People v. DeVaughn CA4/2 , 227 Cal. App. 4th 1092 ( 2014 )

Filed 6/18/14 P. v. DeVaughn CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE,
Plaintiff and Respondent, E052088
v. (Super.Ct.Nos. RIF132760 &
RIF148262)
ANTHONY M. DEVAUGHN,
OPINION
Defendant and Appellant.
THE PEOPLE,
Plaintiff and Respondent, E056252
v. (Super.Ct.Nos. RIF132760 &
RIF148262)
STEPFON MACEY,
Defendant and Appellant.
THE PEOPLE,
Plaintiff and Respondent, E053067
v. (Super.Ct.Nos. RIF132760 &
RIF148262)
MICHAEL OWEN DEVAUGHN,
Defendant and Appellant.
1
APPEAL from the Superior Court of Riverside County. Elisabeth Sichel and
Stephen Sillman, Judges.1 Affirmed in part; reversed in part; remanded with directions.
Joanna Rehm, under appointment by the Court of Appeal, for Defendant and
Appellant Anthony M. DeVaughn.
Cynthia M. Jones, under appointment by the Court of Appeal, for Defendant and
Appellant Stepfon Macey.
Mary Woodward Wells, under appointment by the Court of Appeal, for Defendant
and Appellant Michael DeVaughn.
Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney
General, Julie L. Garland, Assistant Attorney General, James Dutton and Barry J.
Carlton, Deputy Attorneys General, for Plaintiff and Respondent.
A jury convicted defendant Michael DeVaughn (Michael) of 16 counts of identity
theft (Pen. Code, § 530.5, subd. (a)),2 nine counts of money laundering (§ 186.10, subd.
(a)), two of which involved sums greater than $50,000 and less than $150,000 (§ 186.10,
subd. (c)(1)(a)), two counts of causing a false financial document to be filed (§ 532a,
subd. (1)), four counts of operating an unlicensed escrow agent (Fin. Code, § 17200),
three counts of recording a false document (§ 115), six counts of grand theft (§ 487, subd.
(a)) and two counts of elder abuse (§ 368, subd. (d))—seven of the latter three crimes
1 The Honorable Elisabeth Sichel was the sentencing judge for both Michael
DeVaughn and Anthony DeVaughn and the Honorable Stephen Sillman was the
sentencing judge for Stepfon Macey.
2 All further statutory references are to the Penal Code unless otherwise indicated.
2
involving sums in excess of $150,000 (§ 112022.6, subd. (a)(2)). The jury further found
that Michael had committed more than one felony, an element of which was fraud or
embezzlement, involving sums in excess of $500,000 (§ 186.11, subd. (a)(2)). The same
jury convicted Stepfon Macey (Macey) of two counts each of money laundering and
possession of a firearm by an ex-felon (§ 12021, subd. (a)(1)) and one count of
possession of ammunition by an ex-felon (§ 12316, subd. (b)(1)).3 In bifurcated
proceedings, the trial court found Macey had suffered four strike priors (§ 667, subds. (c)
& (e)(2)(a)), three of which were later stricken. Although all three defendants were tried
together, Anthony DeVaughn, Michael’s younger brother (Anthony) had a jury different
from the one that determined the guilt of Michael and Macey. Anthony’s jury convicted
him of four counts of money laundering. Michael was sentenced to prison for 33 years, 4
months, Macey to 14 years and Anthony to 3 years, 4 months. They appeal, making
various claims, some of which we accept, some of which we reject. We, therefore, affirm
some of the convictions, reverse others, reverse an enhancement finding, stay some of the
terms imposed, direct the trial court to correct credits awarded to Anthony, to resentence
him and Macey and to recalculate Michael’s sentence in light of the conclusions drawn in
this opinion.
3 The jury hung on charges of possession of cocaine for sale and two counts of
possession of a firearm by an ex-felon, and a subsequent jury convicted Macey of simple
possession of cocaine (Health & Saf. Code, § 11350) and one of the firearm counts.
3
FACTS
It would try the patience of any reader to recount all the evidence supporting all
the charges of which defendants were convicted. Therefore, enough of the evidence to
give the reader a flavor of what occurred follows.
In August 2005, Michael, representing himself to be “Larry Perry” of Fidelity
Escrow, leased an office in Riverside. In March 2006, with the rent on the office
overdue, Macey, who represented himself as an associate of “Larry Perry’s” appeared at
the office and brought the rent up to date with cash, after “Larry Perry” said by phone
that this was alright.
In the fall of 2005, a woman claiming to be Barbara Karr of Banning, California,
contacted a real estate broker in Inglewood, California and asked him to represent her in
making an offer on a home in Ontario, California that had been listed for sale.
Thereafter, the broker received documents from Fidelity Escrow at the Riverside address
identifying it as the escrow holder for the purchase by Barbara Karr, with “Larry Perry”
as the escrow officer. After encountering questionable circumstances in connection with
the loan,4 the broker tracked down the real Barbara Karr, who told him that she was not
in the process of purchasing the Ontario property. However, this did not occur until after
escrow was opened with “Larry Perry” at Fidelity, and the owners of the Ontario property
4 This included discovering a letter suggesting that Barbara Karr, at the Alhambra
Lane, Perris property (see below) had attempted to get a loan from a company and had
run into problems with credit.
4
had signed a grant deed to Barbara Karr, which their agent sent to Fidelity at its Riverside
office in December 2005. The Ontario property sellers filed a quiet title action to protect
their right to the property on December 13, 2005. In November 2005, a “Tony Sanchez,”
at what he said was “Inland Mortgage,” at the same address in Riverside as Fidelity, had
contacted a mortgage broker about “Barbara Karr” borrowing the money for the purchase
of the Ontario property. Documents submitted by “Barbara Karr” in order to obtain the
loan had shown her address to be the Alhambra Lane, Perris property5 and had contained
other false information. Although the mortgage broker had found a lender for this
transaction, the $275,000 loan had not closed because the mortgage broker had been
informed of the quiet title action. Michael later admitted to the case agent that Jackie
Marshall, a former business associate of Michael’s, had posed as Barbara Karr. When
Jackie Marshall had signed the loan documents for the Ontario property, she had
identified herself with a California Driver’s License that contained the California
Driver’s License of another person. This person did not know Michael, “Larry Perry,”
Jackie Marshall or Barbara Karr and did not authorize any of them to use his driver’s
license number.
The same “Tony Sanchez” who had approached the mortgage broker for the loan
on the Ontario property also asked for two loans on property owned by C.L. and Fannie
Middleton in Los Angeles. The loan application contained false information and Michael
5 See footnote 4, infra.
5
used his mother and a former neighbor of Macey’s, who lived at the Alhambra Lane,
Perris property, to pose as the Middletons on December 1, 2005, to sign the loan
documents for both loans. Fannie Middleton testified at trial that she did not authorize
anyone to take out loans on her properties. Macey’s former neighbor used a driver’s
license bearing the California Driver’s License number of a woman who did not know
C.L. Middleton, “Larry Perry,” Fidelity, any of the defendants, Macey’s former neighbor,
Michael’s mother or Fannie Middleton, and had not authorized any of them to use her
driver’s license number. The mortgage broker decided not to fund a loan on the
Middleton’s 43rd Street, Los Angeles, rental, but did fund a $161,000 loan on their 46th
Street, Los Angeles, home. According to the escrow instruction, the loan proceeds were
to be wired to an account at Washington Mutual Bank, ending in 701, which belonged to
“Larry Perry” doing business as Fidelity Escrow. This wire transfer was the first activity
in this account, which had been opened on November 3, 2005. Subsequently, on
December 14th, 15th and 19th, checks were written on this account to Deals Market in
South Carolina for $30,000, a market owned and operated by Michael and Anthony, to A
Squared Management for $10,000, which Anthony later admitted he owned and was a
“shell company,” to Hi-Tek-N-Effect for $10,000, to Macey and to Fannie Holloway, the
niece of Fannie Middleton. There was no activity in this account after February 6, 2006.
The people who had funded this loan eventually were reimbursed by the title insurance
company. Michael admitted to the case agent that he had orchestrated the successful
loan. No funds from this loan, however, went to either of the Middletons.
