This post examines a recent opinion from the Court of
Appeals of North Carolina: North Carolina v. Arthiando Lurez Phillips, 2017 WL
899991 (2017). The court begins the opinion, as courts usually do, by
explaining how and why the prosecution arose and what happened at the trial
court level:
On 17 March 2014, Detective Micah
Sturgis with the Cleveland County Sheriff's Office attended a meeting with
members from multiple nearby police departments and sheriffs' offices. At the
meeting, officers with the Gaffney Police Department reported that several
items of Michael Kors inventory, including `purses, pocketbooks, [and]
backpacks,’ were being stolen from the Michael Kors Outlet store in Gaffney.
A week later, Detective Sturgis was on
his personal Facebook page when he noticed a posting for Michael Kors backpacks
for sale on a website called `One Man's Junk,’ which he described as an online
`flea market.’ The backpacks, with accompanying photographs, were captioned `Michael
Kors Backpacks Startin' at 45,’ and were listed for sale on the site by an
individual named R.D. Phillips. This name caught Detective Sturgis's eye
because he was familiar with an individual named Arthiando Phillips, the
defendant. Because of the reported larcenies of multiple Michael Kors items
from the Gaffney store, Detective Sturgis decided to investigate further.
Using a fake name and address,
Detective Sturgis created a fake Facebook account and started a conversation
with R.D. Phillips, who was later determined to be defendant, in order to
discuss the purchase of the Michael Kors backpacks. Detective Sturgis asked, `[c]an
you send me pics of the bags you've got or can you get up with me tomorrow
morning sometime?’ Defendant replied that he could `get anything from shades to
shoes, the MK watches and all.’ Detective Sturgis requested to meet defendant
in Shelby at 11:00 a.m. the next morning, 25 March 2014, and defendant agreed
to the meeting and provided his phone number.
Detective Sturgis then contacted
Sergeant Fitch, a supervisor with the Cleveland County Sheriff's Office, and
the two decided to set up an undercover purchase from defendant for one of the
Michael Kors bags in order to determine whether it was (1) one of the stolen
Michael Kors bags from the outlet in Gaffney, or (2) counterfeit merchandise.
Detective Sturgis enlisted Sergeant Fitch's help to set up the undercover
purchase because Sergeant Fitch was more familiar and experienced with
undercover buy operations of illegal purchases.
North Carolina v.
Arthiando Lurez Phillips, supra.
The opinion goes on to explain that on
25 March 2014, Detective Sturgis called
defendant and told him his `business partner Tim’ (Sergeant Fitch) would be
meeting him. Sergeant Fitch then called defendant to set up the time, date, and
location of the meeting for the undercover purchase, and recorded the call.
Sergeant Fitch took $50.00 from the sheriff's office special funds account and
met defendant at the Walmart on Highway 74 in Shelby. Defendant brought two
Michael Kors bags to the meeting, and Sergeant Fitch ultimately purchased one
of the bags for $35.00. Defendant never indicated whether the bags were
authentic or counterfeit, but according to Detective Sturgis, defendant `used
the words `Michael Kors’ and showed a tag on the pocketbook or the book bag as
a Michael Kors tag’ in his Facebook post. Afterwards, Sergeant Fitch delivered
the bag to Detective Sturgis and later testified that he `knew something was
not right, to sell a $400 pocketbook for $45.’
Thereafter, Detective Sturgis contacted
counterfeit expert Wayne Grooms, stating
`[b]ased off of looking at the
pocketbook, there were some things about the pocketbook that made me believe
the pocketbook was a counterfeit pocketbook instead of a true Michael Kors
pocketbook. I had worked with Wayne Grooms and the U.S. Customs in a couple of
other investigations where we had gotten some counterfeit goods, and there's
some telltale signs that I had picked up from other investigations to be able
to determine that this one was probably a counterfeit pocketbook at that point.
So I wanted Investigator Grooms to take a look at it to verify what I thought.’
North Carolina v.
Arthiando Lurez Phillips, supra.
The opinion then explains what happened next with the
investigation:
On 1 April 2014, Investigator Grooms
spoke with Detective Sturgis regarding the authenticity of the Michael Kors
bag, which he determined to be not authentic, based on his experience as a
Charlotte-Mecklenburg police officer who had been involved in over 10,000
trademark investigations and been sworn as an expert on counterfeit merchandise
in both federal and state courts. The same day, Detective Sturgis met with
other officers and planned to meet defendant in the Walmart parking lot for the
purchase of additional counterfeit goods. However, defendant did not answer the
officers' calls or respond to texts, and so officers went to defendant's
residence and conducted a search of the home.
