P. v. Heard
Filed 5/20/13 P. v. Heard CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
THE PEOPLE,
Plaintiff and Respondent,
v.
JEREMY HEARD,
Defendant and Appellant.
D060921, D061687
(Super. Ct.
No. SCD221605)
CONSOLIDATED
APPEALS from a judgment of the Superior Court of
County, Louis R. Hanoian, Judge.
Affirmed as modified with directions.
Rex Williams, under appointment by
the Court of Appeal, for Defendant and Appellant. [Appointed.]
Kamala D. Harris, Attorney General,
Dane R. Gillette, Chief Assistant Attorney General, Julie L. Garland, Assistant
Attorney General, Melissa Mandel and Scott C. Taylor, Deputy Attorneys General
for Plaintiff and Respondent.
Jeremy Heard appeals from a
judgment convicting him of numerous counts of prohibited practice by a mortgage
foreclosure consultant and forgery arising from his operation of a company that
purported to assist homeowners whose residences were in foreclosure. He argues the prohibited practice counts
(based on his acquisition of an interest in the residences) must be reversed
because (1) the statute of limitations
had expired for these counts, and (2) the prosecution did not establish that
the residences were still in foreclosure at the time he acquired an interest in
them. He also argues the forgery counts
must be reversed because (1) the evidence does not support that the charged
misconduct constituted forgery, and (2) the trial court failed to instruct on
aiding and abetting principles. Further,
he challenges the trial court's award of victim restitution on the basis that
one of the victims did not suffer
error.
The
Attorney General concedes, and we agree, that the minute order and abstract of
judgment incorrectly refer to a parole revocation restitution fine that was
unauthorized and not imposed by the court.
Accordingly, we modify the minute order to strike the reference to this
fine, and instruct the superior court to prepare an amended abstract of
judgment reflecting this change.
As so
modified, the judgment is affirmed.
name="_ftnref1" title="">[1]
FACTUAL AND
PROCEDURAL BACKGROUND
In the
early 2000's, defendant formed a company called Good Samaritan Society (GSS or
Good Samaritan) with a partner, James Cloud.
Cloud, a real estate salesperson, had worked with defendant in the real
estate industry since 1988. According to
Cloud, GSS was formed to help people whose residences were in foreclosure. The plan was to get residences out of
foreclosure; place ownership of the residences in a trust account for three
years; allow the homeowners time to rebuild and establish their credit; and
then permit the homeowners to obtain a loan and reacquire their ownership of
their home. To qualify for GSS's
services, the residences had to be in foreclosure and have some equity
value. To build a customer base, Cloud
and defendant purchased a foreclosure list and mailed postcards advertising
their services to homeowners on the list.
The charges in the current case were based on transactions between
defendant and seven homeowners who contracted with GSS in 2004 and 2005.
At trial,
the prosecution's witnesses included Cloud, the homeowner/victims who
contracted with GSS, and several "straw buyers" who were hired by
defendant to participate in the transactions.
The transactions were generally structured as follows.
with GSS and signed a grant deed transferring title to the residence to
GSS. GSS then sold the property to a
straw buyer who obtained a loan to buy the residence. After the straw buyer's loan was finalized,
the straw buyer deeded the property back to GSS. To obtain the loan, the straw buyer submitted
a residential purchase agreement and loan application to the bank indicating
that he or she was buying the property from GSS. The straw buyer's loan was used to pay off
the homeowner's loan, and the portion of the straw buyer's loan derived from
the equity in the home was disbursed through escrow to GSS as the seller.
The straw
buyer's name remained on the loan even after the straw buyer transferred
ownership of the property back to GSS.
The straw buyers received $10,000 from GSS for their participation. The homeowner continued residing in the home,
made monthly payments to GSS, and GSS in turn paid the monthly mortgage on the
loan obtained by the straw buyer. Under
the terms of a beneficiary agreement created with the trust agreement, GSS (or
an affiliated company owned by defendant) was entitled to a percentage of the
equity in the home upon the termination of the trust agreement.
Defendant
used three GSS employees, and the father of a GSS employee, to act as straw
buyers. According to the straw buyers,
defendant made the decisions for GSS's operations and told them how to fill out
the documents, including the residential purchase agreements and loan
applications. The straw buyers were not
experienced in real estate and they simply complied with defendant's
directions.