6
In 2006, “Inland Mortage” contacted Crawford Investments, a hard money lender
about a $210,000 loan by the Middletons on their 43rd street rental property. On
February 8, 2006, Michael’s mother and Macey’s former neighbor, posing as the
Middletons, signed the loan documents and the deed of trust. The name and license
number of a female real estate agent, purported to be representing “Inland” but was, in
fact, unconnected with the transaction, was placed on the brokers’ agreement between
“Inland” and her signature was forged on it. The loan closed on March 16, 2006. The
title company eventually reimbursed Crawford for the loan. Of the loan proceeds,
$153,618.79 was wired to Fidelity per the instructions of “the Middletons” to Fidelity.
The account into which the money was wired at Washington Mutual, ending in 296, had
been opened by “Larry Perry doing business as Fidelity Escrow” on March 14, 2006,
using the California Driver’s License number of an Orange County school teacher. On
March 16 and 17, 2006, two checks, each for $60,000, made out to Larry Perry from this
account, were cashed. Cashier’s checks totaling almost $50,000 were also given to
Macey’s business.
The evidence concerning the transactions dealing with the Alhambra Lane, Perris
property is conflicting and confusing and need not be recounted here, except to say that it
was similar to what had occurred with the Ontario property and the Middletons’
properties.
Michael unsuccessfully approached an acquaintance that lived in Alabama about
going into business with him. Eventually, Michael’s business associate in Alabama put
7
Michael in touch with his nephew’s girlfriend, Felisha Poole. Through his business
associate in Alabama, Michael directed Felisha, in June 2006, to get a business license
and set up three bank accounts at three different banks in the area for three different
entities. The name of one of the companies was identical to the name of a legitimate
company in California that serviced loans. Poole was told that she would get $500 every
time she took money out of these accounts. Proceeds from loans on the Alhambra Lane,
Perris property, totaling $85,342 and $334,538 were deposited into one of these accounts.
A check was written to Deal’s Market on that account, as were checks for $7,880 and
$72,000 (made out to cash), in addition to cash withdrawals totaling $42,000, all during
June 2006. Cashier’s checks in five figure amounts were made out in June 2006, to
Michael and to various entities established and controlled by Anthony and Macey from
the money withdrawn from this account. Similar transactions took place in the other two
accounts.
More facts will be disclosed in connection with the issues discussed below.
ISSUES AND DISCUSSION
1. Insufficiency of the Evidence
a. Count 33
1. Source of Funds for Instrument and Intent When Instrument was Negotiated
Michael and Anthony contend that there is insufficient evidence to support their
convictions for money laundering under count 33, which involves a check written on
Fidelity Escrow’s Washington Mutual Account, ending in 296, made out to A Squared
8
Management Corp., which Anthony deposited into the account of A Squared
Management on April 20, 2006, but which deposit was reversed at the direction of the
bank’s investigator, because the evidence was insufficient to support a finding of the
requisite source of the funds or the intent when the check was negotiated. However,
because the People concede that this check was not a “monetary instrument” within the
meaning of section 186.9, subdivision (d) (see below), as required by the prohibition on
money laundering (§ 186.10, subd. (a)), and, therefore, we must reverse the convictions
for this count, we need not address this issue.
2. “Monetary Instrument”
Section 186.10 prohibits the conducting or attempting to conduct a transaction
“involving a monetary instrument” with a particular specific intent or knowledge.
Section 186.9, subdivision (d) excludes from the definition of a “monetary instrument”
“personal checks which have been endorsed by the named party and deposited by the
named party into the named party’s account with a financial institution.” The People
concede that the above-mentioned check was a personal check which was “deposited by
the payee into the payee’s bank account.” Therefore, Michael’s and Anthony’s
convictions for this count must be reversed.6
6 Because of this, we need not address defendants’ contention that their
convictions of this count must be reversed for jury instruction error, nor Anthony’s
argument that count 18 must be reversed for insufficiency of the evidence on another
basis.
9
b. Counts 18, 19 and 20
For the same reason as explained above, the People concede that Michael’s
convictions for money laundering as to counts 18, 19 and 20, Anthony’s for counts 18
and 19 and Macey’s for count 20 must be reversed. All three involved personal checks
written on the Washington Mutual account of Larry Perry, DBA Fidelity Escrow
Company, ending in 701, made out to Deal’s Market, A Squared Management and Hi-
Tek-N-Effect, respectively, which were endorsed for deposit into the bank accounts for
each entity.7
c. Count 21
Section 186.9, subdivision (d) also excludes from the definition of “monetary
instrument” “any personal check made payable to the order of a named party which have
not been endorsed . . . .” Count 21 involved two checks made out to Macey from Fidelity
Escrow’s Washington Mutual Account, ending in 701, totaling $6,500, both of which
were endorsed by Macey, then by a liquor store and deposited into its account. The
People concede that Michael’s and Macey’s conviction for this count must be reversed.
d. Counts 44 and 45
1. Michael
The Second Amended Information charged, as to count 44, that Michael and
Anthony committed money laundering in that “on or about June 22, 2006, in the County
7 Because of this, we need not address defendants’ contention that their
convictions of these counts must be reversed for jury instruction error.
10
of Riverside, [t]he[y] did . . . conduct a transaction . . . , to wit: Wachovia
Check . . . [ending in] 3546 to the order of ‘A’ Squared Mgmt. for . . . $20,799.40 . . . ”
As to count 45, the same document stated that Michael committed money laundering, “on
or about June 22, 2006 in the County of Riverside . . . [by] conduct[ing] a
transaction . . . to wit: Wachovia Check . . . [ending in] 3547 to the order of Hi-Tek
Enterprises for . . . $30,022.76 . . . .” During her testimony, Felisha Poole stated that she
opened an account at Wachovia Bank in Alabama for American Services Company,
depositing into it the $85,342 and $334,538 checks written to that company for the loan
on the Alhambra Lane, Perris property. She testified that during June, she made
withdrawals from this account for, inter alia, $8,500, $10,000, $5,000, and $28,500 and
she obtained cashier’s checks based on the money that was withdrawn. She also testified
that she “did” cashier’s checks to A Squared Management on June 22, 2006 for
$20,799.40 from American Service Company and one to Hi-Tek Enterprises with
American Service Company as the “remitter” on June 22, 2006, for $30,022.76, the latter
of which was endorsed by Macey, Hi-Tek Enterprises. She admitted that she took a lot of
cash out of the Wachovia account, and with that cash she obtained a lot of cashier’s
checks. Macey testified that the check made out to Hi-Tek Enterprises was from Michael
for Macey, for Michael and an investor from Syria to open a car wash, however, payment
was stopped on the check and it was eventually found by the police in the Riverwalk
11
home (discussed infra). Copies of the front and back of these checks were admitted into
evidence.8 The back of the cashier’s check made out to A Squared Management bears
the endorsement, “Pay to the Order of Bank of America[,] Los Angeles, . . . For Deposit
Only[,] A Squared Management” followed by an account number. It had been
negotiated. The check made out to Hi-Tek Enterprises had been endorsed by Macey,
with the words “Hi Tek Enterprises” printed below his signature, the account number for
his Bancomer account below that and it had also been negotiated. On a copy of the same
check, which had been found at the Riverwalk house, were stamped the words, “Payment
stopped.” A check on Macey’s Bancomer account showed that that account was located
at a branch of Bancomer located in Perris, California.
The jury was instructed that in order for the defendants to be guilty of money
laundering, they had to conduct a financial transaction at “any national bank or banking
institution located or doing business in the State of California.”
During opening argument to the jury, the prosecutor said of count 44, “[W]e’re
talking about the Robert Peters’ loan and the proceeds from the WMC Stewart Title File.
. . . I’ve . . . taken the A[merican] S[ervice] C[ompany] account and put on the side the
different counts and checks that you can point to. . . . [¶] . . . [¶] . . . Count 44 is
8 Although he cites to portions of the record that did not take place in the presence
of the jury, at side bars, the trial court noted that the check made out to A Squared
Management bore clearinghouse stamps stating that it had been deposited into the Bank
of America in Los Angeles and Macey’s Bankcomer Bank account was located in Perris,
California.
