Opinion
No. 4-694 / 03-0813
Filed January 26, 2005
Appeal from the Iowa District Court for Scott County, Mark D. Cleve and Mark J. Smith, Judges.
Ray J. Kraklio appeals his convictions, following his guilty pleas, to three counts of fraudulent practice in the first degree. AFFIRMED.
Kent Simmons, Davenport, for appellant.
Thomas J. Miller, Attorney General, Thomas Tauber, Assistant Attorney General, William Davis, County Attorney, and Kelly Cunningham and Julie Walton, Assistant County Attorneys, for appellee.
Heard by Huitink, P.J., and Mahan and Miller and Vaitheswaran, JJ., and Snell. S.J.
Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2003).
Ray J. Kraklio appeals his convictions, following his guilty pleas, to three counts of fraudulent practice in the first degree. He contends his counsel was ineffective in failing to raise a statute of limitations defense. We affirm his convictions and preserve his ineffective assistance claim on two of the three counts for a possible postconviction proceeding.
I. BACKGROUND FACTS AND PROCEEDINGS.
The record reveals the following facts. This case involves facts going back to the early 1980s. Beginning in the early 1980s the Iowa Department of Human Services (DHS) suspected that Kraklio was living with Debra Dirksen and that at least one of her two children, Tammy, who was born February 21, 1980, and Chad, who was born October 2, 1981, was Kraklio's child but that Dirksen and Kraklio were concealing this fact and his income contribution to the household in order to obtain welfare assistance, including food stamps, Family Investment Program (FIP) benefits (formerly Aid to Dependent Children (ADC) benefits), and Title XIX medical benefits. Between then and November of 2001 Child Support Recovery Unit (CSRU) personnel repeatedly questioned Dirksen as to whom the father of her children was or might be. Dirksen repeatedly maintained she had no idea who the father might be, and that Kraklio was not the father. Kraklio attended most of Dirksen's interviews by state personnel, was aware of what Dirksen told them, and himself denied he was the father of any of Dirksen's children. DHS records also indicate that during this same period of time Dirksen listed Kraklio as her landlord and daycare provider and the DHS used the rental and child-care figures provided by Dirksen to determine and increase her ongoing monthly public aid benefit amounts. Iowa Department of Inspections and Appeals (DIA) Investigator Randy Dodson was also aware of and worked on this case from time to time beginning in the early 1980s.
In November 2001 Kraklio telephoned Investigator Dodson with a child support and welfare fraud complaint regarding his ex-wife. Dodson made arrangements to meet with Kraklio. Dirksen showed up with Kraklio for Dodson's November 28, 2001 interview. At the interview Kraklio and Dirksen revealed to Dodson that they had been together for twenty-one years. They stated they had only been married for about one year, but had only been apart for approximately three months of the last twenty-one years. Dirksen and Kraklio also admitted to Dodson they had one child together, Chad Dirksen, born October 2, 1981. Based on this information Agent Dodson determined he should proceed to a criminal fraud investigation.
The fraud investigation continued for approximately a year until a trial information was filed on November 26, 2002. The joint trial information, as later amended at the plea hearing, charged Dirksen with three counts (Counts 1, 2, and 3) and Kraklio with three counts (Counts 4, 5, and 6) of fraudulent practice in the first degree in violation of Iowa Code sections 714.8 (3) and 714.9 (2001). More specifically, Kraklio was charged with: making, or aiding and abetting Dirksen in making, fraudulent statements in applying to receive food stamps, resulting in her receiving in excess of $10,000 of such benefits, in violation of Iowa Code section 234.13 (Count 4); making, or aiding and abetting Dirksen in making, fraudulent statements in applying to receive FIP benefits resulting in her receiving in excess of $10,000 of such benefits, in violation of Iowa Code section 239B.14 (Count 5); and making, or aiding and abetting Dirksen in making, fraudulent statements in applying to receive Title XIX medical benefits, resulting in her receiving in excess of $10,000 of such benefits, in violation of Iowa Code sections 249A.7 and 249A.8. In each count the State alleged the offenses were committed during the period of July 28, 1981 through March 31, 2000.