To ensure
that the straw buyers would qualify for the purchase loans, defendant had them
engage in numerous fabrications on the loan applications, including falsely
stating that they were going to occupy the residences; creating
"dummy" corporations and stating they worked for these corporations;
inflating their incomes; listing assets that they did not have; and falsely
stating they had no business relationship with the seller (GSS). Defendant also gave money to the straw buyers
to place in their bank accounts to show that they had sufficient assets, which
the straw buyers gave back to defendant after the loan closed.
To sell
GSS's services to interested homeowners, defendant met with them at their homes
or in his office. Defendant told the
homeowners that he could save the home from foreclosure by putting it into a
trust. He explained that the trust,
operated by Good Samaritan, was designed to keep residences safe for homeowners
who had poor credit and could not access the equity in the home until the
homeowners could improve their credit, refinance the property, and buy it back
from the trust. He told the homeowners
that they needed to sign a deed giving the house to him or GSS so that he or
another buyer could get a loan on the home to pay off the homeowner's
loan. He assured the homeowners that
they would still own the home, and the home would be deeded back to them once
they reestablished their credit and could refinance the property. When homeowners asked defendant why they had
to sign a rental agreement if they were still the owners, defendant said it was
part of the trust arrangement.
The
homeowners, who were not experienced in real estate, testified that they
trusted defendant and thought he was placing their home in a trust that would
save the home for them. Defendant told
them that even though they signed the grant deed, they retained ownership of
the home though the placement of the property in the trust. Further, defendant explained to the
homeowners that Good Samaritan's services were designed to use the equity in
the homes to help the homeowner, and also to help other homeowners who needed
assistance, and for this reason the company was called Good Samaritan.
In 2006 and
2007, problems began emerging in the loan payment arrangements. For various reasons, the homeowners stopped
sending payments to GSS and/or GSS stopped sending payments to the bank. For most of the homeowners, the loan went
into default, and the bank ultimately foreclosed on the home or defendant evicted
the homeowner from the home. In June
2006, Cloud, who had become embroiled in a financial dispute with defendant and
had started to question whether defendant was helping people, wrote a letter to
the district attorney's office describing GSS's practices. Also in 2006 and 2007, some of the homeowners
contacted the authorities or retained attorneys, and one of the straw buyers
contacted the FBI.
After an
investigation by the authorities, defendant was charged with six counts of a
prohibited practice by a foreclosure consultant based on his acquisition of an
interest in properties in foreclosure (Civ. Code, § 2945.4, subd. (e)) and
seven counts of forgery
(Pen. Code, § 470, subd. (d)) based on the fabricated home
purchase loan applications.
name="_ftnref3" title="">[3] The prohibited practice counts were based on
the transactions with six of the homeowners.
with five of the homeowners whose transactions involved defendant's use of
straw buyers.
title="">[5]
Defendant
represented himself at trial. After
hearing the evidence, the jury convicted him as charged. Counsel was appointed for purposes of
sentencing, and defendant received an eight-year eight-month sentence (four
years eight months to be served in the county jail and the remaining four years
to be served on supervised community release).
DISCUSSION
I. Challenges
to Prohibited Practice Counts
A.
Statute of Limitations
1. Application of Four-Years-After-Discovery
Statute of Limitations
Defendant
argues that when the prosecution against him was commenced on
July 20, 2009 (his arraignment date), the statute of
limitations had expired for the counts based on a prohibited practice by a
mortgage consultant (Civ. Code, § 2945.4).
Under sections 800 and 801, prosecution of an offense that is punishable
by imprisonment for less than eight years (as here) must be commenced within
three years after commission of the offense.
(c), extend the statute of limitations to four years and allow for a discovery
tolling period if the offense involves an element of fraud or breach of a
fiduciary obligation.
name="_ftnref7" title="">[7] The trial court instructed the jury to
resolve the statute of limitations issue under the four-years-after-discovery
statute.
Because the
charged prohibited practice offenses were committed in 2004 and 2005, the
commencement of the prosecution in 2009 was untimely if the three-year statute
of limitations applied. Defendant
asserts the three-year statute of limitations applied because the prohibited
practice of the acquisition of an interest in a residence in foreclosure does
not include an element of fraud or breach of fiduciary obligation within the
meaning of section 803, subdivision (c).
We disagree.
Section 803
states in relevant part: "(a)
Except as provided in this section, a limitation of time prescribed in this
chapter is not tolled or extended for any reason. [¶] . . . (c) A limitation of
time prescribed in this chapter does not commence to run until the discovery of
an offense described in this subdivision.
This subdivision applies to an offense punishable by
imprisonment . . . , a
material element of which is fraud or breach of a fiduciary obligation . . . ." (Italics added.)
