Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 210807
ELIA, J.A jury convicted appellants James Edwards and David Edwards of one count of conspiracy, six counts of residential burglary, and 16 counts of securities fraud.(Pen. Code, §§ 182, 459, Corp. Code, § 25401.) The jury also found true various enhancing allegations as to certain counts. The trial court sentenced each appellant to a state prison term of 27 years, eight months. Appellants contend that their waivers of counsel were invalid and that the trial court abused its discretion by denying their request for the appointment of advisory counsel. Appellants contend that the trial court made errors in instructing the jury. Appellants further contend the trial court erred in imposing sentence and in its restitution order. We affirm.
THE TRIAL
The prosecution presented evidence at trial to show that David Edwards and his father James Edwards conspired to sell fraudulent investments in Resources Development International (RDI). At the time of trial, Michael Keller and William Whelan had pleaded no contest or guilty and testified to entering the homes of their clients to sell the investments in RDI. Many of the investors testified to the circumstances under which they had invested in RDI, the assurances that they had been given about this investment, and what had not been disclosed to them about RDI. An investigator from the District Attorney's Office, an official from the Federal Reserve Board, and a forensic accountant also testified. Other witnesses testified pursuant to Evidence Code section 1101 concerning a prior fraudulent investment scheme in which the appellants had been involved.
Local investigation of RDI began when Bertha Cummings complained to the Santa Clara County District Attorney's Office about non-payment letters that she had received concerning her $40,000 investment in RDI. In late 2001, District Attorney Investigator Dalton Rolen, posing as Cummings's son, made telephone calls to Whelan, James Edwards, and David Edwards. Tapes and transcripts of these calls were provided for the jury. Whelan told Rolen that Cummings would get her money back and said that payments had been held up by the SEC and the Federal Reserve over concerns about laundered money. He said that she should sign her consolidation paperwork and that it needed to be returned to the Edwards in Washington state. Otherwise, she should send a letter requesting her principal back.
Investigator Rolen spoke to David Edwards in October 2001, again identifying himself as Cummings's son and expressing concern about the non-payment letters Cummings had received. David Edwards told Rolen, "we expect to start getting checks out next week to everybody, and then we're going to pay weekly until we're all caught up." David Edwards said that because of the September 11 terrorist attacks there were problems with the Federal Reserve having lost 40 traders. He said that Cummings had about $12,800 in earnings and that it would take about six weeks of checks every week to make it up to her. Later, Rolen called and talked to James Edwards. James Edwards confirmed that they had thought that they were going to be able to send out the checks. James Edwards said it was a "long story" but that the "Feds" had to make sure that the funds were not laundered but that he hoped that monthly payments would resume that week. In another conversation with James Edwards, Rolen was told that James Edwards had received Cummings's letter requesting that her funds be returned to her and that the checks had already been cut. There was a delay because of the Federal Reserve investigation of a large wire transfer but that some "shenanigans" were going on there and that "some Fed person had to be getting a kickback from that bank to delay it all that time."
In January 2002, David Edwards assured Rolen that Cummings would be getting her principal returned right away and that new bank regulations, the result of the "anti-terrorism stuff," had caused the delay. James Edwards told Rolen in February 2002 that three payments were at a European bank but that the payments had to go through a main investor's account first. He said that new banking compliance regulations for moving large amounts of money were responsible for the delays.
Rolen obtained and reviewed various business records seized from Whelan's office and conducted further investigation. In May 2003 the grand jury convened and in June 2003 an indictment was filed charging David Edwards, James Edwards, William Whelan, and Michael Keller in count 1 with conspiracy to commit securities fraud and alleging 18 overt acts. (Pen. Code, §§ 182, subd. (a), Corp. Code, § 25401.) Count 2 charged Whelan and Keller with sale of an unqualified security to Douglas Drysdale and Mark Drysdale in November 1998. Count 3 alleged the same conduct in December 1998 with Leanne Berrocoso as the named victim. (Corp. Code, § 25110.) Counts 4 through 27 charged David Edwards, James Edwards, Whelan, and Keller with securities fraud and residential burglary with the intent to commit securities fraud with named victims John Bowes (count 5, 6, and 7), Regina Richard (counts 8 and 9), Bertha Cummings (counts 10 and 11), Magdalena Parungao (counts 12 and 13), Karen Hannan (counts 14, 15, and 16), Robert Pugsley (counts 17, 18, and 19), Luigi Scrivani (counts 20 and 21), Wilfred Wood (counts 22, 23, and 24), Thomas Nava (count 25), and Charles Long (counts 26 and 27). The offense dates for these counts spanned October 1999 to February 2002. The indictment also alleged enhancements of excessive taking over $150,000 and aggravated white collar crime. (Pen. Code, §§ 12022.6, subd. (a)(2), 186.11, subd. (a)(1) & (a)(2).)
Appellants brought a Penal Code section 995 motion to dismiss "counts 17 and 18 because the evidence before the grand jury was not sufficient to show that [Pugsley's] motor coach [was an] 'inhabited dwelling' as required for first degree burglary." The prosecution conceded the issue.
Charles Long, an 82-year-old retired truck driver, testified at trial that he knew Keller because he had obtained a living trust from him. In May 2000, Keller and Whelan came to Long's home and he agreed to invest $10,000 in RDI. Keller and Whelan told him that he would receive a four percent per month return on his investment but did not say what the money would be invested in or if it was risky. Long was never told that the money he was investing in RDI would be used to pay other investors, that a similar investment program had been shut down by the government, and that RDI investors were not being paid. After investing, Long received an acknowledgment letter from, and a contract signed by, David Edwards. Long received a few payments, but some were half the amount that he had been told they would be. He received a letter signed by David Edwards saying that his payments had been cut in half. In January 2001, he invested another $15,000 in RDI and received another letter from David Edwards acknowledging the investment. When he stopped receiving payments, and received a non-payment letter from RDI, he spoke by telephone to David Edwards several times. Long testified that he was given "one excuse after another."
By August 2001, Long wanted his money back and went to a Nevada address that had been on one check that he had received from RDI. Long complained to the person there about not receiving payment, took pictures of the office, and said that he might contact the District Attorney. Whelan called Long a few days later. Whelan told Long that David Edwards was going to give him back his principal and Long received a check shortly thereafter. Long called David Edwards to complain about not receiving interest. Long testified that David Edwards told him that he was "lucky to get anything, anything at all."
Karen Hannan testified that in January 2000, Keller came to her San Jose home to accept a check for $40,000 to invest in RDI. Hannan is a high school graduate and child care worker. Keller was a customer of the car dealership where Hannan's husband worked. When the Hannans decided to execute a living trust, Keller came to their home to assist them. When the trust was completed, Keller began a conversation with them about their assets, including their individual retirement accounts. Keller talked to them about moving money out of the individual retirement accounts and began making suggestions about specific private investments. Keller mentioned Hotel Connect as one such plan, and described it as "a foreign bank type investment." He said that the Hannans could earn $14,000 the first year of a $100,000 investment. Hannan testified that Keller seemed "very trustworthy and very honest" and appeared "like Mr. Rogers." In a second meeting, Keller described RDI as an overseas prime bank investment not open to the general public which yielded four per cent per month. He said that it was as safe as the stock market but that she should not talk about it to anyone else. Keller told the Hannans that Whelan would be their contact person at RDI although their contract concerning the investment was signed by David Edwards. In September 2000, Whelan came to the Hannan's home to have her sign more paperwork concerning the RDI investment. The contract contained a paragraph explaining that "should there be a failure to make a payment of profit . . . the investor may elect to request in writing to RDI to return their initial deposit." Hannan testified that she "never felt that [her] initial deposit was going to be in any jeopardy."
The Hannans received payments for almost a year, but were repeatedly cautioned in RDI correspondence not to talk to others about this investment. They renewed their investment in March 2001 and added $10,000 to it. They received, from a Tacoma address, a renewal agreement, welcome letter, and promissory note signed by David Edwards.
The Hannans stopped receiving payments and began to get letters about non-payment which Hannan described as "letters of reassurance." A letter signed by David Edwards said that the government was trying to shut down RDI because it thought RDI was a Ponzi scheme. In September 2001, Hannan received a letter which "added the September 11th attack to their list of reasons that we weren't getting paid." Later, Hannan was given an 800 number that led to a recorded message stating that "the attorney is still in Europe, the money has not hit the account." Karen Hannan testified at trial that her $40,000 investment was "gone."
The letter explained that a Ponzi scheme is one "where you use new investor dollars to pay old investors."
In 1999, Regina Richard invested $40,000 in RDI on Keller's advice. She received documents signed by David Edwards concerning her investment. In January 2000 she renewed that investment and, in April 2000, invested another $20,000. At that time she met with Whelan, whom she thought was Keller's boss.
Richard testified that when she stopped receiving payments she received letters signed by David Edwards giving various reasons for the non-payment, including that the delays were due in part to the events of September 11, 2001. She talked to David Edwards on the telephone, and he told her that he was hiring an attorney and that she would get her money soon.
Magdalena Parungao and John Bowes both testified that they invested $25,000 in RDI through Keller and received welcome letters signed by David Edwards. Both renewed their investments and Bowes added $25,000 to his.
Thomas Nava invested $200,000 in RDI. Although Nava did not really understand the program, he trusted Don Atkins, whom he had met during discussions about establishing a trust fund for the Bible college that Nava's daughter attended. Nava was told that his money would be invested overseas and would collect interest. Like the other investors, Nava was not told that his money would be used to pay the earlier investors. He was not told that a similar program had been shut down. Nava renewed part of his investment, and, when payments stopped, talked to David Edwards and James Edwards several times about this. They told him that something had happened in Europe that was holding up the money. Nava was told, "we're going to send two of our best lawyers to Europe to do the investigation why they were holding the money there." Later, James Edwards told Nava that his money had been released from Europe to the Bank of New York. The money had to be investigated to "make sure it was clean."
Bertha Cummings was deceased by the time of trial but Rolen testified as to her involvement and Keller testified that he sold RDI to her. Keller acknowledged that Robert Pugsley invested $25,000 in RDI and that Luigi Scirvani invested $70,000 in RDI.
Under Evidence Code section 1101, the trial court admitted evidence about Dennel Finance and The Claude Smith Joint Venture investment schemes. Dick Hanson, Mark Drysdale, Leanne Berrocoso, and Joan Loher testified about their experiences and losses.
Evidence Code section 1101 permits the admission of evidence that a person committed a crime, civil wrong, or other act when relevant to prove some fact, such as motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake or accident.
In 1998, Martindale invested $10,000 in PILP. Martindale was told that David Edwards and James Edwards controlled PILP and that he would receive a two percent per month return. He was told that the program was based on the confidential trading of capital, had a humanitarian benefit, and was sponsored by the International Monetary Fund and the Federal Reserve Board. He received a welcome letter, a contract, and a promissory note all signed by James Edwards. In 1999 and 2000, Martindale invested about $211,000 in RDI in part because of David Edwards's recommendation concerning no risk and control of capital. David Edwards signed the contracts and welcome letters about this investment. In 2000, Martindale invested $125,000 and $100,000, for a 10 percent per month return, in Jade Assets Management (JADE). JADE was supposed to be "the off-shore version of RDI." Martindale met with David Edwards for over an hour in David Edwards's office in Washington state to discuss this. Martindale wired his money to an account in the Bank of Nevis.
Martindale's accountant told him that, given the high yield, he might be involved in a Ponzi scheme. In 2000, when Martindale received a call from the SEC saying that RDI was being investigated, Martindale ignored it because of David Edwards's reassurances. By February 2001, Martindale was not receiving payments from JADE or RDI. For the next several months, Martindale received various explanations from James Edwards and David Edwards concerning the non-payment. They told Martindale that the payments would resume. Martindale went to David Edwards's office to meet with him about his concerns. David Edwards described various multi-million dollar investment programs in which he was involved and told Martindale, "I'm a Christian. I believe God is sovereign. . . . [T]he important thing is . . . who you do business with, not all these legal things. . . . [W]e are people of integrity and we'll come through and you'll be paid."
In 1998, Mark Drysdale invested $195,000 in Dennel through Keller. Keller said he would earn two percent per month but did not tell Drysdale that his money was being used to pay other investors. Drysdale received payments for a few months. Keller never gave him an answer to his inquiries about why the payments had stopped.
Dick Hanson testified that he was a retired math teacher from Washington state who made his first investment with the Edwardses in 1996. He met with James Edwards who described a special program for people interested in "overseas investment." Under this program, the money from several small investors would be pooled and "the money would go to some trader bank in western Europe" for reinvestment. This was a "no risk investment." Hanson invested $25,000. Hanson eventually invested over $200,000 in RDI based on the description of that program by James Edwards and David Edwards. After receiving some monthly payments, he began receiving letters explaining problems with the program. David Edwards, in a telephone conversation with Hanson, assured him that his "principal was secure, that we had nothing to worry about."