On March 13, 2003, pursuant to a plea agreement, both Kraklio and Dirksen pled guilty to the charges. Kraklio pled guilty to aiding and abetting Dirksen by making fraudulent statements to help her obtain the benefits, resulting in her obtaining them. In return for his guilty plea and payment of victim restitution the State recommended probation. At the plea hearing the district court asked Kraklio's attorney whether she had discussed with Kraklio "any of the statute of limitations issues and statutes that apply to this situation." She stated she had not reviewed those with Kraklio but had reviewed them in her own mind and believed that the statute of limitations allowed the State to prosecute each of the three charges within three years of the last fraudulent transaction or statement. She believed this requirement had been satisfied by the filing of the trial information on November 26, 2002. Dirksen's attorney agreed and stated that was his understanding as well. Sentencing was set for April 17, 2003.
Shortly before sentencing, Kraklio and Dirksen filed several joint, pro se motions. The relevant motions for purpose of this appeal argued that the DIA had started investigations on the charges long before 2001, thus the one-year discovery rule under section 802.5 was not applicable, and that based on "their own investigation" they had discovered the charges were filed more than three years beyond the last act alleged in the trial information and thus the information was filed outside the statute of limitations provided in sections 802.3 and 802.7 and should be dismissed.
At sentencing Kraklio's attorney told the court she believed the four pending motions could be construed as motions in arrest of judgment. She also stated that she had not had a lot of opportunity to discuss [the motions] in detail with my client, but I have explained their general nature in light of the plea agreement that was offered, and I believe my client may wish to withdraw those motions at this time so that sentencing can proceed, that is, to the extent that the motions have merit at all.
The court asked Kraklio if he wanted to withdraw the motions and, after two discussions off the record with his counsel, Kraklio stated, "Yes, I wish to withdraw," and then added, "As long as they maintain in the record." The court informed him, "Well, they will be part of the file. You are withdrawing them from the Court's consideration at this time, is that correct?" Kraklio answered, "Right."
The court then sentenced Kraklio to a concurrent term of no more than ten years and a $500 fine on each count, and suspended the prison sentences and placed Kraklio on five years probation on each of the three counts, to be served consecutively. Kraklio filed a pro se notice of appeal. Assisted by new counsel, Kraklio filed a motion for limited remand seeking discovery in the district court to determine whether his trial counsel was ineffective for failing to investigate and present a defense based on the statute of limitations. Our supreme court granted the limited remand by order dated December 12, 2003. On limited remand Kraklio deposed the attorney who had previously represented him in this case, deposed Investigator Dodson, and also obtained documents concerning Dirksen and her children, including documents showing benefits paid to or on behalf of Dirksen and her children.
On appeal Kraklio now contends that his prior attorney was ineffective for failing to investigate, prepare, and present a defense based on the fact the State filed the trial information outside the allowable statutes of limitation provided in Iowa Code sections 802.3 and 802.7, and 802.5. He argues that the assertion of such a defense would probably have resulted in a dismissal or acquittal on all counts and that he would not have pled guilty if he had been properly advised.
II. SCOPE AND STANDARDS OF REVIEW.
When there is an alleged denial of constitutional rights, such as an allegation of ineffective assistance of counsel, we evaluate the totality of the circumstances in a de novo review. Osborn v. State, 573 N.W.2d 917, 920 (Iowa 1998). To prove trial counsel was ineffective the defendant must show that counsel failed to perform an essential duty and that prejudice resulted from counsel's error. Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674, 693 (1984); Wemark v. State, 602 N.W.2d 810, 814 (Iowa 1999).
Generally, we do not resolve claims of ineffective assistance of counsel on direct appeal. State v. Biddle, 652 N.W.2d 191, 203 (Iowa 2002) (citing State v. Kinkead, 570 N.W.2d 97, 103 (Iowa 1997)). We prefer to leave ineffective-assistance-of-counsel claims for postconviction relief proceedings. State v. Lopez, 633 N.W.2d 774, 784 (Iowa 2001); State v. Ceron, 573 N.W.2d 587, 590 (Iowa 1997). However, we will consider such claims on direct appeal if the record is sufficient. State v. DeCamp, 622 N.W.2d 290, 296 (Iowa 2001). For the following reasons we find the record to be adequate to address Kraklio's claim of ineffective assistance regarding Count 6, but insufficient to address his claims regarding Counts 4 and 5.