12
Michael and Anthony regarding A-Squared Management check for [$]20,749.40. . . .
Count 45 is Michael . . . regarding a check to Hi-Tek Enterprises for $30,000.22.[9] That
same check is found in . . . Macey’s home at . . . Riverwalk with a stamp over it, stop
payment or payment stopped.” However, during closing argument, the prosecutor said of
the money laundering charges, “If we could develop a trail of financial institutions all in
California, we could have charged [Anthony] for every deposit, withdrawal, deposit,
withdrawal. . . . It doesn’t matter if you get to keep it.” As to the money laundering
charged in Count 18, the prosecutor said, “ . . . I showed you . . . Exhibit 112. It is a
withdrawal out of a bank, Washington Mutual, located in the State of California. . . . [¶]
. . . Count 18 will show a check written out of Deal’s Market out of Washing[ton]
Mutual, the [S]tate of California.” The prosecutor then turned to counts 44 and 45, and
said, “[I]f you look at the bank statement [for American Service Corporation at Wachovia
Bank] you’ll see that the only money that came in to here is the money they got from
Stewart Title from the Robert Peters transaction. Every check written out here that
Felisha Poole wrote . . . came out of that account from ill-gotten gains. [¶] [The first
check was] written to Deal’s Market. And it is out of Wachovia. And we did not
introduce any evidence. I believe the evidence would have shown Wachovia doesn’t do
business in the State of California at that time, but that wasn’t presented. So we had to
think of something a little bit more creative to explain that it actually came out of the
9 See footnote 4, ante, page 4.
13
State of California, because we have to meet those elements. [¶] . . . [¶]
. . . [T]his . . . check, . . . which goes to Count 44, this one goes to A-Squared
Management. . . . Same issue about Wachovia, whether Wachovia was a bank in the
State of California. What you have to do is make sure that some part of the transaction
actually occurred in the State of California. That is what gives us jurisdiction. [¶] So
fortunately for us the stamp shows pay to the order of Bank of America, Los Angeles,
California, for deposit only, A-Squared Management. And that is all we need to know.
[¶] Count 45 has to do with Hi-Tek.”
Michael here asserts that the jury was presented with alternative factual bases for
his guilt of both counts, one of which was legally inadequate. Specifically, he contends
that the jury could have convicted him of counts 44 and 45 on the basis of Felisha Poole’s
purchase of the cashier’s checks at Wachovia Bank or on the deposit of those checks into
accounts at California banks. The problem with the first theory is that, as the jury here
was instructed, the financial institution involved must do business in the State of
California (§ 186.9, subd. (b)) and there was no evidence that Wachovia did business in
California.
The People assert that because the jury was instructed that the financial institution
must do business in California, in order to convict Michael of these counts, it necessarily
based its verdicts on the depositing of these checks into Anthony’s and Macey’s
California banks. Indeed, in his closing argument to the jury, the prosecutor specifically
addressed the necessity of the jury finding that the transaction took place at a bank in
14
California and he suggested that depositing the checks, which are the subject of these
counts, into accounts at California banks fulfilled that requirement. Therefore, we reject
Michael’s contention that the jury could have based its verdicts for these counts on the
obtaining of the cashier’s checks by Felisha Poole at Wachovia Bank.
2. Anthony
Anthony asserts that there is insufficient evidence that he was involved in the
depositing of the cashier’s check into A Squared’s Bank of America account, therefore,
his conviction of count 44 must be reversed. We disagree.
Michael’s business associate in Alabama testified that Michael called him and told
him that he would be receiving a package from Felisha Poole, which the man was to mail
to Deal’s Market, which he did. He also testified that Anthony ran Deal’s Market.
Felisha Poole testified that she gave the cashier’s checks she purchased, including the one
made out to A Squared Management, to the above-mentioned business associate.
Anthony told the case agent that he owned A Squared Management and it was a shell
company. A copy of the articles of incorporation for A Squared were introduced into
evidence. A document dated May 11, 2005, shows Anthony to be the director and the
articles list a B. Moon. In an interview with the case agent, Anthony admitted receiving
stolen money from Michael He admitted that he purchased Deals Market and other retail
stores in the same vicinity for $175,000, which money came from A Squared
Management. He told the case agent that he formed A Squared Management, that it was
supposed to be a holding company or a parent company and it owned other businesses of
15
his, but that it was fake. He also admitted pumping “quite a bit of money” through A
Squared and moving stolen money for Michael. At trial, Anthony admitted starting A
Squared Management and incorporating it. He said he was the Chief Financial Officer,
he owned all its shares and the bulk of its income came from Michael. On the stand,
Anthony first refused to disclose any information about B. Moon, then denied having any
information about him. Anthony admitted opening bank accounts at Washington Mutual
for A Squared Management, for which he was the signatory. One of the accounts
received, in its first month, electronic deposits totaling $250,000, from Michael, using the
name “Ron Bartlett” at “Inner City Escrow” and $60,000 the following month, and two
electronic transfers of a total of $105,000 were made into the other. In April 2006, he
received a check for $31,900 made out to A Squared Management from Larry Perry at
Fidelilty Escrow. He admitted that A Squared was “the funneling agent” for these
monies. Anthony testified that “he had” four bank accounts for A Squared—including
one at Bank of America. He said that when he received money from his customer,
Brittany Spears, “[s]ometimes I had it go into both” “[the bank account of] A Squared
Management or . . . [another of his companies].” No one other than Anthony was
mentioned by any witness as having a connection with A Squared or conducting any of
its banking business.
The foregoing constitutes sufficient evidence that Anthony either personally
deposited the check into A Squared’s Bank of America account or directed the deposit.
16
e. Enhancement on Count 27
Count 27, a conviction against Michael for recording a false or forged document,
pursuant to section 115, was based on the recording of the deed of trust for the loan taken
out by people posing as the Middletons at Crawford for the 43rd Street rental property.
Employees of Crawford testified that people posing as the Middletons signed a deed of
trust on the property and the amount of the loan was $210,000, with the funds being
provided by Arrowhead Servicing Company, an interim funder, also owned by the owner
of Crawford. The deed of trust was signed on February 8, 2006 and filed on March 16,
2006. Of the $210,000, $153,618.79 went to Fidelity Escrow, $14,280 went to Crawford
for broker’s fees and $3,570 to Inland Mortgage for its commission for bringing the loan
to Crawford.
At the time he committed count 27, section 12022.6, subdivision (a)(2) provided
that when a person “takes, damages or destroys any property in the commission or
attempted commission of a felony, with the intent to cause that taking, damage or
destruction, . . . [¶] . . . [¶] [i]f the loss exceeds $150,000,” the court shall impose a
term of two years consecutive to the term for the offense. Section 115 punishes, in
pertinent part, anyone who “knowingly procures or offers any false or forged instrument
to be filed, registered, or recorded in any public office within the state, which instrument,
if genuine, might be filed, registered, or recorded under any law of this state . . . .”
Subdivision (c) of section 115 prohibits the granting of probation, except in unusual cases
where the interests of justice would best be served if probation was granted, for, inter
17
alia, anyone convicted of more than one violation of the section in a single proceeding,
with the intent to defraud another and where “the violations resulted in a cumulative
financial loss exceeding one hundred thousand dollars . . . .”