Appellate
courts (including this court) have concluded that section 803, subdivision (c)
is applicable if an offense has the prevention of fraud or fiduciary breach as
its "core purpose," even if fraud or fiduciary breach is not strictly
an element of the offense. (
17, 25-26 [filing a false nomination paper governed by section 803, subdivision
(c)]; People v. Bell (1996) 45
Cal.App.4th 1030, 1061 [this court's decision holding that offense of filing
false or forged documents is governed by section 803, subdivision (c)].) Defendant argues this interpretation is contrary
to the statute's plain language because "material element" can only
mean an element of the offense that the prosecution must prove. We are not persuaded.
When
interpreting a statute, our goal is to ascertain and effectuate legislative
intent. (People v. Price (2007)
155 Cal.App.4th 987, 991.) We construe
the words of the statute based on their ordinary and usual meaning and in the
context of the statute as a whole. (
" 'Material
element' " can be defined in its narrow, technical sense to mean an
essential element that the prosecution must prove to establish the
offense. (See State v. Reynolds (Or.App. 2002) 51 P.3d 684, 685-686.) However, it can also be defined in its
broader, nontechnical sense to mean an important aspect of the offense. (See Merriam-Webster's Collegiate Dictionary
(10th ed. 2002) pp. 715, 372 ["material" means "having real
importance or great consequences"; "element" means "a
constituent part"].) The latter
interpretation is not contrary to the plain language of the statute; rather, it
is merely based on everyday usage rather than the technical definition of the
term.
We agree
with the holdings in Guevara and
intended the term "material element" to be interpreted based on its
nontechnical usage. Generally, the
delayed discovery rule is designed to relieve " 'the harshness [of barring
prosecution] . . . where it is manifestly unjust to deprive
plaintiffs of a cause of action before they are aware that they have been
injured.' " (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805,
826.) Such injustice can arise when the
defendant engages in a fraudulent act or a breach of a fiduciary obligation
that prevents the plaintiff from being aware of the misconduct or dissuades the
plaintiff from investigating the possibility of misconduct. (See id.
at p. 827.) This unfairness can occur
regardless of whether the fraud or fiduciary breach is an actual element of the
offense, or whether prevention of fraud or fiduciary breach is the underlying
purpose of the statutory enactment.
Given the ameliorative purpose of section 803, subdivision (c)'s delayed
discovery provision, it makes sense that the Legislature intended the phrase
"material element" to be interpreted based on its broader, ordinary
usage so as to apply the tolling provision to offenses that target fraud and
breach of fiduciary obligations even if these matters are not actual elements
of the offense.
As an
alternative argument, defendant posits that the prohibited practice offense of
acquiring an interest in property in foreclosure (Civ. Code, § 2945.4, subd.
(e)), does not have a core purpose of protecting against fraud or breach of a
fiduciary obligation. He notes that the
offenses in Guevara and
whereas no such falsification is needed to acquire an interest in the
homeowner's property. Again, we disagree
because it is clear that the prevention of fraud
and breach of a fiduciary obligation underlies the statutory scheme
governing mortgage foreclosure consultants, including the provision prohibiting
acquisition of an interest in the property.
In the
introductory provisions of the statute regulating mortgage foreclosure
consultants, the Legislature explicitly sets forth its intent to prevent fraud
and unfair dealing, stating:
"[H]omeowners whose residences are in foreclosure are subject to
fraud, deception, harassment, and unfair dealing by foreclosure
consultants . . . .
[¶] . . . [¶] . . . The intent
and purposes of this article
are . . . [¶] . . . to safeguard the
public against deceit and financial hardship; . . . to
prohibit representations that tend to mislead; and to encourage fair dealing in
the rendition of foreclosure services."
(Civ. Code, § 2945, subds. (a), (c)(1).)
To this end, the Legislature imposed a lengthy list of obligations on a
foreclosure consultant who contracts with a homeowner whose home is in
foreclosure, including, for example, the duty to provide a written contract
fully disclosing the exact nature of the consultant's services; to notify the
homeowner in "14-point boldface type" that the consultant cannot ask
the homeowner to sign any deed; to notify the homeowner in "10-point
boldface type" of the right to cancel the transaction within five business
days; not to receive any compensation until after the services are fully
performed; not to take any security to secure payment of compensation; not to
acquire an interest in the residence in foreclosure; and not to take any power
of attorney from the homeowner. (Civ.
Code, §§ 2945.3, 2945.4.)
