People v. Bolding ( 2019 )

Filed 5/1/19
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CERTIFIED FOR PARTIAL PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
THE PEOPLE,
Plaintiff and Respondent, G055187
v. (Super. Ct. No. 16CF1060)
JEDADIAH RAY BOLDING, OPINION
Defendant and Appellant.
Appeal from a judgment of the Superior Court of Orange County, Richard
M. King, Judge. Affirmed in part, reversed in part, and remanded for resentencing.
Donna L. Harris, under appointment by the Court of Appeal, for Defendant
and Appellant.
Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant
Attorney General, Julie L. Garland, Assistant Attorney General, Matthew Mulford and
Steve Oetting, Deputy Attorneys General, for Plaintiff and Respondent.
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Pursuant to California Rules of Court, rule 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of parts I.B., I.C., II., III., and IV of the
Discussion section.
INTRODUCTION
Defendant Jedadiah Ray Bolding was convicted of one count of grand theft
and eight counts of money laundering. On appeal, he challenges his money laundering
convictions, in part, on the ground that the prosecution failed to offer sufficient evidence
tracing the illegally obtained money to the monetary transactions involved in each of the
money laundering counts. We conclude there was sufficient evidence supporting
defendant’s money laundering convictions based on the language of Penal Code
section 186.10, subdivision (a), and current analogous federal law on money laundering.
Defendant relies on the single published California case that has addressed
tracing under Penal Code section 186.10, People v. Mays (2007) 148 Cal.App.4th 13(Mays). That opinion concluded that California law requires dollar for dollar tracing,
regardless of the total amount of illegally obtained money, if the illegally obtained money
is commingled with legally obtained money in a defendant’s bank account.
Mays relied on federal case law that, even when the Mays case issued, was
recognized as a minority view, and on a federal statute that has since been amended to
make clear that money is fungible and that, in tracing for purposes of money laundering,
the defendant’s gross receipts, not profits, must be considered.
We hold that, in a prosecution for money laundering under Penal Code
section 186.10, subdivision (a), when the prosecution proceeds on the theory that the
defendant conducted money laundering activities “knowing that the monetary instrument
represents the proceeds of, or is derived directly or indirectly from the proceeds of,
criminal activity,” the prosecution must demonstrate that the amount of the illegally
obtained funds equals or exceeds the amount of the monetary transaction.
Acknowledging the fungibility of money, we also hold that, whether or not the illegally
obtained funds have been commingled with legally obtained funds, the prosecution need
not prove full or dollar for dollar tracing between the illegally obtained funds and the
2
monetary transaction, as Mays held. Because the statutory basis on which Mays rested its
holding has changed, we publish our opinion to clarify the current state of the law.
In the unpublished portions of this opinion, we conclude that (1) there was
sufficient evidence of money laundering in count 25 of the operative charging document;
(2) defendant forfeited an issue regarding the jury instructions for the money laundering
counts; (3) the sentencing enhancements for white collar crime must be reversed; (4) the
trial court did not err by imposing consecutive rather than concurrent sentences on the
money laundering counts; and (5) the minute order and abstract of judgment must be
amended to reflect the correct amount of defendant’s custody credits.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
In 2006, Defendant was hired as the controller for the Brady, Vorwerck,
Ryder and Caspino law firm (the law firm). Defendant received a regular salary plus
bonuses. In 2013, defendant’s salary was between $105,000 and $110,000.
In late 2013, Pacific Mercantile Bank advised the law firm that defendant
had cashed a large number of checks from the law firm, totaling more than $468,000 over
a two-year period. When confronted by two of the law firm’s partners, defendant
responded, “No, that’s not happening,” but then admitted taking an advance against his
salary once or twice. Defendant assured the partners that he had paid back the salary
advances. Defendant said he would go to his office to get the paperwork, but
immediately left the premises. The law firm’s equity partners met and decided to
terminate defendant’s employment immediately.
Several days later, defendant met with three of the equity partners and
explained he had taken the money to help a friend or family member. When told the
partners believed he had taken $450,000, defendant responded, “I didn’t think it was that
much, but okay. I’m not going to dispute it. Can I find a way to pay you guys back?”
