457 N.E.2d 868 | Ohio Ct. App. | 1982
This cause came on to be heard upon an appeal from the Court of Common Pleas of Hamilton County.
By indictment, defendant-appellant, Mayurkant Trivedi, was charged with twelve counts of selling unregistered securities in violation of R.C.
Defendant's first assignment states:
"The Court erred by ruling that O.R.C.
R.C.
"In any prosecution brought under sections
Defendant contends that the statute creates a mandatory and irrebuttable presumption of knowledge for an essential *413
element of the offense charged. R.C.
"(C) No person shall knowingly and intentionally1 sell, cause to be sold, offer for sale, or cause to be offered for sale, any security which comes under any of the following descriptions:
"(1) Is not exempt under section
Defendant argues that as a result of R.C.
Briefly, we find R.C.
Where the constitutionality of a statute is challenged, it is axiomatic that there is a strong presumption in favor of the legislation's constitutionality. Despite the fact that a presumption of knowledge provision has been part of Ohio's securities law since the first securities statute was enacted in 1913,2 judicial interpretation of R.C.
The Ohio Securities Act creates only two categories of securities: registered or exempt, either of which may be sold lawfully. In Ohio the burden of determining whether a security may be sold lawfully is placed on the offeror or seller of the security. United States, ex rel. Shott, v. Tehan (C.A. 6, 1966),
"[T]he purpose behind the violated provision [R.C.
In view of the above discussion, our *414
examination of the challenged provision leads us to the conclusion that R.C.
Moreover, with respect to that portion of the first assignment ascribing error to the trial court's reliance on R.C.
We next address defendant's third assignment which presents the dual challenge that the trial court erred in denying his motion for acquittal and that the finding of guilty was against the manifest weight of the evidence. Essentially, defendant argues that the state failed to prove the predicate necessary for the operation of the presumption of knowledge set forth in R.C.
Black's Law Dictionary (4 Ed. Rev. 1968) provides the following definition of "reasonable diligence":
"A fair, proper and due degree of care and activity, measured with reference to the particular circumstances; such diligence, care or attention as might be expected from a man of ordinary prudence and activity." Id. at 544.
Clearly, reasonable diligence is a factual question to be resolved on a case by case basis.
The record sub judice reveals that the limited partnership United Investment Ltd. was virtually mass-producing issues of securities. In the spring of 1977, defendant was contacted about selling United Investment Ltd. securities and became a salesman for that limited partnership. Defendant Trivedi was a salesman of securities, licensed in both Ohio and Kentucky. In Ohio a person must pass a written examination covering the state's securities laws in order to be granted a security salesman's license. R.C.
Trivedi maintains that he satisfied the reasonable diligence requirement of R.C.
We find that under the facts of this case defendant did not exercise reasonable diligence. According to his own figures, Trivedi sold twenty to thirty different issues of securities, totaling $800,000 to $850,000 in sales. The three issues to which Trivedi's one inquiry was directed are not even the issues which are the subject of the offenses charged. The securities in question were issued around April and May 1978, nearly seven months after defendant's sole registration inquiry. While admittedly insensitive comments by administrative personnel may have been offensive, such comments could not serve as an excuse for the total dereliction of responsibility, particularly where the sale of a large number of different securities was involved and the defendant was placed on notice that these securities were in a "gray area" and was advised by an attorney that the securities should be registered.
Consequently, we find that the evidence was such that reasonable minds could reach different conclusions as to whether each material element of selling unregistered securities in violation of R.C.
Defendant's second assignment ascribes error to the trial court's order of restitution in the amount of $98,600 as a condition of his probated sentence. Defendant contends that the restitution order was not within the scope of R.C.
R.C.
"* * * In the interests of doing justice, rehabilitating the offender, and insuring his good behavior, the court may impose additional requirements on the offender, including, but not limited to, requiring the offender to make restitution for all or part of the property damage that is caused by his offense and for all or part of the value of the property that is the subject of any theft offense, as defined in division (K) of section
Thus, the question is whether R.C.
"`Theft offense' means any of the following:
"(1) A violation of section
"(2) A violation of an existing or former municipal ordinance or law of this or any other state or the United States substantially equivalent to any section listed in division (K)(1) of this section;
"(3) An offense under an existing or former municipal ordinance or law of this or any other state or the United States involving robbery, burglary, breaking and entering, theft, embezzlement, wrongful conversion, forgery, counterfeiting, deceit, or fraud;
"(4) A conspiracy or attempt to commit, or complicity in committing any offense under division (K)(1), (2), or (3) of this section."
The state argues that Subsection (3) *416
of R.C.
Examining R.C.
"(J) `Fraud,' `fraudulent acts,' `fraudulent practices,' or `fraudulent transactions' means anything recognized on or after July 22, 1929, as such in courts of law or equity; any device, scheme, or artifice to defraud or to obtain money or property by means of any false pretense, representation, or promise; any fictitious or pretended purchase or sale of securities; and any act, practice, transaction, or course of business relating to the sale of securities which is fraudulent or which has operated or would operate as a fraud upon the purchaser."
The fraud encompassed by R.C.
Furthermore, the restitution order sub judice cannot stand because there must be a due process ascertainment that the amount of restitution bears a relationship to the loss suffered. Such a determination was not made in the instant cause.
Finding that the sentencing judge did not have the authority to impose a restitution order as a condition of defendant's probation, we therefore set aside the order of restitution and otherwise affirm the judgment of conviction; further we remand this cause for resentencing according to law and consistent with this decision.
Judgment accordingly.
KEEFE, P.J., DOAN and KLUSMEIER, JJ., concur.
"(A) A person acts purposely when it is his specific intention to cause a certain result, or, when the gist of the offense is a prohibition against conduct of a certain nature, regardless of what the offender intends to accomplish thereby, it is his specific intention to engage in conduct of that nature.
"(B) A person acts knowingly, regardless of his purpose, when he is aware that his conduct will probably cause a certain result or will probably be of a certain nature. A person has knowledge of circumstances when he is aware that such circumstances probably exist."