III. MERITS.
The relevant statutes of limitations are Iowa Code sections 802.3 and 802.7, and 802.5. Section 802.3 provides in relevant part that "an indictment or information for a felony . . . shall be found within three years after its commission." Section 802.7 provides, "When an offense is based on a series of acts committed at different times, the period of limitation prescribed by this division shall commence upon the commission of the last of such acts." As relevant to the facts of this case, section 802.5 allows the commencement of a prosecution within one year after the discovery of the offense in the case of any offense a material element of which is fraud. The trial information charging Kraklio and Dirksen was filed November 26, 2002. Thus, the last fraudulent act by Kraklio would have had to occur after November 26, 1999, unless section 802.5 extended the time for commencing a prosecution beyond three years after the last act. We first address the application of section 802.5 to the facts, and thereafter address the application of sections 802.3 and 802.7 to the facts.
A. Section 802.5.
Fraud is a material element of fraudulent practices as charged in the trial information. In interpreting section 802.5 our supreme court has stated:
We are satisfied that the discovery rule here should include a probable cause element and a due or reasonable diligence requirement. We therefore hold that "discovery" for purposes of section 802.5 occurs when the authorities know or should know in the exercise of reasonable diligence that there is probable cause to believe a criminal fraud has been committed. The probable cause requirement fits well with the language of section 802.5, which requires "discovery of the offense." The due or reasonable diligence requirement is in harmony with our civil discovery rule. It also promotes one of the purposes of a criminal statute of limitations: to discourage inefficient or dilatory law enforcement.
State v. Wilson, 573 N.W.2d 248, 254 (Iowa 1998). The State has the burden to prove that a statute of limitations has been suspended. See State v. Howard, 610 N.W.2d 535, 536 (Iowa Ct.App. 1999) (interpreting and applying Iowa Code section 802.6(1) (1999)). We conclude it is similarly the State's burden to prove any claim by the State that otherwise applicable statutes of limitations have been extended pursuant to Iowa Code section 802.5 (2001).
Beginning in the early 1980s the State, acting through CSRU and other DHS personnel, strongly suspected that Kraklio was the father of one or both of Dirksen's children, Tammy and Chad, that Dirksen and the children and Kraklio were living together, and that Kraklio was providing unreported support for Dirksen. In May 1984 the DHS received a complaint that Dirksen was living with Kraklio, that Kraklio was the father of one of her children, and that Dirksen was employed by Kraklio. Dirksen denied all. The DHS then discovered that Dirksen's address as listed in the telephone directory was the same address as "Ray's Construction," which the DHS understood to be Kraklio's business. In July 1984 Dirksen and a "Ray" visited the DHS office to discuss the complaint. They acknowledged they lived in the same dwelling, but asserted that although they listed it as a single dwelling it was in fact a duplex and they lived separately. They denied that Kraklio was the father of either Tammy or Chad. When asked how long Kraklio had lived in Dirksen's home, Kraklio said he had been living there one and one-half years. However, Dirksen initially said Kraklio had not lived there prior to two months earlier.
In May 1985 the DHS received a complaint that Dirksen's name, in the form of her maiden name "Kroeger," appeared on the registration of a 1979 Ford truck, on which the first owner's name was listed as "Ray's Concrete," which was owned by Kraklio. Despite documentary evidence which apparently supported the complaint, Dirksen denied any ownership interest in the truck. Further complaints were received by the DHS in June 1985. The complaints indicated that despite her reported lack of employment and income Dirksen now owned, among other things, a new 1985 GMC truck, all new furniture, a new TV, and was acquiring central air conditioning; Dirksen had a Master Charge account in her maiden name; Kraklio was Chad's father; and Dirksen worked for Kraklio, as she had been doing for five or six years. In September 1985 the DHS received letters from Kraklio's sister indicating Kraklio had two months earlier stated in court that he paid Dirksen five dollars per hour, eight hours per day, for a seven-day week.
In late 1986 the State investigated circumstances surrounding the birth, death, and burial of a child of Dirksen's. Dirksen had given birth to a child, Rebecca, on September 25, 1982. Rebecca died the same day and was buried on October 1, 1982. Dirksen made application for and secured ADC burial benefits of $400, paid to The Runge Mortuary, Inc. for Rebecca's burial. In 1986 the State, acting through the Scott County Sheriff and the Scott County Attorney, made an investigation. As a part of that investigation DIA Investigator Morrison and DHS income maintenance worker Lorrie Miller became aware Rebecca had been buried in a grave Dirksen had had marked "Rebecca Dirksen Kraklio." They took photos of the grave and added the photos, related correspondence and documents, and their own handwritten notes to the State's file concerning Dirksen.