Joan Loher testified that she was retired after running a day care center for 28 years. Michael Keller prepared a living trust for her and her husband. He began to visit her home to discuss different investments. Eventually, she and her husband invested $50,000 in a program that was supposed to give a monthly return. Ms. Loher had second thoughts about this program and went to Keller's home to discuss her concerns. Keller told her that he was "positively sure" that "there's no way that you can lose this money." One week later, Keller returned their check to them and told them that the program was full. Keller continued to visit the Lohers and said that it was too bad that they did not get in on that investment. The Lohers invested over $20,000 in another program called Hotel Connect that Keller had described. They then began receiving letters explaining why they were not receiving a return. Ms. Loher testified "it just went downhill from that" and "we never got that money back."
William Whelan testified that his occupation was selling "life insurance products." He had pleaded no contest to numerous charges in connection with this case for a three-year sentence. He testified under a grant of use immunity. Keller was one of the agents Whelan used to sell Dennel. As far as Whelan understood it, in the Dennel investment, "somehow the investor's money was leveraged overseas in some bank and would then be used in some way that it would grow." Whelan received a percentage of any money he brought in and a percentage of any money brought in by the "facilitators" that he recruited. By 1999, Whelan knew that Dennel was being called a Ponzi scheme and was shut down, but he "didn't want to believe it." He did not tell any of the RDI investors about Dennel because it was "a different company." He called appellants to see what the problem was with Dennel. One of the Edwardses told Whelan that they planned to pay off the Dennel investors.
At their invitation, Whelan met with appellants once in Tacoma to find out about RDI, a new program that had nothing to do with Dennel. Whelan was told that RDI involved trading monies overseas and that investors could get a better return than with Dennel. Whelan testified that he was just a facilitator for RDI for investors who had already decided to invest. Appellants did not ask Whelan for referrals to RDI. Without specific authorization from appellants, Whelan recruited Keller to sell RDI and paid him commissions. Sometimes, Whelan would have his clients talk directly with appellants by telephone. Whelan himself invested in RDI. When his payments stopped, appellants told him they would work out the problems.
Michael Keller testified that he had pleaded no contest to 25 felony counts including conspiracy to commit securities fraud, securities fraud, and burglary with the understanding that he would receive a sentence of three years. He sold revocable living trusts, insurance products, and "promissory private investments." Among the private investment companies he represented were Dennel Finance, RDI, and Hotel Connect. Keller testified that he was recruited by Allen Clagg to sell Dennel. Keller never met or talked to David Edwards and James Edwards. Keller met Whelan through another investment package that was being marketed. Everything Keller knew about RDI was through Whelan. Whelan told Keller that James Edwards and David Edwards were the principals in RDI and that it had been in business for three years. Keller checked out RDI and the Edwardses on the internet and did not see any problems.
Keller testified under a grant of use immunity. He was in custody and awaiting sentencing at the time of his testimony. Two of the charges to which he pleaded no contest involved Dennel and 23 involved RDI.
Keller believed that his clients trusted him because of past dealings. Whelan wrote the contracts for the clients that Keller referred. The contracts had to be accepted at RDI headquarters in Washington state. Whelan told Keller that investors would receive monthly checks and that "nobody ever missed a payment." Although Keller did not know of any other investment that was as safe as a certificate of deposit yet earned four percent per month, he thought RDI was a legitimate investment. Keller himself did not invest any money in either Dennel or RDI. A standard clause in the contracts that he and Whelan presented to investors read: "The parties agree to abide by the customary international rules of non-circumvention and nondisclosure as are established by the International Chamber of Commerce."
Keller denied conspiring to violate Corporations Code section 25401. He testified that he did not know of the Corporations Code section before being charged with violating it, and that he did not intentionally lie to or mislead his investors.
Herbert Biern testified that he was a senior official with the Federal Reserve Board. He was familiar with the type of program sold by RDI and Dennel. He had reviewed over 1,000 fraudulent schemes and had developed a list of 12 hallmarks of such schemes. He examined documents concerning Dennel and RDI and said that they displayed many of these hallmarks. He testified that the statements made by David Edwards and James Edwards about lost traders, kickbacks, and federal banking regulations were not true.
These hallmarks include using terms such as "prime bank" and "programs" and the promise of an unrealistic rate of return. Other hallmarks are reference to trading as the way to make the return, the use of legitimate financial instruments in strange ways, the use of documents that are nonsensical or overly complex, secrecy, the promise that the principal is safe, and the suggestion that the Federal Reserve, the International Money Fund, or the International Chamber of Commerce were involved, and saying that some of the profits are going to a humanitarian cause.
Forensic accountant Lawrence Warfield testified that he had been appointed as receiver of Dennel in 1999 and RDI in 2002. He analyzed banking records for Dennel and for RDI. According to Warfield, the money from these schemes flowed in a circle. Money from RDI investors was transferred into various accounts and eventually used to pay investors in the Dennel program. Warfield characterized this as a Ponzi scheme in which payments to old investors are made with money from new investors. As more investors sign up and begin to receive monthly payments, more new investors are needed to keep up. Eventually, the program collapses under the weight of the monthly payment demand.
Warfield testified that, based on the records he reviewed, the investors' money was never placed in any legitimate investment vehicle for either RDI or Dennel. Of the $73,000,000 that people invested in RDI, $2,200,000 was "paid for or to the benefit of David and James Edwards." Warfield testified that appellants were "actively involved" and that there was no evidence to support their statements that payments from RDI were delayed because of the problems that they had described with compliance and audits.
A retired dentist testified for the defense that he had invested $385,000 in the Claude Smith program but that the Edwards had no part in it. He also invested in RDI, JADE, and PILP. At the same time he was facilitating other people's investments, sometimes earning commissions approaching $100,000 per month. He believed both appellants to be men of honest character.
Sherie Suter testified for the defense that she was a professional horse trainer from the state of Washington. She was a personal friend of David Edwards. She and her husband invested $5,000 in RDI. She knew that David Edwards was "very stressed" when the problems with RDI developed and that he "went to Europe a lot." She testified that David Edwards was "a man of absolute integrity, a man of God [whom she] absolutely trust[ed]"
In closing, the prosecutor argued that David Edwards and James Edwards were guilty of conspiracy and securities fraud because they were operating a Ponzi scheme and that they were guilty of burglary because Whelan and Keller entered people's homes to sell them the fraudulent securities. The prosecution's theory was that appellants were criminally liable for the burglaries because the burglaries were the natural and probable consequence of the conspiracy to sell the fraudulent securities. David Edwards and James Edwards argued that RDI was a legitimate business and that the prosecution had not met its burden of proving that it was not a legitimate business. They also argued that they were men of good character.
Although the jurors had submitted several questions during the presentation of evidence, they asked none once they were instructed. Shortly after 1:30 on the afternoon of November 16, 2004, after over 20 days of trial, the jury began its deliberations. The next morning, at 11:00, the foreperson notified the court that the jury had reached its verdicts. In a 65-page verdict, the jury convicted appellants of all of the counts submitted to it and found true all of the enhancing allegations.
Appellants filed a motion to arrest judgment, arguing jurisdictional and other issues, which was denied, and a motion asking that appellants be housed together in the jail, which was granted. The trial court sentenced each appellant to a state prison term of 27 years, eight months.
WAIVER OF COUNSEL
Appellant David Edwards contends, "Appellant did not have counsel at the hearing on his Faretta [v. California (1975) 422 U.S. 806] waiver and the judgment must be reversed under the Sixth and Fourteenth Amendments." Appellant James Edwards joins in this argument stating, "Given that Co-Appellant was essentially running the case for both himself and Appellant at Appellant's request, that Appellant concurred in all of Co-Appellant's decisions, including the decision to waive counsel, and permitted Co-Appellant to speak for him . . . , if the waiver is invalid as to Co-Appellant, it is invalid as to Appellant as well."
Background
On May 3, 2004, David Edwards appeared before the Honorable Kevin Murphy and told the court, "I need time to obtain private assistance of counsel." He said that he did not want to be referred to the Public Defender's Office. After some discussion about the Public Defender's Office representation of a co-defendant, the trial court told David Edwards that he would give him a continuance to retain private counsel. The court asked appellant, "If you are unable to retain private counsel, are you going to represent yourself?" adding "It probably would not be a good idea."
On May 19, 2004, David Edwards and James Edwards appeared. David Edwards told the court that he needed more time to secure private counsel. Neither of the Edwardses had waived time. The court told them, "I think you can appreciate if you do locate an attorney – I know a little about this case, enough to know it's complex – and I imagine most attorneys that you might hire are going to need time, so please bear that in mind." Over their objection, the court entered not guilty pleas for appellants.
In court on May 26, 2004, appellants described their efforts to retain counsel and requested more time but reaffirmed that they would not waive time.
On June 2, 2004, appellants still had not retained counsel. The court said that "at some point, something has to change. Either I need to refer you to court-appointed counsel, or time's going to have to be waived or you're going to have to represent yourself."
On June 7, 2004, appellant James Edwards filed an "Application for writ of habeas corpus/petition to dismiss/set aside indictment." In it, he described his arrest in Texas and his 17-month effort to oppose extradition. He stated that he had "not been successful in obtaining assistance of [private] counsel."
This application was denied on June 15, 2004. A similar writ brought by David Edwards was also denied.
On June 9, 2004, appellants told the court that they had not retained counsel. The court asked, "you do not want to represent yourself; is that correct?" James Edwards replied, "I'm not qualified to represent myself" and the court responded, "I probably agree with you there." James Edwards told the court that he wanted to file an application for writ of habeas corpus and a motion to dismiss the indictment under Penal Code section 995. When the court commented that that sounded as if he were representing himself, James Edwards said "I'm here on a special appearance today." David Edwards told the court that he was not qualified to represent himself and that he would not waive time. The prosecutor said that he had delivered to each appellant "a document stating what their maximum penalty is and the list of the scope of the available discovery so that they can be on record as having some idea of the potential complexity of the case."
The court appointed the Alternate Defender's Office at which point a representative of that office advised the court that "given the scope of this case, obviously no competent attorney would be ready within the statutory time frame."
On June 16, 2004, appellants told the court that they had still not retained counsel. The trial court appointed "Legal Aide" to represent David Edwards and James Edwards after an attorney with the Alternate Defenders Office declared that that office had a conflict in those cases. The trial court appointed Andrew Tursi to represent David Edwards and Jack Gordon to represent James Edwards. Steve Avila from the Legal Aide Office was present in the courtroom at the time of the appointment.
On June 25, 2004, David Edwards filed a "Notice of Dismissal of Appointed Attorney" with the court. In it, David Edwards said that Tursi had been appointed over David Edwards's objection, that David Edwards intended to retain private counsel, and that he "hereby dismissed [Tursi] for cause." He said, "I do not accept Mr. Tursi as appointed counsel and he does NOT represent me." (Emphasis in original.) The notice explained, "Mr. Tursi came to see me on Tuesday, June 22, 2004 and after discussion I have concluded he is now in trial and is too busy to assist me. Mr. Tursi will be unavailable for the start of my trial on Monday, June 28, 2004 and does not feel he has the time to be prepared even if he was available." On June 28, 2004, Avila appeared for Tursi and the trial court continued the case to July 2, 2004. On July 1, 2004, the prosecutor filed a response to David Edwards's motion to dismiss counsel entitled "Trial Setting Response to Defendant's Notice about Their Representation."
On July 2, 2004, Jack Gordon told Judge Murphy, "the Court appointed me at the last appearance to represent Mr. [James] Edwards, and I will note that Mr. Edwards again informed me that he does not wish appointed counsel." Avila announced that he was "making a special appearance on behalf of Andy Tursi." He said that he had spoken to Tursi the night before and that Tursi had informed him that he was in an ongoing trial in San Francisco. Avila said "[Tursi] asked me to be here and I agreed to do so." The trial court asked Avila if Tursi had said when he would be ready to proceed to trial. Avila said that Tursi was "aware of the copious nature of the discovery that is involved in this particular case. There is literally hundreds of thousands of pages of discovery that needs to be reviewed. I believe the Indictment is close to 1700 pages alone." Avila said that Tursi could be ready "at the earliest" in November. Gordon told the court that he could be ready in October or November.
The court asked Avila if he had "had a chance to speak to Mr. David Edwards." Avila answered, "No, your Honor, I did not. I was somewhat concerned about doing that because I did represent Mr. Keller in this case and I thought it might not be appropriate."
The prosecutor told the trial court that he was ready for trial and "would get priority pursuant to Penal Code [section] 1048 not only for the length of the case, but because the witnesses and victims being over 70. [¶] I must concede, as I've told defense attorneys up until now, that yes, there is extensive discovery. The Grand Jury transcript is 1650 pages. So it would be ludicrous for me to object because they could need several weeks, if not in fact several months." He said, "I think due process dictates any competent attorney have sufficient time to prepare for the case." The prosecutor said that he had provided Tursi with some discovery and that, assuming that Gordon and Tursi "remain in the case or any attorney remains in the case," an October or November date for trial would be appropriate.