Michael here concedes that there is no authority declaring that a section 12022.6
enhancement is inapplicable to a violation of section 115. However, he asserts that it has
been held inapplicable to filing a false income tax return, citing People v. Frederick
(2006) 142 Cal. App. 4th 400 (Frederick). In so doing, he overstates the holding in
Frederick. Therein, evidence established that the defendants defrauded many individual
and business victims as part of their “elaborate chain scheme” which included securities
fraud. Additionally, there was evidence that they owed $195,697 in income taxes based
on “assumed illegal and unreported activities” and, based on that, they were convicted of
filing a false income tax return. (Id. at pp. 404-405, 408.) An enhancement was found
true in connection with this conviction, pursuant to section 12022.6, subdivision (a)(4),
which applied when, “any person takes, damages, or destroys any property in the
commission . . . of a felony . . . [i]f the loss exceeds . . . $2,500,000 . . . .” Subdivision
(b) of section 12022.6 provides, “In any accusatory pleading involving multiple charges
of taking, damage, or destruction, the additional terms provided in this section may be
imposed if the aggregate losses to the victims from all felonies exceed the amounts
specified in this section and arise from a common scheme or plan.” (Italics added.) The
appellate court concluded, “ . . . [T]he crime of filing a false income tax return is not part
of a common scheme or plan to take property within the meaning of section 12022.6,
18
subdivision (b). The common scheme or plan here involved completed acts of theft and
fraud against thousands of . . . [individual and business victims] . . . . The [defendants’]
filing of a false income tax return was a separate act occurring at a different time against
a different victim. The plain language of the statute does not permit application of the
taking enhancement here . . . .” (Frederick, supra, 142 Cal.App.4th at p. 423.) Thus,
rather than holding that the great loss enhancement does not apply to the failure to file a
tax refund, resulting in the loss to the state, Frederick held that the loss to the state
occurred at a different time than the losses to the individual and business victims,
involved a different victim and was separate from the scheme to defraud the individual
and business victims, and, therefore, could not be considered part of the scheme or plan
to defraud the latter.
Michael’s argument that since section 115 is obviously aimed at preserving the
integrity of recorded documents, any loss occasioned by that cannot be considered a loss
under section 12022.6 is undermined by subdivision (c) of section 115 as set forth above.
2. Multiple Convictions of Operating an Unlicensed Escrow Agent
Financial Code section 17200 provides, “It shall be unlawful for any person to
engage in business as an escrow agent . . . except by means of a corporation duly
organized for that purpose licensed by the commissioner as an escrow agent.”
The People asserted that Michael had committed three violations of this section.
The first, count 12, was in connection with “the Middletons” obtaining a loan from VIP
for the 46th Street home in December 2005, during which Fidelity sent wiring
19
instructions to VIP to send the loan proceeds to Fidelity’s bank account. The second,
count 29, was in connection with “the Middletons” obtaining a loan from Crawford on
the 43rd Street rental property, during which Fidelity sent wiring instructions to Crawford
to send the loan proceeds to Fidelity’s bank accounts. This occurred in February and
March 2006. The third, count 38, occurred when Anna Smith gave Fidelity $2500,
believing that Fidelity was acting as her escrow agency in her purchase of a home in
Victorville. This occurred in 2006. The jury convicted Michael of all three counts.
Michael here seeks reversal of two of these three convictions, asserting that the
offense of engaging in business as an escrow agent by means of a corporation that is not
licensed by the commissioner as an escrow agent is a continuous course of conduct which
may not be splintered into discrete offenses, based on acts that occur on different dates,
involving different transactions.
As Michael asserts, we look to the language of Financial Code section 17200,
giving its words their usual and ordinary meaning. (People v. Trevino (2001) 26 Cal. 4th
237, 240.) If the language is susceptible of more than one reasonable interpretation, we
look to a variety of extrinsic aids, including the objects to be achieved by the legislation,
the evils to be remedied, the legislative history, public policy and statutory scheme of
which it is a part. (People v. Flores (2003) 30 Cal. 4th 1059, 1063.)
Turning first to the language of Financial Code section 17200 itself, Michael
asserts that “engag[ing] in business” in the section implies “activity of a continuous and
frequent nature.” In so doing, Michael contrasts “engaging in business” with “a single or
20
occasional disconnected act” (Advance Transformer Co. v. Superior Court (1974) 44
Cal. App. 3d 127, 135), which, he asserts, does not constitute engaging in business.
However, as the People correctly point out, Michael does not contest his guilt of violating
Financial Code section 17200 when Realty Service Escrow acted as escrow agent in the
purchase of the Alhambra Lane, Perris property, which concluded on June 7, 2006.
Turning to extrinsic considerations, Michael finds support for his position in
Escrow Institute of California v. Pierno (1972) 24 Cal. App. 3d 361, 366, 368. Therein,
independent escrow agents contended, inter alia, that Financial Code section 17200’s
requirement that they must be a corporation was unfair or unreasonable. (Pierno at p.
365.) The appellate court responded, “[C]onsideration is to be given to the fact that an
independent escrow agent may be handling numerous escrows involving substantial sums
of money and in various stages of progress. If an individual person is operating such a
business, his death could give rise to substantial complications and delays in the
consummation of the transactions involved. As stated in County of L.A. v. Southern Cal
Tel. Co (1948) 32 Cal. 2d 378, at pages 390-391 . . . : ‘Corporations . . . are more easily
regulated and supervised, and they have much greater permanency of existence and can
give better assurance of uninterrupted service.’” (Id. at p. 368.) We find no clue in this
language that Financial Code section 17200 was intended to prohibit only the on-going
operation of an unlicensed escrow agency, rather than its discrete acts.
Continuing with extrinsic considerations, Michael also calls our attention to
Financial Code section 17414, which prohibits anyone subject to the provisions of
21
Financial Code section 17200 et seq. from engaging in individual acts that violate escrow
instructions, constitute theft, fraud, misrepresentations or omissions of material fact or
misappropriate money.10 He argues that Financial Code section 17414’s focus on
discrete acts somehow suggests that Financial Code section 17200’s prohibition on
engaging in business as an escrow agent should be construed as a continuing course of
conduct. However, we are persuaded by the People’s argument that Financial Code
section 17414 punishes certain discrete acts performed even by a licensed escrow agent.
This in no way suggests that the crime of engaging in business as an escrow agent except
through a corporation licensed as an escrow agent cannot occur each time an act which
constitutes engaging in business as an escrow agent is committed and the corporation has
no license. Unlike Michael, we detect no conflict in interpreting Financial Code section
17200 as applying to any instance in which one commits an act that constitutes engaging
in the business of an escrow agent in the absence of a licensed corporation and acts
10 Financial Code section 17414 provides in pertinent part, “(a) It is a violation
for any person subject to this division or any director, stockholder, trustee, officer, agent,
or employee of any such person to do any of the following: [¶] (1) Knowingly or
recklessly disburse or cause the disbursal of escrow funds otherwise than in accordance
with escrow instructions, or knowingly or recklessly to direct, participate in, or aid or
abet in a material way, any activity which constitutes theft or fraud in connection with
any escrow transaction. [¶] (2) Knowingly or recklessly make or cause to be made any
misstatement or omission to state a material fact, orally or in writing, in escrow books,
accounts, files, reports, exhibits, statements or any other document pertaining to an
escrow or escrow affairs. [¶] (b) Any director, officer, stockholder, trustee, employee, or
agent of an escrow agent, who abstracts or willfully misappropriates money, funds, trust
obligations or property deposited with an escrow agent, is guilty of a felony.”
22
committed that constitute a violation of escrow instructions, theft, fraud,
misrepresentation or omission of material fact or misappropriation of money.11
Michael fails to persuade us that he can stand convicted of only one count of
violating Financial Code section 17200 in connection with Fidelity Escrow.
3. Section 12022.6, subdivision (a)(2) Finding as to Count 10
Michael and the People agree that the jury failed to make a finding as to the
section 12022.6, subdivision (a)(2) enhancement allegation attached to count 10.
Therefore, its term, which was stayed pursuant to section 654, must be stricken.
4. Incompetency of Anthony’s Trial Counsel
Although all three defendants were jointly tried, Anthony’s guilt was determined
by one jury while Michael’s and Macey’s were determined by another. The case agent
for the search of what the prosecution alleged was Macey’s home on Riverwalk in Perris
testified to finding not only many documents that tied Macey, Michael and Anthony
together, to these crimes and to other individuals involved in these crimes, but four
handguns and a rifle, most of which contained ammunition and all of which appeared to
the case agent to be operable, loose ammunition, suspected cocaine in a lady’s shoe in the
master bedroom closet and in a woman’s purse hanging from a closet off the master
11 In his reply brief, Michael points also to Financial Code section 17403, which
prohibits anyone subject to Financial Code section 17200 et seq. from representing that
he/she is in the escrow business when the person is not licensed. As with Financial Code
section 17414, this punishment of discrete acts does not suggest that Financial Code
section 17200 cannot punish discrete acts of engaging in the business of an escrow agent
in the absence of a licensed corporation.
