Opinion
NOT TO BE PUBLISHED
Appeals from judgments of the Superior Court of Orange County No. 07CF2337, Patrick Donahue, Judge.
Patricia Ihara, under appointment by the Court of Appeal, for Defendant and Appellant Janet Sue Reiswig.
Diane E. Berley, under appointment by the Court of Appeal, for Defendant and Appellant Ronald Edward Reiswig.
Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Gary W. Schons, Assistant Attorney General, Barry Carlton and Sharon L. Rhodes, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
FYBEL, J.
Introduction
Through the three transactions at issue in this case, Janet Sue Reiswig (Janet) and Ronald Edward Reiswig (Ronald) fraudulently induced Cristina and Julius Lichtman to give them $560,000 to invest in Reiswig-owned companies. A jury convicted Janet and Ronald each of three counts (counts 4 6) of making an untrue statement in the purchase or sale of a security in violation of Corporations Code section 25401. The jury also convicted Janet of two counts (counts 7 and 9) of identity theft in violation of Penal Code section, subdivision 530.5(a) and two counts (counts 8 and 10) of forgery with intent to defraud in violation of section 470(a).
Janet and Ronald are collectively referred to as the Reiswigs. Ronald has joined in all of Janet’s arguments which benefit him. (Cal. Rules of Court, rule 8.200(a)(5).)
Further code references are to the Penal Code unless otherwise designated. The designation of “subdivision” or “subd.” is omitted from code citations because the use of parentheses surrounding a letter already establishes the reference to a subdivision.
As to counts 4 through 6, the jury found true: (1) the special allegation under section 1203.045(a) that the Reiswigs committed the crime of theft in an amount exceeding $100,000; (2) the special allegation under section 186.11(a) the Reiswigs engaged in a pattern of related fraudulent felony conduct involving the taking of more than $500,000; and (3) the special allegation under section 12022.6(a)(2) that the Reiswigs intentionally took, damaged, and destroyed property valued in excess of $150,000. The trial court sentenced Janet to an aggregate prison term of 11 years four months, and sentenced Ronald to an aggregate prison term of 10 years.
The current version of section 12022.6(a)(2) states the threshold loss for imposing the enhancement is $200,000. The version of section 12022.6(a)(2) in effect at the time of the loss stated the threshold loss for imposing the enhancement was $150,000. (See Historical and Statutory Notes, 51D pt. 1, West’s Ann. Pen. Code (2009 ed.) foll. § 12022.6, p. 274.)
We remand for the trial court to impose the mandatory restitution fine under section 186.11 and, if necessary, to order corrections to the orders of restitution and abstracts of judgment. In all other respects, we affirm.
Facts
We view the evidence in the light most favorable to the verdict and resolve all conflicts in its favor. (People v. Ochoa (1993) 6 Cal.4th 1199, 1206; People v. Barnes (1986) 42 Cal.3d 284, 303.)
I.
The Reiswigs Insinuate Their Way into the Lichtmans’ Lives.
Cristina and Julius Lichtman first met the Reiswigs in 1997. Janet Reiswig cold called the Lichtmans at their San Juan Capistrano home, told them her business involved family estates, wills, and living trusts, and asked them if they had a will. Cristina said they did and the call ended.
A day or so later, Janet showed up at the Lichtmans’ home uninvited and asked if she could review their will. At the time, Julius Lichtman handled the family’s finances because Cristina had no experience in handling financial matters. Janet was friendly and looked professional, so Julius accepted her offer to review the will. Janet told them their will had not been recorded and that if they let her take it, she would draw up a new one for $300. Julius agreed. Janet later returned with a new will.
Cristina and Janet became friends-or so Cristina thought-and the two went to restaurants and movies together.
In late December 1997, the Lichtmans purchased an annuity contract from Best Western Insurance Company, which was owned by the Reiswigs, and paid premiums of $28,439.89. Janet served as the agent for the transaction. Later, when they received their annuity statements, the Lichtmans learned that the annuities would not mature for 50 years. At the time, Julius was 81 or 82 years old and Cristina was 55 years old. The Lichtmans complained to Janet and she refunded their money without a penalty.
In April 2001, the Lichtmans applied for an annuity from Conseco Annuity Assurance Company, with Ronald Reiswig as the agent, and paid a $43,413.87 premium.
II.
The Reiswigs Fraudulently Induce the Lichtmans and Cristina Into Making Three Investments.
A. The $163,447 Investment Dated November 1, 2001 (the First Investment)
Before retiring, Julius had owned a grocery store. When he sold the store, the buyer paid him half the purchase price, and Julius carried the other half as a loan at 10 percent interest.
In October 2001, Janet intervened and persuaded the buyer to pay off the balance due in a lump sum of $196,927.31. Janet suggested the Lichtmans use part of the money to pay off the mortgage on their condominium and invest the rest in Fidelity Insured Deposits, Inc. (Fidelity), a Reiswig-owned company. Janet told the Lichtmans that Fidelity acted as brokers and agents for insurance companies, invested in all types of things, and was doing very well, and Fidelity would pay them 10 percent annual interest on the investment.
By that time, Julius had suffered strokes and had stopped making the financial decisions. Cristina did not ask Janet too many questions about the investment because they were good friends and she trusted and believed her.
In October 2001, the Lichtmans’ check for $196,927.31 was deposited into a Farmers & Merchants bank account for a corporation called FEP, Inc., doing business as Family Estate Insurance Services (FEP). FEP was owned by the Reiswigs and was licensed by the California Department of Insurance. Using these funds, FEP paid Washington Mutual $73,879.87 as the payoff amount of the Lichtmans’ mortgage. The balance remaining was $123,047. The Lichtmans invested this remainder, plus the $43,413.87 paid earlier as an annuity premium, in Fidelity, for a total investment of $163,447.