Judge Murphy observed that as to David Edwards, "today is apparently the sixtieth day. Neither defendant has waived time. Neither defendant up to this point has indicated they want to represent themselves. Both defendants objected to this Court appointing counsel to represent them, although I've continued the case several times to give them the opportunity to hire attorneys which they have not been able to do up to this point." The court asked appellants whether they wished to comment.
Penal Code section 1382 provides in relevant part, "The court, unless good cause to the contrary is shown, shall order the action to be dismissed . . . [¶] (2) In a felony case, when a defendant is not brought to trial within 60 days of the defendant's arraignment on an indictment or information."
David Edwards said, "First of all, Your Honor, I would like to make it perfectly clear to the Court my stance. I'm not a corporation and only a corporation needs representation. [¶] I'm a human being, and I have all the rights of the Constitution guaranteed to me which means I would like assistance only. I will speak for myself and I will defend myself. And there are some problems that we have to deal with today other than representation, but I do not accept representation from Andrew Tursi." David Edwards asked "Do you have to choose between representation or nothing?" and said, "at this point he's representing me, which I don't allow. If he could assist me, according to the Sixth Amendment of the Constitution, and I will speak for myself, I'll file my own 995 motion, and he can assist me with court procedures only. If he can be only at my side to help me, I would accept that." David Edwards said, "representation and assistance are two different words, and words mean things, especially in a court of law. And again, let me just say, I will speak for myself and I will defend myself." James Edwards told the court, "I concur with what my son just said, that I do not want to be represented by anyone." James Edwards told the court that he wanted a lawyer to assist him "Through court procedures. And if I need him, I can have him maybe talk to a witness or something like that, but not as my representative."
The court referred to several prior conversations it had had with appellants about their efforts to retain counsel and reviewed a document that appellants had said that they would require any counsel to sign. The court said it understood "why no attorney would sign the contract in its current form." After further discussion, the court said "I can't seem to get a straight answer to a question" from appellants. The court observed that the prosecutor had suggested the possibility that appellants were "engaging in some sort of gamesmanship" in that they would not waive time, would not represent themselves, would not retain counsel without counsel "agreeing to something I don't believe they will ever agree," and that after the court appointed counsel "you are not happy with them because they won't sign your contract."
The document that appellants were requiring counsel to sign is entitled "Contract for Assistance of Counsel Arising under the Sixth Amendment." The contract required the attorney to agree to 10 clauses, including that he or she would "not assist the Requesting Party in any Court which is a statutory non-constitutional court," and to disclose "What type of citizen does the Assistance of Counsel assist" and "what is the citizen status of the jury that will be used in the Requesting Party's Trial by Jury of his Peers."
The court began to find good cause to continue the trial date. James Edwards interrupted the court. He said, "I can't be forced into taking representation" and "I'm telling you I can defend myself and I wish to defend myself, and I will defend myself. I know my case better than anybody, and that is what I wanted to do and you now are beginning to take that away from me."
The prosecutor commented on the practical problems in providing discovery to someone who is in jail and also asked the court not to sever the cases from one another. Gordon told the court that when he spoke to James Edwards that morning, "he was adamant about defending himself and believed should he give up certain rights by accepting appointed counsel, he was equally adamant . . . that he wishes assistance of counsel." The trial court said that it was not going to appoint advisory counsel. The court asked James Edwards, "Do you wish to represent yourself?" to which he replied, "Yes. I wish to defend myself, yes." The court reiterated that it would not appoint advisory counsel. The prosecutor told the court that "today is the sixtieth day" for David Edwards and that July 19 was "day sixty" for James Edwards. James Edwards said that he wanted to be able to file a demurrer or a Penal Code section 995 motion. The court said, "If I allow you to represent yourself and if you ask for time to litigate the 995 motion, I will accommodate you."
When the court said that it was going to give the "Faretta advisement" David Edwards commented, "I'm familiar with the case." The court went through the standard advisement, informing David Edwards that he had a right to appointed counsel and that if he changed his mind about self-representation that the court would consider appointing counsel again. The court said that appellant would be at a "procedural disadvantage" being opposed by a trained prosecutor. The court told appellant that the trial judge could not help him by, for example, making objections for him. The court told appellant that the maximum prison term to which appellant was exposed was 31 years eight months, and that appellant's incompetence in representing himself would not provide legal grounds for appeal. The court told appellant that appellant was "very well read and well spoken and you know something about the law" but "I really urge you not to make this decision and to let counsel represent you or to waive time to give the Court and you additional time to talk to other attorneys so you can find a lawyer who you would be comfortable with." David Edwards said that he still wanted to represent himself. The court then went through essentially the same advisement for James Edwards, who confirmed that he wanted to represent himself. The court then relieved appointed counsel.
Toward the end of the July 2 appearance, after discussing the timing of the case, David Edwards asked if he "would be allowed to have outside assistance from somebody, a non-attorney, a paralegal that could meet with me for interviews and to go over documents, papers, go over legal things like that." The court appointed an investigator to assist appellants.
On September 30, 2004, before the Honorable Rene Navarro, appellants requested that the court appoint advisory counsel. David Edwards described "having assistance of counsel, helping us prepare, just counsel to talk to. Not that he would speak [for us] in court or trial, but counsel that could help us with procedures and advise us. . . . I thought I was pretty clear on July 2nd that I would speak for myself and I wanted assistance." Judge Navarro responded, "The Court is not in the position, given that, to appoint advisory counsel, as you've articulated. There isn't a substantial showing that would either promote justice or efficiency in the case."
Discussion
Denial of Right to Counsel
Seizing upon Avila's statement that Avila was making a special appearance on July 2, and had thought it would be "inappropriate" for him to consult with David Edwards because of Avila's representation of a co-defendant, appellant David Edwards contends that he was denied counsel at a critical stage of the proceedings. He states, "appellant had no chance to consult with his own attorney prior to deciding whether to waive his right to counsel, and to represent himself, by that attorney's unilateral decision."
Although Tursi had been appointed by the court to represent David Edwards, appellant David Edwards premises his argument on the assumption that Avila was representing him at Avila's appearance on July 2 to inform the court that Tursi would not be ready for trial until November. Appellant argues that he "is entitled to counsel at a hearing regarding a waiver of his right to counsel." Because Avila declined to speak to David Edwards on July 2, David Edwards argues that he was denied the assistance of counsel at this critical stage of the proceedings.
Citing Streit v. Covington & Crowe (2000) 82 Cal.App.4th 441 (Streit), appellant argues that Avila "was counsel in fact for appellant at the hearing on July 2, 2004." In Streit, the plaintiff sued, in part, Covington & Crowe and one of its attorneys alleging malpractice. (Id. at p. 443.) Covington & Crowe moved for summary judgment, representing "that their only connection to Streit's representation was that, as a professional courtesy to Streit's attorneys of record, . . . Covington & Crowe had 'specially appeared' for Streit in their stead at a hearing on a motion for summary judgment." (Ibid.) The trial court granted summary judgment to Covington & Crowe. (Ibid.) The appellate court reversed saying, "[T]he act of making a court appearance on behalf of a party creates a presumption that the attorney is authorized to do so, and hence is strongly presumptive of an attorney-client relationship. [Citation.] It is also consistent with common sense. By appearing at a hearing in a case in which the attorney has no personal interest, the attorney is obviously representing the interests of someone else, someone who is a party to that action. The client is such a person . . . . We conclude that an attorney making a special appearance is representing the client's interests and has a professional attorney-client relationship with the client." (Id. at p. 446, italics omitted.) The court concluded that an attorney specially appearing for a litigant instead of the litigant's attorney of record owes a duty of care to that litigant. (Id. at p. 444.)
Appellant uses his assertion that Avila was his counsel on July 2 to advance other contentions as well. Appellant argues that because Avila had said that it would be inappropriate for him to discuss the case with appellant, "appellant had no chance to consult with his own attorney prior to deciding whether to waive his right to counsel, and to represent himself, by [Avila's] unilateral decision."
On July 2, 2004, everyone in the courtroom, including appellant, understood that appellant was being represented by Tursi, not Avila. This is not changed by Tursi having Avila make what he termed a special appearance for the purpose of communicating Tursi's readiness information to the trial court. Appearances of this sort occur regularly on master trial calendars, and are commonly, albeit inaccurately, referred to as special appearances. Earlier, appellant had filed his motion stating, "I do not accept Mr. Tursi as appointed counsel and he does NOT represent me." At his first opportunity to speak in court that day, David Edwards said, "First of all, Your Honor, I would like to make it perfectly clear to the Court my stance. . . . I would like assistance only. I will speak for myself and I will defend myself. . . . I do not accept representation from Andrew Tursi." That Avila appeared to inform the court of Tursi's need for a continuance does not change the facts that appellant was offered the assistance of counsel when the court appointed Tursi, that Tursi met with appellant, and that appellant refused Tursi's assistance. The trial court offered appellant the opportunity to accept assistance and representation from Tursi and appellant rejected that offer. Appellant had put in place obstacles to representation, retained or appointed, and had essentially refused to accept representation from any counsel. Appellant was not entitled to appointed counsel of his choice. (Harris v. Superior Court (1977) 19 Cal.3d 786, 795.) Nor could the trial court "forc[e] a lawyer upon an unwilling defendant." (Faretta, supra, 422 U.S. at p. 817.) "To thrust counsel upon the accused, against his considered wish . . . violates the logic of the [Sixth] Amendment." (Id. at p. 820.)
"A special appearance is for the purpose of testing the sufficiency of service or the jurisdiction of the court." (Black's Law Dictionary (5th ed. 1979) p. 89.) Avila's appearance had nothing to do with these matters.
A criminal defendant possesses two mutually exclusive constitutional rights under the Sixth Amendment: (1) to be represented by counsel at all critical stages of a criminal prosecution and (2) the right to represent himself. (Faretta, supra, 422 U.S. at p. 819.) The federal Constitution requires assiduous protection of the right to counsel. The right to counsel persists unless the defendant affirmatively waives that right. (Johnson v. Zerbst (1938) 304 U.S. 458, 464-465 [58 S.Ct. 1019].) Courts indulge every reasonable inference against waiver of the right to counsel. (Brewer v. Williams (1977) 430 U.S. 387, 404 [97 S.Ct. 1232].)
At any stage of a criminal proceeding, there is a difference between a defendant who is denied the assistance of counsel and one who refuses to accept the assistance of counsel. Appellant is the latter. Appellant characterizes this case as one in which "the defense lawyer announces that he has refused to talk to his client because he represents a co-defendant, after which, while the lawyer says and does nothing, the defendant waives his right to counsel." A more accurate characterization is that this is a case in which the defendant would not enter a plea, refused to waive time, did not retain counsel after being given several continuances to do so, refused to accept counsel that the court appointed for him, and then announced that he would represent himself.
Given appellant's clear and unequivocal refusal to accept the representation by counsel that the court had appointed, appellant's argument amounts to a claim that he has a constitutional right to advisory counsel in asserting his right to self-representation. This is not the state of the law. Appellant has cited no case, and we know of none, in which the court must force a defendant who has already steadfastly refused to accept representation from appointed counsel to consult with counsel about his refusal to accept that representation or his assertion of his right to self-representation. The trial court had already appointed Tursi as counsel over appellant's objection. Once appellant refused Tursi's representation, and stated that he was representing himself, the trial court was obligated to take a valid waiver of counsel from appellant, not to force appellant to accept Tursi, Avila, or other advisory counsel for the purpose of consulting about waiving the right to counsel.
Appellant cites People v. Chesser (1947) 29 Cal.2d 815, to argue that his "Sixth Amendment rights were diminished when Avila appeared as his counsel." Chesser was a capital case in which appellant was accused of murdering his infant daughter. In Chesser, "At the request of the district attorney, an attorney practicing in Merced consented to appear for defendant 'solely for the purpose of waiving the preliminary examination.' The attorney making the appearance was not acquainted with defendant, knew nothing about the case, and did not discuss the facts with defendant or undertake to advise him as to what course he should pursue. Defendant was informed by the attorney concerning the purpose of the hearing and the effect of a waiver, and thereupon at the request of defendant, the attorney waived a preliminary hearing in his behalf." (Id. at p. 817.) The defendant was arraigned in superior court, waived counsel, pleaded guilty, and was sentenced to death. In reversing the judgment, our Supreme Court said " 'a perfunctory appearance at the request of the district attorney is a practice not to be commended,' since an accused is thereby precluded from receiving the effective aid guaranteed by the Constitution." (Id. at p. 821.) The Chesser court said that "the constitutional right of an accused to be represented by counsel of itself invokes the protection of the court when the accused is without counsel" and "this protecting duty imposes the serious and weighty responsibility upon the trial judge of determining whether there is an intelligent and competent waiver by the accused. While an accused may waive the right to counsel, whether there is a proper waiver should be clearly determined by the trial court, and it would be fitting and appropriate for that determination to appear upon the record." (Id. at pp. 821-822, italics omitted.)
