People v. Riley , 193 Cal. Rptr. 3d 218 ( 2015 )

Filed 9/30/15 (Opinion on rehearing)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE,
Plaintiff and Respondent, E059103
v. (Super.Ct.No. RIF10000395)
JAMES WILLIAM RILEY et al., OPINION
Defendants and Appellants.
APPEAL from the Superior Court of Riverside County. Mac R. Fisher, Judge.
Affirmed in part; reversed in part.
Reed Webb, under appointment by the Court of Appeal, for Defendant and
Appellant James William Riley.
Sarah A. Stockwell, under appointment by the Court of Appeal, for Defendant and
Appellant Ryan Jay Robinson.
Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney
General, Julie L. Garland, Assistant Attorney General, Arlene A. Sevidal, Collette
1
Cavalier and Tami Falkenstein Hennick, Deputy Attorneys General, for Plaintiff and
Respondent.
Defendants and appellants James William Riley and Ryan Jay Robinson appeal
their convictions on three counts each of commercial bribery, in violation of Penal Code
section 641.3, subdivision (a).1 The charges are based on the premise that Riley, who
was the insurance broker for Pechanga Resort and Casino, paid bribes to Robinson, who
was the chief financial officer of the casino, in order to permit Riley to charge excessive
fees for insurance products he obtained for the casino.
On appeal, defendants assert that there is insufficient evidence that they acted
“corruptly,” i.e., with the specific intent to injure or defraud Robinson’s employer, as
required by the statute. (§ 641.3, subds. (a), (d)(3).) They also assert, in response to our
request for supplemental briefing, that there is insufficient evidence to support their
convictions on two of the counts against each of them because the evidence showed that
as of the date of those charged offenses, Robinson was no longer employed by Pechanga
Resort and Casino.
We conclude that the evidence that Robinson was not employed by Pechanaga
Resort and Casino as of the dates alleged in counts 6 through 9 compels reversal of the
defendants’ convictions on those counts. However, we also conclude that there is
substantial evidence to support their convictions on counts 4 and 5.
1 All further statutory citations refer to the Penal Code.
2
PROCEDURAL HISTORY
The grand jury indicted Riley and Robinson on three counts of grand theft (§ 487,
subd. (a); counts 1-3) from Pechanga Resort and Casino, and indicted each of them on
three counts of commercial bribery (§ 641.3, subd. (a); counts 4, 6, 8 (Riley) and 5, 7, 9
(Robinson)). As to each count of commercial bribery, the indictment alleged that the
bribe paid or accepted was in excess of $1,000. The grand jury also indicted Riley on
three counts of money laundering. (§ 186.10, subd. (a); counts 10-12.) The indictment
alleged that in count 12, the transaction exceeded $50,000, within the meaning of section
186.10, subdivision (c)(1)(A), and alleged that both defendants committed two or more
related felonies involving embezzlement as a material element and that the pattern of
felonies involved the taking of more than $500,000, within the meaning of section
186.11, subdivision (a)(2).
At defendants’ first trial, counts 2 and 3 were submitted to the jury only as to
Riley. The jury was unable to return a verdict as to any count of the indictment. Upon
motion by the defendants, the trial court dismissed counts 1 through 3 and 10 through 12,
as well as the special allegations related to those counts, in the interest of justice. The
court cited insufficient evidence to support a finding of guilt beyond a reasonable doubt.
The court set the remaining counts for retrial.
Following a second trial, Riley was found guilty on counts 4, 6 and 8, and
Robinson was found guilty on counts 5, 7 and 9. The jury found true the allegations that
each count involved a bribe in excess of $1,000. As to Riley, the court imposed the lower
3
term of one year four months on count 4 with consecutive terms of eight months on
counts 6 and 8, and imposed associated fines and fees. As to Robinson, the court
imposed the lower term of one year four months on count 5 with consecutive terms of
eight months on counts 7 and 9, and imposed associated fines and fees. Each defendant
filed a timely notice of appeal.
