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01/27/98 PEOPLE STATE ILLINOIS v. DAVID K. BARTLETT

January 27, 1998

THE PEOPLE OF THE STATE OF ILLINOIS, PLAINTIFF-APPELLANT,
v.
DAVID K. BARTLETT, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Du Page County. No. 96--CF--401. Honorable Ann Brackley Jorgensen, Judge, Presiding.

The Honorable Justice Rathje delivered the opinion of the court. Geiger, P.j., and Thomas, J., concur.

The opinion of the court was delivered by: Rathje

The Honorable Justice RATHJE delivered the opinion of the court:

The State appeals the circuit court's order dismissing four counts of a six-count indictment against defendant, David Bartlett. The indictment charged defendant with violating the Illinois Securities Law of 1953 (815 ILCS 5/1 et seq. (West 1994)) (the Act). On appeal, the State contends that the court erred in (1) dismissing counts I and II on the ground that the indictment failed to allege specifically that anyone relied on the allegedly false statements; and (2) dismissing counts III and IV on the ground that the indictment failed to allege that the "statement" defendant circulated was one required by the Act. We reverse and remand.

All six counts of the indictment relate to defendant's alleged promotion of a pyramid scheme. Counts I and II allege that defendant knowingly engaged in a course of business in connection with the sale of securities that tended to work a fraud and deceit upon buyers. Specifically, they allege that defendant solicited investors to purchase "investment contracts" for $2,000. Defendant represented that the investors would receive a return of $16,000; that the scheme was legal; and that there was no risk to investors. The indictment alleges that defendant knew that each of these statements was untrue, given that the investment contract was in fact an illegal pyramid scheme. See 815 ILCS 5/12(F) (West 1994).

Counts III and IV allege that defendant "circulated a statement purported to be 'rules' for the participation in an illegal pyramid scheme having reasonable grounds to know that certain material representations contained therein were false and untrue." See 815 ILCS 5/12(H) (West 1994). Counts V and VI, which are not at issue in this appeal, charge defendant with promoting an illegal pyramid sales scheme (720 ILCS 5/17-7(B) (West 1994)).

The court dismissed counts I and II on the ground that they failed to allege that anyone in fact relied on the allegedly false statements. The court also dismissed counts III and IV, alleging that defendant circulated a statement containing false representations because they failed to allege that the "statement" was one that the Act required.

We note that defendant has not filed a brief in this court. However, we will consider the merits of the appeal under the standard set forth in First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128, 345 N.E.2d 493 (1976).

The State first contends that the court erroneously dismissed counts I and II. The State concedes that it is required to allege and prove reliance, but contends that the element of reliance is inherent in the allegation that defendant's conduct "tended to work a fraud and deceit."

When a charging instrument is attacked in a pretrial motion, it will be found sufficient if it states the name of the offense and the relevant statutory provision, the nature and elements of the offense, the date and county where the offense occurred, and the name of the accused. 725 ILCS 5/111-3(a) (West 1994); People v. Meyers, 158 Ill. 2d 46, 51, 196 Ill. Dec. 646, 630 N.E.2d 811 (1994). An instrument that charges an offense in the language of the statute is sufficient when the words of the statute sufficiently define the offense so that the accused is apprised with reasonable certainty of the precise offense with which he or she is charged. Meyers, 158 Ill. 2d at 51-52.

Section 12(F) of the Act, on which counts I and II are based, provides:

"It shall be a violation of the provisions of this Act for any person *** to engage in any transaction, practice or course of business in connection with the sale or purchase of securities which works or tends to work a fraud or deceit upon the purchaser or seller thereof." 815 ILCS 5/12(F) (West 1994).

The indictment tracks the language of the statute and adds specific factual allegations about the transactions. The statute does not specifically require that anyone have relied on any false statements. However, we agree with the State that the concept of reliance is inherent in the requirement that the transaction "works or tends to work a fraud or deceit."

In interpreting a statute, courts must give the language its plain and ordinary meaning. A term of well-known legal significance is presumed to have that meaning in a statute. Advincula v. United Blood Services, 176 Ill. 2d 1, 17, 223 Ill. Dec. 1, 678 N.E.2d 1009 (1996). The word "fraud" has an accepted legal definition. To state a cause of action for fraud, a party must establish, inter alia, that a person made a false statement of material fact and that the aggrieved party justifiably relied on the truth ...


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