Here, what precluded appellant from receiving the effective aid guaranteed by the Constitution was his refusal to accept Tursi's representation. That Avila appeared for Tursi on July 2 is of no consequence. Appellant had already communicated to the court, by objecting at the time of Tursi's appointment, by filing his motion to dismiss Tursi, and by refusing in open court to accept Tursi's representation, that he would not accept the assistance of counsel. What was left for the trial court to do, and what was not done in Chesser, was to insure a proper waiver of counsel. This is precisely what the trial court did.
Conflict
Appellant David Edwards argues, "The failure of the trial court to inquire regarding a conflict after counsel decided not to consult with appellant, is federal constitutional error which is reversible per se under Cuyler [v. Sullivan (1980) 446 U.S. 335]."
The right to effective assistance of counsel, secured by the Sixth Amendment to the United States Constitution and article I, section 15 of the California Constitution, includes the right to representation that is free from conflicts of interest. (People v. Cox (2003) 30 Cal.4th 916, 948.) Conflicts of interest arise in "all situations in which an attorney's loyalty to, or efforts on behalf of, a client are threatened by his responsibilities to another client or a third person or by his own interests." (People v. Bonin (1989) 47 Cal.3d 808, 835.) If the defendant establishes that there is an actual conflict of interest, no prejudice analysis is conducted because the conflict itself establishes the denial of the right to effective assistance of counsel under the Sixth Amendment. (Cuyler v. Sullivan, supra, 446 U.S. at p. 349 [100 S.Ct. 1708], citing Glasser v. United States (1942) 315 U.S. 60, 76 [62 S.Ct. 457].) Once a trial court knows, or reasonably should know, of the possibility of a conflict of interest on the part of defense counsel, the court has a duty to inquire into the matter. (People v. Lawley (2002) 27 Cal.4th 102, 145.) Appellant argues that the trial court knew that there was a conflict, based on Avila's statement that because he represented a co-defendant he had not consulted with appellant, and thus the trial court knew that Avila could not advise appellant "regarding the wisdom of waiving or retaining counsel for his defense."
As discussed above, appellant David Edwards's counsel on July 2 was Tursi, not Avila. Appellant refused Tursi's representation, and appellant does not assert that Tursi had a conflict of interest in representing him. Avila announced that he was appearing for Tursi, not for David Edwards, and clearly informed the court why he was not consulting with David Edwards. Because we do not consider Avila to have been representing appellant, we reject appellant's argument that the trial court had a duty to inquire into a conflict.
Knowing and Intelligent Waiver
Appellant David Edwards argues, "Appellant's waiver of counsel was not knowing and intelligent given the Cronic and Cuyler error, and the invalid waiver also requires reversal under the Sixth and Fourteenth Amendments." Appellant asserts that the waivers of counsel here were deficient because "the trial court never asked appellant if he had previously discussed the merits of the case, including strategy and defenses, with any attorney, including his appointed one." He asserts, "the [trial] court did not ask if appellant had consulted with his appointed counsel about waiving his right to counsel, nor did it inform him that Avila's refusal to advise him was denying him any right."
"The requirements for a valid waiver of the right to counsel are (1) a determination that the accused is competent to waive the right, i.e., he or she has the mental capacity to understand the nature and object of the proceedings against him or her; and (2) a finding that the waiver is knowing and voluntary, i.e., the accused understands the significance and consequences of the decision and makes it without coercion." (People v. Koontz (2002) 27 Cal.4th 1041, 1069-1070, citing Godinez v. Moran (1993) 509 U.S. 389, 400-401 & fn. 12.)
"In order to make a valid waiver of the right to counsel, a defendant 'should be made aware of the dangers and disadvantages of self-representation, so that the record will establish that "he knows what he is doing and his choice is made with eyes open." [Citation.]' (Faretta, supra, 422 U.S. at p. 835 . . . .) No particular form of words is required in admonishing a defendant who seeks to waive counsel and elect self-representation; the test is whether the record as a whole demonstrates that the defendant understood the disadvantages of self-representation, including the risks and complexities of the particular case. [Citations.]" (Koontz, supra, 27 Cal.4th at p. 1070.) "On appeal, we examine de novo the whole record-not merely the transcript of the hearing on the Faretta motion itself-to determine the validity of the defendant's waiver of the right to counsel. [Citation.]" (Ibid.)
Here, appellant had been informed repeatedly by the court, counsel, and the prosecutor that his case was complex and that any competent attorney would need considerable time to prepare it for trial. From everything appellant told the court and considering appellant's filed motion to dismiss counsel, appellant would not discuss the merits of the case, including strategy and defenses, with any attorney who had not signed his contract. The record as a whole demonstrates that David Edwards had considerable knowledge and experience that he brought to bear on his decision to waive counsel. The court had appointed counsel who was free of any conflict in representing appellant. The court took a proper waiver of counsel. The record as a whole demonstrates that appellant's waiver of counsel was knowing and intelligent. Appellant James Edwards links the validity of his waiver to that of David Edwards's waiver. We find that both appellants waived counsel knowingly and intelligently.
Advisory Counsel
Appellant James Edwards contends, "The trial court erred in refusing to appoint advisory counsel for appellants."
California courts have discretion to appoint advisory counsel to assist an indigent defendant who elects to represent himself. (People v. Crandell (1988) 46 Cal.3d 833, 861, disapproved on other grounds by People v. Crayton (2002) 28 Cal.4th 346, 364-365.) However, "[a] criminal defendant does not have a right to simultaneous self-representation and representation by counsel. [Citations.] '[N]one of the "hybrid" forms of representation, whether labeled "cocounsel," "advisory counsel," or "standby counsel," is in any sense constitutionally guaranteed.' [Citation.]" (People v. Bradford (1997) 15 Cal.4th 1229, 1368.) When ruling on a request for advisory counsel, the court may consider the defendant's intelligence and verbal skills (People v. Clark (1992) 3 Cal.4th 41, 111), demonstrated legal abilities and reasons for seeking advisory counsel, and whether the motion represented an effort to manipulate the legal proceedings. (People v. Crandell, supra, 46 Cal.3d at p. 863.) California courts have distinguished between capital and noncapital cases in ruling on a request for appointment of advisory counsel. A court's ruling on a request for advisory counsel in a capital case will be reviewed on appeal and will not be reversed absent an abuse of discretion. (People v. Clark, supra, 3 Cal.4th at p. 111.) If an abuse of discretion is found, the conviction will be reversed. (People v. Bigelow (1984) 37 Cal.3d 731.) Some courts have held that, in a noncapital case, although the trial court has the option of appointing advisory counsel, its ruling on that appointment is not subject to appellate review; there can be no abuse of discretion in denying a request for advisory counsel in a noncapital case. (People v. Garcia (2000) 78 Cal.App.4th 1422, 1428-1431.)
In any event, the record does not demonstrate that the denial of the request was an abuse of discretion. Even in a capital case, the question of whether to appoint advisory counsel is left to the trial court's discretion, and its decision will not be set aside " 'as long as there exists a reasonable or even fairly debatable justification' " for its decision. (People v. Clark, supra, 3 Cal.4th at p. 111; People v. Crandell, supra, 46 Cal.3d at p. 863.) Appellant James Edwards argues,"The record is devoid of any evidence that the request was made for a manipulative purpose." He observes, "While it is true that Co-Appellant was generally articulate, managed to follow proper procedure (i.e., timely file appropriate motions, make and argue/oppose evidentiary objections, obtain and utilize the services of an investigator, question witnesses, propose special jury instructions, and deliver argument to the jury), there is no question that the case involved extremely complex and unusual issues both factually and legally that would make even the most seasoned defense attorney wince."
A trial court ruling on a motion for advisory counsel may take into account factors such as the defendant's demonstrated legal abilities and his or her reasons for seeking appointment of advisory counsel. (People v. Crandell, supra, 46 Cal.3d at p. 863.) Here, by the time Judge Navarro denied the request for advisory counsel, the court file included the Edwardses' pre-trial motions that had among its exhibits an opinion, over 30 pages long, of a United States Magistrate for the Northern District of Texas disposing of appellants' federal petition for writ of habeas corpus challenging their extradition to California. The court file also contained a copy of the seven-page opinion of the federal appellate court affirming the district court's denial of the writ. Appellants had appeared before Judge Navarro to discuss discovery issues, to call their investigator to testify to receive more funding for his work, and to inform the court that they were filing writs of prohibition. The court had denied appellants' motion to dismiss, had discussed jury selection and challenges, and had heard appellants' motions in limine. Although the case was complex, these intelligent, articulate appellants had demonstrated that they understood its legal complexity and factual background. There was no abuse of discretion in the trial court's denial of appellants' request for the appointment of advisory counsel.
JURY INSTRUCTIONS
Background
James Edwards and David Edwards were each convicted of six counts of residential burglary based on the entries by Whelan and Keller into the homes of investors to sell the fraudulent securities. The prosecution's theory was that appellants were criminally liable for the burglaries because the burglaries were the natural and probable consequence of the conspiracy to sell the fraudulent securities. Appellant David Edwards advances three arguments to challenge the burglary convictions. He argues that a principal can not be vicariously liable for the acts of his agent, that the trial court erred in instructing on the innocent agent doctrine, and that the court erred in instructing that not knowing that an act is unlawful is not a defense. James Edwards joins in these contentions and contends that the trial court erred in failing to give a unanimity instruction as to the securities fraud counts.
At the instructional conference, the prosecution offered aiding and abetting instructions. These were withdrawn by the parties. The court said, "specifically, Mr. Edwards indicated he did not want them."
The trial court instructed the jury regarding conspiracy as follows: "A conspiracy is an agreement entered into between two or more persons with the specific intent to agree to commit the crimes of California Corporations Code section 25401, and with the further specific intent to commit that crime followed by an overt act committed in this state by one or more of the parties for the purpose of accomplishing the object of the agreement. [¶] Conspiracy is a crime and may be shown whether charged or not. In order to find a defendant guilty of conspiracy, in addition to proof of the unlawful agreement and specific intent, there must be proof of the commission of at least one of the alleged acts in count one of the indictment to be an overt act, and that the act found to have been committed was an overt act. [¶] It is not necessary to the guilt of any particular defendant that he personally committed an overt act if he was one of the conspirators when the alleged overt act was committed. [¶] The term overt act means any step taken or act committed by one or more of the conspirators which goes beyond mere planning or agreement to commit a crime, which step or act is [d]one in furtherance of the accomplishment of the object of the conspiracy.[¶] To be an overt act, the step taken or act committed need not, in and of itself, constitute the crime or even an attempt to commit the crime which is the ultimate object of the conspiracy. Nor is it required that the step or act, in and of itself, be a criminal or an unlawful act."
The trial court instructed, "A member of a conspiracy is not only guilty of the particular crime that to his knowledge his confederates agreed to and did commit, but is also liable for the natural and probable consequence of any crime or act of a co-conspirator to further the object of the conspiracy even though that crime or act was not intended as part of the agreed upon objective and even though he was not present at the time of the commission of that crime or act. . . . [¶] In determining whether a consequence is natural and probable, you must apply an objective test based not on what the defendant actually intended but on what a person of reasonable and ordinary prudence would have expected would be likely to occur."
The court instructed, "Every person who offers or sells a security in this state, by means of any written or oral communication, which either includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made not misleading in the light of the circumstances under which they were made is guilty of a felony."
The court's burglary instructions said that in order to prove burglary, there must be proof of entry into an inhabited dwelling and that "at the time of the entry that person had the specific intent to commit the crime of [a] violation of Corporations Code section 25401."
In his closing argument, the prosecutor said that "the heart" of the case was the Corporations Code section violation and that "There's also a conspiracy to do that." He reviewed the specific intent requirement for a violation of Corporations Code section 25401. He said, "so the people doing the talking who are just agents of the Edwardses and, by the way, even if those sales people were innocent, the Edwardses, if they directed them, if I dupe you into committing a crime, I'm guilty. That's the nature of conspiracy and using someone else." He argued, "And I would submit to you that the people involved in this conspiracy from top to bottom, especially from top, the men on trial here, knew what was going on and put blinders on every morning and left them on at night. [¶] And the law says that's a criminal intent. . . . The law says they're guilty even if they duped their salesman."
In describing the concept of an innocent agent, the prosecutor said, "you can't use an innocent agent. If I say to [District Attorney Investigator] Dalton [Rolen], Judge Navarro borrowed a set of silverware from me but he's on vacation. Go in his office, get my silverware, I've got too much too carry. Dalton doesn't mind. I'm stealing the judge's silverware. I'm guilty. And I can't say I never went in there, I didn't touch the stuff. I can say it but it's not a defense. [¶] They're also charged with conspiracy to do this. Conspiracy is an agreement to commit a crime. While this case, I'm making it real clear what the crime is, so it's an agreement to commit securities fraud."