3
A forensic accountant identified a total of 524 unauthorized checks written
against the law firm’s payroll account that were made out to defendant, totaling
$1,115,396. The unauthorized checks had all been signed by defendant. The forensic
accountant also charted deposits into and expenditures from defendant’s personal
Wescom Credit Union account from 2007 through October 2013. In analyzing the
transactions from defendant’s credit union account, the forensic accountant identified the
following, which comprised the basis for the money laundering counts:
Count 20: August 29, 2011, cashier’s check for $8,000, payable to
Giant RV.
Count 21: November 16, 2011, electronic fund transfer of $7,769.74 to
Discover Card.
Count 22: December 1, 2011, electronic transfer of $6,000 from
defendant’s checking account to defendant’s savings account.
Count 23: December 14, 2011, cashed a check for $4,675, and
December 19, 2011, electronic transfer of $6,908.55 to Discover Card.
Count 24: December 10, 2012, electronic transfer of $6,624 for an
automated clearinghouse payment to UCS online.
Count 25: February 12, 2013, electronic transfer of $5,000 to UCS online.
Count 26: June 18, 2013, electronic transfer of $5,485.48 to
Discover Card.
Count 27: October 16, 2013, electronic transfer of $5,981.27 to
Discover Card.
Defendant testified on his own behalf, and denied stealing any money from
the law firm. When defendant needed extra money, his mother gave him money from a
family trust. Defendant testified that the law firm’s partners authorized him to receive
excess expense reimbursements for looking the other way regarding accounting
improprieties at the law firm. These reimbursements were input through the payroll
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system. A forensic accountant for the defense testified to numerous transfers from the
law firm’s client trust account to other law firm accounts, including the payroll account
and the operating account.
A jury convicted defendant of one count of grand theft (Pen. Code, § 487,
subd. (a) [count 1]), and eight counts of money laundering (id., § 186.10, subd. (a)
[counts 20 through 27]). The jury found defendant not guilty of 18 counts of fraudulently
falsifying records. (Id., §§ 470, 471 [counts 2 through 19].) The jury found true the
sentencing enhancement allegations that the conduct in counts 1 and 20 through 27
involved the taking of more than $500,000 (id., § 186.11, subd. (a)(1), (2)); that the
transactions represented by counts 20 through 27 involved more than $50,000 but less
than $150,000 (id., § 186.10, subd. (c)(1)(A)); and that the value of the property loss in
count 1 was in excess of $200,000 (id., § 12022.6, subd. (a)(2)).
The trial court sentenced defendant to 10 years in state prison: an
aggravated term of three years on count 1; a consecutive five-year term for the Penal
Code section 186.11, subdivision (a) enhancement; and a consecutive two-year term for
the Penal Code section 12022.6, subdivision (a)(2) enhancement on count 1. The court
imposed a three-year aggravated term on each of the money laundering charges, and
ordered that those sentences be served concurrently to the sentence on count 1. The
Penal Code section 186.10, subdivision (c)(1)(A) enhancements on counts 20 through 27
were stricken for purposes of sentencing. In addition to other fees and fines, the court
ordered defendant to pay $1,115,396 plus interest in restitution.
DISCUSSION
I.
SUFFICIENT EVIDENCE SUPPORTS THE MONEY LAUNDERING COUNTS.
Defendant argues that the prosecutor failed to offer sufficient evidence that
more than $5,000 alleged to have been laundered in each of counts 20 through 27 was
5
derived from the proceeds of criminal activity. We review the record in the light most
favorable to the judgment to determine whether the evidence is reasonable, credible, and
of such solid value that a reasonable trier of fact could have found defendant guilty.
(People v. Carter (2005) 36 Cal.4th 1114, 1156; People v. Davis (1995) 10 Cal.4th 463,
509.)
A.
Tracing
As is relevant to the theory pursued by the prosecutor, Penal Code
section 186.10, subdivision (a) provides: “Any person who conducts or attempts to
conduct a transaction or more than one transaction within a seven-day period involving a
monetary instrument or instruments of a total value exceeding five thousand dollars
($5,000) . . . through one or more financial institutions . . . knowing that the monetary
instrument represents the proceeds of, or is directly or indirectly from the proceeds of,
criminal activity, is guilty of the crime of money laundering.”