23
bedroom and three scales, one containing white residue. A criminalist testified that the
suspected contraband was 26.07 grams and 0.51 grams of cocaine. A narcotics detective
testified that the amount of cocaine found, the scales and the guns suggested that the
drugs were being sold. Macey testified for himself, denying that he lived at the
Riverwalk house, but admitting that he visited there once or twice a month because his
estranged wife lived there. He denied any knowledge of the drugs, the guns and some of
the ammunition. Interestingly, he said that Anthony occupied an upstairs bedroom at the
house. Anthony similarly testified for himself and admitted telling the police that he
moved stolen money around for Michael. As already stated, Anthony admitted forming a
number of corporations, none of which appeared to be engaged in any substantial
business, and he was very defensive on the stand about his refusal to disclose basic
information about his main corporation. He admitted that he opened a bank account for
his main corporation that in less than a month’s time received deposits of $150,000,
$50,000 and $55,000, but he was unable to satisfactorily tie these profits to legitimate
business, other than to say that the latter two came from another account he had opened
the same month for the same corporation. That latter account had a deposit of $250,000,
the bulk of which Anthony admitted came from Michael. He also admitted that a strip
mall he and Michael owned in South Carolina was purchased with money Michael
illegally obtained doing real estate transactions. At Michael’s direction, Anthony sent
$4,500 to Macey. During an interview with the case agent, Anthony admitted receiving
money from Michael, knowing that Michael was not making the money he gave Anthony
24
legitimately because Michael had just gotten out of prison and had no job. He admitted
several times to receiving stolen money or moving stolen money for Michael. He also
admitted that his main corporation was a fake. He demonstrated knowledge of all the
different entities Michael set up and revealed that he, himself, had an additional case
pending in Los Angeles County. It also was revealed during the interview that everyone
else involved in these schemes had extensive criminal records. It is remarkable that in
the interview, although Anthony admitted that he moved money that was stolen; he
expressed not a pittance of remorse or concern for any of the victims of the thefts.
Rather, he expressed sorrow only that he had been caught and that he had not personally
received more of the ill-gotten money than he claimed he actually did. He was flippant
and acted entitled.
We will bypass Anthony’s argument that had his counsel objected to his jury
hearing evidence related to the guns, ammunition and drugs found at the Riverwalk
house, he would have been successful in preventing his jury from hearing this evidence.
We turn to the ultimate question, assuming, for the sake of this argument only, that
Anthony’s counsel was ineffective in not preventing his jury from hearing this evidence,
and we examine the prejudice resulting from this failure. Anthony carries the heavy
burden of demonstrating a reasonable probability that he would have enjoyed a better
outcome had his jury not heard this evidence. (Strickland v. Washington (1984) 466 U.S.
668, 687, 689.)
25
We have read the entire transcript of this very lengthy trial, most of which was
devoted to the offenses that did not involve drugs, ammunition or guns. Frankly, the
truly shocking and highly inflammatory evidence adduced at trial related to the
financial/fraud offenses. The notion that someone could randomly pull some innocent
person’s driver’s license number out of thin air, put it on a loan application and end up
walking away with hundreds of thousands of dollars, while encumbering yet another
innocent person’s property and “ripping off” lenders and title insurance companies far
outweighs evidence about a codefendant possibly having a stash of guns, ammunition and
drugs. Added to this is shock value of the effort that Michael went through to launder his
ill-gotten gains—the use of Felisha Poole, who was barely literate, but who, at Michael’s
direction, funneled hundreds of thousands of dollars through accounts he had her set up.
As the sentencing court observed, Michael, who proved himself pre-trial and at trial to be
a very intelligent self-represented defendant, would have been better off going to law
school and using his obvious intellectual gifts to earn money legitimately rather than
what he did. The jury heard Anthony’s interview with the case agent and the ease with
which he admitted knowing that the astronomical sums of money he “handled” for his
brother had not been legitimately obtained, without expressing any concern for the people
who had been harmed or inconvenienced by what Michael did, which Anthony assisted
by “moving” the money around. This was truly outrageous and far outpaced the almost
inconsequential, by comparison, evidence about Macey’s guns, ammunition and drugs.
We add that the other jury was apparently so unconvinced by the evidence concerning
26
these latter crimes that it hung as to the drug possession for sale charge and two of the
gun possession charges. As the People correctly point out in their brief, there was also a
dearth of evidence, aside from the comparatively insubstantial amounts of money
Michael directed his brother to send to Macey, linking Anthony and Macey, thus, any
suggestion that Anthony, or even Michael, for that matter, was somehow involved in any
drug-or gun-aspect of this case is absurd. In fact, evidence adduced at trial about
Macey’s obtaining government assistance under highly questionable circumstances, and
obtaining money for his estranged wife to “care take” of him while she lived many miles
away from where he claimed to live, demonstrated that Macey, the twice-convicted
robber, had his fingers in a number of illegal pies, in addition to Michael’s schemes. In
fact, Macey’s use of government entitlements made what was found at the Riverwalk
house seem like small potatoes. Additionally, surely it could not have escaped the jury’s
attention that the mother of Anthony and Michael, even in the sunset of her life,
apparently willingly participated in Michael’s far-flung effort to steal from a number of
persons and entities. Whether each juror was a fan of the nature or nurture theory of
child development, it would not have taken a leap of logic to see that the apple hadn’t
fallen far from the tree. Given this record, Anthony cannot possibly persuade us that
there was even a remote possibility that he would not have been convicted of the four
counts of money laundering, three of which we reverse in this appeal, had the evidence at
issue not been heard by his jury.
27
5. Sentencing
a. Michael
In connection with the obtaining of the loan from VIP for the Middleton’s 46th
Street home, the jury convicted Michael of one count each of identity theft for Macey’s
former neighbor’s use of a woman’s California driver’s license number on an
identification he presented to VIP when he signed for the loan (count 5), Michael’s
mother’s use of a man’s California driver’s license number on an identification she
presented to VIP when she signed for the loan (count 6), Macey’s former neighbor
representing himself to be C.L. Middleton when he went to the mortgage broker (count 7)
and Michael’s mother representing herself to be Fannie Middleton when she went to the
mortgage broker (count 8). The sentencing court imposed terms concurrent to count 9,
the principal term, for counts 5, 6, 8 and stayed the term for count 7 pursuant to section
654. The terms for the conviction for elder abuse, for forging C.L. Middleton’s name on
the deed of trust and the promissory note in order to obtain the loan from the mortgage
broker on the 46th Street home (count 9), was designated as the principal term, and the
terms for recording a false or fraudulent document, which was the trust deed on that
home (count 10), and for grand theft, by having Macey’s former neighbor and Michael’s
mother identify themselves as C.L. and Fannie Middleton to obtain that loan, thereby
injuring the investors who funded that loan (count 11), were run consecutive to the term
for count 9. The term for operating an unlicensed escrow agency, which was based on
28
Michael running Fidelity Escrow during the mortgage broker’s loan on the Middleton’s
46th Street home (count 12) was run concurrently with the term for count 9.
Michael here contends that the concurrent terms imposed for counts 5, 6, 8 and 12
and the consecutive term for count 11 should be stayed pursuant to section 654 because
they were all part of an indivisible course of conduct to further his plan to fraudulently
obtain money from the Middleton’s property. Michael made the same argument below.
The sentencing court observed that counts 5, 6 and 8 involved different victims than
count 9, therefore section 654 was inapplicable. The court added, “ . . . I can have more
than one objective for a crime. I can have an overall plan or scheme to defraud a title
company out of some money, but in order to put that into effect, I have to commit smaller
crimes with other victims, like identity theft, and I don’t think the law is intending or
telling us that you can’t be punished separately for those. . . . [¶] . . . [I]t is in a sense
part of an overall crime, but you have lesser objectives along the way in committing those
crimes. Your objective there was to commit identity theft and then use that stolen
identity to commit the fraud. But you still had another . . . goal in mind, which was
identity theft.” The court also observed, “[I]n deciding whether it’s part of one
continuous transaction or not [one must ask, ‘D]id it happen close in time or did it happen
with sufficient separation so that a defendant has the ability to pause and reflect about his
actions[?’] [¶] Another exception is it can be one transaction, but when you have
different victims, it’s not subject to 654.” In later imposing sentence on count 8, the
court reversed its original ruling that section 654 applied when it was pointed out that
29
count 8 involved Fannie Middleton, a separate victim from the victim of count 9, C.L.