A fiduciary
obligation arises when a person " 'knowingly undertake[s] to act on behalf
and for the benefit of another, or . . . enter[s] into a
relationship which imposes that undertaking as a matter of law.' " (City
of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375,
386.) A foreclosure consultant who
contracts with a homeowner whose property is facing foreclosure has undertaken
an obligation to act for the benefit of the homeowner and is subject to strict
statutory oversight. As such, a
foreclosure consultant falls into the category of persons who owe fiduciary
obligations to his or her clients. (See,
e.g., George Ball Pacific, Inc. v.
Coldwell Banker & Co. (1981) 117 Cal.App.3d 248, 256 [real estate
broker owes fiduciary duties to client]; Apollo
Capital Fund LLC. v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226,
245 [stockbroker who advises on investment decisions owes fiduciary
duty].) And, by acquiring an interest in
the homeowner's property, the foreclosure consultant has violated one of the
statutorily-defined fiduciary obligations.
It is clear that this prohibited practice offense has at its core the prevention
of a breach of fiduciary obligation.
We conclude
the four-years-after-discovery provision applies to the prohibited practice
counts.
2. Substantial
Evidence of Delayed Discovery
Even
applying the four-years-from-discovery statute of limitations, defendant
asserts the evidence does not support the jury's finding that the discovery of
the prohibited practice offenses occurred on or after July 20, 2005, so as to
make the July 20, 2009 commencement of the prosecution timely. He contends the homeowners discovered or
should have discovered the offenses when they signed the deeds transferring the
properties to GSS, which occurred in 2004 and January 2005.
An offense
is discovered when either the victim or law enforcement learns of facts which,
when investigated with reasonable diligence, would make the person aware a
crime had occurred. (
1433, 1445.) The crucial determination
is whether the victim or the authorities had actual notice of circumstances
sufficient to make them suspicious of fraud or breach of a fiduciary obligation
leading them to make inquiries that might have revealed the misconduct. (Ibid.) However, when there is a fiduciary
relationship between a defendant and a victim, "facts which ordinarily
require investigation may not incite suspicion . . . ." (Hobbs
v. Bateman Eichler, Hill Richards, Inc. (1985) 164 Cal.App.3d 174,
201.) In this circumstance, "the
duty to investigate may arise later because the [victim] is entitled to rely
upon the assumption that his fiduciary is acting on his behalf." (Id.
at p. 202.)
The
prosecutor must prove that the prosecution is timely by a preponderance of the
evidence. (People v. Wong, supra, 186 Cal.App.4th at p. 1444.) On appeal, we review the record in the light
most favorable to the judgment and draw all reasonable inferences that the jury
could draw from the evidence. (
The record
supports that when the homeowners signed the deeds transferring title to their
residences in 2004 and early 2005, they thought they were transferring their home
to a trust which would safeguard the property on their behalf, and hence they
were not aware of facts giving rise to a suspicion that there had been a
prohibited transfer to a foreclosure consultant. By contracting to help the homeowners save
their homes from foreclosure, defendant assumed the fiduciary obligations
defined in the Civil Code for foreclosure consultants. The homeowners consistently testified that
although they signed a deed transferring the property to GSS, defendant told
them that under the trust arrangement the home still belonged to them and it
would be transferred back to them when they could improve their credit and
obtain refinancing. Given defendant's
status as a foreclosure consultant subject to statutorily-specified duties of disclosure
and fair dealing, the jury could reasonably consider that the homeowners were
entitled to rely on defendant's expertise and the truth of his representations
when he described the transaction as effectively retaining their ownership
interests in the property notwithstanding the execution of the deeds.
Because
defendant led the homeowners to believe that under the terms of the transfer he
did not own their homes, but rather the trust owned the home for the benefit of
the homeowner, the jury could reasonably find that when the homeowners signed
the grant deeds in 2004 and early 2005 they were unaware of facts triggering a
duty to investigate the possibility of a prohibited transfer of interest to a
foreclosure consultant. Thus, the jury
was not required to find that the offenses were discovered, or should have been
discovered, prior to July 2005 so as to make the July 2009 commencement of the
prosecution untimely.
B. Substantial
Evidence of Residence in Foreclosure
With
respect to the prohibited practice counts, defendant argues there was
insufficient evidence to support the statutory requirement that the homeowners'
residences were in foreclosure based on outstanding recorded notices of default
at the time he acquired the interests in their properties. He contends that although the prosecution
presented evidence that notices of default were recorded at some point before
he acquired the interests, it did not present evidence that they were
interests.