STATEMENT OF FACTS
Defendant James Riley had been a licensed commercial insurance broker since
1989. In 1996, while working for a firm called Austin Cooper and Price, he obtained the
account of Pechanga Development Corporation (PDC).2 He took the account with him
when he left that firm and went to work for Dodge Warren and Peters. In 2002, he left
Dodge Warren and Peters and opened his own firm, Riley Garrison and Associates
(RGA). At that point, Riley was designated broker of record by Anthony Miranda, the
PDC board member responsible for insurance matters. Miranda and Riley had known
each other since junior high school, but Riley did not know that Miranda worked for PDC
2 Pechanga Resort and Casino is operated by Pechanga Development Corporation,
or PDC. PDC is one of three “entities” which are the operating constituents of the
Pechanga tribe (officially named the Pechanga Band of Luiseño Indians; see
[as of Sept. 30, 2015]). PDC operates all business
operations of the tribe. A second entity is the tribal government. That entity operates in
effect as a city council for the tribal reservation. A third entity is the Pechanga Gaming
Commission, which oversees gaming compliance at the casino. The three entities are
separate from one another, and employees of one entity are not employees of either of the
other two. (We discuss this in greater detail elsewhere in this opinion.)
The focus in this case was on insurance transactions for the casino, to which the
parties frequently referred simply as “Pechanga.”
4
when he first sought the account in 1996.3 Although he initially dealt with Miranda and
the board on PDC insurance matters, after 2001 or 2002, he dealt with Robinson.
Approximately four years after Riley obtained the account, Robinson became the
chief financial officer (CFO) for Pechanga Resort and Casino. (Hereafter sometimes
referred to as the casino.) As CFO, Robinson was responsible for insurance for the
casino. Robinson had worked for the casino for several years before he became CFO
and, during that time, he and Riley had become friends.
On a number of occasions, beginning in April 2005, Riley gave Robinson large
sums of money in the form of cashier’s checks. Riley transferred the money from RGA’s
operating account into his personal savings account and then obtained the cashier’s
checks. Riley testified that the payments were personal loans or gifts motivated solely by
friendship and, in one instance, an investment in a business Robinson was involved with,
unrelated to Pechanga. He denied that the payments were related to or intended to
influence Robinson with respect to Pechanga’s insurance.
The first such payment took place in April 2005. This incident was not one of the
charged offenses, but was offered to show the beginning of the pattern of activity. On
April 28, 2005, $55,000 was deposited into Riley’s personal savings account. On that
same date, $55,000 was withdrawn from the account and a cashier’s check in the amount
3 Although the parties and the witnesses sometimes referred to Riley’s
relationship with Miranda, there is no evidence that Miranda had any involvement in the
events which are the subject of the prosecution. Miranda did not testify at the trial.
5
of $40,000 was issued to Robinson, who negotiated the check. On March 24, 2005,
Pechanga had issued a check in the amount of $869,942.28, to Riley’s firm (RGA) as the
down payment on a contract to finance several insurance policies. (Financing of large
commercial insurance premiums is a common practice.) The financing agreement, which
was actually issued on March 31, 2005, showed a total premium for three policies and did
not reflect any broker’s fees. A revised financing agreement for the same three policies,
issued April 29, 2005, showed the same total premium as the March 31, 2005 agreement.
However, the premiums charged by two of the three insurance companies were reduced
by a total of $1,441,000, but the financing agreement showed a broker’s fee of
$1,441,000.4 In addition, the financing agreement showed a broker’s fee in the amount
of $538,200 on other policies being financed under the same agreement, in addition to the
commission which was shown on the policies themselves. A forensic accountant who
4 It is a common practice in the industry to charge a broker’s fee in lieu of a
commission or in addition to a commission. A broker will commonly charge a fee if the
policy does not carry a commission or if he or she determines that the commission is
inadequate to provide a reasonable profit. The parties stipulated that the Insurance Code
does not limit the amount of fees and/or commissions relating to commercial insurance
policies and that it does not require a broker to disclose fees or commissions relating to
commercial insurance policies.
