State v. Workum ( 2020 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.
PETER J. WORKUM, Appellant.
No. 1 CA-CR 17-0306
1 CA-CR 19-0127 PRPC
(Consolidated)
FILED 1-14-2020
Appeal from the Superior Court in Maricopa County
No. CR2012-009416-001 DT
The Honorable Pamela S. Gates, Judge
AFFIRMED; REVIEW GRANTED; RELIEF DENIED
COUNSEL
Arizona Attorney General’s Office, Phoenix
By Michelle L. Hogan, Mary L. Harriss
Counsel for Appellee
Christian Dichter & Sluga, P.C., Phoenix
By Stephen M. Dichter, Daniel B. Bernardone
Counsel for Appellant
STATE v. WORKUM
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Kenton D. Jones delivered the decision of the Court, in
which Judge Diane M. Johnsen and Judge James B. Morse Jr. joined.
J O N E S, Judge:
¶1 Peter Workum appeals his convictions and sentences for theft,
money laundering in the first degree, fraudulent schemes and artifices, and
residential mortgage fraud. He further seeks review of the superior court’s
denial of his petition for post-conviction relief (PCR). For the following
reasons, we affirm his convictions and sentences, grant review of the denial
of his PCR, and deny relief.
FACTS AND PROCEDURAL HISTORY
¶2 Between 2005 and 2007, the victim and his wife worked with
an attorney to form a limited liability company, Deveras, L.L.C.1 Based
upon a miscommunication with counsel, the articles of organization were
never filed with the State. Mistakenly believing the company had been
properly formed, the victim transferred the deed to his home to Deveras,
L.L.C.
¶3 In 2010 and 2011, the victim and Chad K. imported and
distributed chlorine through a series of separate limited liability companies
(collectively, Shiner) financed in part by loans from the victim and Owen F.
Chad, a certified public accountant, managed Shiner and handled all its
finances.
¶4 By the summer of 2011, Shiner struggled to repay its debts,
and Owen told Chad that Workum might be interested in providing a cash
advance to Shiner. At an informal meeting, Chad and Workum discussed
the details of a short-term loan with a high interest rate, but nothing was
reduced to writing. At some point, Workum advised Chad that “if [Shiner]
1 “We view the facts in the light most favorable to sustaining the
convictions with all reasonable inferences resolved against the defendant.”
State v. Harm, 236 Ariz. 402, 404, ¶ 2 n.2 (App. 2015) (quoting State v.
Valencia, 186 Ariz. 493, 495 (App. 1996)).
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STATE v. WORKUM
Decision of the Court
were to default or if anything happens, I’m coming after you . . . I’m coming
after everything.” The victim did not hear the details of the loan, did not
agree to the specific terms of the loan, and did not pledge his personal assets
as collateral for Shiner’s debt.
¶5 In September 2011, Workum wired $25,000 to Owen, who
then transferred $23,000 to Shiner. When Shiner failed to repay the loan,
Workum focused his repayment efforts at Shiner and Chad, eventually
filing an involuntary bankruptcy petition against Shiner claiming Workum
was owed $40,700 on the loan.
¶6 Meanwhile, in October 2011, Workum filed articles of
organization for Deveras, L.L.C. that identified Workum as its manager.
Having assumed control of the company the victim believed he had created
several years earlier, Workum transferred the victim’s home — the title to
which was already held by Deveras, L.L.C. — to a different company
Workum controlled. Although Workum met with Owen and the victim to
discuss the outstanding loan, Workum never told either that he was
actively pursuing the victim’s personal assets as repayment.
¶7 A few months later, by claiming he lawfully owned the home,
used it as a rental property, and did not want to inform the tenants of the
loan, Workum was able to obtain a $220,000 non-recourse loan from CTP
Funding, L.L.C. (CTP), which was secured by a deed of trust on the home.
Workum then distributed the proceeds of the loan to various other
companies he controlled. Workum transferred the beneficial interest in the
deed of trust securing $137,000 in debt to Owen, who understood he would
receive the funds after the victim’s home was sold at a trustee sale.
¶8 By April 2012, Workum had not made any payments on the
loan and CTP initiated a trustee sale of the victim’s home. Upon receiving
notice of the sale, the victim contacted Workum, CTP, and an investigator
with the Arizona Attorney General’s Office. Workum relinquished his
interest in Deveras, L.L.C. back to the victim but did not repay CTP or
transfer the victim’s home to the victim or Deveras. The trustee’s sale was
canceled, and title insurance covered CTP’s loss.
