P. v. Cruz-Cody

Filed 5/24/06 P. v. Cruz-Cody CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

APPEAL from a judgment of the Superior Court of Los Angeles County.

Marsha N. Revel, Judge. Affirmed.

Robert M. Sweet, under appointment by the Court of Appeal, for Defendant and Appellant.

Bill Lockyer, Attorney General of the State of California, Robert R. Anderson, Chief Assistant Attorney General, Pamela C. Hamanaka, Senior Assistant Attorney General, Lance E. Winters, Supervising Deputy Attorney General, and Susan Sullivan Pithey, Deputy Attorney General, for Plaintiff and Respondent.

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Appellant Olivario De La Cruz Cody was convicted, following a jury trial, of one count of theft from an elder in violation of Penal Code[1] section 368, subdivision (d) and one count of attempted theft from an elder in violation of sections 368 and 664. The jury found true the special allegations that over $100,000 was stolen within the meaning of section 1203.45, subdivision (a) and that appellant took, damaged or destroyed property of a value exceeding $150,000 within the meaning of section 12022.6, subdivision (a)(2).) The trial court sentenced appellant to a total term of four years and six months in state prison.

Appellant appeals from the judgment of conviction, contending that there is insufficient evidence to support his conviction for either theft or attempted theft, and further contending that the trial court erred in refusing to instruct the jury on third-party capability. We affirm the judgment of conviction.

Facts

Appellant received his license as an insurance agent on July 25, 2000. He worked for Adam & Associates, a company owned by Adam Sandoval. An insurance agent must be appointed by an insurance company to sell its products. Appellant had about 20 such appointments on file. As an insurance agent, appellant was authorized to sell fixed-rate annuities, which are considered an insurance product. An insurance agent needs a special license to sell variable-rate annuities, which are considered to be somewhat like a security. Appellant did not have such a license.

1. Paraino

In October 2001, seventy-five year old James Paraino responded to an advertisement offering assistance with living trusts and other financial arrangements. He was interested in having someone review his living trust. Adam Sandoval and Stephanie Davidson came to Paraino's house and discussed ways that Paraino could get a better return on his investments. Paraino expressed interest in short-term investments with about five-year terms. Sandoval suggested an annuity by Conseco. Paraino filled out an application for a Conseco annuity and authorized a transfer of $100,000 from his trust to Conseco. Paraino did so because he believed that it was safe investment with a guaranteed rate of return.

Ultimately, $243,937.98 was transferred from Paraino's trust to Conseco. This amount represented about half of Paraino's retirement fund. At some point after receiving documents about the annuity, Paraino discovered that the term of the annuity was 15 years.

Paraino contacted Sandoval's company, Adam & Associates, to complain about the long term of the annuity. He spoke with appellant. Paraino told appellant that he was going to terminate the annuity contract if the company would not agree to a shorter term. Appellant replied that Paraino would incur a stiff penalty if he cancelled the annuity contract.

In April 2002, Paraino wrote a letter to Conseco accusing Sandoval of misrepresentation and asking to rescind the contract. Apparently, Conseco refused to rescind.

In August 2002, Adam & Associates agreed to cover any penalties incurred by Paraino from termination of the Conseco annuity " as long as James Paraino continues to work with Adam and Associates." This agreement was signed by appellant and Paraino.

In November 2002, the Conseco annuity was terminated. Paraino received a check for $178,555.28, the value of the account after surrender fees of $40,988.91 were assessed. Paraino also received one distribution check from Conseco prior to termination.

In December 2002, appellant met with Paraino to discuss investment options. Appellant told him about a company called Global Enterprises Incorporated (" Global" ) that offered seven year investments with an interest rate of 8.5%. Appellant used a piece of paper to calculate the dollar amount of the annual yield. Appellant did not discuss any other investment options with Paraino. Paraino agreed to invest the Conseco refund with Global and filled out a Global Enterprises Fixed Annuity application. He did not receive any literature about Global. Appellant confirmed that Adam & Associates would contribute an additional $40,988.91 to the Global account.

At some point thereafter, Paraino received a document from Global showing that his annuity, in the form of an individual retirement account, went into effect on December 20, 2002. The form showed an initial deposit of $178,555.28 and a " premium bonus" of $40,988.91. The form also showed an interest rate of 8.5%. A separate form showed that Paraino was scheduled to receive a distribution of $18,661.25 on about December 20, 2003.

Paraino did not receive a distribution in December 2003. He tried to contact appellant and Global on several occasions. Eventually, he spoke with appellant, who agreed to meet with Paraino in January, 2004.