6
testified for the prosecution stated that the total fees and commissions paid to RGA on
this group of policies amounted to approximately 24.5 percent of the premiums.5
On March 30, 2006, RGA invoiced Pechanga for a deposit on the April 1 renewal
of a policy issued by Hudson Insurance Company. The invoice was for $1,682,148.45.
The financing agreement dated March 31, 2006, showed that the down payment was to be
$1,091,606.45. The total premium on the policy was $8,200,000. On a revised financing
agreement for the same policy, dated April 6, 2006, the policy premium was shown as
$7,380,000, a difference of $820,000. On the April 6 financing agreement, the fee
charged by RGA was increased by that amount over the March 31 financing agreement.6
On April 27, 2006, Riley transferred $60,000 from the RGA operating account into his
savings account. On that same date, he used funds from his savings account to issue a
5 The witness based his calculations on net premium, i.e., the gross premium less
the commissions and fees. He acknowledged that testimony from experts in the
insurance industry (called by the prosecution) had established that the compensation is
based on the gross premium. Based on the total dollar sales, however, RGA’s profit on
the Pechanga account in 2006 was 20.8 percent. Jerry Konchar, the CFO of PDC,
testified that the brokers PDC now uses charge commissions ranging from 15 to 20
percent.
6 RGA did not provide financing. Financing was provided by First Insurance
Funding Corporation (FIFC). FIFC was not involved in negotiating premiums or broker
fees. It is standard in the industry that a broker or agent could add a percentage to the
finance rate, called a “bump.” This is typically not disclosed on the financing agreement.
Other fees imposed by the broker may “exist outside the scope of the financing
agreement,” i.e., paid separately by the insured and not financed, or financed in part. It is
typical for a broker to include at least a portion of the fee in the deposit.
7
cashier’s check to Robinson in the amount of $50,000. The check was deposited to
Robinson’s bank account.
On June 8, 2006, a financing agreement from FIFC required a renewal down
payment in the amount of $167,926.20. The balance of the premium was $1,511,335.80.
RGA invoiced Pechanga for $367,926.20 for the renewal down payment. On July 11,
2006, $50,000 was transferred from RGA’s general account into Riley’s savings account.
On that same date, Riley withdrew $20,000 from his savings account and obtained a
cashier’s check in that amount, payable to Robinson. Robinson deposited the check into
his bank account.
On July 28, 2006, FIFC issued a financing agreement for premiums totaling
$11,600,000. The agreement required a cash down payment in the amount of
$1,160,000. Pechanga paid RGA’s invoice for $1,160,000 for the down payment on
August 22, 2006.
On August 16, 2006, $100,000 was deposited to Riley’s savings account. On that
same date, $80,000 was withdrawn from the account, and four cashier’s checks, each in
the amount of $20,000, were made payable to Robinson. All were deposited into
Robinson’s bank account.
The $11.6 million transaction in July and August 2006 ultimately lead to the
discovery of the outside financial dealings between Riley and Robinson. That transaction
was for obtaining additional “difference in conditions” (DIC) insurance, which covered
property losses from earthquake and flood. Pechanga’s DIC policy ran from April to
8
April. In insurance years 2005-2006, Pechanga carried approximately $1.2 billion dollars
in DIC insurance. In 2006, the availability of such insurance became severely limited as
a result of Hurricane Katrina,7 and premiums had greatly increased. In April 2006, Riley
was able to obtain only $380 million in DIC coverage, for which the casino paid
approximately $8.7 million. In July 2006, Nancy Veeh, one of the wholesale insurance
brokers Riley used to procure DIC insurance for Pechanga, alerted him that some
additional coverage might be available.8 She told him that because of the highly
competitive market, he would need to obtain a firm commitment from the casino for the
projected cost of the insurance, which she placed at approximately $9,817,222 for the
premium alone, exclusive of any fees the various brokers involved in the transaction
would impose. The transaction involved three layers of coverage from three carriers.