Middleton. The sentencing court also concluded that counts 5 and 6 were separate crimes
from count 9, but were related to that count.
Under section 654, “[a]n act or omission that is punishable in different ways by
different provisions of law shall be punished under the provision that provides for the
longest potential term of imprisonment, but in no case shall the act or omission be
punished under more than one provision . . . .” The statute thus prohibits punishment for
two crimes arising from a single, indivisible course of conduct. (People v. Latimer
(1993) 5 Cal. 4th 1203, 1208 (Latimer).)
Whether a course of conduct is indivisible for purposes of section 654 depends on
the intent and objective of the actor. (Latimer, supra, 5 Cal.4th at p. 1208.) If all the
offenses are incidental to one objective, the defendant may be punished for any one of
them, but not for more than one. (Ibid.) On the other hand, if the evidence discloses that
a defendant entertained multiple criminal objectives, which were independent of and not
merely incidental to each other, the trial court may impose punishment for independent
violations committed in pursuit of each objective even though the violations shared
common acts or where part of an otherwise indivisible course of conduct. (People v.
Centers (1999) 73 Cal. App. 4th 84, 98 [Fourth Dist., Div. Two].)
The question of whether section 654 is factually applicable to a given series of
offenses is for the trial court, and the law gives the trial court broad latitude in making
this determination. (People v. Hutchins (2001) 90 Cal. App. 4th 1308, 1312.) Its findings
30
on this question must be upheld on appeal if there is any substantial evidence to support
them. (Ibid.) ‘“We must “view the evidence in a light most favorable to the respondent
and presume in support of the [sentencing] order the existence of every fact the trier
could reasonably deduce from the evidence. [Citation.]” [Citation.]’ [Citation.]” (Id. at
pp. 1312-1313.)
‘“Under section 654, “a course of conduct divisible in time, although directed to
one objective, may give rise to multiple violations and punishment. [Citations.]”
[Citations.] This is particularly so where the offenses are temporally separated in such a
way as to afford the defendant opportunity to reflect and to renew his or her intent before
committing the next one, thereby aggravating the violation of public security or policy
already undertaken. [Citation.]’ [Citations.]” (People v. Andra (2007) 156 Cal. App. 4th
638, 640 (Andra).)
In connection with his argument as to other counts, Michael asserts that although
section 654 does not prohibit punishing crimes involving separate victims of violence, it
applies if the crimes are against property interests, citing People v. Beamon (1973) 8
Cal. 3d 625 and 638, footnote 10 and People v. Bauer (1969) 1 Cal. 3d 368, 378 (Bauer).
Beamon, in a footnote, merely cites Bauer for the proposition that “where a course of
conduct involves only crimes against property interests of multiple victims, common
sense requires, in the absence of other circumstances, a determination of the indivisibility
of the course of conduct and the applicability of section 654.” (Beamon, supra, 8 Cal.3d
at p. 625, fn. 10.) Bauer involved punishment for a single conviction of robbery, even
31
though three different victims were held up at the same time and place, along with
punishment for auto theft, which resulted when, during the robbery, defendant also stole a
car of one of the three victims. (Bauer, supra, 1 Cal.3d at p. 372.) The California
Supreme Court observed that the intent to steal the car was formed while items from a
home were being taken. (Id. at p. 377.) Another appellate court later observed that the
car was taken to facilitate the taking of the items from the home and to leave the scene
with the stolen goods. (People v. Lopez (2011) 198 Cal. App. 4th 698, 718 (Lopez).) The
California Supreme Court in Bauer concluded, “[T]he taking of several items during the
course of a robbery may not be used to furnish the basis of separate sentences. . . .
[W]here a defendant robs his victim in one continuous transaction of several items of
property, punishment for robbery on the basis of the taking of one of the items and other
crimes on the basis of the taking of other items is not permissible. [¶] . . . [¶]
Where . . . the offenses arising out of the same transaction . . . involve crimes against
property interests of several persons, this court has recognized that only single
punishment is permissible. Thus, . . . the theft of several articles at the same time
constitutes but one offense although such articles belong to several different owners.
[Citations.] . . . If the rule were otherwise a burglar who entered an empty house and
took numerous articles belonging to one person could be punished for only one offense,
but if some of the articles belonged to each of the other members of the family, the
burglary could be given consecutive sentences for as many offenses as there are members
of the family. The situation would be even more anomalous where stolen property was
32
owned jointly or by a partnership.” (Bauer, supra, 1 Cal.3d. at pp. 376-378.) Of course,
identity theft was not even an offense in 1973 when Beaumon was decided—section
530.5 was added to the Penal Code in 1997. Additionally, in our view, identity theft is
not just a property offense, as it impacts the identity, privacy and authority of its victims.
When one’s identity is stolen, mere money cannot compensate the victim for the time and
effort that must be expended to clear the victim’s good name and financial standing.
We note with interest that what defendant suggests is a blanket prohibition on
separate terms when the crimes are property crimes and do not involve violence was not
adhered to in Andra, cited above. There, the appellate court concluded that the defendant
could be separately punished for identity theft, for using another person’s name to obtain
a credit card on December 23, 2005, and for vehicle theft, for failing on January 8, 2006
to return the car she rented using the credit card to the rental agency. (Andra, supra, 156
Cal.App.4th at p. 641.) The court concluded, “The weeks between the commission of
these crimes afforded defendant ample opportunity to reflect and then renew her intent
before committing the next crime. [Citation.] Moreover, these crimes . . . had two
different victims: [the person whose identity defendant stole] and [the rental car agency].
Accordingly, no plausible argument can be made that defendant’s sentence on either
count should be stayed under section 654.” (Id. at p. 641.) The defendant had also been
convicted of identity theft for using the same woman’s information to open bank
accounts on January 13, 2006, and of obtaining money by false pretenses for, over the
subsequent weeks, depositing fraudulent and stolen checks into these accounts, then
33
withdrawing the money. (Id. at pp. 641-642.) The appellate court rejected her claim that
section 654 applied, saying, “[D]efendant committed these crimes weeks apart. . . .
Given the temporal separation between these crimes, defendant had substantial
opportunity to ‘reflect’ on her conduct and then ‘renew’ her intent to commit yet another
crime. [Citation.] . . . [¶] Additionally, as with the [other] charges . . . defendant had
more than one victim . . . [the person whose identity defendant stole] and . . . [the b]ank.”
(Id. at p. 642.)
In Frederick, supra, 142 Cal. App. 4th 400, 407, as already stated,12 the defendants
operated a fraudulent “chain scheme” under which, inter alia, individual victims were
falsely promised items in exchange for their contributions to the scheme. One of the
defendants contended on appeal that section 654 prohibited the imposition of sentencing
on several counts of grand theft because “she held but a single intent and objective—to
take money from the [scheme] members—in committing [those] c[rimes] . . . .” (Id. at p.
420.) The appellate court concluded that section 654 did not apply because there was
substantial evidence to support the sentencing court’s finding that the course of conduct
was divisible in time. (Id. at p. 421.) The appellate court added, “Moreover, the
[sentencing] court stated that [defendant’s] crimes involved many victims, [and] she took
advantage of poor and vulnerable people . . . .” (Ibid.)
12 See text at page 20.
34
In People v. Neder (1971) 16 Cal. App. 3d 846, the defendant used a stolen store
credit card to purchase merchandise in three different transactions on the same day at the
store. (Id. at pp. 849-850.) The appellate court rejected defendant’s contention that the
three forgeries should be punished as one offense, saying, “ . . . [I]t is probably true that
the forgeries were motivated by a preconceived plan to obtain merchandise from [the
store] by use of . . . [the stolen] credit card and by forging sales slips. . . . The real
essence of the crime of forgery . . . is not concerned with the end, i.e., what is obtained or
taken by the forgery; it has to do with the means, i.e., the act of signing the name of
another with intent to defraud and without authority, or of falsely making a document, or
of uttering the document with intent to defraud. . . . [¶] . . . [¶] Here, it might be said
that the offenses were incidental to the fundamental objective of taking goods from [the
store] by use of the credit card and by forging the sales slips. We feel, however, that this
objective is too broad to tie the separate acts into one transaction. . . . [¶] . . . In the
instant case . . . we have three separate forgeries, each directed to the obtaining of
different property and none playing a part in the accomplishment of the end of the others.