In February 1999 the DHS again referred the matter to the DIA. The DHS income maintenance worker indicated in her referral that Dirksen claimed to be paying rent to her landlord, Kraklio, and be paying utilities, in combined amounts that exceeded her reported income; she believed Kraklio was Dirksen's boyfriend and lived with her; and Chad looked "a lot" like Kraklio. When the DIA investigator interviewed Dirksen at her home on February 25, 1999, she denied that Kraklio was living with her and Tammy and Chad, despite the fact the investigator could see a man in the house, and observed a blue pickup truck that an interview of the closest neighbor on the same day indicated was Kraklio's truck. The neighbor told the investigator that Dirksen's household consisted of Kraklio, Dirksen, and three children, one of whom was Kraklio's child, and that the household had been so composed for about four or five years.
As shown by the record made on limited remand, in securing Kraklio's guilty pleas and convictions the State relied heavily, if not entirely, on the statute of limitations extension provided by the "discovery rule" in section 802.5. Wilson, 573 N.W.2d at 254, holds "'discovery' for purposes of section 802.5 occurs when the authorities know or should know in the exercise of reasonable diligence that there is probable cause to believe a criminal fraud has been committed." As of February 1999 the authorities knew Kraklio had made and assisted Dirksen in making statements to secure the various forms of public assistance, and Dirksen had received such assistance; knew Kraklio was probably the father of Rebecca, who was born to Dirksen less than a year after Chad was born; knew Chad very closely resembled Kraklio; and knew that despite their protestations to the contrary Kraklio had in all likelihood been living with Dirksen and contributing to the support of her and her children for at least four to five years and probably for much longer.
The charges in the trial information covered a period of almost nineteen years, ending almost twenty-eight months before the trial information was filed. Although the trial information alleged acts occurring through March 31, 2000, the minutes of evidence referred to "applications and reviews" only through January 31, 2000, and did not indicate dates that assistance had been provided or received or dates that payments for assistance had been made or received. We conclude that under these circumstances counsel had an essential duty to make a reasonable investigation concerning a statute of limitations defense.
We find that an adequate investigation would have revealed the facts which were discovered on limited remand. We conclude there is a reasonable probability a finder of fact presented with those facts would find that as of February 25, 1999, the authorities knew or should have known in the exercise of due diligence that there was probable cause to believe Kraklio had aided and abetted Dirksen in the fraudulent practices with which he was much later charged. There is thus a reasonable probability the finder of fact would find that the "discovery rule" of section 802.5 would extend the time for commencement of charges against Kraklio to no later than late February 2000. See Wilson, 573 N.W.2d at 252-53 (reading section 802.5 as meaning prosecution may commence despite the expiration of the three-year limitation period provided by section 802.3, as long as the prosecution commences within one year after discovery of the offense).
Kraklio asserts a statute of limitations defense would probably have resulted in a dismissal or acquittal on all counts. Our rules of criminal procedure provide, in relevant part: "If it appears from the . . . information and the minutes of evidence . . . that a prosecution for [the charged] offense is barred by the statute of limitations" the defendant is entitled to dismissal unless the defect is cured by a bill of particulars. Iowa R. Crim. P. 2.11(6)( a). In this case Kraklio's assertion that prosecution is barred by the applicable statute of limitations is based upon and depends upon the record made on limited remand, rather than being based upon the trial information and minutes of evidence. We therefore assume, without so deciding, that under the posture of the case as it existed in the trial court the issue was one to be determined by the finder of fact at trial and not by the court upon its own motion or motion by Kraklio.
These determinations lead us to the following additional conclusions. First, counsel breached an essential duty by not conducting a sufficient investigation to determine the possible viability of a statute of limitations defense. Second, Kraklio may have been prejudiced as a result. We say "may have been" because even if the period for commencing prosecution was not extended by application of section 802.5, Kraklio was not prejudiced if the prosecution was commenced within the period of time allowed by sections 802.3 and 802.7, a question we next address.