Civil Code
section 2945.4, subdivision (e) makes it unlawful for a foreclosure consultant
to "[a]cquire any interest in a residence in foreclosure from an owner
with whom the foreclosure consultant has contracted." A residence in foreclosure is defined as
"residential real property consisting of one- to four-family dwelling
units, one of which the owner occupies as his or her principal place of
residence, and against which there is an
outstanding notice of default, recorded pursuant to [section 2920 et
seq.]." (Civ. Code, §§ 1695.1,
italics added, 2945.1, subd. (f).)
In
reviewing a challenge to the sufficiency of the evidence, we consider the
entire record and draw all reasonable inferences in favor of the judgment to
determine whether a reasonable trier of fact could find the elements of the
offense beyond a reasonable doubt. (People
v. Young (2005) 34 Cal.4th 1149, 1175.)
The same standard applies when the prosecution relies primarily on
circumstantial evidence. (
"An appellate court must accept logical inferences that the jury
might have drawn from the circumstantial evidence." (People
v. Maury (2003) 30 Cal.4th 342, 396.)
To carry its burden of proof, the prosecution is not required to
"call all witnesses or introduce all exhibits or documents referred to in
the testimony or suggested by the evidence." (People
v. Simms (1970) 10 Cal.App.3d 299, 313.)
"Unless it is clearly shown that 'on no hypothesis whatever is
there sufficient substantial evidence to support the verdict' the conviction
will not be reversed." (
Cal.App.4th 1091, 1114.)
At trial,
the prosecution submitted into evidence notices of default for each of the
homeowners involved in the prohibited practice counts. Each notice of default was recorded prior to
the time defendant acquired the interest in the property. Also, the homeowners testified that they
contacted defendant and agreed to the trust transaction because they were
behind in their mortgage payments and/or their homes were in foreclosure and
defendant told them he could save their homes from foreclosure.
To
illustrate, the evidence included the following.
(1) For homeowner Kathy Barnes, the prosecution
submitted a notice of default recorded on January 7, 2004, and a trust
agreement and deed for the GSS transaction signed by Barnes on February 3,
2004. Barnes testified that she missed
three mortgage payments in late 2003; she met with defendant in December 2003
and January 2004 to discuss what she could do in the event of foreclosure; and
defendant provided money to get her home out of foreclosure.
(2) For homeowner Leotha Britt, the evidence
showed a July 21, 2003 recorded notice of default, and a September 21 and 22,
2004 signed trust agreement and deed, respectively. Britt testified that in 2004 she fell behind
on her mortgage payments "to the point of foreclosure"; defendant
told her he would be able to save her home from the foreclosure; Britt signed
the deed because she was desperate and "trying to save [her] home";
and she filed for bankruptcy to stop the foreclosure because the house was
going to be sold through foreclosure "within a couple of days[.]"
(3) For homeowner Ruta Tavale, the evidence
showed a September 8, 2004 recorded notice of default, and an October 13 and
20, 2004 signed trust agreement and deed, respectively. Tavale testified that in 2004 she was falling
behind on her mortgage payments; she received notices from the bank about
foreclosure; defendant told her he could stop the foreclosure; and she entered
into the transaction to get out of foreclosure.
(4) For homeowner Ominae Aiono, the evidence
showed a January 30, 2002 recorded notice of default, and a January 7 and 11,
2005 signed trust agreement and deed, respectively. Aiono testified that he had trouble making his
mortgage payments in the early 2000's; by the time he met with defendant he was
about $12,000 behind in his $1,900 monthly payment; he told defendant about his
"foreclosure situation"; and
defendant said GSS could get him out of foreclosure.
(5) For homeowner Larry Bridges, the evidence
showed a November 30, 2004 recorded notice of default, and a January 31, 2005
signed trust agreement and deed. Bridges
testified that he was three months behind on his mortgage and the home started
going into foreclosure in the summer; he contacted defendant in the fall; and
defendant said he could give him a loan to help him catch up with his mortgage
and he would pay defendant instead of a bank.
(6) For homeowner Andrew Bulinski, the evidence
showed an August 2, 2004 recorded notice of default, and a January 6, 2005
signed trust agreement and deed.
Bulinski testified that he began falling behind in his mortgage payments
and received notices from his bank about defaulting on the loan; he contacted
the bank and was told they could not help him; he "started panicking"
and contacted defendant in early 2005; defendant told him he could save his
home; and when Bulinski signed the documents provided by defendant Bulinski was
"desperate."