At defendant's residence, the officers
found `other counterfeit goods located inside the residence, but it appeared
that they were for personal use and not for redistribution.’ During the search,
officers also found and seized seven illegal `poker style’ video gambling
machines in an outbuilding warehoused on the property. Additionally, defendant
indicated to Special Agent Brian Bowes with U.S. Customs, that he purchases
`counterfeit merchandise’ from a warehouse on Old National Highway in Atlanta,
Georgia called The Discount Mall. Detective Sturgis passed this information
along to authorities in Georgia and U.S. Customs.
North Carolina v.
Arthiando Lurez Phillips, supra.
As a result, Phillips
was arrested and charged
with obtaining property by false pretenses and possessing five or more video
gaming machines. On 8 September 2014, defendant was indicted by a Cleveland
County grand jury for the same. The cases were consolidated and tried by a jury
during the 14 December 2015 Criminal Session of the Superior Court of Cleveland
County, the Honorable Gregory R. Hayes, Judge presiding. Defendant entered a
plea of not guilty to both charges.
Following the close of the
State's evidence, defendant moved to dismiss all charges against him due to
insufficient evidence. The trial court denied the motion. Defendant did not
present any evidence at trial.
On 15 December 2015, the jury
returned a verdict of guilty of attempting to obtain property by false
pretenses and a verdict of not guilty of possession five or more video gaming
machines. The trial court entered judgment the same day, committing defendant
to the custody of the North Carolina Department of Correction for a term of
eleven to twenty-three months. Defendant filed written notice of appeal.
On appeal, defendant contends the
trial court committed reversible error by denying defendant's motion to dismiss
the charge where the evidence was insufficient to support the conviction for
attempting to obtain property by false pretenses. We disagree.
North Carolina v. Arthiando Lurez Phillips, supra.
The court went on to explain that
`[t]his Court reviews the trial
court's denial of a motion to dismiss de novo.’ State v. Smith, 186
N.C. App. 57, 62, 650 S.E.2d 29, 33 (2007) (citation omitted). `Upon
defendant's motion for dismissal, the question for the Court is whether there
is substantial evidence (1) of each essential element of the offense charged,
or of a lesser offense included therein, and (2) of defendant's being the
perpetrator of such offense. If so, the motion is properly denied.’ State v.
Fritsch, 351 N.C. 373, 378, 526 S.E.2d 451, 455 (2000) (quoting State
v. Barnes, 334 N.C. 67, 75, 430
S.E.2d 914, 918 (1993)). `In making its determination, the trial court must
consider all evidence admitted, whether competent or incompetent, in the light
most favorable to the State, giving the State the benefit of every reasonable
inference and resolving any contradictions in its favor.’ State v. Rose,
339 N.C. 172, 192–93, 451 S.E.2d 211, 223 (1994) (citing State v.
Sumpter, 318 N.C. 102, 107, 347
S.E.2d 396, 399 (1986)).
North Carolina v.
Arthiando Lurez Phillips, supra.
The opinion goes on to explain
that Phillips
was charged and
convicted of obtaining property by false pretenses. Pursuant to North Carolina
General Statutes § 14-100, our Supreme Court has defined this offense as `(1) a
false representation of a subsisting fact or a future fulfillment or event, (2)
which is calculated and intended to deceive, (3) which does in fact deceive,
and (4) by which one person obtains or attempts to obtain value from another.’ State v. Childers, 80 N.C. App. 236,
242, 341 S.E.2d 760, 764 (1986) (quoting State v. Cronin, 299 N.C. 229, 262 S.E.2d 277, 286 (1980));); see
North Carolina General Statutes §
14-100 (2015), 286 (2015). A key element of the offense is that `an
intentionally false and deceptive representation of a fact or event has been
made.’ State v. Kelly, 75 N.C.
App. 461, 464, 331 S.E.2d 227, 230 (1985).
When a defendant is
charged with the completed offense of obtaining property by false pretenses,
proof that the victim was indeed deceived at the time of the offense is
required. See State v. Simpson, 159 N.C. App. 435, 539, 583 S.E.2d 714, 716-17 (2003). However,
this Court has previously held that actual deceit is not an element of the
crime of attempting to obtain property by false pretenses. See
State v. Wilburn, 57 N.C. App. 40,
46, 290 S.E.2d 782, 786 (1982) (`It is not necessary in order to
establish an intent, that the prosecutor should have been deceived, or should
have relied on the false pretenses and have parted with his property . . . .’