Describing the liability of co-conspirators, the prosecutor said, "You've had an implied agreement to be part of the team that sells investments but are not being honest and fair, are there natural and probable crimes that could occur, like visiting old people in their homes could do it. Because if there is, you're good for it, even if it wasn't intended and even if it wasn't part of the original agreement. . . . It is not a defense that David Edwards never walked into John Bowes' home, never set foot in California, doesn't know where Santa Clara County is. If it's a natural and probable consequence that David and James Edwards' sales force is going to go visit old people in their homes to make these sales and the other elements are proven, they're guilty. . . . [¶] Natural and probable, what a reasonable person would have expected."
The prosecutor further argued, "So is burglary a reasonable and probable consequence? . . . when one of the salesmen for this company entered a home intending to offer or sell this investment program, either by lying or leaving something out, or not caring, they committed burglary. And because this was a multi-state if not nationwide sales effort targeting anybody who moved, especially elders, was it a likely occurrence that some of those salesmen would go into people's homes to close these deals? If you believe it is, these two men are guilty of burglary under California law. [¶] Even if they didn't know what the law is, that's no defense. I don't just mean that's no defense, I mean by the law that's no defense. There's another instruction on that."
The Edwardses argued that RDI was a legitimate business, that the prosecution had not shown beyond a reasonable doubt that it was not a legitimate business. They also argued that they were men of good character.
Discussion
Appellant David Edwards argues that "the burglary-conspiracy instructions permitted a finding of appellant's guilt for a burglary committed by another, which he did not intend." He asserts, "the conspiracy instructions given in this case allowed a finding of appellant's burglary liability as a principal, for burglaries committed by his agents. However, as also noted, those instructions imposed that liability based on what a reasonable person might foresee, rather than on what appellant knowingly directed, consented to, or authorized."
Principal/Agent
Appellant David Edwards contends, "No principal can be vicariously liable for the crimes of an agent under [People v. Doble (1928) 203 Cal. 510] and the court's contrary instruction is prejudicial federal constitutional error."
In Doble, the defendant was convicted of conspiracy to violate the Corporate Securities Act and of four counts charging substantive violations of that act. The conspiracy was to illegally take subscriptions for common stock without a permit to do so. On appeal, the defendant claimed that certain records of his agent had been erroneously admitted against him. The defendant was the president of the corporation but had but little to do with the stock sales department. His agent, Cox, was authorized to sell stocks. An expert witness for the prosecution testified about and relied on certain bookkeeping entries. There was no evidence that the information on which the expert relied was "genuine, true, or correct." (Doble, supra, 203 Cal. at p. 514.) The appellate court observed that the defendant "was in nowise connected with the said entries, it being expressly admitted that he had no knowledge whatsoever of the books and had no custody or control whatsoever over them. The entries were not made by Cox and were therefore at most the acts of subagents and ordinarily would not be binding even in a civil action on appellant (Civ. Code, secs. 2349-2351)." (Id. at. p. 515.)
The Doble court took care to distinguish between the use of the entries as proof of the substantive charges of violating the Corporations Code and their use as the declarations of a co-conspirator. The Doble court said, "If the books were in fact the acts or declarations of Cox, and the record otherwise showed evidence warranting the finding that a conspiracy existed between the appellant and Cox, this position would be sound, provided always that the jury was told that the acts and declarations of a co-conspirator were not binding unless and until, independent of such declarations and acts, a conspiracy had been shown beyond a reasonable doubt to exist, and in no case should such declarations be received as proof of the conspiracy." (Id. at pp. 516-517.)
In response to the argument that these entries were admissible as the acts of an agent as to the substantive offenses charged and as the acts of a co-conspirator as to the offense of conspiracy, the court said, "A principal, in order to be held criminally liable, must be shown to have knowingly and intentionally aided, advised, or encouraged the criminal act committed by the agent. In the absence of proof to this extent, the summary of the books should not have been received as a declaration binding upon appellant." (Doble, supra, 203 Cal. at p. 515.) The court said, in dictum, that if these entries were admitted into evidence, the court would have been required to instruct that " 'before one can be convicted of a crime by reason of the acts of his agent, a clear case must be shown. The civil doctrine that a principal is bound by the acts of his agent within the scope of the agent's authority has no application to criminal law. If a principal is liable at all criminally for the acts of another, such liability must be founded upon authorized acts. Authority to do a criminal act will not be presumed. You are instructed that six of the charges contained in the indictment are based upon alleged violations of the Corporate Securities Act without the element of conspiracy. You are therefore instructed that unless you find from the evidence beyond a reasonable doubt that the co-defendants F. G. Cox and W. E. Barnard were the agents of the defendants Abner Doble and W. A. Doble, Jr., in the perpetration of the acts alleged in said six charges and were directly authorized to commit said alleged acts by the defendants Abner Doble and W. A. Doble, then you must find said defendants Abner Doble and W. A. Doble not guilty of said six charges.' " (Doble, supra, 203 Cal. at p.516, italics added.)
Appellant also relies on Corporations Code section 25403, which states in subdivision (a), "Every person who with knowledge directly or indirectly controls and induces any person to violate any provision of this division or any rule or order thereunder shall be deemed to be in violation of that provision, rule, or order to the same extent as the controlled and induced person." Appellant argues that, reading Doble and Corporations Code section 25403 together, one must conclude that when an agent is in violation of the Corporations Code, "the principal of that agent is not liable for any of those violations unless he knowingly directed or consented to their commission. . . . [N]o principal is liable under a conspiracy theory for crimes committed by his agents, unless he authorized or consented or directed them." Thus, "The issue is whether the trial court erred in instructing that appellant could be found guilty of the six charged burglaries under a vicarious conspiracy theory, regardless of whether he 'actually intended' those crimes to occur."
Respondent agrees that Doble protects an officer of a corporation from criminal liability for acts of other officers or agents unless he directly authorized or consented to the acts. Respondent argues, "no issue of princip[al] liability based solely upon the princip[al]/agent relationship arose. . . . Under the law of conspiracy, the Edwardses were guilty of burglary because the burglary was a natural and probable consequence of the conspiracy in which they – the Edwardses- participated."
The natural and probable consequences doctrine applies both to aiding and abetting and to conspiracy. (See, e.g., People v. Prettyman (1996) 14 Cal.4th 248, 260-261; People v. Croy (1985) 41 Cal.3d 1, 12, fn. 5; People v. Kauffman (1907) 152 Cal. 331, 334.) Under that doctrine as it applies to aiding and abetting, a person may be held criminally responsible as an accomplice not only for the crime he or she intended to aid and abet but also for any other crime that is the natural and probable consequence of the target offense. (People v. Croy, supra, at p. 12, fn. 5.) Here, the prosecution's theory of liability was not based on aiding and abetting and the parties agreed that no instructions regarding accomplice liability should be given.
Under the natural and probable consequences doctrine as it applies to conspiracy, a person may be held criminally responsible not only for the crime he or she conspired to commit (here, the violation of Corporations Code section 25401), but for any deed of a conspirator which was done in furtherance of the object of the conspiracy or which was the natural and probable consequence of any act of a coconspirator done in furtherance of the object of the conspiracy. (People v. Kauffman, supra, 152 Cal. at p. 334.) Appellant argues that because Kauffman was decided before Doble, our Supreme Court "could have made an exception for it" and thus the court intended Doble "to limit the criminal liability of a principal for the criminal acts of an agent about which he, subjectively, knew nothing, in context of conspiracy" and "That limitation is irreconcilable with the rule of vicarious conspiracy liability" under the natural and probable consequences doctrine.
Although the court in Doble did not make an express exception for the application of the natural and probable consequences doctrine in conspiracy cases, it did not except other theories of imputed criminal liability in existence at the time either. For example, Doble did not make an exception for the felony-murder doctrine, which was well-established at the time Doble was decided. (See, e.g., People v. Milton (1904) 145 Cal. 169.) Appellant's argument could be used to defeat the imputed liability of a principal for murder when the principal commits a bank robbery with his agent during which his agent kills someone. There is nothing in Doble which convinces us to accept appellant's expansive interpretation of Doble's language concerning the limits of the use of the doctrine of respondeat superior in imposing criminal liability.
Doble supports appellant's proposition that the doctrine of respondeat superior is not a theory for imposing criminal liability and that a principal, in order to be held criminally liable, must be shown to have knowingly aided, advised, or encouraged the criminal act committed by the agent. Thus, Doble serves as a shield for a principal from criminal liability for the criminal acts of his agent of which the principal was unaware. Nothing in Doble or Corporations Code section 25403, however, suggests that this proposition can be used as some sort of white collar cloak of immunity for a principal who is prosecuted under other standard theories of criminal liability. Although, in the respondeat superior sense of the term, the Edwardses may have been principals and Whelan and Keller may have been their agents, the jury here was properly instructed regarding well-established conspiracy principles, including the criminal liability of a conspirator for crimes that are the natural and probable consequence of the conspiracy. These standard instructions regarding one's criminal liability for the acts of others do not become erroneous or inapplicable just because the actors may also have had a principal/agent business relationship. The trial court properly instructed the jury concerning the natural and probable consequences doctrine as it applies to conspiracy and no constitutional error appears.
Innocent Agent Instruction
The prosecution requested, and appellants had no objection to, the following instruction, "Even if the evidence does not show that agents of the defendants acted with criminal intent, the defendants may still be found liable for the actions of innocent agents who acted under the direction or assistance or aid of the defendants." Appellant David Edwards contends that, as to the burglary counts, "The trial court committed prejudicial federal constitutional error in giving the prosecution's 'innocent agents' special instruction." Appellant James Edwards joins.
The court gave the innocent agent instruction based on People v. Taylor (1973) 30 Cal.App.3d 117, in which the defendant challenged the sufficiency of the evidence to support his convictions for grand theft and for violations of the Corporations Code because there was no showing that he personally had defrauded the investors or that he had received any personal benefit from the transactions. In Taylor, certain representations concerning an investment "although made through an innocent agent, were false, known to defendant to be false and circulated to investors with his knowledge and acquiescence." (Id. at p. 122.) The Taylor court said, "An accused cannot escape responsibility merely because he used an innocent agent as his instrumentality in soliciting through misrepresentation." (Id. at p.121.)
Appellant acknowledges that the "rule invoked in Taylor" is authorized by Penal Code section 31. Appellant argues that the jury could have understood the innocent agent instruction in a manner contrary to law because "the only theory of appellant's burglary liability which was given was based on conspiracy." Appellant argues, "the correct law is that no conspirator is criminally liable for the acts of any other conspirator unless that other conspirator has committed a crime. . . . If Whelan and Keller were 'innocent' agents, they did not commit the crime of burglary, because they lacked the necessary specific intent to violate section 25401. Similarly, if they did not commit burglary, appellant could not be liable for burglary under a conspiracy theory, because no crime of burglary was committed by anyone."
Penal Code section 31 provides, "All persons concerned in the commission of a crime, whether it be felony or misdemeanor, and whether they directly commit the act constituting the offense, or aid and abet in its commission, or, not being present, have advised and encouraged its commission, and all persons counseling, advising, or encouraging children under the age of fourteen years, lunatics or idiots, to commit any crime, or who, by fraud, contrivance, or force, occasion the drunkenness of another for the purpose of causing him to commit any crime, or who, by threats, menaces, command, or coercion, compel another to commit any crime, are principals in any crime so committed."
If the jury believed that Whelan and Keller knew the fraudulent nature of the securities when they entered the homes to sell them, then the jury had no reason to consider the innocent agent instruction in finding that appellants are guilty of the burglaries. Appellant does not dispute that burglary was a natural and probable consequence of the conspiracy to commit securities fraud. Appellant argues, however, that if Whelan and Keller did not know that the securities were fraudulent then no burglary was committed. This argument employs an interpretation of the innocent agent concept that is far too restrictive. For purposes of Penal Code section 31, the "crime" is "the act constituting the offense," that is, the wrong to which the victim was subjected. When a person's home is entered for the purpose of making an offer to sell that person fraudulent securities, that person is the victim of a burglary. When Keller entered Karen Hannan's home to offer to sell her the securities which were fraudulent, the act constituting the offense of burglary, the wrong to which Hannan was subjected, occurred just as surely as if the defendants themselves had made the entry. In other words, the innocent agent doctrine tells us that had a defendant done himself what his agent did, the defendant may be held responsible for it. That Keller could have been unconvictable (in that he could defend against a burglary prosecution on the grounds that he did not know that the securities were fraudulent) does not mean that "the act constituting the offense" has not been committed or relieve appellant of criminal responsibility for Keller's act.
Appellant asserts that the innocent agent concept is a "rule which imposes this liability . . . . because the person who uses the innocent agent has, himself, the mens rea necessary to the crime, while the innocent agent does not." As applied in this case, "The vicarious conspiracy instructions given did not, however, require the jury to make any finding regarding appellants' mens rea relative to the burglary charges, since what he 'actually intended' was declared immaterial. The 'innocent agent' instruction informed the jury that it was not required to find that Whelan and Keller had the mens rea of burglary to prove appellant's guilt, since that too was immaterial."