¶9 The State ultimately prosecuted Workum for two counts of
theft of property valued at more than $25,000 (counts 1 and 4), two counts
of money laundering in the first degree (counts 2 and 6), one count of
fraudulent schemes and artifices (count 3), and one count of residential
mortgage fraud (count 5). After an eleven-day trial, the trial court denied
Workum’s motion for judgment of acquittal, and the jury found him guilty
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STATE v. WORKUM
Decision of the Court
on all counts. The court then sentenced Workum to concurrent terms of
imprisonment, the longest of which was five years.
¶10 Workum timely appealed. While the appeal was stayed,
Workum filed a timely petition for PCR. The superior court held
evidentiary hearings and denied relief. Workum petitioned for review, and
we granted his request to consolidate the petition and appeal. See Ariz. R.
Crim. P. 31.4(b).2 We have jurisdiction over both matters pursuant to
Arizona Revised Statutes (A.R.S.) §§ 12-120.21(A)(1), 13-4031, -4033(A)(1),
and Arizona Rule of Criminal Procedure 32.9.
DISCUSSION
I. Sufficient Evidence Supports the Verdicts.
¶11 Workum argues the trial court erred in denying his motion
for judgment of acquittal because insufficient evidence supports his
convictions. We review claims of insufficient evidence de novo and will
affirm so long as the record contains substantial evidence to support the
verdicts. State v. West, 226 Ariz. 559, 562, ¶¶ 15-16 (2011). Substantial
evidence is evidence that, when viewed in the light most favorable to
sustaining the verdict, “reasonable persons could accept as adequate and
sufficient to support a conclusion of [the] defendant’s guilt beyond a
reasonable doubt.” Id. at ¶ 16 (quoting State v. Mathers, 165 Ariz. 64, 67
(1990)). We do not distinguish between direct and circumstantial evidence,
State v. Stuard, 176 Ariz. 589, 603 (1993) (citing State v. Harvill, 106 Ariz. 386,
391 (1970)), or reweigh the evidence, State v. Tison, 129 Ariz. 546, 552 (1981)
(collecting cases). Applying this standard, we find no error in Workum’s
convictions.
¶12 Workum argues, generally, that the State failed to prove
criminal intent because he presented testimony that conflicted with the
State’s theory. But substantial evidence may exist even when the jury hears
conflicting evidence. See State v. Felix, 234 Ariz. 118, 120-21, ¶ 10 (App. 2014)
(citing State v. Soto-Fong, 187 Ariz. 186, 200 (1996)). The weight given to
witness testimony at trial is a question of credibility left entirely to the jury.
Id. Additionally, criminal intent is typically proven by circumstantial
evidence. Harm, 236 Ariz. at 406, ¶ 13 (citing State v. Lester, 11 Ariz. App.
408, 410 (1970), and then State v. Routhier, 137 Ariz. 90, 99 (1983)). The
2 Absent material changes from the relevant date, we cite the current
version of rules and statutes.
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STATE v. WORKUM
Decision of the Court
record contains substantial circumstantial evidence that Workum, an
experienced businessman, acted deliberately to use the victim’s property to
pay Shiner’s debts without the victim’s permission. Thus, sufficient
evidence supports the jury’s determination that Workum possessed the
requisite criminal intent, as well as the remaining elements, of each count.
See infra ¶¶ 13-16.
A. Counts 1 and 4: Theft
¶13 As relevant here, a person is guilty of theft if, without lawful
authority, he “knowingly . . . [c]ontrols property of another with the intent
to deprive the other person of such property” or “[o]btains property of
another by means of any material misrepresentation with intent to deprive
the other person of such property,” and the property is valued at $25,000 or
more. A.R.S. § 13-1802(A)(1), (3), (G). As to count 1, substantial evidence
showed that Workum filed articles of organization falsely establishing
himself as manager of Deveras, L.L.C. and then transferred title of the
victim’s home, valued at over $200,000, to a company Workum controlled.
Additionally, the victim testified he did not pledge his home as collateral
for the loan to Shiner and did not authorize the transfer of the deed. As to
count 4, substantial evidence showed that Workum obtained the $220,000
loan from CTP by misrepresenting the purpose of the loan and the
circumstances surrounding his ownership of the property he pledged as
security for the loan.