Paraino and appellant met in January 2004. Appellant filled out a document called a service request, which was addressed to Global and requested that a distribution be made to Paraino. On January 20, 2004, Paraino received a telephone call from Anthony Stroupe, the chief executive officer of Global. Stroupe stated that he had received the service request.

Paraino did not receive a distribution from Global. He was unable to contact appellant or Stroupe again. Paraino never recovered the money he invested with Global, or the $40,000 in surrender fees that Adam & Associates had promised to cover.

2. Troutman

In November 2002, Jane Troutman received a postcard offering free facts and advice on matters that could affect her and her heirs. She thought that she might receive some help changing her trust, and so she responded to the postcard. A few weeks later, Sandoval called and set up a meeting with Troutman at her house. Appellant came to the meeting with Sandoval.

At the meeting, Troutman described some legal and financial issues that she wanted help resolving. The men told her that they could help her. They asked to see and photocopy her brokerage statements, and set up a second meeting.

At the second meeting, Sandoval and appellant told Troutman that they could set her up in an annuity which had a higher annual income than her current investments. Troutman told Sandoval that she was not interested in purchasing an annuity. Troutman signed something at the conclusion of the meeting, was but not sure what it was.

Troutman became suspicious of Sandoval and appellant. Through the American Association of Retired Persons, Troutman learned of the Retired Seniors Volunteer Program (" RSVP" ), a financial fraud fighting organization. Troutman contacted RSVP, which sent Esther Rubin, one of its volunteers, to Troutman's house.

Rubin was present at Troutman's next meeting with appellant and Sandoval. Troutman introduced Rubin as a friend. Sandoval and appellant tried to convince Troutman to invest her money in an annuity which they were selling, and to sign more paperwork. Troutman told them that she was not interested in an annuity. Rubin suggested that the men leave the paperwork for Troutman to review with her attorney.

Once the men left, Rubin gathered up the paperwork which she later turned over to her supervisor at RSVP. She testified at trial that she remembered seeing the name Global Enterprises on the business cards she received from Sandoval and appellant and on one of the papers the men gave Troutman.

After the meeting, Troutman received a letter from a company called Allianz thanking her for purchasing an annuity. She also received a telephone call from her broker, who had received a $100,000 transfer request signed by Troutman. The broker cancelled the transfer. Troutman admitted at trial that she might not have read everything that she signed at the second meeting with Sandoval and appellant because she trusted them.

3. Investigation

In December 2002, at the request of the District Attorney, Rebecca Gutierrez, a legal analyst with the California Department of Corporations, searched the Department's records and found that Global was not qualified to sell securities in California. She prepared a Desist and Refrain Order that was later served on Stroupe, Sandoval and appellant. Appellant was served with the order on January 16, 2003.

Jerry Gallardo, a senior investigator with the Department of Insurance, investigated the case. He learned that Global was not licensed to sell insurance in California. Global had previously been ordered not to sell securities in South Carolina. In Gallardo's opinion, Global was a " Ponzi" scheme. In Gallardo's experience, life insurance agents usually got involved in such schemes because they were offered very high commissions.

Gallardo was at the Wilshire Division of the Los Angeles Police Department on July 26, 2004, when appellant and Sandoval arrived to surrender to police. They were accompanied by an attorney. In the presence of his attorney, appellant told Gallardo that he had received a commission from Sandoval for the Paraino-Global transaction.

Union Bank records for Global's account showed a deposit of $178, 555.28 into Global's account on December 20, 2002. Checks were subsequently written on that account for lease payments for Stroupe's car and Global's office space, and for Stroupe's hotel bills at the Peninsula Hotel and his American Express card bill. These checks reduced the balance of the account to $40.73 by January 31, 2003. Bank records also showed transfers between the Global account and an Adam & Associates' account at Bank of America.

In his defense, appellant presented the testimony of Gallardo that he did not verify whether Adam & Associates received any money from Global specifically for the Paraino transaction. Gallardo also testified that he was not able to tie funds from Global or Adam & Associates to appellant after December 18, 2002. Gallardo confirmed that the check from Conseco to Paraino, which Paraino endorsed to Global, was deposited by Global.

Discussion

1. Theft - Paraino

Appellant contends that there is insufficient evidence to support his conviction for theft from Paraino. He contends that there is no evidence that he intended to permanently deprive Paraino of his property or that he made a knowingly false representation of past or present fact. He contends that such a conviction violated his right to due process under the Fourteenth Amendment to the United States Constitution. We see sufficient evidence to support appellant's conviction, and therefore no violation of appellant's federal constitutional rights..