Defendant concedes that he engaged in monetary transactions of more than
1
$5,000 through his Wescom Credit Union account on eight occasions. Defendant
contends, however, that the prosecutor failed to establish that at least $5,000 of each of
those monetary transactions could be traced to criminal activity—the money embezzled
from the law firm by defendant—and that defendant knew that money was from an
illegitimate source. Thus, the issues for us on appeal are (1) whether the prosecution was
required to trace the embezzled money to the charged monetary transactions, and
(2) whether the prosecution did so.
1
With regard to count 25, involving a transaction alleged to be in the amount of $5,000,
as explained post in part I.B., there was evidence of additional transactions within a
seven-day period that raised the total to more than $5,000.
6
1. Mays, supra, 148 Cal.App.4th 13Mays, supra, 148 Cal.App.4th 13 was the first, and remains the only,
published case in California addressing tracing under Penal Code section 186.10. In
Mays, the defendant was convicted of pimping and money laundering. The money
laundering counts involved checks written for rent on the office through which the
defendant ran his prostitution business, rent on a residence at which the prostitutes lived,
and bills for cell phones used in the business. (Mays, supra, 148 Cal.App.4th at pp. 18,
20.) The trial court concluded that a prosecution, based on the same theory employed
here, namely that a defendant conducted “a transaction through a financial institution
with a monetary instrument of $5,000 or more based on the knowledge of criminal
proceeds theory, requires proof that (1) the defendant’s entire business was illegal, (2)
there were deposits of $5,000 or more in criminally derived funds, or (3) there was a
transfer of all funds out of the account.” (Id. at p. 32.)
Mays held that under such a theory, the prosecutor must trace the full
amount of the monetary transaction to the illegally obtained money. “[T]he statutory
language provides that the monetary instrument or instruments must be composed of at
least $5,000 of proceeds from criminal activity; that is, there must be proof that the
monetary instrument involved $5,000 of criminal proceeds; it is not sufficient merely to
show the transaction was of more than $5,000 and from an account with commingled
funds. [¶] . . . [¶] We are unpersuaded by the Attorney General’s argument that the
legislative intent for a broad definition of ‘transactions’ supports its interpretation of the
statute. In light of the words of the statute and the legislative history, the $5,000
minimum amount applies to the amount of the criminal proceeds that must be involved in
the monetary instrument(s). Therefore, it is not sufficient to show that the transaction
involved over $5,000 and some portion of this amount derived from criminal activity;
there must be a showing that at least $5,000 of the amount involved in the transaction is
related, directly or indirectly, to criminal activity. [¶] We . . . conclude a Penal Code
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section 186.10, subdivision (a) prosecution based on a defendant’s conducting a
transaction through a financial institution with a monetary instrument of $5,000 or more
based on the knowledge of criminal proceeds theory, requires proof that (1) the
defendant’s entire business was illegal, (2) there were deposits of $5,000 or more in
criminally derived funds, or (3) there was a transfer of all funds out of the account. [¶] In
this case, the prosecution proved [the defendant] had the intent to promote or facilitate
criminal activity through monetary instrument(s) of $5,000 or more, all the funds
represented criminally derived funds, there were deposits of $5,000 or more in criminally
derived funds, and there were transfers out of an account that exceeded the clean money
in the account.” (Mays, supra, 148 Cal.App.4th at pp. 31-32, fn. omitted.)
Mays, supra, 148 Cal.App.4th 13 ultimately concluded that the prosecution
had provided sufficient evidence of tracing, despite defendant’s testimony that he earned
income from other, legitimate businesses, and the evidence that a percentage of the
defendant’s customers paid only for escort services, and not for sexual services. (Id. at
pp. 33-35.) Because the defendant did not offer any evidence that his legitimate interests
generated any money, “a reasonable jury could conclude [his] music and graphic
businesses were mere hobbies, funded by his escort/prostitution business, rather than
businesses that generated profits that were deposited in the financial institutions.” (Id. at
p. 34.) Further, because the escort and prostitution businesses were “inextricably
intertwined,” the income generated from the escort services constituted the indirect
proceeds of the prostitution business—a criminal activity. (Id. at pp. 34-35.) The
opinion’s holding left open the possibility that complete tracing need not be performed if
the facts of the case permit sufficient reasonable inferences to be drawn regarding the
source of the monetary transactions.