The
documents showing that notices of default had been recorded, combined with the
homeowners' testimony reflecting that they were trying to save their homes from
foreclosure when they contacted defendant, provides substantial evidence to
support the jury's finding that the default notices were still outstanding when
defendant acquired the interests in the properties.
To support
his challenge to the sufficiency of the evidence, defendant notes that the
prosecution could have presented evidence indicating that a records search had
been conducted and that no notices of rescission of the notices of default had
been recorded at the time he acquired the interests in the homes. The absence of this evidence does not defeat
the support for the findings that there were outstanding notices of
default. As stated, the prosecution is
not required to present all evidence that could support the alleged
charges. On appeal, our inquiry is
whether there is substantial evidence supporting the jury's finding that the
element was established beyond a reasonable doubt. This standard is met here.
II. Challenges
to Forgery Counts
A.
Substantial Evidence of Misconduct Constituting Forgery
Defendant
argues the record does not support that the charged acts constituted
forgery. He asserts the prosecution's
theory was that he committed forgery by directing the loan applicants to
inflate income and assets on the loan applications; forgery requires a false
writing that purports to be that of another or something that it is not; the
loan applications were signed by the applicants and were what they purported to
be; and the mere inclusion of false information contained in a document does
not constitute forgery.
The offense
of forgery is committed when the defendant, with the intent to defraud, falsely
makes or passes, as true and genuine, a writing that, if genuine, creates some
legal right or obligation. (§ 470, subd.
(d); People v. Gaul-Alexander (1995)
32 Cal.App.4th 735, 741-742.) However,
when a document is what it purports to be, the inclusion of false statements
within the instrument may constitute false pretenses, but it does not
constitute forgery. (2 Witkin, Cal.
Criminal Law: Crimes Against Property
(4th ed. 2012) § 194, pp. 244-245.)
"[F]orgery directly implicates the writing itself, not the oral or
implied misstatement about the writing."
(Id. at p. 245) To constitute forgery based on the creation
or use of a fraudulent document, the "instrument
must fraudulently purport to be what it is not." (People
v. Bendit (1896) 111 Cal. 274, 277.)
" 'The term falsely, as applied to making or altering a writing in
order to make it forgery, has reference not to the contents or tenor of the
writing, or to the fact stated in the writing, because a writing containing a true
statement may be forged or counterfeited as well as any other, but it implies
that the paper or writing is false, not
genuine, fictitious, not a true writing, without regard to the truth or
falsehood of the statement it contains --a writing which is the counterfeit
of something which is or has been a genuine writing, or one which purports to
be a genuine writing or instrument when it is not.' " (Id.
at p. 279, italics added.) That is,
"[t]hough a forgery, like false pretenses, requires a lie,
itself:[] the lie must relate to the genuineness of the document." (LaFave, Substantive Criminal Law (2d ed.
2013) § 19.7, subd. (j)(5), p. 138, italics added, fn. omitted.)
The jury
was instructed that to convict defendant of forgery the defendant must have
"falsely made a residential loan application" or "passed or used
a false residential loan application."
The evidence showed that defendant caused the submittal of home purchase
loan applications (and accompanying documentation) to the banks purporting to
be applications from persons who were seeking loans to purchase the homes,
whereas in fact the persons identified in the loan applications were
purchase transaction.
name="_ftnref10" title="">[10] Rather, the persons identified on the home
purchase loan applications were hired by defendant to pose as buyers.
the loan applications, they did so at defendant's direction and thus the
creation and use of the documents could properly be attributed to defendant.
In short,
defendant caused documents to be submitted to the banks that purported to be
genuine home purchase loan applications that were not home purchase loan
applications at all because there was no real buyer and no home actually being
sold to a buyer. The home purchase loan
documents did not merely contain false statements about such matters as the
buyer's income and assets; rather, the documents themselves were fake
representations of a nonexistent transaction.
Thus, defendant created and used a document that purported to be a
genuine home purchase loan application that was not in fact a genuine document
because a home buyer and a home purchase transaction did not exist. This factual scenario supported the forgery
counts.
Defendant
also argues the loan applications were not subject to the forgery statute
because they did not create a legal duty on the part of the bank to approve the
loan applications. The forgery offense
applies to fabricated documents that will damage the legal rights, usually
money or property, of a person who acts upon the document as genuine. (People
v. Gaul-Alexander, supra, 32 Cal.App.4th at p. 742; People v. Vincent (1993) 19 Cal.App.4th 696, 700;
332 ["Whether the forged instrument . . . , if
genuine, would create a legal liability, is immaterial; the test is whether
upon its face it will have the effect of defrauding one who acts upon it as
genuine."].) Although the bank was
not required to approve the loan application, when it did so it was acting upon
the document as a genuine home purchase loan application. The bank's right not to extend loans for
nonexistent transactions was prejudiced by the fabricated document. There was no error in applying the forgery
statute to defendant's conduct of creating or using the fabricated home
purchase loan applications.
