Justia White Collar Crime Opinion Summaries
Articles Posted in California Courts of Appeal
Jensen v. Superior Court
Jensen was charged as a coconspirator in a felony indictment alleging a scheme under which members of the Santa Clara County Sheriff’s Department issued hard-to-obtain concealed firearms permits in exchange for substantial donations to an independent expenditure committee supporting the reelection campaign of Sheriff Smith. Jensen is a sheriff’s department captain identified as the individual within the sheriff’s department who facilitated the conspiracy. Jensen unsuccessfully moved to disqualify the Santa Clara County District Attorney’s Office from prosecuting him, alleging that that office leaked grand jury transcripts to the press days before the transcripts became public which created a conflict of interest requiring disqualification. He also joined in codefendant Schumb’s motion to disqualify the office due to Schumb’s friendship with District Attorney Rosen and Rosen’s chief assistant, Boyarsky.The court of appeal rejected Jensen’s arguments for finding a conflict of interest requiring disqualification: the grand jury transcript leak, Schumb’s relationships with Rosen and Boyarsky, and a dispute between Rosen and Sheriff Smith about access to recordings of county jail inmate phone calls. The trial court could reasonably conclude Jensen did not demonstrate that the district attorney’s office was the source of the leak. Jensen himself does not have a personal relationship with Rosen or Boyarsky. The trial court could reasonably conclude that Jensen did not establish a conflict of interest based on the existence of a dispute between the district attorney and the elected official with supervisory power over Jensen. View "Jensen v. Superior Court" on Justia Law
Schumb v. Superior Court
Schumb was charged as a coconspirator in a felony indictment alleging a quid pro quo scheme in which members of the Santa Clara County Sheriff’s Department issued hard-to-obtain concealed firearms permits in exchange for substantial monetary donations to the reelection campaign of Sheriff Smith. Schumb is an attorney with a history of fundraising for elected officials; he accepted the donations as a treasurer of an independent expenditure committee supporting Sheriff Smith’s reelection. Schumb is a friend of Rosen, the elected Santa Clara County District Attorney, and previously raised funds for Rosen’s campaigns.Schumb unsuccessfully moved to disqualify the Santa Clara County District Attorney’s Office from prosecuting him, arguing that his friendships with Rosen and Rosen’s chief assistant, Boyarsky, created a conflict of interest making it unlikely Schumb would receive a fair trial. Schumb asserted that he intends to call Rosen and Boyarsky as both fact and character witnesses at trial and. despite their personal connections to the case, neither Rosen nor Boyarsky made any effort to create an ethical wall between themselves and the attorneys prosecuting the case. The court of appeal vacated and directed the lower court to enter a new order disqualifying the Santa Clara County District Attorney’s Office in Schumb's prosecution. View "Schumb v. Superior Court" on Justia Law
California v. Paredes
Gonzalo Paredes was found guilty by jury of 35 counts of offering or delivering compensation for workers’ compensation patient referrals and 16 counts of concealing an event affecting an insurance claim. The trial court sentenced Paredes to an aggregate term of five years in prison. On appeal, Paredes claimed the prosecutor committed misconduct during his examination of one of the witnesses and during closing argument by suggesting the existence of facts not in evidence. He also contended the trial court erred in excluding as hearsay, an unavailable witness' testimony from a prior federal trial. Further, Paredes contended the evidence presented was insufficient to support the jury's verdicts. Finding no reversible error, the Court of Appeal affirmed Paredes' convictions and sentences. View "California v. Paredes" on Justia Law
Wang v. Fang
Plaintiffs Zhi An Wang, Yu Liu, Bo Xu, Yanhong Sun, Yong Li, Tao Chen, Lina Tao, Bin Qu, Qingjiang Li, Tao Jing, Xingchuan Wu, Jun Shi, Ke Zhang, Zhuo Xiao, and Yugang Xie appealed a trial court order granting defendants Shimin Fang and his spouse, Juhua Liu's motion to dismiss plaintiffs’ complaint on the grounds of forum non conveniens (motion). Fang and Juhua Liu resided in San Diego County. Plaintiffs all resided in the People’s Republic of China. Fang created a website in China that published articles and other content regarding purported examples of fraud, corruption, and bureaucratic inefficiency affecting the scientific and academic communities in China. In about 2005, Fang publicly criticized a urologist who claimed to have a developed a treatment for a rare disease. A year later, the urologist sued Fang, and a Chinese court ruled in the urologist's favor. In 2010, Fang was attacked by individuals purportedly hired by the urologist as revenge for his public criticism of the doctor. As a result of the attack, Fang established a business in China called “Personal Safety Foundation for Scientific Anti-Fraud Individuals” (Foundation). Fang used the Foundation’s website among other methods to obtain donations. Fang represented that donated funds “would be used solely for the protection of the personal safety of individuals engaged in anti-fraud activities,” and that any such awards could be used by recipients for the “purpose of protecting their personal safety.” As an inducement to obtain donations, Fang publicly represented that no monies collected to fund the Foundation would be used to pay for his personal living expenses. For approximately eight years, the Foundation collected donations from “several thousand donors” including plaintiffs. The complaint alleged defendants misused Foundation funds “for personal transactions” in contravention of the stated mission and purpose of the Foundation. Defendants in their motion argued the complaint should have been dismissed on the ground of inconvenient forum because the matter should be litigated in China, where all plaintiffs resided and where the Foundation was located. The Court of Appeal concluded substantial evidence supported the trial court’s finding that China was a suitable forum. However, the California Court agreed with plaintiffs that in the interest of justice, the case should have been stayed and not dismissed, with the U.S. court to retain jurisdiction over the matter pending the outcome of the case in China. View "Wang v. Fang" on Justia Law
