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State v. Krause

Supreme Court of South Dakota

April 12, 2017

STATE OF SOUTH DAKOTA, Plaintiff and Appellee,
v.
RYAN ALAN KRAUSE, Defendant and Appellant. STATE OF SOUTH DAKOTA, Plaintiff and Appellee,
v.
BRIAN MICHAEL KRAUSE, Defendant and Appellant,

          ARGUED OCTOBER 5, 2016

         APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT GRANT COUNTY, SOUTH DAKOTA THE HONORABLE VINCENT A. FOLEY Judge

          MARTY JACKLEY Attorney General KIRSTEN E. JASPER Assistant Attorney General Pierre, South Dakota Attorneys for plaintiff and appellee.

          CHAD C. NELSON Milbank, South Dakota Attorney for defendants and appellants.

          GILBERTSON, Chief Justice

         [¶1.] Twin brothers Ryan Alan Krause and Brian Michael Krause appeal the circuit court's imposition of four consecutive, two-year sentences on each brother for multiple convictions of unlawfully using a computer system. The Krauses first argue their sentences violate the Eighth Amendment's prohibition against cruel and unusual punishment. They also argue the circuit court erred by deviating from presumptive sentences of probation for these offenses and in failing to state the aggravating circumstances justifying such deviation. We affirm.

         Facts and Procedural History

         [¶2.] In 2014, the Krauses were both employed in information-technology positions in Milbank. Brian worked for Valley Queen Cheese, and Ryan worked for Big Stone Therapies. Valley Queen Cheese had contracted with the Xerox Company to supply toner cartridges. Under the agreement, Xerox maintained ownership of a cartridge even while it was in Valley Queen Cheese's possession. In order to protect its property interest in leased cartridges, Xerox maintains a security division that monitors the internet for the sale of such consumables.

         [¶3.] In January 2014, Xerox's security division discovered some of its toner cartridges posted for sale on the internet. The cartridges had been assigned to Valley Queen Cheese and were offered for sale by someone using the email address Brian.Krause1@html.com. Xerox purchased the cartridges and made similar purchases from the same seller in April 2014. Afterward, the seller offered to sell Xerox additional property worth $5, 800 for the price of only $600. After this exchange, Xerox notified the Milbank Police Department.

         [¶4.] The subsequent investigation uncovered a scheme in which the Krauses stole equipment from both Valley Queen Cheese and Big Stone Therapies and sold it on the internet. An internal investigation conducted by Valley Queen Cheese revealed that approximately $180, 000 in equipment had been stolen by the Krauses. The stolen equipment included: toner, toner cartridges, computers, computer monitors, printers, phones, electronic equipment, and other miscellaneous items of inventory. The Krauses had also taken additional electronics from Big Stone Therapies.

         [¶5.] In addition to stealing company property, the Krauses also accessed sensitive and private information. On December 27, 2013, the Krauses accessed the restricted database of Valley Queen Cheese's accounting department and copied the 2013 payroll statement, which included the ID numbers, salaries, benefits, accrued leave, bonus payments, mailing addresses, and bank-account numbers of its employees. On July 1, 2014, Brian accessed the email account of the chief financial officer (CFO) and copied an email containing a local businessman's development-loan application, which included the businessman's taxpayer ID number, social security number, underwriting documents, personal financial statement, and business financial statement. On July 23, 2013, Brian accessed the CFO's personal files and copied the personal financial statements of the CFO and the chief executive officer. On May 31, 2013, and February 12, 2014, Brian accessed the CFO's and IT administrator's email accounts and used their information to access the CFO's and administrator's online banking records. In each of the foregoing instances, Brian shared and discussed the information he accessed with Ryan.

         [¶6.] On July 10, 2015, the Krauses entered into identical plea agreements with the State. The Krauses agreed to pay restitution to Valley Queen Cheese and Big Stone Therapies in the amount of $80, 000 and to sign over the title to a jointly owned pontoon boat. In exchange, the State agreed to limit charges to one count each of grand theft for the property taken and four counts each of unlawfully using a computer system. The State also agreed to recommend that the sentences for unlawfully using a computer system run concurrent with the sentence for grand theft. Pursuant to these agreements, the State filed separate complaints against the Krauses on July 14. Each complaint alleged one count of grand theft under SDCL 22-30A-1 and four counts of unlawfully using a computer under SDCL 43-43B-1(2).

         [¶7.] The Krauses entered guilty pleas to all charges on July 20, 2015, and the circuit court sentenced them on September 15, 2015. Focusing on punishment and deterrence, the circuit court sentenced each of the Krauses to four years imprisonment for grand theft. The court also sentenced the Krauses to two years imprisonment for each count of ...


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