Defendant argues that because his legitimate income (a salary of at least
$105,000 in 2013) and legitimate expense reimbursements and bonuses were deposited in
the same Wescom Credit Union account as the embezzled funds, and was sufficient to
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cover the amounts of the monetary transactions represented by counts 20 through 27,
those convictions must be reversed.
2. Analysis of Mays; Federal Court Decisions and a Change in Underlying
Federal Statute Support the Majority View that Dollar for Dollar Tracing Is Not Required
The Attorney General argues that Mays was incorrectly decided and should
not be followed by this court. To determine whether tracing was required for a Penal
Code section 186.10 violation, the court in Mays looked to the federal money laundering
statutes: sections 1956 and 1957 of title 18 of the United States Code (hereafter “section
1956” and “section 1957,” respectively), and to federal cases interpreting those statutes.
Mays concluded that the theory under which the prosecution proceeded in
that case (which is also the theory used in the present case) was comparable to a violation
of section 1957. “Section 1957 punishes a person who ‘knowingly engages or attempts
to engage in a monetary transaction in criminally derived property of a value greater than
$10,000 and is derived from specified unlawful activity.’ [Citation.] A ‘monetary
transaction’ includes a deposit or withdrawal. [Citation.] ‘“[C]riminally derived
property” means any property constituting, or derived from, proceeds obtained from a
criminal offense.’ [¶] ‘Because the recipient need not actually exchange or launder the
funds or have any specific intent to further or conceal unlawful activity, [section] 1957
potentially criminalizes seemingly “innocent” acts or commercial transactions. In
enacting [section] 1957, Congress intended to dissuade people from engaging in even
ordinary commercial transactions with people suspected to be involved in criminal
activity. However, [section] 1957 does require that the violator “knowingly” engage in a
transaction involving criminally derived property.’” (Mays, supra, 148 Cal.App.4th at
p. 24.)
While recognizing that some federal courts had concluded that no tracing
was required in a section 1957 prosecution, the Mays court relied on the holding of
U.S. v. Rutgard (9th Cir. 1997) 116 F.3d 1270 (Rutgard) regarding tracing under
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section 1957: “In sum, the Rutgard court, after noting section 1957 was a potentially
draconian law because it eliminated criminal intent, concluded that in a section 1957 case
involving commingled funds, the government could show: (1) the defendant’s entire
business was illegal; (2) a single deposit of $10,000 or more in criminally derived funds;
or (3) all the funds were transferred out of the account. The Rutgard court rejected the
theory that proof of criminally derived funds in an account creates a presumption that
those funds are involved in a later transfer from the account.” (Mays, supra, 148
Cal.App.4th at p. 28.)
We have identified two significant problems with the continued use of the
analysis of Mays. First, while never overruled, the federal case on which Mays based its
analysis, Rutgard, has been recognized as representing a “minority view” with respect to
tracing. (U.S. v. Braxtonbrown-Smith (D.C. Cir. 2002) 278 F.3d 1348, 1354.) As we
discuss, we believe the majority view is based on a sounder analysis.
The majority view, as summarized by the Fourth Circuit Court of Appeals,
is: “Money is fungible, and when funds obtained from unlawful activity have been
combined with funds from lawful activity into a single asset, the illicitly-acquired funds
and the legitimately-acquired funds (or the respective portions of the property purchased
with each) cannot be distinguished from each other [citation]; that is, they cannot be
traced to any particular source, absent resort to accepted, but arbitrary, accounting
techniques [citation]. As a consequence, it may be presumed in such circumstances, as
the language of section 1957 permits, that the transacted funds, at least up to the full
amount originally derived from crime, were the proceeds of the criminal activity or
derived from that activity. [Citations.] A requirement that the government trace each
dollar of the transaction to the criminal, as opposed to the non-criminal activity, would
allow individuals effectively to defeat prosecution for money laundering by simply
commingling legitimate funds with criminal proceeds.” (U.S. v. Moore (4th Cir. 1994)
27 F.3d 969, 976-977; see U.S. v. Silver (S.D.N.Y. 2016) 184 F.Supp.3d 33, 51-52.)
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Even before Rutgard was decided, a majority of other courts had employed
an analysis when tracing in money laundering cases recognizing that money is fungible.