People v. Martinez
A felony complaint alleged that on seven different dates in 2014, Martinez committed a felony under Insurance Code section 1814 by entering into an agreement and having an understanding with a person incarcerated in jail, to inform and notify Martinez, a bail licensee, of the fact of an arrest in violation of California Code of Regulations, title 10, section 2076. Martinez was associated with Luna Bail Bonds.The court of appeal reversed her subsequent conviction, finding the regulation facially invalid. Section 2076 prohibits bail licensees from entering, indirectly or directly, any arrangement or understanding with specified types of people— including a “person incarcerated in a jail”—“or with any other persons” to inform or notify any bail licensee, directly or indirectly, of information pertaining to (1) an existing criminal complaint, (2) a prior, impending, or contemplated arrest, or (3) the persons involved therein, which impliedly includes arrestees and named criminals. The section is not unconstitutionally vague but is a content-based regulation, which unduly suppresses protected speech and fails to survive even intermediate judicial scrutiny. While section 2076 might indirectly deter unlawful solicitation of arrestees, an indirect effect is not enough to survive intermediate scrutiny. View "People v. Martinez" on Justia Law
California v. Koenig
James Stanley Koenig was convicted by jury on 33 counts of securities fraud, mostly involving Corporations Code section 25401, in addition to two counts of residential burglary. He was sentenced to an aggregate term of 42 years eight months. On appeal, defendant raised 15 contentions. The Court of Appeal concluded the trial court erred by not instructing on mistake of law as to some counts and it erred in failing to define the term “indirect” for the jury as to one count. However, the Court concluded these errors were harmless and found no merit to the other contentions. Accordingly, Koenig's convictions were affirmed. View "California v. Koenig" on Justia Law
People v. Braum
In two civil enforcement actions, the Court of Appeal affirmed the trial court's judgments against the trustee and the trust (collectively, "defendants") and the imposition of civil fines in excess of $6 million. The court held that the trial court's judgments did not violate the double jeopardy clause, because the allegations and evidence before the trial court were insufficient to show that the earlier criminal complaint was based on the same offenses as the civil actions. The court also held that the $5,967,500 in civil penalties were not unconstitutionally excessive under the four-part Bajakajian test. The court rejected defendants' contention that neither the trial court nor the city had the authority to require the trustee to evict the dispensaries. Finally, the court held that the medical-marijuana regulations were not void for vagueness, and the trial court did not err in holding the trustee personally liable for the civil penalties and other relief imposed against him in each of the judgments. View "People v. Braum" on Justia Law
Kurtz-Ahlers, LLC v. Bank of America N.A.
Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law
Galeotti v. International Union of Operating Engineers
Galeotti, a former Union Local 3 employee, filed a complaint against Local 3 and three of individual union leaders, alleging that the individual defendants required union employees to pay them money to keep their jobs, lied about the reason for collecting the money, and caused Local 3 to terminate Galeotti’s employment when he failed to pay the full amount demanded. The trial court dismissed his second amended complaint without leave to amend.The court of appeal reversed in part, reasoning that a threat to terminate employment can provide a basis for an extortion claim and that the allegations of the second amended complaint stated a cause of action for wrongful termination in violation of the public policy underlying the extortion statutes. The complaint stated a cause of action for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO; 18 U.S.C. 1961), based on the predicate acts of extortion, but did not state a cause of action for interference with prospective economic advantage. View "Galeotti v. International Union of Operating Engineers" on Justia Law
California v. Schmidt
Defendant Lonnie Schmidt managed a home foreclosure rescue operation, doing business as Second Opinion Services and Financial Services Bureau Limited. Following a lengthy jury trial in which he represented himself, defendant was convicted on four counts of prohibited practices by a foreclosure consultant, ten counts of filing false instruments, six counts of identity theft, and five counts of attempted grand theft. Defendant was sentenced to a total of 28 years in prison, plus one year to serve in the county jail. On appeal, defendant argued, and the State conceded: (1) insufficient evidence supported some of defendant’s convictions for grand theft; (2) the evidence did not support some of defendant’s convictions for filing false instruments; and (3) the trial court should have stayed his sentence for second degree burglary and attempted grand theft. The Court of Appeal agreed as to all these contentions and reversed judgment and sentence regarding those counts. The Court remanded the case for resentencing in light of this decision. View "California v. Schmidt" on Justia Law