The largest layer, which was projected to cost $7.25 million, did not carry a commission.
7 Hurricane Katrina made landfall in Louisiana and Mississippi on August 29,
2005. (See
[as of Sept. 30, 2015].)
8 Wholesale brokers have access to certain types of insurance to which retail
brokers such as Riley do not. DIC insurance is one of them. Two commercial brokers
who were involved in obtaining DIC insurance for the Pechanga casino testified that in
any year, there is only a certain amount of DIC insurance available for tribal casinos on
the world market. In 2005-2006, there was far less coverage available than in prior years
because of the tremendous losses caused by Hurricane Katrina.
9
Robinson approved the purchase of the additional DIC coverage and signed the
financing agreement for $11.6 million for the package of coverage, which would bring
the total DIC coverage up to $700,000,000.
By the time this transaction took place, Robinson was no longer Pechanga’s CFO.
In May 2006, Robinson had been hired by the Pechanga Tribal Government as its CFO.
Jerry Konchar, the CFO of PDC, took over as interim CFO of the casino until a
permanent replacement could be hired. Robinson told Konchar he was going to continue
to handle the casino’s insurance, and Konchar apparently agreed to this because he was
immersed in an annual audit, which needed to be completed and a report filed with the
NIGC, or National Indian Gaming Commission.9 The report was late, and completing
the audit was Konchar’s priority.
The invoice for the premium financing the down payment for the DIC insurance
was sent to Robinson. The down payment was $1.16 million. Robinson issued a check
request, which was eventually forwarded to Konchar, along with the invoice. Konchar
had previously signed off on a check request issued by Robinson for an insurance policy
renewal in the amount of approximately $12,500, which he did not question, but he was
unwilling to sign off on the request for $1.16 million. Konchar was familiar with
property insurance in general, but not with DIC insurance, and he did not understand why
it was so expensive. There was no insurance information in Robinson’s office, so
9 See (as of Sept. 30, 2015).
10
Konchar was unable to determine the basis for the $1.16 million down payment.
Konchar testified that he did not understand why the cost of the DIC insurance had more
than doubled from April 2006 to August 2006. In meetings and via emails to Konchar,
Riley and Robinson explained the reasons that the DIC premium was so high.10
Nevertheless, Konchar and Robinson’s permanent successor, Tjeerd Brink, apparently
remained skeptical, and an investigation ensued.11
Ironically, Riley was able to obtain more DIC insurance in 2006 for the Pechanga
casino than almost any of the other tribal casinos in California, and at lower cost per
million than most. Accordingly, despite Konchar and Brink’s suspicions, there was in
fact nothing untoward about the July 2006 transaction involving DIC insurance except,
10 Konchar testified that before a meeting with Riley and Robinson on August 22,
2006, Robinson never provided him with any information about the DIC insurance, other
than the invoice and an amortization schedule, and that even at the meeting Riley did not
provide much information. On cross-examination, however, it became clear that
Robinson and Riley had in fact provided him with a great deal of information, including
an email from Nancy Veeh which explained the issues concerning DIC coverage in the
aftermath of Hurricane Katrina. Ron Randazzo, the casino risk manager, told Konchar
that based on the information they had received, he believed that Robinson was correct
that it was in the casino’s best interest to obtain as much DIC insurance as it could.
Konchar ultimately authorized the payment of the $1.16 million down payment because
he did not want the casino to be in default on the loan.
11 Konchar also described several subsequent insurance transactions with Riley,
which ultimately led PDC to terminate his services.
11
arguably, the size of Riley’s fee.12 Neither Konchar nor Brink, however, ever asked
Riley how much of the cost of the DIC insurance consisted of his fees or commissions.
The evidence showed that between 2003 and 2006, Robinson made large
payments to Thomas LaValle, in connection with gambling activities and some stock
purchases. Robinson also lent money to LaValle. Riley testified that Robinson also had
large expenses resulting from a divorce.