B. Failure
To Instruct on Aiding and Abetting for Forgery
Defendant
contends the prosecutor relied on aiding and abetting principles for the
forgery counts and hence the court erred in failing to sua sponte instruct the
jury on aiding and abetting.
A trial court must sua sponte
instruct on general principles of law that are commonly connected to the facts
adduced at trial and that are necessary for the jury's understanding of the
case. (People v. Young, supra, 34 Cal.4th at p. 1200.) The court must instruct on every theory of
the case supported by substantial evidence.
(Ibid.) The perpetrator of a crime is the person
whose culpability is premised on his or her own commission of acts that
constitute the crime. (See
1117.) An aider and abettor of a crime
is a person whose culpability is premised on his or her assistance or
encouragement of the perpetrator's acts.
(See ibid.) To establish culpability based on aiding and
abetting, the defendant must have had knowledge of the perpetrator's unlawful
purpose, intended to commit or encourage the offense, and by act or advice aided
or encouraged the commission of the offense.
(People v. Williams (1997) 16
Cal.4th 635, 676.)
When the evidence can support
culpability based on aiding and abetting, the jury should be instructed on the
intent necessary to establish guilt on this theory. (See People
v. Williams, supra, 16 Cal.4th at p. 676.) However, instructions on aiding and abetting
are not required where the defendant was not tried as an aider and abettor and
there was no substantial evidence to support the theory. (People
v. Young, supra, 34 Cal.4th at
p. 1201.) Evidence is
substantial if a reasonable jury could find it persuasive. (Id. at
p. 1200.)
Contrary to
defendant's contention, the record shows that defendant was tried as the actual
perpetrator of the forgery, not as an aider and abettor. The prosecution's theory was that defendant
was the actual perpetrator because he masterminded the fraudulent home purchase
loan application scheme and instructed the straw buyers on how to fill out the
documents. Although the straw buyers may
have been defendant's accomplices because they helped defendant, there was no
claim by the prosecutor that defendant could be culpable as a facilitator of
the straw buyers even if he was not the direct perpetrator.
Defendant
contends he could not be prosecuted as the direct perpetrator because he did
not personally produce the loan applications but directed others to do so. The contention is unavailing. The evidence showed that defendant in effect
committed the acts of fabricating the loan applications by directing his
subordinates to prepare the documents per his instructions. In this context, defendant used agents to
commit acts for him, which can make him culpable as the perpetrator. (People
v. Waxman (1952) 114 Cal.App.2d 399, 407-408; see 17 Cal.Jur. 3d (2010)
Criminal Law: Core Aspects, § 128, pp.
224-225.) This is not a case where the
defendant merely assisted or encouraged other persons to commit the acts
underlying the criminal offense; rather, defendant himself generated and controlled
the acts through the use of subordinates who obeyed his directions.
Because
defendant was not tried on an aiding and abetting theory and there was no
substantial evidence to support that he was merely a facilitator and not an
actual perpetrator, the trial court was not required to sua sponte instruct on
aiding and abetting principles.
Alternatively,
even assuming arguendo the trial court should have instructed on aiding and
abetting, the error was harmless beyond a reasonable doubt. (People
v. Kurtenbach (2012) 204 Cal.App.4th 1264, 1274.) The jury was instructed that to find
defendant guilty of forgery, the prosecution had to prove that defendant made
or used a false residential loan application; that he knew the application was
false; and that he intended that the application be accepted as genuine and
intended to defraud. (See CALCRIM Nos.
1904, 1905.) Thus, the instructions
required the jury to find defendant committed the acts and had the requisite
state of mind for forgery, and the jury was not led to believe that it could
find him guilty based merely on an accomplice's acts or state of mind.
Defendant
argues that because the jury was not instructed on aiding and abetting, it did
not know that the straw buyers who actually filled out the loan applications
had to have acted with intent to defraud in order to find defendant guilty as
an aider and abettor. This contention is
based on a misunderstanding of aider and abettor principles. Aiding and abetting culpability may be based
on the combined acts of the perpetrator and aider and abettor, but the
culpability of each turns on his or her own individual mens rea. (People
v. McCoy, supra, 25 Cal.4th at p. 1120.)
