from the Iowa District Court for Polk County, Jeffrey D.
Brouse appeals his conviction for fraudulent practice in the
first degree on retrial. REVERSED AND REMANDED.
L. Campbell of Dickey & Campbell Law Firm, P.L.C., Des
Moines, for appellant.
J. Miller, Attorney General, and Martha E. Trout, Assistant
Attorney General, for appellee.
by Vogel, P.J., and Tabor and Mullins, JJ.
Brouse appeals his conviction for fraudulent practice in the
first degree. This appeal is from Brouse's second trial
on this same charge. He argues his conviction must be
reversed because: (1) it violates double jeopardy, (2) it was
barred by the statute of limitations, (3) the district court
improperly instructed the jury, and (4) the district court
abused its discretion in making various evidentiary rulings.
For the reasons stated below, we reverse the conviction and
remand for a new trial.
Background Facts and Proceedings
court already established the background facts relevant to
this case in Brouse's prior appeal:
In 2007 the Iowa legislature enacted the Iowa Film,
Television, and Video Project Promotion Program (Film
Program). The Film Program was created to bring filmmakers
and television producers from other locations to Iowa with
the hope they would spend money in Iowa and grow the economy.
The program, administered by the Iowa Film Office, offered
transferable tax credits to producers and investors for
qualified expenditures from Iowa-based businesses. Tom
Wheeler ran the Iowa Film Office and assisted filmmakers and
television producers with tax credits. Filmmakers and
producers had to apply to the Iowa Film Office in order to be
approved for the tax credits. After the Iowa Film Office
approved a film project, the filmmaker or producer would
provide a list of expenditures to the Iowa Film Office. The
Office would then review the expenditures and issue a tax
certificate. The tax certificate could be used to reduce a
tax liability owed to the State of Iowa. If the filmmaker or
producer did not owe Iowa taxes, the tax credit could be sold
to a third party that did have tax liability to the State.
Dennis Brouse had developed a television program about horses
for Nebraska Educational Telecommunications (NET). After
failing to find enough cash funding, Brouse and NET parted
ways. Brouse contacted Wheeler about the possibility of his
television program obtaining tax credits from the State of
Iowa. Brouse then moved his corporation (Changing Horses) and
his television program (Saddle Up) to Iowa. Brouse
hired Chad Witter, a certified public accountant, to help
with the tax credits. Wheeler believed Witter had a vast
knowledge of the Film Program.
The Iowa Film Office had preapproved the use of
"in-kind" exchanges-exchanges for services, such as
advertising or sponsorships, or goods, but no cash
exchange-as qualified expenditures. Additionally, the Iowa
Film Office allowed a pass-through corporate structure, where
an Iowa corporation is created as the business entity to
allow non-Iowa sponsorships to qualify as expenditures under
the Film Program. These expenditures would be submitted to
the Iowa Film Office and the filmmaker or producer would
receive tax credits for approximately half of the
expenditures. . . .
. . . .
Brouse submitted many purchases as qualified expenditures
relevant to this case. One such expenditure was submitted as
a claim of an in-kind exchange. Brouse purchased a . . .
camper from Shirley and Wayne Weese. The Weeses offered
Brouse the trailer for $10, 500 and he paid them $10, 500 in
cash. The purchase agreement stated the purchase price was
$21, 000 and the Changing Horses expenditure sheet, as
submitted to the Iowa Film Office, claimed a $22, 500
qualified expenditure. The Weeses testified . . . Brouse
asked them to sign the $21, 000 purchase agreement to
facilitate tax credits. Brouse also asked Shirley Weese to
tell the person calling from the Iowa Film Office that the
trailer was purchased for $21, 000. The audit tie-out sheet
(a document linking the expenditure claims to specific
records from the production accountant) showed Brouse paid in
cash $10, 500 and in services $10, 500 to the Weeses. The
Weeses' restaurant was subsequently advertised in
Saddle Up. However, the Weeses did not know their
restaurant would be advertised and testified that they did
not agree to be paid in advertising.
The Iowa Attorney General charged Brouse and Witter with
fraudulent practice in the first degree, theft in the first
degree, and ongoing criminal conduct. Brouse moved to sever
the defendants and was later tried alone. After receiving a
bill of particulars, Brouse filed a motion to dismiss the
charges. The Attorney General amended the trial information
and bill of particulars. The district court denied
Brouse's motion to dismiss. . . . The jury returned a
general verdict finding Brouse guilty of first-degree
fraudulent practice and not guilty of theft and ongoing
criminal conduct. Brouse filed a motion for new trial, which
was denied. Brouse appealed his conviction.
State v. Brouse, No. 12-1076, 2014 WL 1714969, at
*1-2 (Iowa Ct. App. Apr. 30, 2014).