As explained by the Tenth Circuit Court of Appeals: “The government had the burden of
showing that the criminally derived property used in the monetary transactions was in
fact derived from specified unlawful activity. This does not mean, however, that the
government had to show that funds withdrawn from the defendant’s account could not
possibly have come from any source other than the unlawful activity. Once proceeds of
unlawful activity have been deposited in a financial institution and have been credited to
an account, those funds cannot be traced to any particular transaction and cannot be
distinguished from any other funds deposited in the account. The ‘tainted’ funds may be
commingled with ‘untainted’ funds, with the result being simply a net credit balance in
favor of the depositor. The credit balance gives the depositor a claim against the bank
and allows him to withdraw funds to the extent of the credit. In the context of a
withdrawal, the portion of § 1957 requiring a showing that the proceeds were in fact
‘derived from specified unlawful activity’ could not have been intended as a requirement
that the government prove that no ‘untainted’ funds were deposited along with the
unlawful proceeds. [Citation.] Such an interpretation would allow individuals to avoid
prosecution simply by commingling legitimate funds with proceeds of crime. [Citation.]
This would defeat the very purpose of the money-laundering statutes.” (U.S. v. Johnson
(10th Cir. 1992) 971 F.2d 562, 570.)
Second, since both Rutgard and Mays were decided, section 1957 has been
amended to include a definition of “proceeds.” In U.S. v. Santos (2008) 553 U.S. 507,
the Supreme Court held that the word “proceeds” in section 1956 was ambiguous and
could mean profits or receipts. (U.S. v. Santos, supra, 553 U.S. at p. 511.) Under the rule
of lenity, the court interpreted proceeds as meaning profits because to trace the money
laundering transaction to the defendant’s profits would require more from the prosecution
in order to obtain a conviction. (Id. at pp. 513-514.)
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In 2009, Congress amended section 1956 to add a definition of proceeds as
“any property derived from or obtained or retained, directly or indirectly, through some
form of unlawful activity, including the gross receipts of such activity.” (§ 1956(c)(9),
italics added.) Section 1957 incorporates the definition of proceeds from section 1956.
(§ 1957(f)(3).)
We hold that, when a defendant is charged with money laundering
“knowing that the monetary instrument represents the proceeds of, or is derived directly
or indirectly from the proceeds of, criminal activity,” the prosecution must demonstrate
that the amount of the illegally obtained funds equals or exceeds the amount of the
monetary transaction, whether or not the illegally obtained funds have been commingled
with legally obtained funds. (Pen. Code, § 186.10, subd. (a).) The prosecution need not
trace every illegal dollar to the monetary instrument. In this case, there was sufficient
evidence that the amount of money defendant embezzled from the law firm and placed in
his Wescom Credit Union account was greater than the amount of the monetary
transactions charged in the money laundering counts. Therefore, defendant’s convictions
for money laundering must be affirmed.
B.
There Was Sufficient Evidence of a Monetary Transaction Exceeding $5,000 for the
Count 25 Money Laundering Conviction.
Defendant argues the conviction for money laundering in count 25 must be
reversed because the money laundering statute requires proof of a transaction exceeding
$5,000, while the prosecutor proved a transaction in the exact amount of $5,000. We
conclude that there was sufficient evidence supporting the conviction on count 25.
Although the summary exhibit prepared by the prosecutor referred only to a
$5,000 electronic transfer to UCS on February 12, 2013 in support of count 25, evidence
established that defendant made withdrawals totaling more than $5,000 within the
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statutorily permitted seven-day period. Specifically, in addition to the $5,000 electronic
transfer on February 12, defendant made ATM withdrawals, online payments, and debit
card purchases from the same Wescom Credit Union account between February 13 and
2
February 15.
This issue was first identified by the jury during deliberations. After
confirming that one transaction of $5,000 would not violate the money laundering statute,
the jury sent the following note to the court: “The district attorney presented us with a
summary sheet listing Mr. Bolding’s transactions on or about February 12, 2013 as one
$5000 disbursal. However, the detailed bank statement for count 25 has withdrawals
totaling more than $5000 within a 7-day period. Should we rely on the summary or the
bank statement detail?”