The fact that the direct perpetrator may have a lesser (or no)
culpability does not exonerate an aider and abettor who acts with the state of
mind required for the charged offense. (
There was
no reversible error arising from the failure to instruct on aiding and
abetting.
III. Restitution
A. Restitution
Awarded to Wilson
After
holding a restitution hearing, the trial court ordered defendant to pay
restitution to the homeowners based on the amount of equity they had in their
homes at the time of defendant's misconduct.
Defendant asserts there was no evidence to support a finding of
compensable loss by one of the victims (Michael Wilson) because Wilson's father
was the owner of the home, and Wilson was a victim associated with the forgery,
but not the prohibited practice, counts.
The Attorney General contends this challenge is forfeited on appeal
because although defendant challenged the amount of the award to Wilson, he did
not raise the issue of Wilson's lack of ownership of the home.
To avoid a
forfeiture on appeal, the defendant must generally raise restitution objections
to the trial court. (
745, 755.) In any event, even assuming
arguendo the issue is not forfeited, the record supports the award to Wilson.
The trial
court is required to award restitution to "a victim [who] has suffered
economic loss as a result of the defendant's
conduct . . . ."
(§ 1202.4, subd.
(f).) A victim is a person who is the
object of a crime. (People v. Crow (1993) 6 Cal.4th 952, 957.) On appeal, we review the trial court's
restitution order for abuse of discretion.
(People v. Gemelli (2008) 161
Cal.App.4th 1539, 1542.) No abuse of
discretion will be found where there is a rational and factual basis for the
restitution order. (See
The
prosecution did not file a prohibited practice count for the transaction
associated with Wilson because the residence was not owner-occupied as required
by the prohibited practices statutory scheme.
(See fn. 4, ante.) The forgery counts were based on the
fabricated loan applications, and defendant argues that the bank (not Wilson)
was the direct victim of the forgery and Wilson has not suffered an economic
loss based on the forgery.
Although
Wilson did not directly suffer loss from the forgery, he nevertheless was a
direct victim of, and suffered economic loss from, defendant's overall trust
agreement scheme. Wilson testified that
his father originally purchased the home and title to the home was in his
father's name, but Wilson made the monthly mortgage payments and lived there
with his family. Wilson met with
defendant and decided to use GSS's services, and thereafter brought his father
to a meeting with defendant to sign the necessary documentation. Wilson explained that his father let him
decide whether to sign up for GSS services, stating: "[M]y dad left it in my purview to
do. At the time I was messing up my
father's credit. I wanted to get my
dad's name off of the credit. So this
was like [a] last shot. We'll do this,
get his name out of it, and he won't have anything to do with the house
anymore."
Drawing all
inferences in favor of the court's ruling, the evidence showed that Wilson paid
the mortgage, used the home as his permanent residence, and had an
understanding with his father that the house effectively belonged to him. This provided a reasonable basis for a
finding that he suffered economic loss from defendant's misconduct. Further, because Wilson lived in and was
financially responsible for the residence and met with defendant to secure GSS's
services, he was the object of defendant's misconduct. Under these circumstances, he can reasonably
be characterized as a victim of defendant's misconduct even though he was not
the title owner and his transaction did not correlate with the prohibited
practice counts. The record supports the
trial court's inclusion of Wilson in the victim restitution award.
B. Correction
of Minute Order and Abstract of Judgment
The parties
agree, as do we, that the minute order and abstract of judgment should be
corrected to remove a parole revocation restitution fine (§ 1202.45) that was
not imposed by the court and that is not authorized given that defendant is
serving his sentence in local custody and will not be paroled.
DISPOSITION
The
judgment is modified to remove the parole revocation restitution fine from the
minute order. As so modified, the
judgment is affirmed. The superior court
is directed to correct the abstract of judgment to remove the parole revocation
restitution fine and to transmit a corrected abstract of judgment to the local
custody officials and to the California Department
of Corrections and Rehabilitation as necessary.
HALLER, Acting P. J.
WE CONCUR:
McDONALD, J.
O'ROURKE, J.
name="_ftn1" title="">[1] Defendant has also filed a petition for writ of habeas
corpus, which we have considered with the appeal. In an order filed separately from this
opinion, we deny the habeas petition.
name="_ftn2" title="">[2] There were some differences in the way some of the
transactions were structured, but for purposes of resolving the issues on
appeal we need not specify the variations.