B. Counts 2 and 6: Money Laundering in the First Degree
¶14 A person is guilty of money laundering in the first degree if
he “[k]nowingly initiates, organizes, plans, finances, directs, manages,
supervises or is in the business of money laundering.” A.R.S. § 13-
2317(A)(1). A person commits money laundering if he “acquires or
maintains an interest in, transacts, transfers, transports, receives or conceals
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 activity includes theft committed for financial gain. A.R.S.
§§ 13-2301(D)(4)(b)(v), -2317(F)(3)(c). For counts 2 and 6, substantial
evidence showed that Workum obtained control of the victim’s home and
the proceeds of a loan secured by that home by means of theft. Workum
then transferred the home and the proceeds of the loan to various
companies he controlled. Additionally, an investigator testified for the
State that disbursing funds to multiple companies, or “layering,” is a
common method of concealing unlawful conduct.
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STATE v. WORKUM
Decision of the Court
C. Count 3: Fraudulent Schemes and Artifices
¶15 A person is guilty of fraudulent schemes and artifices if he
“pursuant to a scheme or artifice to defraud, knowingly obtains any benefit
by means of false or fraudulent pretenses, representations, promises or
material omissions.” A.R.S. § 13-2310(A). As to count 3, substantial
evidence showed that Workum obtained the CTP loan by lying about the
circumstances of his ownership interest in the victim’s home and its
occupancy, effectively preventing CTP from communicating with the
victim.
D. Count 5: Residential Mortgage Fraud
¶16 A person is guilty of residential mortgage fraud if, “with the
intent to defraud, the person . . . [k]nowingly makes any deliberate
misstatement, misrepresentation or material omission during the mortgage
lending process that is relied on by a mortgage lender, borrower or other
party to the mortgage lending process.” A.R.S. § 13-2320(A)(1). As to count
5, substantial evidence showed CTP relied upon deliberately false
information provided by Workum during the mortgage lending process.
II. Preclusion of Victim’s Prior Business Transactions Was Not
Prejudicial.
¶17 Workum argues the trial court erred in precluding evidence
that the victim defrauded lenders and investors in prior business
transactions. On appeal, Workum contends the evidence was admissible
under Arizona Rule of Evidence 404(b) and as third-party culpability
evidence.3 Because Workum did not move to admit the evidence on these
theories at trial, he has waived all but fundamental error review. See State
v. Hargrave, 225 Ariz. 1, 11, ¶ 28 (2010) (citing State v. Henderson, 210 Ariz.
561, 567-68, ¶¶ 19-20 (2005)); State v. Bolton, 182 Ariz. 290, 304 (1995)
(limiting consideration of evidentiary theories advanced for the first time
on appeal to fundamental error review).
¶18 To establish fundamental error, a defendant must show that
error occurred and that the error was so egregious the defendant could not
possibly have received a fair trial, the error went to the foundation of the
3 Workum concedes that no legal authority supports admission of the
evidence under Arizona Rule of Evidence 404(a)(2), which conditionally
permits “[e]vidence of a pertinent trait of character of the victim of the crime
offered by an accused.” See State v. Coghill, 216 Ariz. 578, 582 (App. 2007)
(identifying other limitations on the admissibility of other-act evidence).
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STATE v. WORKUM
Decision of the Court
case, or the error took from the defendant a right essential to his defense.
State v. Escalante, 245 Ariz. 135, 142, ¶ 21 (2018) (citing Henderson, 210 Ariz.
at 568, ¶ 23). If fundamental error is established under either of the latter
two circumstances, the defendant must also prove prejudice. Id. (citing
Henderson, 210 Ariz. at 568, ¶ 26).
¶19 Workum fails to prove that the preclusion of the evidence was
prejudicial or deprived him of a fair trial. Although the trial court
prevented Workum from eliciting testimony about specific business
transactions to show the victim had a history of “scamming” lenders and
investors, the court did allow Workum to question the victim about using
funds from a relative’s company to invest in Shiner and permitted the
victim’s business associate to testify that the victim was not entirely
trustworthy. Workum also elicited testimony that the victim had a history
of unwise business decisions. Workum then painted the victim as a “crook”
and liar in his closing argument. Thus, the jury heard evidence and
argument that the victim mishandled investments and lacked
trustworthiness in business relationships, and no fundamental, prejudicial
error occurred.
III. Trial Counsel’s Absence During the Verdicts Was Not Structural
Error.
