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Amos v. State

Court of Appeals of Indiana

August 30, 2017

Michael Amos, Appellant-Defendant,
v.
State of Indiana, Appellee-Plaintiff.

         Appeal from the Marion Superior Court The Honorable Lisa F. Borges, Judge Trial Court Cause No. 49G04-1606-FC-21338

          ATTORNEYS FOR APPELLANT Thomas W. Farlow Darren A. Craig Emily K. Cremeans Frost Brown Todd, LLC Indianapolis, Indiana.

          ATTORNEYS FOR APPELLEE Curtis T. Hill, Jr. Attorney General George P. Sherman Deputy Attorney General Indianapolis, Indiana.

          BROWN, JUDGE.

         [¶1] Michael Amos appeals the trial court's denial of his motion to dismiss the charges against him. Amos raises one issue which we revise and restate as whether the court erred or abused its discretion in denying his motion to dismiss based on the statute of limitations. We affirm.

         Facts and Procedural History

         [¶2] On June 3, 2016, the State filed an affidavit of probable cause and an information charging Amos with sixteen counts of securities fraud, sixteen counts of offer or sale of an unregistered security, and one count of acting as an unregistered broker-dealer, all as class C felonies. The counts for securities fraud and offer or sale of unregistered securities alleged that Amos committed the crimes on or about dates from August 4, 2006, to February 23, 2009. These counts allege that Amos concealed the evidence of his offenses such that evidence sufficient to charge him was not available to the State until no earlier than June 2011, that Amos began in or about March 2009 sending updates to the investors to provide a reason why he was temporarily unable to make promised payments and describe the steps he was taking to fulfill his promises, and the email updates continued approximately monthly and were ongoing as recently as September 6, 2012. The State also alleged that Amos acted as an unregistered broker-dealer from August 6, 2008, to the present.

         [¶3] The State filed an affidavit for probable cause prepared by an investigator for the Indiana Secretary of State, Securities Division, which states the investigator identified two separate schemes involving thirteen investors in Indiana, a promissory note scheme and a real estate investment contract scheme. The affidavit states that the promissory notes were for a period of time between twelve and one hundred twenty months, each note indicated a specific interest applied to the investor money, most of the notes purport to return thirty-six to forty-eight percent interest annually, the investors viewed the promissory notes as investments, and many of the investors purchased the notes using their individual retirement accounts. The affidavit states that the real estate investment contracts consisted of a sale agreement in which Amos sold property to an investor, a lease agreement in which he would lease the property from the investor immediately after the sale, and a second sale agreement in which Amos would purchase the property back from the investor at the original purchase price at the end of either five or ten years. The lease payments equaled either thirty-six or forty-eight percent of the purchase price per year. The affidavit further states that, from January 2007 until March 2011, Amos received over $13 million from investors nationwide and over $6 million from Indiana investors, that over $2.8 million was spent on personal expenses such as car payments, school fees, student loans, mortgage payments, medical bills, credit card bills, and church donations, and that he returned approximately $1.9 million to Indiana investors. The affidavit states that the promissory notes and real estate investment contract operated as a Ponzi scheme, that Amos would collect substantial upfront principal payments from investors and return a fraction of that money each month, investors were led to believe an actual business existed from which profits were derived, and in reality the enterprise did not have the assets or profits to sustain the scheme.

         [¶4] Additionally, the affidavit of probable cause states that the State of Indiana first became aware of Amos when a Consumer Complaint Form was submitted to the Office of the Indiana Attorney General in June 2011. The affidavit states that Amos concealed his actions from the investors in the manner in which he structured the securities, structured the promissory notes so the principal was not due to be returned to the investor for twelve to one hundred twenty months, and structured the real estate investment contracts so that the investors would not take actual possession of the properties and the investors did not expect to see their principal returned for ten years. The affidavit states that, once Amos failed to pay interest payments and lease payments, "he began, in or about March 2009, sending 'updates, ' approximately monthly, to the investors, " and "[i]n these 'updates' Amos apologized for missing payments, blamed the missed payment on something beyond his control, and explained his plan for recovery." Appellant's Appendix Volume II at 70. The affidavit states "Amos repeatedly informed investors in these 'updates' that he expected to close a deal soon and then he could send payments" and "[i]nvariably, something beyond Amos' control intervened, the deal could not be closed, and investors were not repaid." Id. The affidavit further states that Amos also concealed his actions from the State of Indiana by offering and selling the securities without registering the securities or himself with the Indiana Secretary of State's Office.

         [¶5] On July 12, 2016, Amos filed a motion to dismiss and a supporting brief arguing that the charges again him are barred by the applicable statute of limitations and that the securities fraud charges are deficiently pled. He maintained that he did not positively act to conceal his actions, the nature of the promissory notes and real estate investment contracts and their maturity or termination dates are clear from the faces of the documents, it was easily ascertainable at the time the documents were signed that he was not a registered agent or broker, and that, if his actions constitute an offense, that offense could have been determined by authorities or the alleged victims on the date the notes and contracts were signed.

         [¶6] On August 1, 2016, the State filed a response to Amos's motion to dismiss and an affidavit in support. It argued that the structure of the securities prevented the discovery of crimes, and that, "all the way through 2015, [Amos] was sending regular emails to the investors preaching optimism about the prospects of the investments while making no mention of the fact that he had expended vast sums of the invested money for his own personal benefit" and "[t]hese emails fulfilled their intended purpose and delayed investors' discovery of the crime committed until years had passed." Id. at 91-92. It also argued that the securities fraud allegations were more than sufficient to place Amos on notice of the nature of the charges against him.

         [¶7] The affidavit in support of the State's response included several attached investment documents and email messages. On December 1, 2014, Amos sent an email message with the subject "November Update" stating "I hope everyone had a happy thanksgiving, and I am very thankful for all of you, " "I am also thankful to be able to report that we are writing up our contract on our commercial transaction, and will be sending it out by the end of the week, " "[w]e assume the contract will be signed in the next three weeks, which will allow us to begin the due diligence tests required by our money partner, " and "[o]nce the contract is signed, we will be able to lock down the timing of the due diligence tests and I will know a more exact date and impact it will have on our recovery." Id. at 116. The message stated "[b]elow is our recover outline, I have removed the pending transactions list as I will begin providing close dates by project as we are informed by the lenders, " "[i]n this financial environment it is impossible to anticipate when and if a lender or buyer will follow through on previous commitments, " and "I hope that this letter will provide you the cautious optimism that I have at this point in regards to our full recovery." Id. The message also stated:

As a reminder our 5 step plan is listed below.
[] Step 1 - Stabilization
a. We need to close an initial transaction to provide a stable base of income and opportunity to recover.
b. Once an initial transaction is closed it will act as a catalyst to other transactions which will ...

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