Justia California Court of Appeals Opinion Summaries

Articles Posted in White Collar Crime
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In two civil enforcement actions, the Court of Appeal affirmed the trial court's judgments against the trustee and the trust (collectively, "defendants") and the imposition of civil fines in excess of $6 million. The court held that the trial court's judgments did not violate the double jeopardy clause, because the allegations and evidence before the trial court were insufficient to show that the earlier criminal complaint was based on the same offenses as the civil actions. The court also held that the $5,967,500 in civil penalties were not unconstitutionally excessive under the four-part Bajakajian test. The court rejected defendants' contention that neither the trial court nor the city had the authority to require the trustee to evict the dispensaries. Finally, the court held that the medical-marijuana regulations were not void for vagueness, and the trial court did not err in holding the trustee personally liable for the civil penalties and other relief imposed against him in each of the judgments. View "People v. Braum" on Justia Law

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Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law

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Galeotti, a former Union Local 3 employee, filed a complaint against Local 3 and three of individual union leaders, alleging that the individual defendants required union employees to pay them money to keep their jobs, lied about the reason for collecting the money, and caused Local 3 to terminate Galeotti’s employment when he failed to pay the full amount demanded. The trial court dismissed his second amended complaint without leave to amend. The court of appeal reversed in part, reasoning that a threat to terminate employment can provide a basis for an extortion claim and that the allegations of the second amended complaint stated a cause of action for wrongful termination in violation of the public policy underlying the extortion statutes. The complaint stated a cause of action for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO; 18 U.S.C. 1961), based on the predicate acts of extortion, but did not state a cause of action for interference with prospective economic advantage. View "Galeotti v. International Union of Operating Engineers" on Justia Law

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Defendant Lonnie Schmidt managed a home foreclosure rescue operation, doing business as Second Opinion Services and Financial Services Bureau Limited. Following a lengthy jury trial in which he represented himself, defendant was convicted on four counts of prohibited practices by a foreclosure consultant, ten counts of filing false instruments, six counts of identity theft, and five counts of attempted grand theft. Defendant was sentenced to a total of 28 years in prison, plus one year to serve in the county jail. On appeal, defendant argued, and the State conceded: (1) insufficient evidence supported some of defendant’s convictions for grand theft; (2) the evidence did not support some of defendant’s convictions for filing false instruments; and (3) the trial court should have stayed his sentence for second degree burglary and attempted grand theft. The Court of Appeal agreed as to all these contentions and reversed judgment and sentence regarding those counts. The Court remanded the case for resentencing in light of this decision. View "California v. Schmidt" on Justia Law

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Allstate filed suit under Insurance Code section 1871.7 on behalf of the People against defendant, her mother, and others for insurance fraud in violation of Penal Code section 550, which makes it unlawful to submit false or fraudulent claims to an insurance company. The jury found in favor of Allstate. The Court of Appeal affirmed, holding that the trial court did not abuse its discretion in denying defendant's ex parte application for a stay. The court also held that unlawful conduct under section 550 does not require a misstatement of fact in the insurance claim. In this case, defendant and her mother committed insurance fraud in violation of section 550 where they perpetrated a deceitful insurance scheme designed to acquire insurance proceeds illegally for personal gain. View "People ex rel. Allstate Insurance Co. v. Suh" on Justia Law

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Defendant Sara Salcido provided immigration services. Under the Immigration Consultant Act (Act), with certain exceptions, it is illegal for a person to act as an “immigration consultant” (as defined in the Act) unless he or she has complied with a host of consumer protection requirements, such as passing a background check and filing a bond. Defendant failed to comply with these. As a result, defendant was convicted on one count of misdemeanor unlawfully engaging in the business of an immigration consultant. The State argued, however, that each time defendant took money from a client in exchange for providing immigration services, she was committing theft by false pretenses, because she was not a legally qualified immigration consultant under state law. The trial court agreed; thus, it also convicted her on six counts of grand theft, and two counts of petty theft. It dismissed two additional counts of grand theft as time-barred. Defendant was placed on probation for five years. Defendant contended the Act was preempted by federal law. She demurred to the complaint on this ground. The Court of Appeal determined federal law did not preempt the application of the Act to defendant. View "California v. Salcido" on Justia Law