We do not believe that section 654 should make it a matter of indifference whether
defendant, on entering [the store] with the intention to obtain goods fraudulently by
means of forgery, carried out the intention one or three times.” (Id. at pp. 852-854, fns.
omitted.)
The concept of defendant characterizing his or her objective too broadly in order
to take advantage of section 654 was echoed in People v. Gangemi (1993) 13
35
Cal. App. 4th 1790, 1794, where the defendant was convicted of filing several false deeds
of trust in order to protect his friend’s home from being encumbered by a couple who
were executing on a judgment they had obtained against the friend. The appellate court
concluded, “Each offense was complete upon knowingly offering that false document for
filing, and one act was not a means to the end of any of the others. It is no defense to
assert that these acts were part of an indivisible transaction which had as its single
criminal objective the illegal protection of [defendant’s friend’s] property from [the
couple]. As in Neder, such an objective is too broad to satisfy the purposes of section
654. [¶] . . . ‘To accept such a broad, overriding intent and objective to preclude
punishment for otherwise clearly separate offenses would violate the statute’s purpose to
insure that a defendant’s punishment will be commensurate with his culpability.
[Citation.] It would reward the defendant who has the greater criminal ambition with a
lesser punishment.’ [Citation.] [Citations.] [¶] Each false filing creates a separate harm
to the person defrauded as well as to the integrity of the public records and the defendant
may be punished for each such criminal act. Otherwise, to apply section 654 in this case
would violate the law’s goal of punishing violators commensurate with their criminality.”
(Id. at pp. 1800-1801.)
Indeed, the purpose of section 654 is “to ensure that a defendant’s punishment will
be commensurate with his culpability.” (People v. Correa (2012) 54 Cal. 4th 331, 341.)
“[A]t some point the means to achieve an objective may become so extreme they can no
longer be termed ‘incidental’ and must be considered to express a different and more
36
sinister goal than mere successful commission of the original crime. [¶] . . . . [¶] . . .
[S]ection [654] cannot, and should not, be stretched to cover . . . other criminal acts far
beyond those reasonably necessary to accomplish the original offense.” (People v.
Nguyen (1988) 204 Cal. App. 3d 181, 191.) “[M]ultiple crimes are not one transaction
where the defendant had a chance to reflect between offenses and each offense carried a
new risk of harm.” (People v. Felix (2001) 92 Cal. App. 4th 905, 915.)
In People v. Lochmiller (1986) 187 Cal. App. 3d 151, the defendant “made separate
sales at different times for different amounts of money to 10 of the 11 victims” and pled
guilty to 10 counts of selling unregistered securities. (Id. at pp. 152-153.) Division One
of this court rejected the defendant’s claim that section 654 prohibited imposition of
sentence on only one of the 10 convictions, thusly, “Because each unlawful sale occurred
at different times for different amounts of money to different victims, punishment for
each separate sale is not prohibited by Penal Code section 654. A single object, to obtain
money, does not bar multiple punishments for separate crimes. [¶] . . . [¶] [The
defendant] cites footnote 10 in the Beamon case in support of the argument [that] crimes
of violence are treated differently than crimes against property in applying section 654.
The principle expressed in Beamon is inapplicable here. The Beamon court was referring
to multiple crimes committed in the course of carrying out an objective on one occasion.
With regard to incidents occurring at different times, the court said: ‘It seems clear that a
course of conduct divisible in time, although directed to one objective, may give rise to
multiple violations and punishment.’ [Citation.] [¶] . . . [¶] [The defendant], through
37
her part in the unlawful scheme, took the life savings of a group of elderly citizens. She
did so by making separate sales to 11 individuals on 10 occasions over a 3-month period.
This was not one act or one indivisible course of conduct. To accept her argument, she
could have continued to take the savings of every citizen in San Diego County and be
punished no more than if she had done so to one individual. Penal Code section 654
simply does not apply.” (Id. at pp. 153-154.)
It is notable that in People v. James (1977) 19 Cal. 3d 99, wherein defendant was
convicted of three burglaries for breaking into three offices in the same building, the
defendant “claim[ed] he cannot be separately punished for each of the three burglaries
because he committed them all within the confines of the same building. He points out
that burglary is a crime against property, and quotes our general rule that when ‘the
offenses arising out of the same transaction are not crimes of violence but involve crimes
against property interests of several persons, this court has recognized that only single
punishment is permissible [quoting Bauer]. More particularly, he relies on our ensuing
dictum in that opinion . . . to the effect that a thief who enters a house and steals articles
belonging to different members of the same family can be punished for only one
burglary. [¶] We adhere to that view, but we decline to extend it to the facts of this case
at bar. Here defendant forcibly broke into three different rented premises occupied by
tenants who had no common interest other than the fortuitous circumstance that they
happened to lease office suites in the same commercial building. . . . If the rule were
otherwise, a thief who broke into and ransacked every store in a shopping center under
38
one roof, or every apartment in an apartment building, or every room or suite in a hotel,
could claim immunity for all but one of the burglaries thus perpetrated. Nothing in the
statute or case law on multiple punishment compels such an incongruous result.”
(Id. at p. 119, fns. omitted.)
Count 11 involved the investors who funded the loan. They were separate victims
from the Middletons, and they suffered their loss at a different time than the forgery of
C.L. Middleton’s name on the trust deed and promissory note. Therefore, a consecutive
term for Count 11 was appropriate. The victim of count 5 was the woman whose driver’s
license number Macey’s former neighbor used and the victim of count 6 was the man
whose driver’s license number Michael’s mother used. As the People correctly point out,
defendant could have used his own driver’s license number and that of Anthony’s or
Macey’s—he did not need to involve these two innocent bystanders. Fannie Middleton
was the victim of count 8. Moreover, substantial evidence supports the sentencing
court’s finding that these crimes were separate from count 9 in that they occurred at a
different time, (even though perhaps minutes apart)13 than the signing of C.L.
Middleton’s name on the trust deed and promissory note by Macey’s former neighbor.
Therefore, staying punishment for these counts is not appropriate.
The People agree with Michael that count 12 should be stayed.
13 See Lopez, supra, 198 Cal. App. 4th 698, 718 [The time it took defendant to
drive to a convenience store, park the car and walk in was sufficient time for him to
reflect on the fact that he had just stolen a purse containing an access card and what he
was about to do, i.e., use the card to buy items.].
39
For reasons expressed above, we reject Michael’s assertion that the consecutive
terms for counts 13-16, four counts of identity theft in connection with the failed loan
from the mortgage broker for the Middleton’s 43rd Street rental property—count 13 for
Macey’s former neighbor claiming to be C.L. Middleton, count 14 for Michael’s mother
claiming to be Fannie Middleton, count 15 for Macey’s former neighbor using the
driver’s license number of the same woman mentioned in connection with count 5, and
count 16 for Michael’s mother using the driver’s license number of the same man
mentioned in connection with count 6—should have been stayed pursuant to section 654
because like count 9, these offenses were directed at obtaining money from the
Middletons. The sentencing court concluded that count 13 involved a separate victim and
a separate intent, and that counts 14-16 involved separate victims and those finding are
supported by substantial evidence.
Michael urges the application of section 654 to several of the terms imposed for
counts 22-29. Counts 23-25 were the identity thefts committed at Crawford in February
2006, for the loan on the 43rd Street rental, comprising Michael’s mother posing as
Fannie Middleton (count 23), Macey’s former neighbor using the aforementioned female
victim’s driver’s license number (count 24) and Michael’s mother using the
aforementioned male victim’s driver’s license number (count 25).14 The sentencing court
14 We note that the sentencing court stayed the term for the conviction of count
22, which comprised Macey’s former neighbor posing as C.L. Middleton at Crawford,
because the court imposed a term for elder abuse for Macey’s former neighbor signing
the documents for the Crawford loan (count 26).