In reviewing a challenge to the sufficiency of evidence, " the reviewing court must consider the evidence in a light most favorable to the judgment and presume the existence of every fact the trier could reasonably deduce from the evidence in support of the judgment. The test is whether substantial evidence supports the decision, not whether the evidence proves guilt beyond a reasonable doubt." (People v. Mincey (1992) 2 Cal.4th 408, 432.)

The standard of review is the same when the prosecution relies mainly on circumstantial evidence. (People v. Rodriguez (1999) 20 Cal.4th 1, 11.)

Paraino told appellant that he wanted a safe investment with a certain return.[2] Appellant responded by suggesting a Global annuity, and by working out on paper what that certain return would be. Thus, at a minimum, appellant represented that Global was an investment company dealing in annuities which would provide a certain return on Paraino's money.

Appellant contends that there is no proof that he knew that this representation was false. The jury was not required to find that appellant knew that the representation was false. Section 484 " has long been construed to permit conviction of a defendant who makes such representations 'knowing them to be false, or (which is tantamount to knowledge of falsity) recklessly, and without information justifying a belief that they were true.' [Citations.]" ( People v. Cook (1978) 22 Cal.3d 67, 90, fn.14.) Thus, as the jury was properly instructed, it could convict appellant of theft if it found that he made a false representation " recklessly and without information which would justify a reasonable belief in its truth." (CALJIC No. 14.10.) We find that it was reasonable for the jury to infer that appellant made such a reckless representation.

Appellant was a licensed insurance agent with about twenty appointments on file. It was reasonable to deduce that he knew that he needed an appointment to sell an insurance company's product, including an annuity, and that he knew he did not have an appointment for Global. Thus, not only was he violating the law by selling Global products, he knew that Global was willing to violate the law as well by permitting him to sell its products in violation of California law.

Global offered a suspiciously high interest rate of 8.5%, almost triple the rate of 3% offered on the Conseco annuity. Global's application form was minimal, and did not even have Global's address on it. It appears inexpertly made compared to the application of Allianz, a large, well-established insurance company.

Faced with a suspect company, appellant either chose not to investigate Global or did investigate it and learned that Global was not licensed to sell insurance products (or securities) in California.

Global was not an investment company whose products included annuities and which could provide a certain return on an investment. Given the facts known to appellant, he was reckless to make such a representation and had no information which would justify a reasonable belief that Global was an investment company whose products included annuities and which could provide a certain return for a period of years.

Appellant also contends that his representation involved a prediction of future events, for which no criminal liability could attach. We do not agree.

Like many statements which involve future events, appellant's statement consisted of statements of present facts and predictions of future events. Representing that giving money to a company is an investment with a certain return, or an even investment at all, necessarily includes a representation that the company is currently solvent, meeting its obligations, etc. This is a statement of present fact. Saying that the company will continue to be in a position to meet its obligations also involves a prediction of future events, that is that the company will remain financially sound. Such a prediction is not an actionable statement. The fact that appellant's representation involved a mixture of present fact and future prediction does not relieve him from liability. (See, e.g., People v. Bennett (1953) 122 Cal.App.2d 244, 251-252 [representation that purchase of machine would earn minimum monthly amount for purchaser]; People v. Staver (1953) 115 Cal.App.2d 711, 717 [representations about an investment in a business]; People v. Chamberlain (1950) 96 Cal.App.2d 178, 182.)

Appellant further contends that there is no evidence that he intended to permanently deprive Paraino of his money, primarily because there is no evidence that he personally received any of the Paraino funds which were embezzled by Stroupe.[3] There is no requirement of such personal gain in the theft statute.

Section 484 " does not itself expressly require an intent to permanently deprive. Rather, it merely says that, to be guilty of theft, the person must 'feloniously steal' the property; it does not further define the intent requirement. (§ 484, subd. (a).)" (People v. Avery (2002) 27 Cal.4th 49, 55.) " The reference to the intent to permanently deprive is merely a shorthand way of describing the common law requirement and is not intended literally." (Ibid.) The " requisite intent to steal may be found even though the defendant's primary purpose in taking the property is not to deprive the owner permanently of possession." (People v. Davis (1998) 19 Cal.4th 301, 307.)