The jury was instructed that the conspiracy here was an agreement "with the specific intent to agree to commit the crimes of California Corporations Code section 25401." The trial court instructed the jury that the specific intent for a violation of Corporations Code section 25401 was that "the defendant acted willfully and either: A, with knowledge of the falsity or misleading nature of the statement or of the materiality of an omission or; B, with criminal negligence in failing to investigate and discover the truth or falsity of the statements or omissions." The jury was fully instructed on the elements of burglary including an entry into an inhabited dwelling and that "at the time of the entry that person had the specific intent to commit the crime of violation of California Corporations Code section 25401." Appellant's mens rea was not, as appellant argues, declared "immaterial." The jury had to have found that appellant had the intent to violate Corporations Code section 25401 to convict him of the conspiracy charge. Thus, the instructions required the jury to find all of the elements of burglary, including the intent element, but permitted it to join appellant's intent to violate Corporations Code section 25401 with the conduct of appellant's agent, who acted "under the direction or assistance or aid" of appellant, to find that a burglary was committed. The trial court did not err in giving the innocent agent instruction and there was no constitutional violation.
Lawful Belief Instruction
Appellant David Edwards contends, "The trial court committed prejudicial federal constitutional error in giving the prosecution's 'lawful belief as no defense' special instruction." James Edwards joins. The trial court instructed the jury, "If you find by a reasonable doubt that a defendant acted with a required specific intent as instructed, it is no defense that he did not know that the act was unlawful or that he believed it to be lawful." Appellant argues that "the jury wrongly convicted him of burglary, because the instruction rendered immaterial Whelan and Keller's testimony that they did not have the specific intent to commit securities fraud in entering the homes."
Appellant's argument regarding this instruction is similar to his argument concerning the "innocent agent" instruction. Appellant claims that "like the 'innocent agent' instruction, the 'no defense' instruction allowed the jury to find burglary proved without finding that anyone had the mens rea for that crime. The difference between the effect of the two instructions is that the 'innocent agent' one applied only if the jury believed Whelan and Keller. The 'no defense' instruction told the jurors that it did not matter if they believed Whelan and Keller."
Appellant argues that the lawful belief instruction was error under People v. Corey (1995) 35 Cal.App.4th 717, 725 (reversed on another ground in People v. Salas (2006) 37 Cal.App.4th 717.). Cory interpreted People v. Simon (1995) 9 Cal.4th 493. Simon involved the sale of securities by means of false statements or omissions in violation of Corporations Code section 25401. In Simon, the Supreme Court said that a violation of Corporations Code section 25401 was not a strict liability offense. The court said, "[K]nowledge of the falsity or misleading nature of a statement or of the materiality of an omission, or criminal negligence in failing to investigate and discover them, are elements of the criminal offense described in section 25401." (Simon, supra, 9 Cal.4th at 522.) Corey reversed a defendant's conviction for violating Corporations Code section 25401, in light of People v. Simon, because the trial court had instructed the jury that " 'When the evidence shows that a person voluntarily did that which the law declares to be a crime, it is no defense that he did not know that the act was unlawful or that he believed it to be lawful.' " (People v. Corey, supra, 35 Cal.App.4th 725.) Appellants argue that "the substance of the 'no defense' instruction given below was that a good faith belief in the legitimacy of the RDI investments was immaterial to an intent to violate section 25401."
Respondent argues that this instruction "did no more than tell the jury that appellants were guilty of burglary even if they did not believe that they could be because they had others do the selling." Appellant asserts that this response is a mischaracterization of their argument. Appellant defines the challenge to the instruction as follows: "The court instructed that burglary was committed if someone entered a home with the specific intent to commit securities fraud. Whelan and Keller testified that they did not have this intent, because while they entered to sell the investment, they believed it legitimate. The 'no defense' instruction told the jury that Whelan and Keller were guilty of burglary whether or not they believed this testimony. That is, it told the jurors that it did not matter if Whelan and Keller believed what they were doing was lawful, because they were guilty of burglary once they entered homes to sell the investments as they did. That instruction, in turn, allowed the jury to convict appellant of burglary regardless of what he may have 'actually intended' under the vicarious conspiracy instructions."
Appellant's interpretation of how the jury might have viewed this instruction is at odds with the wording of the instruction itself. The instruction told the jury, "If you find by a reasonable doubt that a defendant acted with a required specific intent as instructed, it is no defense that he did not know that the act was unlawful or that he believed it to be lawful." The jury could not have used this instruction to consider what Whelan and Keller believed to be lawful because those men were not the defendants in this case. Furthermore, the prosecutor's argument specifically directed this instruction at appellants' belief in the lawfulness of their conduct. Thus, we reject the argument that the instruction "told the jurors that it did not matter if Whelan and Keller believed what they were doing was lawful" because the instruction was specifically directed at a defendant's belief in the lawfulness of his conduct. The jury was properly instructed on the mens rea for conspiracy, burglary, and securities fraud, and this instruction reinforced that the specific intents for those offenses had to be found beyond a reasonable doubt. Other instructions properly outlined appellants' vicarious liability under the natural and probable consequences doctrine. The trial court did not err in giving the "lawful belief" instruction.
We note that at least one commentator has observed, "Simon does not significantly affect the responsibility of the prosecution in situations where criminal liability is essentially vicarious, i.e., for the conduct of another. This is increasingly important due to the tendency of securities fraud promoters to insulate themselves by delegating the actual contact with investors to a relatively ignorant sales force." (33 San Diego L. Rev. 1127, 1138.)
Unanimity Instruction
Appellant James Edwards contends, "The trial court erred in failing to give a unanimity instruction as to the Corporations Code section 25401 counts, for which reversal of those counts is required." David Edwards joins.
From the constitutional principle that a jury's verdict in a criminal case must be unanimous, courts have derived the general rule that if one criminal act is charged, but the evidence tends to show the commission of more than one such act, "either the prosecution must elect among the crimes or the court must require the jury to agree on the same criminal act." (People v. Russo (2001) 25 Cal.4th 1124, 1132.) "This requirement of unanimity as to the criminal act 'is intended to eliminate the danger that the defendant will be convicted even though there is no single offense which all the jurors agree the defendant committed.' " (Ibid., quoting People v. Sutherland (1993) 17 Cal.App.4th 602, 612.)
The requirement of jury unanimity is expressed in CALJIC 17.01. At the instructional conference, the prosecutor referred to CALJIC 17.01 and explained that "The Court felt it was inappropriate and the parties, my notes indicate, agreed." The court said, "That's true. . . . 17.01 and 17.03 were withdrawn by the parties." Later, David Edwards confirmed that 17.01 had been withdrawn.
CALJIC 17.01 provides: "The defendant is accused of having committed the crime of ___ [in Count ___]. The prosecution has introduced evidence for the purpose of showing that there is more than one [act] [or] [omission] upon which a conviction [on Count ___] may be based. Defendant may be found guilty if the proof shows beyond a reasonable doubt that [he] [she] committed any one or more of the [acts] [or] [omissions]. However, in order to return a verdict of guilty [to Count ___], all jurors must agree that [he] [she] committed the same [act] [or] [omission] [or] [acts] [or] [omissions]. It is not necessary that the particular [act] [or] [omission] agreed upon be stated in your verdict."
A unanimity instruction must be given sua sponte where the evidence shows more than one act that could constitute the charged offense and the prosecutor does not elect to rely on any one such act. (People v. Dieguez (2001) 89 Cal.App.4th 266, 274-275.) Appellants argue that "the evidence showed multiple misstatements/ omissions which could have served as the basis for [appellants'] Corporations Code section 25401 convictions. For example, the prosecution presented evidence that the various victims were told their principal was safe, that the investment was as safe as a CD, or they were not told what the commission structure was for their RDI investment, specifically that the investment had to double every year in order to pay the commissions, that their RDI investment was a 'fake' that a similar investment (Dennel) had been shut down by the SEC and was under investigation, and that Dennel investors were not receiving their payments. . . . Without [a unanimity] instruction, there was the risk that [appellants were] convicted because certain jurors believed that Statement A was made or certain other jurors believed in the existence of Omission B." Appellants further contend that they were entitled to a unanimity instruction of the issue of "materiality" within the meaning of Corporations Code section 25401.
"[I]n order for the unanimity instruction to make a difference, there must be evidence from which jurors could both accept and reject the occurrence of at least the same number of acts as there are charged crimes. [Citation.]" (People v. Brown (1996) 42 Cal.App.4th 1493, 1502.) In contrast, in cases where the jury is presented with an all-or-nothing choice, a unanimity instruction is unnecessary or, if error, harmless. (People v. Schultz (1987) 192 Cal.App.3d 535, 539.) In People v. Vargas (2001) 91 Cal.App.4th 506, 561, this court acknowledged that "[t]here is a split of authority on the proper standard for reviewing prejudice when the trial court fails to give a unanimity instruction." Some cases apply the "harmless beyond a reasonable doubt" standard under Chapman v. California (1967) 386 U.S. 18, 24 [87 S.Ct. 824]; other cases apply the standard from People v. Watson (1956) 46 Cal.2d 818, 836, which is whether "it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (See e .g., People v. Jenkins (1994) 29 Cal.App.4th 287, 298-299 [applying Watson]; People v. Melhado (1998) 60 Cal.App.4th 1529, 1536, [applying Chapman].) In Vargas, this court held, "Watson provides the correct standard on the issue." (Vargas, supra, 91 Cal.App.4th at p. 562.)
Appellant David Edwards argued at trial that there were no material misstatements or omissions in violation of Corporations Code section 25401 because of "the nature of this investment." He described some of the misstatements and omissions offered by the prosecution to support the charge and said, "You've heard RDI is a fake. This is really the crux of the whole thing. Is RDI a fake? No. So can it be material? No, because it is not a fact." He argued, "The real question is was RDI pooling money for legitimate investments." He reviewed testimony concerning RDI in detail and said "these problems have nothing to do with violating 25401, which is the only real charge that all the charges rest on this issue, did we lie." He asserted, "we believed we were involved in legitimate buying and selling of notes." Appellant David Edwards argued at trial, "I personally believe this is an all or nothing case. We're liars, cheats, or we're not."
James Edwards argued at trial that the prosecutor had "to show that we not only violated 25401, but we did it with criminal mindset and a specific criminal intent. He must also prove that we had knowledge of some false statement. And by that false statement we sold a security by means of a false statement. He has to prove we had knowledge of that and we went ahead and did it anyway." He asserted, "The real truth is that Dave and I sincerely believed and still do that we could accomplish what we set out to do for our clients and our friends and our relatives."
Appellants relied on the defense that they believed that RDI was a legitimate investment vehicle, not that any particular statement was or was not made or was not material. The jury's verdict, which was swift and sweeping, clearly implied that it did not believe the only defense offered. (People v. Riel (2000) 22 Cal.4th 1153, 1200.) It is not reasonably probable that there was any disagreement by the jury regarding the factual basis for the convictions. For the same reason, any error was harmless even under the Chapman standard of harmless error beyond a reasonable doubt.
SENTENCING
Background
At sentencing, the trial court commented on the "insidious and repulsive nature" of appellants' conduct and described appellants as "the epitome of ruthless and savage arrogance." The court said that justice had "reigned over that evil which unleashed to steal the fruits of a life's work from decent, hard working, honest salt of the earth people." The court said that although the case "calls out for aggravation" the court would impose the midterm "because of recent Supreme Court decisions." The court said that it would impose some consecutive sentences "Based on the totality of the circumstances and the fact that each count involves a different victim and occurred at different dates."
The trial court sentenced each appellant to a state prison term of 27 years, eight months. The court said, "I'm going to select count four to be the [principal] term, which is the charge of first degree burglary." The court imposed five 16-month consecutive terms on counts 6, 14, 20, 22, and 26 (the remaining burglary counts), plus 11 one-year consecutive terms on counts 8 through 13, 15, 16, 19, 24, and 25 (some securities fraud counts). The court imposed a one year consecutive term on count 1, the conspiracy charge. Then the court said it was imposing, on counts 5, 7, 21, 23, and 27 (the remaining securities fraud counts) three year mid-terms with execution suspended pursuant to Penal Code section 654. The court said, "In addition, the Court will impose a three year enhancement under Penal Code section 186.11 (A) (2) which will run consecutive, two year enhancement under Penal Code section 12022.6, two years consecutively." In addition to various fines and fees, the court ordered restitution including specific amounts to named victims of the burglary counts as well as $2,500,000 to Warfield as receiver.
Penal Code section 654/Securities Fraud Counts
Appellants assert that the trial court erred under Penal Code section 654 concerning some of the violations of Corporations Code section 25401. Appellants contend, "counts 11, 13, 16, and 24 must be reversed under the multiple conviction prohibition of our state law, and under the federal Constitution." Appellants further contend, "Multiple punishment is prohibited for counts 10-11, 12-13, 15-16 and 23-24."
These arguments are based on the evidence that money was invested in RDI contracts for one year, and that RDI allowed reinvestment of the same money for another year by renewal contracts. Karen Hannan reinvested additional money with the renewal contract. The other victims simply renewed their original investments. Appellants challenge both their convictions and their sentences for those counts in which the victim renewed his or her investment, citing People v. Bailey (1961) 55 Cal.2d 514.