LEGAL ANALYSIS
1.
THE PROSECUTION DID NOT MEET ITS BURDEN OF PROOF
WITH RESPECT TO COUNTS 6 THROUGH 9
Section 641.3 provides in relevant part, “Any employee who solicits, accepts, or
agrees to accept money or any thing of value from a person other than his or her
employer, other than in trust for the employer, corruptly and without the knowledge or
consent of the employer, in return for using or agreeing to use his or her position for the
benefit of that other person, and any person who offers or gives an employee money or
any thing of value under those circumstances, is guilty of commercial bribery.” (Pen.
Code, § 641.3, subd. (a), italics added.)
12 Riley’s fee on the August 2006 DIC transaction was apparently $2,282,567.
This figure is the difference between the $11.6 million Robinson committed to and the
actual premium, which ultimately turned out to be $9,317,433. Riley admitted that he
used the difference as his fee.
12
In this case, the indictment specifies three dates upon which alleged acts of
commercial bribery took place: on or about April 27, 2006 (count 4 as to defendant Riley
and count 5 as to defendant Robinson); on or about July 11, 2006 (count 6 as to defendant
Riley and count 7 as to defendant Robinson); and on or about August 16, 2006 (count 8
as to defendant Riley and count 9 as to defendant Robinson). Each count alleges that
Robinson was on the specified date an employee of Pechanga Resort and Casino. At
trial, however, it was undisputed that Robinson left his job with Pechanga Resort and
Casino on or before May 22, 2006, and had become the chief financial officer for the
Pechanga tribal government. We asked the parties to provide supplemental briefing
addressing the question of whether this evidence affects the validity of defendants’
convictions on counts 6 through 9.
In her supplemental brief, the Attorney General asserts that the record shows that
Robinson was an employee of “Pechanga” throughout the entire period alleged in the
indictment, apparently referring to the Pechanga tribe. She notes that Konchar testified,
“[W]e all work for the Tribe.” The indictment did not allege that Robinson was an
employee of the Pechanga tribe, however; it alleged that he was an employee of
Pechanga Resort and Casino. Even if it is true that employees of the casino and of the
tribal government do ultimately work “for the Tribe,” it is also true that not all employees
of the tribe work for the casino. Konchar testified that the Pechanga tribal government
was an entirely separate entity from Pechanga Resort and Casino. He described each as
an “entity” of the Pechanga tribe, but testified that each had its own physical location and
13
operating structure, and that Robinson’s new position as CFO of the tribal government
was not a transfer but a new job. He specifically stated that as of May 22, 2006,
Robinson “was no longer an employee of the casino.” Tjeerd Brink, who became the
permanent CFO of the casino after Robinson moved to the tribal government, also
testified that working for the tribal government is considered “a complete and separate
employment from the Pechanga Resort and Casino.” There was no contrary evidence.
Accordingly, the undisputed evidence shows that Robinson’s change in employment was
not an internal transfer within a single organization but rather a new job for a separate
legal entity.
The Attorney General also argues that the conclusion that Robinson was “a
Pechanga employee” throughout the relevant period is supported by the evidence that
even after changing jobs, “Robinson still handled the purchase of property and casualty
insurance for the Resort and Casino.” She implies that doing so was still Robinson’s job.
However, at trial, the prosecutor used the fact that Robinson did not work for the casino
when he had insurance invoices sent to him at the tribal government office and persuaded
Konchar to approve them as evidence that Robinson was improperly exercising his
influence to ensure that Riley’s allegedly inflated fees and commissions would be paid,
even though he had no authority to sign off on insurance for the casino or to approve
payment for the casino’s insurance. Even if it is true that Robinson was trying to induce
Konchar to approve payment of the invoice for DIC insurance for a wrongful purpose—
as opposed to attempting to ensure that the casino had an adequate amount of DIC
14
insurance—however, it was undisputed that Robinson was not an employee of the casino
at that time.