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Defendant Jedadiah Bolding was convicted of one count of grand theft and eight counts of money laundering. On appeal, he challenged his money laundering convictions, in part, on the ground that the prosecution failed to offer sufficient evidence tracing the illegally obtained money to the monetary transactions involved in each of the money laundering counts. After review, the Court of Appeal determined there was sufficient evidence supporting defendant’s money laundering convictions based on the language of Penal Code section 186.10(a), and current analogous federal law on money laundering. In the unpublished portions of its opinion, the Court concluded: (1) there was sufficient evidence of money laundering in count 25 of the operative charging document; (2) defendant forfeited an issue regarding the jury instructions for the money laundering counts; (3) the sentencing enhancements for white collar crime should have been reversed; (4) the trial court did not err by imposing consecutive rather than concurrent sentences on the money laundering counts; and (5) the minute order and abstract of judgment must be amended to reflect the correct amount of defendant’s custody credits. View "California v. Bolding" on Justia Law

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Petitioner William Avignone, at the time of this appeal, was in custody awaiting trial on charges of multiple counts of grand theft of personal property and fraud in connection with the offer, purchase, or sale of security. As part of a plea deal, Avignone pled guilty to three counts of fraud and two counts of grand theft while the prosecution dismissed the remaining counts. The trial court sentenced him to five years four months to be served in the custody of the sheriff. Before December 2017, he had been out on bail for four years. During that time, he made all court appearances and did not engage in criminal activity. Avignone appealed his sentence, arguing, among other things, the court abused its discretion in denying probation. The Court of Appeal rejected that contention, but allowed Avignone to withdraw his guilty plea. He did, and the superior court held a bail review hearing. After multiple hearings, the court increased Avignone's bail to $300,000. Avignone appealed, arguing the court abused its discretion in increasing his bail and setting it at an amount that violated In re Humphrey, 19 Cal.App.5th 1006 (2018), the Eighth Amendment of the United States Constitution, and article 1, section 12 of the California Constitution. To this point the Court of Appeal agreed that the sentencing court abused its discretion. As such, the court vacated the superior court's bail determination, and directed reconsideration of the amount of bail. View "In re Avignone" on Justia Law

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Petitioner Peyman Heidary (Heidary) allegedly owned and oversaw a network of medical clinics to generate fraudulent billings to workers’ compensation and insurance carriers. A non-attorney, he also allegedly controlled the day-to-day operations of various law firms, including California Injury Lawyers (collectively, the law firm.). He allegedly controlled or directed hiring and firing, legal decision making, and income flow to and from the law firm. Codefendants (and petitioners in a related writ case discussed below) Abramowitz, a lawyer, and Solis allegedly assisted Heidary in these operations. Under the alleged fraud scheme, injured workers appeared at the law firm, which would fill out boilerplate paperwork and, on Heidary’s order, direct the workers to one of his clinics to begin treatment. Each provider would fill out a “ ‘super bill,’ ” describing services rendered, which would then go to support staff to review compliance with Heidary’s orders. They would forward the superbill to a medical billing company. Those companies would generate a form to start the claim process. The billing companies contracted with each provider to bill for services, on Heidary’s order, including sometimes by forgery. Payment came from two sources: workers’ compensation insurers and third-party accounts-receivable buyers. The defendants were indicted by grand jury on conspiracy, making false or fraudulent claims for payment of health care benefits, knowingly making false and fraudulent material representations for payment of workers' compensation, money laundering, forgery, and unlicensed practice of medicine. In Petitioner challenged challenges the trial court’s denial of his motion to set aside the indictment pursuant to Penal Code section 995(a)(1)(B). Finding no reason to disturb the indictment, the Court of Appeal denied the petition. View "Heidary v. Superior Court" on Justia Law

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Dillard was the executive director of ACAP, an agency created by Alameda County and several cities. Daniels was the grants manager. The two married. The Agency was awarded a $500,000 Department of Health and Human Services AFI grant to fund programs for low-income people, who deposit money in an individual bank account, matched with federal AFI grant funds and equal nonfederal funds, which can be withdrawn for higher education, starting a business, or buying a house. Dillard and Daniels were charged with: Count I, conspiracy to commit grand theft by false pretenses in a letter to HHS “falsely attesting” that ACAP had more than $426,000 in non-federal match funds. Count 2: Grand theft by false pretenses by unlawfully taking grant funds exceeding $200,000. Count 3: Making a false account of public money. Count 4: Using public money for a purpose not authorized by law to fund Agency payroll and other expenses. Count 5: Dillard was charged with instructing employees to work on her residence at below-market rates and obtaining reimbursement for improper business expenses. Count 6: Preparing false documentary evidence regarding the residency status of Agency clients and a seminar agenda. They were convicted on Counts 2, 3, and 6. The court of appeal affirmed the Count 6 convictions but found the other convictions preempted by federal law. View "People v. Dillard" on Justia Law