Count 10 involved Bertha Cummings's original investment in RDI and count 11 involved the offer to sell by renewal of the previous investment. Count 12 involved Parungao's original investment and Count 13 involved her renewal. Count 15 involved Karen Hannan's original investment and Count 16 involved her renewal of that investment plus an additional $10,000. Count 23 was Wood's investment and count 24 represented his renewal contract.
In Bailey, the defendant was convicted of grand theft based on evidence that she unlawfully received numerous welfare checks, each of which was for an amount less than the threshold value for grand theft but when aggregated exceeded the threshold. The Bailey court approved an instruction that informed the jury that if several thefts are committed pursuant to an initial design to take more than $200 and more than that amount is taken, there is one crime of grand theft. However, if there is no such initial design, then the taking of an amount less than $200 is petty theft. In approving this instruction, the appellate court noted that in theft-by-false-pretense cases, the separate receipt of various amounts of money as part of "a single plan" may be "cumulated to constitute but one offense" of grand theft. (Bailey, supra, 55 Cal.2d at p. 518.) In those cases, as well as in larceny and embezzlement cases, the applicable test is "whether the evidence discloses one general intent or separate and distinct intents." (Id. at p. 519.) The Bailey court stated, "[w]hether a series of wrongful acts constitutes a single offense or multiple offenses depends upon the facts of each case, and a defendant may be properly convicted [on] separate counts charging grand theft from the same person if the evidence shows that the offenses are separate and distinct and were not committed pursuant to one intention, one general impulse, and one plan." (Ibid.)
Appellants argue that the challenged counts "all evince identical conduct. That is, money was obtained by fraudulent misrepresentation, that being violation of section 25401 by initial investment contracts, and that same money was then kept by that same fraudulent misrepresentation, by renewal contracts." Thus, they argue, conviction on the initial investment precludes conviction for the renewal contract and punishment for these paired counts is prohibited under Penal Code section 654.
As this court noted in People v. Washington (1996) 50 Cal.App.4th 568, "The single-intent-and-plan doctrine or test articulated in Bailey has been consistently applied in theft cases. (See, e.g., People v. Sullivan (1978) 80 Cal.App.3d 16 . . . [error not to give Bailey instruction where evidence supports finding one intent and plan concerning multiple misappropriations]; People v. Packard (1982) 131 Cal.App.3d 622 . . . [affirming one count of grand theft and reversing others where no evidence of separate intents and plans]; People v. Kronemyer (1987) 189 Cal.App.3d 314 . . . [following Packard ]; . . . .)" (Id. at p. 575.) We noted, however, that courts have generally refused to apply the Bailey approach in situations other than theft.
In People v. Neder (1971) 16 Cal.App.3d 846, the court refused to apply the Bailey approach to multiple forgeries. In Neder, the defendant was convicted of three counts of forgery, arising from his use of a stolen credit card three times in one day at the same store. (Id. at pp. 849-850.) The defendant claimed there was only one forgery, citing the Bailey rule that multiple thefts from the same person pursuant to a single larcenous intent constitute a single offense. The Neder court declined to apply the rule to cover multiple forgeries. The court acknowledged that the multiple forgeries were probably motivated by a single intent to obtain property from the same victim. Nevertheless the court did "not feel that the Bailey doctrine should be extended to forgery. That doctrine was developed for the crime of theft to allow, where there is a common plan, the accumulation of receipts from takings, each less than $200, so that the taker may be prosecuted for grand theft as opposed to several petty thefts. The essential act in all types of theft is taking. If a certain amount of money or property has been taken pursuant to one plan, it is most reasonable to consider the whole plan rather than to differentiate each component part. [Citation.] The real essence of the crime of forgery, however, is not concerned with the end, i.e., what is obtained or taken by the forgery; it has to do with the means, i.e., the act of signing the name of another with intent to defraud and without authority, or of falsely making a document, or of uttering the document with intent to defraud. Theft pursuant to a plan can be viewed as a large total taking accomplished by smaller takings. It is difficult to apply an analogous concept to forgery. The designation of a series of forgeries as one forgery would be a confusing fiction." (Id. at pp. 852-853, fns. omitted.)
Respondent argues, "Bailey does not apply to a violation of Corporation[s] Code section 25401. This section is violated when the seller makes a material misrepresentation. The amount of the loss is irrelevant; indeed, no loss is necessary to establish a violation. Thus, the Bailey rationale, which was premised upon the amount of loss, does not apply to section 25401." Respondent relies on People v. Drake (1996) 42 Cal.App.4th 592. In Drake, the court followed Neder and refused to apply Bailey to multiple convictions for presenting false Medi-Cal claims (Welf. & Inst. Code, § 14017). (Drake, supra, 42 Cal.App.4th at p. 597.) The court explained that the offense is concerned with "the 'means' as opposed to the 'ends' of the offense. It is the act of a physician intentionally submitting a false or fraudulent claim that constitutes the offense rather than the amount of money the physician obtains through his or her fraudulent act." (Id. at p. 596.)
Appellants distinguish Drake by arguing that because a violation of Corporations Code section 25401 involves a sale of security, and, because that code defines a sale of a security as one "for value," then every sale under section 25401 "necessarily includes proof that the victim has lost property which had some 'value.'" (Corp. Code, § 25017, subds. (a-b).) Appellants argue that the purpose of the Corporate Securities Law is to protect "the money of the public, their personal wealth" and thus a violation is more analogous to a theft, as in Bailey, than to Drake, in which the amount of money taken was not an issue in determining the presentation of a false claim. We consider an offer to sell or sale of a security that includes a material misrepresentation to be more akin to making a false claim than to a theft. Even if the overall purpose of Corporations Code section 25401 is to protect the public wealth, a violation of the statute, like the presentation of a false Medi-Cal claim, does not necessarily involve loss to anyone. An offer to sell a fraudulent security, which is not accepted by the potential buyer, constitutes a violation without monetary loss to the victim. Thus, the Bailey rule does not apply to violations of Corporations Code section 25401and multiple convictions for the violation concerning the initial investment and for the renewed investment do not offend Penal Code section 654.
In challenging their punishment, as opposed to their convictions, for these counts under Penal Code section 654 appellants contend, "The evidence establishes that Appellants had a general, overall, indivisible plan to defraud each victim of money, of which the renewals were simply the means to keep the money already stolen from them, and in the case of Mrs. Hannan, to obtain more pursuant to the same underlying intent to defraud." Appellants argue, "the 'pairs' of counts referred to . . . involve the taking of the same money pursuant to the same scheme to defraud, i.e. investment in RDI. . . . [T]he renewals were the means by which the original investment was retained. This unique factual feature distinguishes the instant case from Drake, supra, involving a form of fraud, and other cases relied upon by Respondent." (Italics omitted.)
Penal Code section 654, subdivision (a) provides in pertinent part: "An act or omission that is punishable in different ways by different provisions of law shall be punished under the provision that provides for the longest potential term of imprisonment, but in no case shall the act or omission be punished under more than one provision." Penal Code section 654 precludes multiple punishments not only for a single act, but for an indivisible course of conduct. (People v. Hester (2000) 22 Cal.4th 290, 294.)
Whether a course of conduct is indivisible for purposes of section 654 depends on the intent and objective of the actor. If all the offenses are incidental to one objective, the defendant may be punished for any one of them, but not for more than one. (People v. Latimer (1993) 5 Cal.4th 1203, 1208.) On the other hand, if the evidence discloses that a defendant entertained multiple criminal objectives which were independent of and not merely incidental to each other, the trial court may impose punishment for independent violations committed in pursuit of each objective even though the violations shared common acts or were parts of an otherwise indivisible course of conduct. (People v. Centers (1999) 73 Cal.App.4th 84, 98; In re Adams (1975) 14 Cal.3d 629, 634.)
The principal inquiry in each case is whether the defendant's criminal intent and objective were single or multiple. Each case must be determined on its own facts. (People v. Perez (1979) 23 Cal.3d 545, 551; People v. Beamon (1973) 8 Cal.3d 625, 630-639.) The question whether the defendant entertained multiple criminal objectives is one of fact for the trial court, and its findings on this question will be upheld on appeal if there is any substantial evidence to support them. (People v. Coleman (1989) 48 Cal.3d 112, 162.) Where the trial court does not make an express finding, an implied finding that the crimes were divisible inheres in the judgment and must be upheld if supported by the evidence. (People v. Nelson (1989) 211 Cal.App.3d 634, 638.)
Furthermore, under section 654, "a course of conduct divisible in time, although directed to one objective, may give rise to multiple violations and punishment. [Citations.]" (People v. Beamon, supra, 8 Cal.3d 625, 639, fn. 11, People v. Kwok (1998) 63 Cal.App.4th 1236, 1253-1254.) "If the offenses were committed on different occasions, they may be punished separately." (Kwok, supra, at p. 1253.) This is particularly so where the offenses are temporally separated in such a way as to afford the defendant opportunity to reflect and to renew his or her intent before committing the next one, thereby aggravating the violation of public security or policy already undertaken. (Id. at pp. 1255-1256.)
In this case, the trial court imposed concurrent sentences pursuant to Penal Code section 654 on counts 5, 7, 21, 23, and 27. Each of these was a securities fraud count for which sentence was imposed for a burglary committed on the same occasion. In sentencing appellants to consecutive terms on the reinvestment counts, the trial court implicitly found that appellants maintained multiple intents and objectives. "The factual finding of the trial court, whether explicit or implicit, may not be reversed 'if there is any substantial evidence to support it.' [Citations.]" (People v. McCoy (1992) 9 Cal.App.4th 1578, 1585.)
Appellants argue that the reinvestment counts involved the "same scheme to defraud, i.e. investment in RDI. . . [T]he renewals were the means by which the original investment was retained." This proffered intent and objective is "much too broad and amorphous to determine the applicability of section 654." (People v. Perez, supra, 23 Cal.3d 545, 552.) "Although [appellants'] actions involved a continuing intent to defraud the [investor], such an intent constitutes too general an objective to constitute one transaction and preclude punishment for divisible separate offenses." (People v. Williams (1980) 106 Cal.App.3d 15, 20, superseded by statute on other grounds as stated in People v. Preston (1996) 43 Cal.App.4th 450, 455-456; [multiple punishment proper for perjury convictions arising from single welfare fraud scam].) Even if we were to accept that the initial offer to sell the fraudulent security and the offer to reinvest in the fraudulent scheme months later did involve a continuing intent to keep the defrauded investor, that intent is much too general an objective to constitute one transaction under section 654. The consecutive sentences on the reinvestment counts did not offend Penal Code section 654.
Penal Code Section 654/Conspiracy Count
Appellant David Edwards contends, "The judgment must be ordered modified to stay execution of sentence on count 1, conspiracy, under section 654." He argues this must be stayed because the "sole object of the conspiracy was the commission of certain crimes" and "execution of sentence has been ordered for convictions of those exact crimes." Appellants argue that "the sole object of the conspiracy was taking and keeping money by means of the burglary and section 25401 offenses."
"[I]t would violate [section 654] to sentence a defendant for conspiracy to commit several crimes and for each of those crimes where the conspiracy had no objective apart from those crimes. If, however, a conspiracy had an objective apart from an offense for which the defendant is punished, he may properly be sentenced for the conspiracy as well as for that offense." (In re Cruz (1966) 64 Cal.2d 178, 180-181.)
In People v. Keller (1963) 212 Cal.App.2d 210, cited by appellants, the defendant was sentenced for a conspiracy to commit burglary and for an attempted burglary. The reviewing court looked to the overt acts charged in the conspiracy count in considering the defendant's claim that his sentence violated section 654. The overt acts charged in the conspiracy count were ones committed in perpetrating the attempted burglary. The conspiracy was not shown to have any objective apart from that involved in the attempted burglary, and the Keller court held that sentencing the defendant for both offenses violated the rule against multiple punishment.
Here, the conspiracy count alleged in overt act 18, "On or about and between August 3, 1999 and October 2, 2000, William Whelan participated in the sales of investments in Resource Development International to the following persons on or about the following dates: Walter Callahan 4/14/00; Sidney James Carrell 5/25/00 and 10/2/00; Richard H. Deitz 9/21/99, 2/9/00 and 9/27/00; Barbara Holloway 8/3/99; Peter A. Jones 12/10/99 and 12/15/99; Douglas Norman 5/10/00; James and Joan Russell 6/20/00 and 10/1/00; Donald and Helena Wilson 5/31/00; Christine Henkel Williams 12/15/99; Linda Worrell 10/6/99." Evidence concerning this overt act came from investor files found in Whelan's office. These files showed, for example, that Walter Callahan, before investing, requested information from RDI using his Visalia, California, address and that David Edwards sent a letter to Richard Deitz's Woodlake, California, home acknowledging Deitz's investment in RDI. Whelan testified that he was holding these files for another person with whom he worked.