The court instructed the jury: “Certain charts and summaries have been
admitted in evidence. Charts and summaries are only as good as the underlying
supporting material. You should, therefore, give them only such weight as you think the
underlying material deserves.” Defendant’s trial counsel agreed this was an “accurate
statement of the law” and the defense was therefore “fine” with giving it to the jury.
C.
Defendant Forfeited the Issue of the Jury Instruction Regarding the Money Laundering
Counts; in any Event, the Instruction Is Correct.
The trial court instructed the jury with CALCRIM No. 2997, in relevant
part, as follows: “The defendant is charged in Counts 20 through 27 with money
laundering in violation of Penal Code section 186.10. [¶] To prove that the defendant is
guilty of this crime, the People must prove that: [¶] 1. The defendant conducted one or
more financial transactions involving at least one monetary instrument through at least
2
Defendant did not address this issue in his appellate reply brief.
13
one financial institution; [¶] 2A. The defendant conducted the financial transactions
within a seven-day period and the monetary instruments involved had a total value of
more than $5,000; [¶] and [¶] 3A. The defendant knew that the monetary instruments
represented the proceeds of criminal activity or were derived directly or indirectly from
the proceeds of criminal activity.”
Defendant argues that the instruction was incorrect because it failed to
instruct the jury that “at least $5,000 of the amount involved in the transaction is related,
directly or indirectly, to criminal activity.” (Mays, supra, 148 Cal.App.4th at p. 31.)
The Attorney General argues that defendant forfeited the right to challenge
3
the instruction on appeal. Defendant did not object to the instruction at trial or request
that the trial court modify it in any way. (People v. Lee (2011) 51 Cal.4th 620, 638 [“A
trial court has no sua sponte duty to revise or improve upon an accurate statement of law
without a request from counsel [citation], and failure to request clarification of an
otherwise correct instruction forfeits the claim of error for purposes of appeal”]; People v.
Hudson (2006) 38 Cal.4th 1002, 1012 [“‘[A] party may not complain on appeal that an
instruction correct in law and responsive to the evidence was too general or incomplete
unless the party has requested appropriate clarifying or amplifying language’”].)
In Mays, the appellate court concluded that the language of Penal Code
section 186.10, subdivision (a) is “sufficient to instruct the jury as to the elements of the
offense.” (148 Cal.App.4th at p. 36.) Defendant concedes in his appellate reply brief
(albeit in connection with his argument regarding the white collar crime enhancement)
that CALCRIM No. 2997 “mirrors the elements of the offense set forth in Penal Code
section 186.10, subdivision (a). Nothing in either the statute or the jury instruction
requires a finding that the minimum $5,000 monetary transaction be derived from
criminal activity resulting from fraud or embezzlement.”
3
Defendant did not address this argument in his appellate reply brief.
14
Because the pattern jury instruction correctly sets forth all of the elements
of the crime, and defendant did not request any modification of the pattern instruction, his
challenge on appeal has been forfeited.
II.
THE WHITE COLLAR CRIME ENHANCEMENT UNDER PENAL CODE SECTION 186.11,
SUBDIVISION (A) MUST BE REVERSED.
The jury found true the white collar crime enhancement alleged against
defendant. Penal Code section 186.11, subdivision (a) provides, in relevant part:
“(1) Any person who commits two or more related felonies, a material element of which
is fraud or embezzlement, which involve a pattern of related felony conduct, and the
pattern of related felony conduct involves the taking of, or results in the loss by another
person or entity of, more than one hundred thousand dollars ($100,000), shall be
punished, upon conviction of two or more felonies in a single criminal proceeding, in
addition and consecutive to the punishment prescribed for the felony offenses of which
he or she has been convicted, by an additional term of imprisonment in the state
prison . . . . This enhancement shall be known as the aggravated white collar crime
enhancement. . . . For purposes of this section, ‘pattern of related felony conduct’ means
engaging in at least two felonies that have the same or similar purpose, result, principals,
victims, or methods of commission, or are otherwise interrelated by distinguishing
characteristics, and that are not isolated events. . . . [¶] (2) If the pattern of related felony
conduct involves the taking of, or results in the loss by another person or entity of, more
than five hundred thousand dollars ($500,000), the additional term of punishment shall be
two, three, or five years in the state prison.” (Italics added.)