Brouse's previous appeal, he argued, among other things,
there was insufficient evidence to convict him of joint
criminal conduct, an alternative theory of fraudulent
practice charged by the State. Id. at *3. On appeal,
the State conceded the joint criminal conduct theory could
not have been the basis for the jury's verdict.
Id. We examined the joint criminal conduct jury
instruction and found it "was so confusing that we are
not confident the jury was able to parse through the unclear
elements and properly assess Brouse's guilt under that
theory." Id. at *5. Thus, we reversed
Brouse's conviction for fraudulent practice in the first
degree, concluding "it was not possible for the jury to
find sufficient evidence to convict pursuant to a general
verdict that implicated [an erroneous] joint criminal conduct
instruction." Id. The State filed an
application for further review, which our supreme court
August 18, 2014, Brouse filed a motion for entry of judgment
of acquittal, which the district court denied, concluding
"a new trial is permitted when a conviction is reversed
due to error at trial in instructing the jury" and,
alternatively, "retrial is permitted because the verdict
is general and other theories of guilt were presented that
could have supported the verdict (or that, at least, the
court of appeals did not say could not have supported
it)." Brouse sought discretionary review of the
court's order, which our supreme court denied.
November 10, the State amended the trial information,
charging Brouse with one count of fraudulent practice in the
first degree, in violation of Iowa Code section 15A.3 (2007),
specifically alleging "the defendant requested Wayne
and/or Shirley Weese to sign a 'Bill of Sale' stating
that the price of the trailer he bought from them was twice
the actual price, in order to double the value of tax credits
he received for it."
January 14, 2015, Brouse filed a renewed motion for entry of
judgment of acquittal and motion to dismiss, which was
denied. On January 23, the State filed a motion to amend the
trial information. In its motion, the State sought to
"add aiding and abetting as an alternative
theory" and to "remove fact-specific language
following the statutory language of the charge, " that
is, to remove the language quoted above regarding the bill of
sale for the used trailer. The district court allowed the
State to amend the trial information to remove the
above-quoted language but refused to allow the State to add
an alternative aiding-and-abetting theory.
case proceeded to retrial on January 26. At retrial, Brouse
testified his company, Changing Horses, paid $10, 500 cash to
the Weeses for the purchase of their used trailer and also
agreed to provide $12, 000 in advertising on his television
show titled Saddle Up for the Weeses' restaurant
as a services-in-kind exchange. A rolling credit for the
restaurant appeared in the "Special Thanks" section
at the end of all thirteen episodes of Saddle
Up's first season. Brouse introduced an expenditure
report Witter had sent him that split the Weese trailer
transaction into $10, 500 in cash outlay and $12, 000 in an
in-kind exchange, for a total qualifying amount of $22, 500.
This expenditure report was not the same report Witter
submitted to Wheeler on behalf of Changing Horses for
approval for tax credits, which also listed the expense of
the trailer as $22, 500 but did not divide the expenditure
into separate payment categories.
Weese testified she did not enter into an additional deal
with Brouse beyond the $10, 500 cash for the trailer and she
did not enter into an agreement with Brouse for the remainder
of the price of the trailer to be exchanged for advertising
on Saddle Up. Shirley testified she and her husband
signed a bill of sale for the trailer in the amount of $21,
000 because Brouse asked her to do so, even though they had a
deal to sell the trailer to Brouse for $10, 500 cash.
State introduced the bill of sale at trial, signed by both of
the Weeses but unsigned by Brouse. Brouse submitted a phone
log Wheeler kept when he contacted vendors to "spot
audit" various purchases. The log shows Shirley
confirmed on the phone with Wheeler that Brouse had purchased
the trailer from the Weeses for $22, 000 and that she had
received payment in full. Brouse also submitted an exchange
of e-mails between Shirley and Wheeler in which Shirley
confirmed the purchase price of the trailer was $22, 000. The
audit tie-out sheet submitted by the State shows the trailer
was paid for in two transactions: $10, 500 in cash and $10,
500 in services. This sheet and the bill of sale were never
shown to Wheeler and were not used to issue tax credits to
the close of evidence, the district court granted
Brouse's motion for judgment of acquittal as to the bill
of sale as a false statement in writing but denied his motion
as it pertained to the expenditure report.
January 30, a jury found Brouse guilty of fraudulent practice
in the first degree. Brouse timely filed a motion in arrest
of judgment and motion for new trial, arguing his conviction
violated the statute of limitations and the double-jeopardy
clause of the federal and state constitutions, there was
insufficient evidence to support his conviction, the verdict
was contrary to law and contrary to the weight of evidence,
and the district court ...