The prosecution has the burden of proving every element of a charged offense
beyond a reasonable doubt. (People v. Neidinger (2006) 40 Cal. 4th 67, 72.) An element
of the offense of commercial bribery is that one of the parties to the illicit transaction
must be an employee of the entity alleged to have been injured by the transaction.
(§ 641.3, subd. (a).) Here, there is no evidence that Robinson was an employee of
Pechanga Resort and Casino as of the dates alleged in counts 6 through 9, as required by
section 641.3. Accordingly, the convictions on those counts must be reversed.
2.
SUBSTANTIAL EVIDENCE SUPPORTS THE VERDICTS
Defendants contend that there was insufficient evidence to support the verdicts
because (1) there was no evidence that any payment from Riley to Robinson was related
to any specific insurance transaction, and (2) there was no substantial evidence that the
defendants acted with the specific intent to injure or defraud Pechanga.
Underlying defendants’ first contention is the assumption that section 641.3
requires evidence of a direct relationship between each bribe and a specific benefit
conferred. This is a question not of the sufficiency of the evidence, but of statutory
interpretation, i.e., whether the statute requires evidence of a direct quid pro quo. The
meaning of a statute is a question of law which we decide de novo. (People ex rel.
Lockyer v. Shamrock Foods Co. (2000) 24 Cal. 4th 415, 432.)
15
If statutory language is unambiguous, the plain meaning controls. (People v.
Dunbar (2012) 209 Cal. App. 4th 114, 117.) There is nothing in the unambiguous
language of section 641.3 that supports the conclusion that a direct quid pro quo is
required. Rather, the statute requires proof that a bribe was offered and accepted or
solicited and given with the specific intent to injure or defraud the employer. (§ 641.3,
subds. (a), (d).)13 It does not require proof that a particular payment was tied to a
particular act.
13 In pertinent, part, section 641.3 provides:
“(a) Any employee who solicits, accepts, or agrees to accept money or any thing
of value from a person other than his or her employer, other than in trust for the
employer, corruptly and without the knowledge or consent of the employer, in return for
using or agreeing to use his or her position for the benefit of that other person, and any
person who offers or gives an employee money or any thing of value under those
circumstances, is guilty of commercial bribery. [¶] . . . [¶]
“(d) For purposes of this section: [¶] . . . [¶]
“(3) “Corruptly” means that the person specifically intends to injure or defraud
(A) his or her employer, (B) the employer of the person to whom he or she offers, gives,
or agrees to give the money or a thing of value, (C) the employer of the person from
whom he or she requests, receives, or agrees to receive the money or a thing of value, or
(D) a competitor of any such employer.”
16
With respect to their second argument, defendants rely on the absence of evidence
that the casino suffered any economic injury as a result of their activities as
demonstrating that they did not act with the specific intent to injure it. To the extent that
this argument rests on the premise that proof of injury is required, it is fallacious; section
641.3 does not require proof that injury resulted from the bribery. Moreover, section
641.3 does not necessarily require proof of intent to injure. Rather, section 641.3 states
its specific intent requirement in the alternative: to injure or defraud the employer or a
competitor of the employer. (§ 641.3, subd. (d)(3).) An intent to defraud is an intent to
deceive another person for the purpose of gaining a material advantage over that person
or to induce that person to part with property or alter that person’s position by some false
statement, false representation of fact, wrongful concealment or suppression of the truth,
or by any artifice or act designed to deceive. (People v. Pugh (2002) 104 Cal. App. 4th 66,
72.) It is also the intent to obtain something of value by means of a “dishonest
stratagem.” (People v. Dieguez (2001) 89 Cal. App. 4th 266, 279.) As we discuss post,
there is substantial evidence that Riley and Robinson engaged in such a stratagem.