(citations omitted)); see also State v. Dawson, No COA15-420, 2015 WL 7729662 at *2-4 (North
Carolna Court of Appeals 2015) (unpublished) (finding no error in
the trial court's denial of the defendant's motion to dismiss `where neither
clerk was deceived by the counterfeit $100.00 bills and did not part with any property
in exchange for [them],’ as the evidence was sufficient to show the defendant's attempt to
obtain property by false pretenses, a crime for which `actual deceit’ is not
required). Indeed, for attempt crimes, the two elements required are (1) `the
intent to commit the substantive offense’ and (2) `an overt act done for that
purpose which goes beyond mere preparation but falls short of the completed
offense.’ State v. Smith, 300 N.C.
71, 79, 265 S.E.2d 164, 169-20 (1980) (citations omitted).
North Carolina v.
Arthiando Lurez Phillips, supra.
The court then took up Lurez Phillips’ next argument, which
was that
the evidence fails to
establish a false pretense or intent to deceive because defendant did
not `actually represent that the bag he offered for sale was an
authentic Michael Kors bag.’ We disagree.
In the instant case, the
evidence shows that defendant advertised Michael Kors bags for sale for
$45.00 on a website titled `One Man's Junk.’ In his statements
to Detective Sturgis on Facebook, defendant described one bag as a
`Michael Kors bag with tags,’ and included photographs. The evidence in the
record also shows that defendant originally purchased the bags from a
warehouse in Atlanta (`The Discount Mall’), and sold the bags for
only a fraction of their worth, which also helps to establish that defendant
knew the merchandise was counterfeit. Sergeant Fitch testified that he made an
undercover purchase of one of the bags, paying defendant $35.00, at the behest
of Detective Sturgis. Evidence in the record also supports the fact that
Detective Sturgis and Sergeant Fitch were suspicious and had knowledge that the
bags sold by defendant, including the one Sergeant Fitch purchased, were likely
counterfeit. Indeed, Wayne Grooms, the owner of a private investigative firm
that specializes in intellectual property investigations dealing with counterfeit
merchandise testified at trial that the Michael Kors bag at issue in
this case was `not a genuine handbag’: `The label is totally
wrong. The way the “MK” is put on the label is wrong. The way the label is
attached to the handbag is wrong. The zippers are wrong. The circles are wrong.
The material of the pocketbook is wrong.’
Thus, defendant's act of
advertising and holding the items out as a particular brand (Michael Kors),
even though he knew the merchandise was counterfeit, establishes intent on the
part of defendant to deceive undercover officers and other potential buyers. See id. Thus, viewing the
evidence in the light most favorable to the State, defendant had the requisite
intent to cheat or defraud, an action which was calculated to deceive buyers,
and the trial court properly denied defendant's motion to dismiss.
North Carolina v.
Arthiando Lurez Phillips, supra.
The court went on to explain that
[w]ith regard to the second element of
the attempt offense (overt act), however, defendant, relying on this Court's
opinion in State v. Wilburn, argues that `where the evidence
presented by the State . . .showed a completed offense, then the evidence [is]
insufficient to support a conviction for the attempt[,]’ and therefore, his
conviction should be vacated. See 57 N.C. App. at 46, 290 S.E.2d at
786 (citations omitted). Defendant misconstrues the law as stated in Wilburn.
In Wilburn, this Court held
that `if property is actually obtained in consequence of the
prosecut[ing party's] reliance on the false pretenses, the offense is
complete and an indictment for an attempt will not lie.’ Id. (emphasis
added) (citations omitted). However, here, the property was not obtained `in
consequence’ of Sergeant Fitch's `reliance on the false pretense.’ Instead, the
property was obtained as a part of an undercover operation, and the record
supports the conclusion that the officers involved in the operation were
suspicious and had knowledge that the bag was likely counterfeit. Thus, because
Sergeant Fitch was never deceived by defendant's misrepresentation that the bag
was an authentic Michael Kors brand bag, the crime was not complete at the time
of the sale. Therefore, while the officer did complete the purchase of the
counterfeit bag for the purpose of the undercover operation, the officer was
never deceived because he did not rely on defendant's false representation, and
defendant was only guilty of attempting to obtain property by false pretenses.
Accordingly, where there was
substantial record evidence to support that defendant intended to deceive the
buyer but fell short of the completed offense because Sergeant Fitch was not
deceived at the time of the sale, the State presented sufficient evidence to
establish that defendant attempted to obtain property by false pretenses, and
the trial court did not err in denying defendant's motion to dismiss.
North Carolina v.
Arthiando Lurez Phillips, supra.
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