¶20 Workum argues his trial counsel’s absence when the jury
returned its verdicts deprived him of his constitutional right to counsel.4
See U.S. Const. amend. VI (“In all criminal prosecutions, the accused shall
. . . have the Assistance of Counsel for his defence.”). Workum did not raise
this argument with the trial court but contends on appeal that the
circumstances constitute structural error. We review Sixth Amendment
issues de novo. State v. Rasul, 216 Ariz. 491, 493, ¶ 4 (App. 2007) (citing State
v. Glassel, 211 Ariz. 33, 50, ¶ 59 (2005), and United States v. Goldberg, 67 F.3d
1092, 1097 (3d Cir. 1995)).
¶21 A criminal defendant has the right to assistance of competent
counsel at trial at every stage of the proceedings where the “substantial
4 To the extent Workum asserts that trial counsel’s absence constituted
ineffective assistance of counsel, we address the argument solely in the
context of our PCR review. See State v. Spreitz, 202 Ariz. 1, 3, ¶ 9 (2002)
(reiterating that “the appellate court simply will not address” ineffective
assistance of counsel claims on direct appeal, as such claims “are to be
brought in Rule 32 proceedings”).
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STATE v. WORKUM
Decision of the Court
rights of the accused may be affected.” State v. Conner, 163 Ariz. 97, 104
(1990). Counsel’s absence constitutes structural error where the “fail[ure]
to subject the prosecution’s case to meaningful adversarial testing” renders
“the adversary process presumptively unreliable.” Glassel, 211 Ariz. at 51,
¶ 62 (quoting United States v. Cronic, 466 U.S. 648, 659 (1984)).
¶22 The record does not support the contention that Workum’s
trial counsel completely failed to subject the State’s case to adversarial
testing. Although trial counsel was absent when the jury returned guilty
verdicts, he was present for all other critical stages of the proceedings,
conducted pretrial litigation, called and cross-examined witnesses, and
presented evidence and argument on Workum’s behalf. See, e.g., id. at ¶ 64
(rejecting a claim of deprivation of counsel where the record demonstrated
that trial counsel had presented arguments and evidence). Additionally,
Workum’s Knapp counsel5 actively participated throughout trial and was
present when the jury returned guilty verdicts. On this record, no
structural error occurred.
IV. Workum Did Not Prove Ineffective Assistance of Trial Counsel.
¶23 Workum contends the superior court erred in denying his
PCR petition based on his claim of ineffective assistance of trial counsel.6
Workum argued counsel was ineffective because he was unreceptive to
Workum’s comments, improperly advised him not to testify, and rushed
through the trial to go on vacation. Workum also argued he committed the
offenses based upon advice from civil counsel, believing his actions to be
lawful, and trial counsel failed to present an advice-of-counsel defense. If
available,7 an advice-of-counsel defense requires a showing that:
5 Pursuant to Knapp v. Hardy, 111 Ariz. 107, 111 (1974), privately
retained counsel may associate with appointed counsel in representing a
criminal defendant.
6 Workum is precluded from raising any issues that were raised or
could have been raised on appeal. Ariz. R. Crim. P. 32.2(a). Accordingly,
we decline to address any issues that exceed the scope of the claim of
ineffective assistance of counsel.
7 Although the parties, Workum’s trial counsel, and the superior court
seem to accept this premise, it is unclear whether an “advice of counsel”
defense exists in Arizona. We have identified no Arizona case law on the
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STATE v. WORKUM
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1) [the defendant] placed all the relevant facts known to him
before his counsel 2) counsel rendered an opinion on the
propriety of a particular course of action 3) he believed that
the opinion was rendered in good faith, and 4) in reasonable
reliance upon that opinion he engaged in a course of action
which corresponded with his counsel’s opinion.
State v. Fendler, 127 Ariz. 464, 478 (App. 1980) (identifying “general rule” of
advice-of-counsel defense under federal law) (citing United States v. Danser,
26 F.R.D. 580, 587 (D. Mass. 1959), and Bursten v. United States, 395 F.2d 976
(5th Cir. 1968)).
¶24 We will not disturb a superior court’s ruling on a petition for
PCR absent an abuse of discretion. State v. Gutierrez, 229 Ariz. 573, 577, ¶ 19
(2012) (citing State v. Bennett, 213 Ariz. 562, 566, ¶ 17 (2006)). A defendant
bears the burden of showing the court abused its discretion. State v. Poblete,
227 Ariz. 537, 538, ¶ 1 (App. 2011). On review, we accept the court’s factual
findings unless clearly erroneous, but review legal conclusions and any
alleged constitutional issues de novo. State v. Pandeli, 242 Ariz. 175, 180,
¶¶ 3-4 (2017).