Neither fraud nor embezzlement is a material element of Penal Code
section 186.10, which criminalizes money laundering. Fraud was a material element of
the charges of falsifying records, but the jury found defendant not guilty of all of those
15
charges. (Pen. Code, § 471.) Embezzlement was a material element of the crime of
grand theft, but because that was charged as a single felony, the white collar crime
enhancement could not be imposed unless defendant was convicted of another relevant
felony.
The Attorney General argues that because the theft of money from the law
firm was based on a theory of embezzlement, the money laundering counts necessarily
required proof of embezzlement. Nothing in the money laundering statute permits, much
less requires, the addition of elements of other crimes to the elements of money
laundering.
The Attorney General also argues that “money laundering intrinsically
involves a fraud against society in general.” That may be true, but committing the crime
4
of money laundering does not require proof of fraud on the part of the defendant.
The sentencing enhancement imposed pursuant to Penal Code section
186.11, subdivision (a) is reversed.
III.
THE TRIAL COURT DID NOT IMPROPERLY IMPOSE CONSECUTIVE SENTENCES.
Defendant argues that the trial court erred in imposing consecutive
sentences for counts 20 through 27 in violation of Penal Code section 654 because those
crimes resulted from a single, indivisible course of conduct to accomplish a single
objective.
Penal Code section 186.10 explicitly excludes its provisions from
section 654: “Notwithstanding any other law, for purposes of this section, each
4
Defendant argues that the minute order and abstract of judgment must be corrected to
reflect that the white collar crime enhancement was imposed once for all money
laundering counts. Penal Code section 186.11, subdivision (a) permits the trial court to
impose the sentencing enhancement once in a case. Our holding that the white collar
crime sentencing enhancement must be reversed moots this issue.
16
individual transaction conducted in excess of five thousand dollars ($5,000), [or] each
series of transactions conducted within a seven-day period that total in excess of five
thousand dollars ($5,000), . . . shall constitute a separate, punishable offense.”
(Pen. Code, § 186.10, subd. (b), italics added.)
“It is assumed that the Legislature has in mind existing laws when it passes
a statute.” (Estate of McDill (1975) 14 Cal.3d 831, 837.) Here, in enacting Penal Code
section 186.10, it is presumed that the Legislature was familiar with Penal Code
section 654. The California Supreme Court has recognized that the Legislature has the
power to override section 654 in specific circumstances and that it need not specifically
cite section 654 to do so. (See People v. Benson (1998) 18 Cal.4th 24, 32-33.) When the
language of a criminal statute provides that “[f]or purposes of prosecution under this
section, each act . . . shall be considered a separately punishable offense,” that statute is
excluded from the provisions of Penal Code section 654. (People v. Gangemi (1993) 13
Cal.App.4th 1790, 1800, citing Pen. Code, § 115, subd. (d).) Based on the plain language
of Penal Code section 186.10, subdivision (b), defendant’s convictions pursuant to Penal
Code section 186.10, subdivision (a) were not subject to the prohibition of multiple
punishment under Penal Code section 654.
IV.
DEFENDANT’S PRESENTENCE CUSTODY CREDITS MUST BE CORRECTED.
Defendant argues, and the Attorney General agrees, that defendant is
entitled to two additional days of presentence custody credit. The trial court did not
count the day defendant was taken into custody when determining his actual custody, and
thus when determining his conduct credit under Penal Code section 4019.
Defendant was taken into custody on April 21, 2016, and sentenced on
June 2, 2017. Defendant was entitled to 408 actual credit days and 408 conduct credit
17
days. We will direct the trial court to correct the minute order and the abstract of
judgment to reflect 816 total days of presentence credit.
DISPOSITION
The white collar crime sentencing enhancement under Penal Code section
186.11, subdivision (a) is reversed. In all other respects, the judgment is affirmed.
We remand the matter for resentencing consistent with this opinion. We
direct the trial court to correct the minute order, and to prepare an amended abstract of
judgment and forward a copy to the Department of Corrections and Rehabilitation.
FYBEL, J.
WE CONCUR:
O’LEARY, P. J.
IKOLA, J.
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