B. Sections 802.3 and 802.7. 1. Counts 4 and 5.
Under section 234.13 (food stamps) a person commits a fraudulent practice if that person, with the intent to gain financial assistance to which that person is not entitled, "knowingly makes or causes to be made a false statement or representation or knowingly fails to report . . . any change in circumstances affecting that person's entitlement to such financial assistance." Iowa Code § 234.13(1). A person also commits a fraudulent practice if that person acquires or possesses a food stamp benefit transfer instrument knowing it has been received in violation of law. Iowa Code § 234.13(4).
Under section 239B.14 an individual commits a fraudulent practice if that individual "obtains, or attempts to obtain . . . by means of a willfully false statement or representation, [or] by knowingly failing to disclose a material fact . . . any assistance or other benefits . . . to which the individual is not entitled." Iowa Code § 234B.14(1).
As conceded by the State, the record as developed on limited remand shows that Dirksen last received food stamp assistance or benefits in September 1999, and last received FIP benefits in July 1999, both outside the statute of limitations provided by sections 802.3 and 802.7. However, that fact is not dispositive, as one commits a fraudulent practice not only by illegally acquiring or possessing food stamp assistance or benefits, or by illegally obtaining FIP benefits, but also by attempting to acquire or obtain them through the proscribed fraudulent means.
The record before us, even with the evidence presented during the limited remand, contains no substantial evidence of when Dirksen last made, or Kraklio last assisted her in making, fraudulent applications for food stamp benefits or FIP benefits. The existing record thus provides us with no way to determine whether a statute of limitations defense to Count 4 or 5 would have probably led to a different result on those counts if it had been investigated, prepared, and presented.
2. Count 6.
Under section 249A.7 (Title XIX Medicaid assistance) a person commits a fraudulent practice when the person either (1) "obtains assistance or payments for medical assistance by knowingly making or causing to be made, a false statement or a misrepresentation of a material fact or by knowingly failing to disclose a material fact required of the applicant," or (2) "knowingly makes or causes to be made, a false statement or a misrepresentation of a material fact or knowingly fails to disclose a material fact concerning the applicant's eligibility for aid." Iowa Code § 249A.7. Just as with Counts 4 and 5, the record before us contains no substantial evidence of when Dirksen last made, or Kraklio last assisted her in making, fraudulent applications for Title XIX benefits as alleged in Count 6. Again, however, that fact is not dispositive, as one also commits a fraudulent practice when one "obtains assistance or payments for assistance" as a result of a fraudulent application or applications.
The record as developed on limited remand contains three documents, each titled "Iowa Department of Human Services Medicaid Management Information System Recipient History Request," one for Debra, one for Tammy, and one for Chad. The three documents show nineteen line items of payments of Medicaid benefits between December 13, 1999, and April 10, 2000, inclusive. All are within the statute of limitations provided by sections 802.3 and 802.7. Eight of the line items are for Debra, two are for Tammy, and nine are for Chad. Some of the payments for assistance for Chad were made to the same provider and on the same day as some of the payments for Debra, and were apparently made as part of the same check or warrant. After eliminating any such possible "double counting" of payments there remain eight payments between December 13, 1999, and April 10, 2000, inclusive, for assistance for Debra, two payments on February 7, 2000, for assistance for Tammy, and two payments between December 13, 1999 and January 10, 2000, inclusive, for Chad, all within the statute of limitations provided by sections 802.3 and 802.7.
The record thus shows numerous payments within the statute of limitations for medical assistance. We conclude with respect to Count 6 that the record demonstrates Kraklio was not prejudiced by any breach of duty by counsel.
IV. CONCLUSION.
Based on our de novo review of the record, for the reasons set forth above we conclude Kraklio's counsel did not adequately investigate a statute of limitations defense to the charges against Kraklio.
On Counts 4 and 5 we conclude the record is inadequate to determine whether Kraklio was prejudiced. We therefore affirm Kraklio's convictions on those counts and preserve for a possible postconviction proceeding his claims of ineffective assistance of counsel regarding those counts.
On Count 6 we conclude the record is adequate to determine whether Kraklio was prejudiced. The record demonstrates Kraklio was not prejudiced by any breach of duty by counsel. We therefore affirm his conviction on Count 6.