Under the reasoning of modern California Supreme Court decisions, the requisite intent to steal exists when the defendant manifests an intent to deal with the owner's property in such a way that there is a substantial risk of permanent loss. (People v. Mumm (2002) 98 Cal.App.4th 812, 818-819; see People v. Davis, supra, 19 Cal.4th at pp. 307-313.)

We find evidence of such an intent here. Appellant invested Paraino's money in a company which was acting outside the law, and paying a suspiciously high rate of return. This created a substantial risk of the permanent loss of Paraino's funds.

2. Third-party culpability

Appellant contends that the trial court erred in refusing appellant's proposed instruction on third-party culpability. He contends that this error violated his rights under the Sixth and Fourteenth Amendments to the United States Constitution.

Appellant requested the following instruction: " Evidence has been offered that a third party, Global Enterprises, Inc. is the perpetrator of the charged offense. It is not required that the defendant prove this fact beyond a reasonable doubt. In order to be entitled to a verdict of acquittal, it is required only that such evidence raise a reasonable doubt in your minds of the defendant's guilt."

Assuming for the sake of argument that the trial court erred in refusing to give this instruction, the trial court's error was not prejudicial. In People v. Earp (1999) 20 Cal.4th 826, the California Supreme Court assumed without deciding that the trial court erred in refusing to give an instruction virtually identical to the one requested by appellant in this case. The Court found that the error was harmless because the jury was instructed that the prosecution had to prove the defendant's guilt beyond a reasonable doubt, and the jury knew from defense counsel's argument that the defendant was contending that another person had committed the crimes. (Ibid.) That was the situation here. We likewise find that any error by the trial court was harmless.

We do not agree with appellant that the failure to give this instruction denied him his right to present his theory of the defense and so violated his federal constitutional rights. Appellant was permitted to present evidence and to argue that Global stole Paraino's money, not appellant. Thus, appellant was able to present his defense.

3. Attempted theft -Troutman

Appellant contends that there is insufficient evidence to support his conviction for attempted theft from Troutman. He contends that such a conviction violated his right to due process under the Fourteenth Amendment to the United States Constitution. We see sufficient evidence to support appellant's conviction, and therefore no violation of appellant's federal constitutional rights..

An attempt to commit a crime occurs when a defendant has the specific intent to commit that crime and commits a direct but ineffectual act toward the commission of the crime. (§ 21a; People v. Kipp (1998) 18 Cal.4th 349, 376; People v. Bonner (2000) 80 Cal.App.4th 759, 764.) The act must be more than mere preparation; it must show that the defendant was putting a plan into the action. The act need not be the last step toward the commission of the crime. (People v. Bonner, supra, 80 Cal.App.4th at p. 764.)

Appellant contends that there is no evidence that he acted with the requisite intent to permanently deprive Troutman of her property or that he committed an act which caused harm or sufficient danger of harm. He contends that the evidence at most shows that he attempted to transfer Troutman's money to an annuity offered by Allianz, an established insurance company authorized to do business in California, and that the purchase of such an annuity would not have caused Troutman monetary loss.

As we discuss in section 1, supra, " [t]he reference to the intent to permanently deprive is merely a shorthand way of describing the common law requirement and is not intended literally." (People v. Avery, supra, 27 Cal.4th at p. 55.) The requisite intent to steal, " although often summarized as the intent to deprive another of the property permanently, is satisfied by the intent to deprive temporarily but for an unreasonable time so as to deprive the person of a major portion of its value or enjoyment." (Id. at p. 58.)

Here, Troutman was 76 years old when she filled out the Allianz application. Had her money been invested in an annuity, she would not have had access to that money for the term of the annuity, possibly for the remainder of her life. Given Troutman's age, taking her money for even a few years would deprive her of a major portion of its value or enjoyment.

There is also evidence that appellant attempted to deceive Troutman into investing money in Global, and aggressively tried to get her to sign paperwork related to Global. Had appellant succeeded in his endeavor, he would have committed theft from Troutman, for the reasons set forth in section 1, supra. The fact that appellant did not succeed makes him guilty of an attempt.

Disposition

The judgment is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ARMSTRONG, Acting P. J.

We concur:

MOSK, J.

KRIEGLER, J.

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[1] All further statutory references are to that code unless otherwise indicated.

[2] Paraino testified that he told Sandoval at the first meeting that he wanted " a safe [investment] and one that would have a certain return." When asked if he similarly discussed this objective with appellant in the December 18, 2002, meeting Paraino replied: " I'm pretty sure we did." It was at this meeting that appellant told Paraino about Global.

[3] There was evidence that appellant received a commission for the sale of the Global investment.