In reviewing a claim of insufficient evidence, we review the entire record to
determine whether it contains substantial evidence to support the judgment or finding in
question. (People v. Johnson (1980) 26 Cal. 3d 557, 577.) We review the evidence
“‘in a light most favorable to respondent and presume in support of the judgment the
existence of every fact the trier could reasonably deduce from the evidence.’” (Id. at
p. 576.) Substantial evidence is evidence that is reasonable, credible and of solid value,
17
such that a reasonable trier of fact could find the defendant guilty beyond a reasonable
doubt. (Ibid.) We do not reweigh the evidence or resolve credibility issues or conflicts in
the evidence; those functions are reserved for the trier of fact. (People v. Young (2005)
34 Cal. 4th 1149, 1181.)
Here, there is substantial evidence that in return for the numerous payments he
received from Riley, Robinson exercised no oversight over the fees Riley charged. The
evidence showed that in one instance, Riley obtained a lower premium on a policy than
he had originally quoted to the casino, but that instead of giving the casino the benefit of
the reduction, he merely added the difference to his own fee. There is no evidence that
the additional fee was justified by any additional work performed by Riley to obtain the
lower premium. And, there is evidence that in at least one instance, Riley charged what
would appear to be an unconscionable fee: Riley charged a fee of $1,055,000 on a
premium of $1,105,000. When the amount of the fee was questioned by one of his
18
employees, Riley replied that the client was “helping us get our agency started.”14 There
was no evidence that in either instance, or in any other instance, Robinson ever objected
to Riley’s fee or commission or sought to negotiate a more favorable deal for the casino.
Rational jurors could infer from that evidence that Riley was bribing Robinson not to
14 In their petitions for rehearing, both defendants challenged our reliance on this
evidence. Robinson’s attorney stated his belief that the invoice reflecting this transaction
was for a self-insured workers’ compensation program made available exclusively to
Indian casinos. A prosecution witness testified that Pechanga saved a very substantial
amount of money under that program, and that the program required a great deal of
administrative work by RGA, for which no commission was paid. Robinson argued that
RGA was justified in charging a substantial agency fee reflecting the amount of work
involved. Riley argued that the exhibit does not support our interpretation of it.
We granted rehearing and also granted Riley’s motion for late transmission of
exhibits. Having reviewed the pertinent exhibit, we reject Robinson’s contention.
Neither the exhibit nor any other portion of the record Robinson cited establishes that the
invoice was related to the workers’ compensation program. Nor, we should point out, is
there any evidence that a fee of over one million dollars would have been justified by the
amount of work RGA performed in administering that program.
We also reject Riley’s argument that the exhibit merely shows the broker fee paid
to Affinity Insurance and the agency fee paid to RGA and does not also reflect the
premium paid by Pechanga. The exhibit states a “package renewal” in the amount of
$1,105,000, a broker fee to Affinity Insurance in the amount of $50,000, and an agency
fee to RGA in the amount of $1,055,000, with a total of $2,210,000 billed to Pechanga.
On its face, the invoice rationally supports the conclusion stated ante.
Robinson also complains that this invoice reflects a transaction in 2004, which is
two years earlier than the offense charged in counts 4 and 5 of the indictment. However,
neither party disputes the sufficiency of the evidence that Riley made a payment to
Robinson on or about April 27, 2006, which is the act alleged in counts 4 and 5. The
undisputed evidence showed that on that date, Riley paid Robinson $60,000. As we have
discussed ante, the prosecution did not have the burden of proving that in return for the
amount Robinson provided a direct benefit to Riley. The evidence that Riley and
Robinson engaged in a course of conduct over several years in which bribes were paid
and benefits accrued to Riley is sufficient to satisfy the requirements of section 641.3, as
long as there is evidence that they acted with the necessary intent.
19
scrutinize his fees and commissions, and that Robinson placed his own financial interests
above those of his employer. That conclusion is further supported by the evidence that
Robinson used some of the money Riley gave him either to gamble or to pay off
gambling debts, and that Robinson had significant expenses in connection with a divorce.
This is a “dishonest stratagem” designed to enrich both Riley and Robinson, potentially at
the expense of Pechanga. At the very least, their stratagem deprived Pechanga of the
opportunity to seek a better deal on its insurance.
