the larger deal fell through and various funding attempts failed, the uncle lost his property to foreclosure. The State charged Squires with communications fraud and engaging in a pattern of unlawful activity.

Key Legal Issues

Squires raised three main challenges: (1) whether ineffective assistance of counsel occurred when trial counsel failed to request jury instructions requiring specific intent to defraud for communications fraud, (2) whether counsel was ineffective for not objecting to alleged hearsay testimony, and (3) whether insufficient evidence supported the pattern of unlawful activity conviction.

Court’s Analysis and Holding

The court affirmed the communications fraud convictions, finding counsel was not deficient. The communications fraud statute contains two variants – schemes “to defraud” and schemes “to obtain” property through fraudulent means. The court concluded the statute’s plain language and existing caselaw did not clearly require specific intent to defraud for the “obtain” variant, making counsel’s performance objectively reasonable. The court also rejected importing civil fraud’s “presently existing fact” requirement into criminal fraud instructions.

However, the court reversed the pattern of unlawful activity conviction. Under the “continuity plus relationship” test borrowed from federal RICO law, the State must prove either substantial duration or threat of future criminal conduct. Squires’s communications occurred over only seven to eight months, involved a single victim and single goal, and showed no threat of repetition.

Practice Implications

This decision clarifies that Utah’s communications fraud statute does not necessarily require specific intent to defraud jury instructions in all cases. For pattern of unlawful activity charges, prosecutors must demonstrate true continuity – brief schemes targeting single victims rarely satisfy this element. Defense counsel should carefully analyze whether alleged criminal patterns meet federal RICO continuity standards, as Utah courts follow federal precedent on this issue.