¶25 To prevail on a claim of ineffective assistance of counsel, a
defendant must show that counsel’s performance fell below objectively
reasonable standards and that the deficient performance prejudiced the
defense. Strickland v. Washington, 466 U.S. 668, 687 (1984); State v. Nash, 143
Ariz. 392, 397 (1985). To establish prejudice, a defendant must show there
is “a reasonable probability that, but for counsel’s unprofessional errors, the
result of the proceeding would have been different.” Strickland, 466 U.S. at
694. “A reasonable probability is a probability sufficient to undermine
confidence in the outcome.” Id. A criminal defendant does not have the
right to “perfect counsel, only competent counsel,” State v. Valdez, 160 Ariz.
9, 15 (1989), overruled on other grounds by Krone v. Hotham, 181 Ariz. 364, 366
(1995), and ineffectiveness must be “a demonstrable reality rather than a
matter of speculation,” State v. McCall, 160 Ariz. 119, 127 (1989) (citation
omitted).
subject, and, on its face, the theory appears contrary to our legislature’s
decree that “[i]gnorance or mistake as to a matter of law does not relieve a
person of criminal responsibility.” A.R.S. § 13-204. Because Workum fails
to prove the defense was viable, see infra ¶ 28, we do not address the issue,
which was neither briefed nor argued.
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STATE v. WORKUM
Decision of the Court
¶26 Here, the trial court found Workum raised colorable claims of
ineffective assistance of trial counsel and conducted bifurcated evidentiary
hearings. At the hearings, Workum testified to the deficiencies identified
above. See supra ¶ 23. Workum’s trial counsel testified that he presented a
strategically targeted defense, did not rush the trial for personal reasons,
and maintained a good working relationship with Workum throughout the
trial. And, trial counsel was assisted by Knapp counsel and a defense
investigator in presenting Workum’s case. Workum’s civil counsel did not
testify regarding his role in the events underlying Workum’s convictions,
choosing instead to invoke his right to remain silent.
¶27 In two detailed rulings, the superior court denied the PCR
petition. The court first found that Workum failed to show that his trial
counsel disregarded his requests or forced him not to testify. Rather, the
court found that “trial counsel provided credible and reasonable
explanations for his recommendation that Mr. Workum waive his right to
testify” and “credibly testified that he did not abbreviate Mr. Workum’s
defense for any reason other than his assessment that the State had failed to
meet its burden of proof.” The court then found Workum failed to prove
by a preponderance of the evidence that the advice-of-counsel defense was
viable on the facts, i.e., Workum failed to prove he sought advice from civil
counsel and acted in accordance with that advice in pursuing the
transactions forming the basis of the offenses. This was based, at least in
part, upon the court’s finding that Workum’s testimony at the hearing “was
implausibly evolving and refuted by credible trial witnesses.” As such, the
court concluded Workum failed to show the alleged errors prejudiced him.
¶28 We find no abuse of discretion. Just as we do not reweigh trial
evidence on appeal, we do not reweigh evidence presented at a post-
conviction evidentiary hearing. See State v. Sasak, 178 Ariz. 182, 186 (App.
1993). The superior court acted within its discretion in considering
Workum’s credibility as a witness, see State v. Fritz, 157 Ariz. 139, 141 (App.
1988), and properly held Workum to his burden of proving the factual
allegations underlying his claim by a preponderance of the evidence, see
Ariz. R. Crim. P. 32.13(c). The court’s conclusion that an advice-of-counsel
defense was not viable and/or would not have affected the outcome of the
trial is reasonably supported by the evidence; indeed, Workum did not
present evidence that he provided his civil counsel with all the relevant
facts or explain what advice he received based on those facts. Thus, on this
record, we cannot say that “but for” the alleged errors, the result of the
proceeding would have been different, or that the court erred in applying
the Strickland test.
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STATE v. WORKUM
Decision of the Court
CONCLUSION
¶29 Workum’s convictions and sentences are affirmed.
Additionally, we grant review but deny relief from the denial of his petition
for PCR.
AMY M. WOOD • Clerk of the Court
FILED: AA
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