40
imposed a concurrent term on count 23, and consecutive terms on counts 24 and 25,
finding both involved a different victim. As before, when it was pointed out that count
23 involved a victim different from the victim of count 26 (see below), the sentencing
court changed its mind about staying the term pursuant to section 654. The sentencing
court also imposed consecutive terms for elder abuse (count 26), recording a false
document (count 27) and operating an unlicensed escrow (count 29), finding the latter
was a separate crime involving a separate victim, but stayed the term for grand theft
(count 28), all in connection with this loan. We, like the People, have difficulty
discerning Michael’s argument in this regard. First, he appears to argue that the terms for
the three identity thefts, the elder abuse, the recording of a false document and operating
an unlicensed escrow should have been stayed because defendant was merely repeating
what he had done at the mortgage broker, which was just trying to get money from the
Middleton’s property. Then, he argues that the identity thefts, the elder abuse, the
recording of the false document and operating an unlicensed escrow were “interrelated
prepatory steps to . . . count 28 . . . .” However, the term for count 28 was stayed under
section 654. Next, he argues that the sentencing court should have stayed the punishment
for all the counts involving this transaction except for the term for the elder abuse (count
26) and the recording of the false document, the latter of which is not subject to section
654. Finally, he argues that the terms for counts 23, 24, 25 and 29 should be stayed. The
People concede that the term for operating an unlicensed escrow should be stayed. As to
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the remaining counts, whatever they be, we refer Michael to the conclusions we have
already reached regarding counts 5-11.
The People argued to the jury that the identity theft alleged in count 30 occurred
when Michael, posing as Larry Perry, opened the account at Washington Mutual for
Fidelity that ended in 296, using the California driver’s license number belonging to the
Orange County teacher. The sentencing court concluded that this count involved a
separate victim and was separate in time from other offenses, which the court did not
specify.15 Michael here asserts that the use of the teacher’s driver’s license number was
“incidental to and in furtherance of [his] scheme to launder the proceeds received from
the Crawford-funded loan” and, therefore, should have been stayed pursuant to section
654. However, there is substantial evidence to support the sentencing court’s conclusion
that this count involved a separate victim, i.e., the Orange County teacher, and occurred
15 Michael misconstrues the sentencing court’s earlier remarks. After the
prosecutor asserted that this count was not “654[ed] to anything[,]” he then discussed the
money laundering convictions in counts 31 and 32. The prosecutor explained that while
the People did not charge Michael for putting the proceeds of the Crawford loan going
into the Washington Mutual account, counts 31 and 32 were for him taking money out of
that account. (At trial, the prosecutor had argued to the jury that these counts comprised
two checks for $60,000 each taken from the Washington Mutual account ending in 296.)
The sentencing court responded to this (and not, as Michael here asserts to the
prosecutor’s argument about count 30) that the only thing that saved counts 31 and 32
from being stayed was the fact that the statute on money laundering “seems to make clear
that it’s separate punishment for each instrument used.” The sentencing court went on to
express amazement that the money laundering statute so provided, thus allowing greater
punishment for 10 acts of money laundering $10,000 each versus one act of money
laundering $100,000.
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at a different place and time than the cashing of the checks in counts 31 and 32. The
account was opened on March 14, 2006 and the checks involved in counts 31 and 32
were cashed March 16 and March 21, 2006, respectively.
Next, Michael turns our attention to counts 34, 35 and 36. Count 34, recording a
false document, occurred when Michael used the name of the female real estate agent to
record a fictitious business name statement.16 In imposing a consecutive term for it, the
sentencing court concluded that it was a separate occasion and “it was used . . . to obtain
separate criminal proceeds as the escrow company to get the escrow fees.” Count 35,
identity theft, occurred when Michael used the female real estate agent’s name and
broker’s license number on the fictitious business name statement.17 The sentencing
court concluded that this count involved a different victim and imposed a consecutive
term for it. The grand theft that comprised count 36 occurred when Michael signed the
female real estate agent’s name to a broker’s agreement between Crawford and Inland
16 Thus, contrary to the assertion in Michael’s reply brief, this offense did not
occur when Michael offered the fictitious business name statement to Crawford in order
to obtain the broker’s commission. The prosecutor reiterated this a number of times at
the sentencing hearing and the sentencing court agreed with him.
17 The prosecutor attempted to argue at the sentencing hearing that this identity
theft also occurred when Michael signed the female real estate agent’s name to the
broker’s agreement. The sentencing court correctly observed that that may not have been
the basis for the jury’s convicting Michael of identity theft in count 35 and, indeed, it was
not. The sentencing court observed that the term for recording a false document (count
34) could not be stayed pursuant to section 654 because the statute so provided. The
court then questioned whether this also prohibited the use of section 654 on the identity
theft (count 35).
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Mortgage which resulted in Michael receiving $3,750, rather than Crawford receiving it.
The agreement, dated March 16, 2006, was signed on March 27, 2006 and the check to
Inland Mortgage was dated March 16th, although it was not cashed because a stop
payment had been put on it, but Crawford did not recoup the amount. The sentencing
court concluded that it involved a different victim and imposed a consecutive term for it.
Michael here asserts that he should be punished for only one of these crimes because the
use of the female real estate agent’s name and broker’s license number and the filing of a
fictitious business name statement were means of obtaining the $3570 broker’s fee from
Crawford. While that may be the case, we again find sufficient evidence to support the
sentencing court’s conclusion that these events occurred at different times and involved
different victims. The fictitious business name statement was filed on March 16, 2006,
obviously after Michael placed the female real estate agent’s name and broker’s license
number on it. The victim of this count were all those who rely on the authenticity of
documents which are recorded. The identity theft occurred, as already stated, before the
recording of this statement, when Michael placed the female real estate agent’s name and
broker’s license number on the statement. The victim of this count, as the sentencing
court found, was the female real estate agent. Also as the sentencing court found, the
victim of the grand theft was Crawford and that theft occurred after the other two counts,
when Crawford did not recoup the $3,750.
Finally, Michael asserts that section 654 should have been applied to counts 38
and 46. As to count 38, which comprised operating an unlicensed escrow, it occurred
44
when Fidelity acted as the escrow agent for the purchase of a home by Anna Smith,
including giving Smith escrow instructions. Count 37, grand theft, occurred when Anna
Smith gave Fidelity $2500 towards the purchase of a house, which funds were never
returned to her, although she did not buy a house involving Fidelity. Michael asserts that
his use of Fidelity was incidental to the taking of the $2,500 from Smith and the People
agree. Therefore, the consecutive term imposed for count 38 must be stayed pursuant to
section 654. The same applies to count 46, operating an unlicensed escrow, which was
Realty Services Escrow in connection with the purchase of the Alhambra Lane, Perris
property, which should be stayed as to count 47, which was for the loan on that property
by WMC for Robert Peters.
b. Anthony
People v. Brown (2012) 54 Cal. 4th 314, having become final since the briefs in
this case were authored, the parties agree that Anthony is entitled to an additional 112
days of credits for the 225 of presentencing time he served, for a total of 2165 days of
credit.
DISPOSITION
For Michael, the following are reversed: the enhancement under section 12022.6,
subdivision (a)(2) as to count 10 and counts 18, 19, 20, 21 and 33. The sentences
imposed for them are stricken. The terms for counts 12, 29, 38 and 46 are stayed
pursuant to section 654. The trial court is directed to amend the abstract of judgment to
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reflect these changes, and to recalculate the total sentence, in addition to the following:
the terms for count 2 is 8 months consecutive and count 23 is 2 years concurrent.
For Anthony, counts 18, 19 and 33 are reversed and the sentences imposed for
them are stricken. Anthony is to be resentenced for count 44 and is to receive 2165 days
of credit.
For Macey, counts 20 and 21 are reversed and the sentenced imposed for them are
stricken. Macey is to be resentenced on his remaining convictions.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAMIREZ
P. J.
We concur:
McKINSTER
J.
KING
J.
46