Riley contends that Robinson cannot be faulted for his lack of scrutiny because
both Konchar and Brink testified that they did not ask Riley to break out his fees from the
gross premium, and Robinson merely acted in the same manner. However, the issue is
not whether Robinson was negligent but whether the evidence supports the conclusion
that Robinson was intentionally allowing Riley to charge whatever fees he chose rather
than protecting his employer’s interests. Rational jurors could determine that the
evidence does support that conclusion.
Defendants also contend that as long as the casino received the “full benefit of a
market value bargain,” there is no basis for finding them guilty of commercial bribery.
They point out that the casino received the insurance it needed, sometimes at a lower rate
than other casinos were able to obtain, and that the casino was never billed for insurance
it did not receive. They also contend that Riley always charged fees and commissions
20
that were within the standards of the industry. Even if this is true, however, it is not
dispositive.15 Section 641.3 does not require proof that the employer was injured by the
bribery. Accordingly, although absence of injury may be a circumstance that persuades
jurors a defendant did not act with the specific intent to injure or defraud, it does not
compel a not guilty verdict.16
15 We have not found any evidence that established what the industry standard is.
The sole instance of testimony on that point that we could find in the record was stricken
by the trial court following an objection based on lack of foundation. However, the
evidence showed that RGA’s overall profit from the Pechanga account was 20.8 percent.
Based on Konchar’s testimony that Pechanga’s current brokers charge between 15 and 20
percent fees and commissions (see fn. 5, ante), RGA’s profit might indeed have been
only slightly above industry norms.
16 CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal. App. 4th 631, 644
(CrossTalk) on which defendants rely to assert that the “full benefit of a market value
bargain” formulation is the definition of injury under section 641.3, does not so hold. In
that case, the court held that a demurrer was properly sustained because the allegations of
the complaint did not compel the conclusion the plaintiffs had committed commercial
bribery; the facts alleged did not establish that they necessarily intended to injure or
defraud anyone, because “[t]he complaint does not necessarily demonstrate any intent on
the part of plaintiffs that CBS not receive the full benefit of a market value bargain or
that plaintiffs obtained a contract improperly.” (CrossTalk Productions, Inc. v.
Jacobson, at pp. 643-644, italics added.) The court did not hold that “full benefit of a
market value bargain” is the sole formulation of injury under section 641.3, and it also
recognized that intent to injure is not the sole intent that can satisfy the requirements of
section 641.3.
21
Defendants urge us to consider all of the favorable evidence and the weaknesses in
the prosecution’s case in determining whether there truly is substantial evidence of
specific intent to injure or defraud the casino. Even if we view the evidence in the light
most favorable to defendants—which is the opposite of the standard we actually apply
(People v. Johnson, supra, 26 Cal.3d at p. 576)—however, we can at most say that
reasonable minds could differ as to whether the prosecution convincingly demonstrated
that defendants acted with the necessary specific intent. If our review of the record
shows that there is substantial evidence to support the judgment, we must affirm, even if
there is also substantial evidence to support a contrary conclusion and the jury might have
reached a different result if it had believed other evidence. (Howard v. Owens Corning
(1999) 72 Cal. App. 4th 621, 631.) Accordingly, if the evidence is such that rational
people could reach conflicting conclusions, there is by definition substantial evidence to
support the judgment. As we have discussed ante, substantial evidence supports the
verdict. It is irrelevant that another jury might have entertained doubt as to their guilt.
22
DISPOSITION
The convictions on counts 6, 7, 8 and 9 are reversed for insufficient evidence. The
trial court is directed to enter a judgment of acquittal on those counts and to issue
amended abstracts of judgment and sentencing minutes, and to provide certified copies of
the amended documents to the Department of Rehabilitation and Correction and to the
parties. The judgment is otherwise affirmed.
CERTIFIED FOR PUBLICATION
McKINSTER
J.
We concur:
RAMIREZ
P. J.
KING
J.
23