Respondent argues that because in overt act 18 of the conspiracy count appellants were alleged to have violated Corporations Code section 25401 with regards to victims who were not named in the substantive counts, "the conspiracy was broader than the substantive counts" and "the conspiracy encompassed victims in many states who lost money in the fraudulent RDI investments."
In his reply brief, appellant David Edwards argues that "respondent's three groups of non-substantive crimes as objects of the conspiracy do not support the judgment." Appellants argue that "The record does not provide any reasonable basis to determine which of the 18 alleged overt acts were found true. That being so, there is also no basis to assume that no. 18 was the overt act found true." Appellant quotes People v. Hiscox (2006) 136 Cal.App.4th 253, "For a court to hypothesize which acts the jury may have based its verdicts on, . . . would amount to 'judicial impingement upon the traditional role of the jury.' (Blakely v. Washington [(2004) 542 U.S. 296], 309.)" (Id. at p. 261.) Hiscox concerned a defendant's right to be sentenced under terms of prior laws in effect when he committed his offenses, where the jury did not make findings on which years, during a several year time frame, defendant's multiple acts of child molestation occurred. The sentence here was imposed for a conspiracy count for which the jury found appellant guilty. Appellants argue that because there was no basis for finding that the jury found overt act 18 to be true, to sentence appellants consecutively for the conspiracy based on this act constitutes "judicial fact-finding" unauthorized by the federal Constitution.
Blakely held that " 'any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.' " (Blakely, supra, 542 U.S. at p. 301 [124 S.Ct. 2531, 2536].) It explained that the relevant "statutory maximum" is not the maximum sentence a court may impose after finding additional facts, but the maximum it may impose based solely on the facts reflected in the jury verdict or admitted by the defendant. (Id. at p. ___ [124 S.Ct. at pp. 2537-2538].) In People v. Black (2005) 35 Cal.4th 1238, our Supreme Court considered Blakely and stated "that the judicial factfinding that occurs when a judge exercises discretion to impose an upper term sentence or consecutive terms under California law does not implicate a defendant's Sixth Amendment right to a jury trial." (Id. at p. 1244.)
In People v. Groves (2003) 107 Cal.App.4th 1227, decided after Apprendi v. New Jersey (2000) 530 U.S. 466 but before Blakely, the appellate court held that the trial court did not violate the defendant's right to trial by jury by finding by preponderance of the evidence and without submitting the matter to the jury the factual matters necessary for the operation of section 667.6, subdivision (d), and therefore did not err in imposing full-term consecutive sentences in accordance with that statute. (Groves, supra, 107 Cal.App.4th at pp. 1230-1231.) As noted, in Black, our Supreme Court observed that several cases had held that the right to jury trial was not implicated by the imposition of consecutive sentences and cited Groves with approval. (Black, supra, 35 Cal.4th at pp. 1263-1264, fn. 19.) In Cunningham v. California (2007) 549 U.S. ___ [127 S.Ct. 856, 166 L.Ed.2d 856], the high court held that California's Determinate Sentencing Law violates a defendant's Sixth and Fourteenth Amendment right to a jury trial to the extent it permits a trial court to impose an upper term based on facts found by the court rather than by a jury beyond a reasonable doubt. Cunningham did not address the distinct issue of imposition of consecutive sentencing and we remain bound by Black. Given this holding, we must conclude there was no constitutional infirmity in the imposition of consecutive terms based on an application of Blakely. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)
In further attacking the consecutive sentence for the conspiracy count, David Edwards, in his reply brief, argues, "California has no subject matter jurisdiction of an out-of-state crimes [sic] produced by an out-of-state conspiracy." He claims, "California cannot punish appellant for a conspiracy formed in Washington, under either our state law or under the federal [C]onstitution, on the basis of out-of-state crimes which were one of its objects." Appellants argue, "any express or implied jury finding that Whelan and Keller were California members of the conspiracy was the product of instructional error, given the 'no defense' instruction." As discussed above, we find no instructional error. In the trial court, appellants made numerous challenges to the subject matter jurisdiction of the court below. The jury verdict convicting appellants of conspiracy authorized the trial court to sentence appellants for that conspiracy. In determining whether to sentence appellants consecutively for the conspiracy, the court could look to the objectives of the conspiracy. Whether its objectives encompassed some acts occurring outside California, it also included acts within California that were not included in the substantive counts. A number of the victims named in overt act 18 were solicited in, and made their investments, in California.
Appellants argue, "The Drysdale, Berrocoso and [Loher] sales were not found proven as objects of the conspiracy by the jury, or the trial court." Reviewing the dates of the contracts with these investors, appellants argue that, because the jury found that the conspiracy began on or about April 1, 1999, "the jury did not find that these three sales were the product of the conspiracy, because they found that the conspiracy did not exist at the time they were made." However, the trial court could look to alleged acts occurring within the time frame of appellants' convictions and described in overt act 18 to determine the scope of the conspiracy without including older acts outside the scope of the conviction.
Because the scope of appellants' conspiracy, as revealed through evidence presented at trial concerning the overt acts, had broader objectives than the substantive counts of which appellants were convicted, consecutive sentencing was proper.
Enhancements
Appellants contend, "The trial court erred in ordering full consecutive term service on the section 12022.6 and 186.11 findings." Although appellant David Edwards concedes that consecutive sentencing on these enhancements was proper, he argues that the court could only impose one third of the term prescribed for each enhancement. The parties disagree as to whether the trial court imposed these enhancements on count 4, a burglary count which the court designated as the principal term, or count 1, the conspiracy count, which was a subordinate term.
Appellants argue that imposition of full consecutive terms under Penal Code section 186.11 and Penal Code section 12022.6 was error because Penal Code section 1170.1 limits the imposition of the term for an enhancement attached to a subordinate term to one-third of the prescribed term. Appellants interpret the court's sentencing statement as imposing these enhancements on count 1, the sentence for which was ordered to be served consecutively to count 4. We find this factual assumption unwarranted. Although separated by a detailed recitation of the sentences imposed on other counts, the court's imposition of the punishments for the enhancements logically relates to the count the court specifically designated as the principal term.
Penal Code section 186.11 (a)(1) provides, "Any person who commits two or more related felonies, a material element of which is fraud or embezzlement, which involve a pattern of related felony conduct, and the pattern of related felony conduct involves the taking of more than one hundred thousand dollars ($100,000), shall be punished, upon conviction of two or more felonies in a single criminal proceeding, in addition and consecutive to the punishment prescribed for the felony offenses of which he or she has been convicted, by an additional term of imprisonment in the state prison as specified in paragraph (2) or (3). This enhancement shall be known as the aggravated white collar crime enhancement. The aggravated white collar crime enhancement shall only be imposed once in a single criminal proceeding. For purposes of this section, 'pattern of related felony conduct' means engaging in at least two felonies that have the same or similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics, and that are not isolated events. For purposes of this section, 'two or more related felonies' means felonies committed against two or more separate victims, or against the same victim on two or more separate occasions."
" 'As a general rule, we presume that the trial court has properly followed established law.' " (People v. Scott (1997) 15 Cal.4th 1188, 1221; People v. Lewis (1987) 191 Cal.App.3d 1288, 1296, [" 'It is a basic presumption indulged in by reviewing courts that the trial court is presumed to have known and applied the correct statutory and case law in the exercise of its official duties' "].) Consistent with this principle, we presume that the court would not have imposed an unauthorized full consecutive term on the enhancements, by affixing them to a subordinate term, when such imposition could be properly affixed to the principal term. This conclusion finds support in the court's comments about the gravity of appellants' conduct and the court's statement that it would have imposed aggravated terms had that choice not been complicated by recent developments in the law. We see no basis in the record before us to accept appellant's assertion that the enhancements were tied to a count for which a consecutive sentence was imposed rather than to the principal term.
This interpretation is consistent with the very detailed sentencing statement filed by the prosecution.
Restitution
Appellant James Edwards contends that the trial court erred in ordering restitution to Walter Callahan, Sidney Carrell, Richard Dietz, and Christine Henkel-Williams. Appellants were neither convicted of nor charged with offenses involving these four people, and appellants contend that "an award of restitution to them is in excess of the trial court's statutory authority." Respondent argues that because these four people were named in overt act number 18 of the conspiracy count, the restitution order was proper.
Article I, section 28, subdivision (b), of the California Constitution provides in pertinent part: "Restitution shall be ordered from the convicted persons in every case, regardless of the sentence or disposition imposed, in which a crime victim suffers a loss. . . ." This directive is implemented by Penal Code section 1202.4, which states in pertinent part: "(a)(1) It is the intent of the Legislature that a victim of crime who incurs any economic loss as a result of the commission of a crime shall receive restitution directly from any defendant convicted of that crime."
In the context of restitution statutes, " '[a] "victim" is a "person who is the object of a crime . . . ." ' [Citation.]" (People v. Birkett (1999) 21 Cal.4th 226, 232.) Thus, "victim[s]" entitled to restitution are only those "persons or entities against which the [defendant's] crimes had been committed." (Ibid.) This does not include "persons whose losses arose only as a result of crimes committed against others." (Id. at p. 243.) As noted by our Supreme Court, "the Legislature intended to require a[n] . . . offender, for rehabilitative and deterrent purposes, to make full restitution for all losses his crime had caused . . . ." (Id. at p. 246.)
Appellants rely on People v. Percelle (2005) 126 Cal.App.4th 164. In Percelle, the defendant had been sentenced to state prison for 14 years and was ordered to pay victim restitution based on the auto theft charge of which he had been acquitted. (Id. at pp. 179-181.) This court found that in a nonprobation case, there is no case law or statutory authority permitting a trial court to order victim restitution for a dismissed or acquitted count. (Id. at p. 179.) This court held that the victim restitution order was unauthorized and that thus this order must be stricken. (Id. at pp. 179- 181.) Percelle rejected the argument that restitution was authorized because section 1202.4, subdivision (f), required the court to order restitution to a victim who has suffered economic loss as a result of the defendant's "conduct." (Percelle, supra, 126 Cal.App.4th at p. 180.) Percelle said the subdivision merely described how to calculate the amount of restitution, and the statute in total made clear that the victim should receive restitution from a defendant convicted of that crime. (Ibid.)
Unlike the defendant in Percelle, appellants were not acquitted of any charges against them. They were convicted of conspiracy. They claim that the restitution order was unauthorized because the people to whom the challenged restitution was ordered were not "named in the indictment." They acknowledge that these victims were named in overt act 18, but argue, "Given that the jury was only required to find proof of one such overt act to support the conspiracy charge . . . , and numerous such acts were alleged here, the mere fact that [appellants were] convicted of conspiracy does not establish proof of the overt act in which Callahan, Carrell, Dietz and Henckel-Williams were named."
Accepting appellants' argument would require an interpretation of Penal Code section 1202.4 that limits restitution awards only to those persons who are specifically named as victims in the wording of the count of which a defendant is convicted. This would be inconsistent with the purpose of Penal Code section 1202.4. "In view of the strongly expressed concern for persons who have suffered loss as the result of criminal conduct, our Supreme Court has given the term 'victim' a broad and flexible meaning." (People v. Ortiz (1997) 53 Cal.App.4th 791, 796-797, citing People v. Crow (1993) 6 Cal.4th 952, 957, see also People v. Broussard (1993) 5 Cal.4th 1067, 1075.) Many offenses, the commission of which results in loss to another do not, as described in the charging document, specify the name of a victim. Because Callahan, Carrell, Dietz, and Henckel-Williams all incurred economic loss as a direct result of appellants' commission of the crime of conspiracy to commit securities fraud, they were victims within the meaning of Penal Code section 1202.4. The trial court's restitution order was authorized.
DISPOSITION
The judgments appealed from are affirmed.
WE CONCUR: RUSHING, P. J., PREMO, J.
Penal Code section 12022.6 provides in relevant part, "When any person takes, damages, or destroys any property in the commission or attempted commission of a felony, with the intent to cause that taking, damage, or destruction, the court shall impose an additional term as follows: . . . [¶] (2) If the loss exceeds one hundred fifty thousand dollars ($150,000), the court, in addition and consecutive to the punishment prescribed for the felony or attempted felony of which the defendant has been convicted, shall impose an additional term of two years."
Penal Code section 1170.1 provides in part, "Except as otherwise provided by law, and subject to Section 654, when any person is convicted of two or more felonies, whether in the same proceeding or court or in different proceedings or courts, and whether by judgment rendered by the same or by a different court, and a consecutive term of imprisonment is imposed under Sections 669 and 1170, the aggregate term of imprisonment for all these convictions shall be the sum of the principal term, the subordinate term, and any additional term imposed for applicable enhancements for prior convictions, prior prison terms, and Section 12022.1. The principal term shall consist of the greatest term of imprisonment imposed by the court for any of the crimes, including any term imposed for applicable specific enhancements. The subordinate term for each consecutive offense shall consist of one-third of the middle term of imprisonment prescribed for each other felony conviction for which a consecutive term of imprisonment is imposed, and shall include one-third of the term imposed for any specific enhancements applicable to those subordinate offenses."