In exchange, the Lichtmans received a security contract consisting of a promissory note (the First Note), a pledge of 100, 000 shares of Fidelity stock, and a security agreement (the First Security Agreement) granting the Lichtmans a security interest in Fidelity’s assets. The First Note was in the amount $163,447 and provided that Fidelity would pay the Lichtmans 10 percent annual interest, made in monthly interest-only installments of $1,363 for 10 years, beginning December 1, 2001. The principal balance of the promissory and any unpaid interest was due on November 1, 2011. The First Note bears a signature in the name of Ronald Reiswig, as president of Fidelity. The pledge of stock was signed by Ronald and Janet Reiswig, as, respectively, president and vice-president of Fidelity, and stated, in part, “for value received, the undersigned RONALD E. REISWIG, President of FIDELITY INSURED DEPOSITS, INC. hereby deposits, delivers to JULIUS LICHTMAN and CHRISTINA LICHTMAN” 100, 000 shares of Fidelity’s common stock as collateral to secure payment of the note.
Unbeknownst to Cristina, in March 17, 1999, the Orange County Superior Court in an another matter had issued a ruling stating, “while Janet Reiswig was acting in a fiduciary capacity of co trustee for which she received payment in advance, that her conduct rose to the level of a conflict of interest.” Cristina also did not know that Fidelity had no income and that the First Note and First Security Agreement were not qualified as securities with the California Department of Corporations. Cristina would not have invested $163,447 in Fidelity if she had known any of those facts when she invested.
The Lichtmans’ check for $196,927.31 was endorsed by Ronald and deposited into FEP’s bank account sometime between October 31 and November 9, 2001. In that time period, $73,895 was transferred from that account to pay off the Lichtmans’ mortgage, and $100,000 was transferred from that account into a bank account for the Reiswig Family Trust. None of the money was deposited into an investment other than a standard checking or money market account.
B. The $250,000 Investment Dated February 2, 2005 (the Second Investment)
After Julius Lichtman died in January 2003, Cristina and Janet became even closer friends. Janet told Cristina that she loved her like a sister, invited her to the Reiswig home for dinners and holidays, and drove her to doctors’ appointments. Cristina trusted Janet, whom she considered her best friend.
In 2004, Cristina opened a $400,000 home equity line of credit at Washington Mutual Bank at the bank manager’s suggestion. Cristina told Janet about the line of credit.
In January 2005, after Cristina had been told she needed back surgery, Janet asked Cristina to invest again in Reiswig-owned companies, and suggested she obtain the investment funds by drawing on her unused home equity line of credit. Janet told Cristina, “you are going to have many expenses, medical expenses, and you need more income, because you are going to have too many bills to pay. Why don’t you give me power of your equity, and I give you very good interest, too.” When Cristina expressed concern about using the equity in her home, Janet assured her she and Ronald would make her loan payments and pay interest too. Janet told Cristina that business was going very well and they were “opening offices all over.”
On January 25, 2005, the Reiswigs met Cristina at her bank. While Ronald waited outside, Janet accompanied Cristina inside the bank where she withdrew $200,000 from her home equity line of credit in the form of a cashier’s check. Cristina endorsed the check to FEP, and gave it to Janet. Ronald later endorsed the check on behalf of FEP and deposited into one of its bank accounts.
Sixteen days later, Cristina withdrew an additional $50,000 from her home equity line of credit in the form of a cashier’s check payable to FEP, and gave the check to Janet. Ronald endorsed the check on behalf of FEP and deposited it into FEP’s bank account.
Cristina’s $250,000 investment in the Reiswig companies was evidenced by a promissory note (the Second Note) and a loan and security agreement (the Second Security Agreement). The Second Note provided that Fidelity and FEP would pay Cristina the principal sum of $250,000 with nine percent annual interest, payable in monthly installments of $2,000 for 10 years, beginning March 1, 2005, with the remaining principal balance and any unpaid interest due on February 28, 2011. In addition, Fidelity was to make all the payments due on Cristina’s home equity line of credit. The Second Note was signed by Ronald as chief financial officer of Fidelity and FEP, and by Janet as secretary of Fidelity and FEP.
To secure payment of the $250,000 note, the Reiswigs executed, on Fidelity’s and FEP’s behalf, the Second Security Agreement, which granted Cristina a security interest in the assets of Fidelity and FEP. The Second Security Agreement stated the proceeds of the loan would be used for the companies’ “general working capital purposes, ” and that any pending litigation, threatened litigation, or governmental proceeding had been disclosed.
On July 29, 2004, the California Department of Corporations (DOC) had issued a desist and refrain order (the Desist and Refrain Order) against the Reiswigs, Fidelity, and FEP. The DOC ordered them to stop all activity relating to selling or offering to sell a particular offering which the DOC had determined was a security. In February 2005, the DOC and the Reiswigs were involved in litigation over the validity of the Desist and Refrain Order, which the trial court set aside on September 2, 2005. The Reiswigs did not disclose the Desist and Refrain Order or the subsequent litigation to Cristina. If they had, Cristina would not have invested in Reiswig companies.
In Reiswig v. Department of Corporations (2006) 144 Cal.App.4th 327 (Reiswig), we affirmed the trial court’s determination the CD plus bonus investments involved did not constitute securities. Those investments are entirely different from all the ones involved in this case.
During an August 20, 2004 administrative hearing regarding the Desist and Refrain Order, Janet testified Fidelity and FEP were two separate entities; FEP did business under the name Family Estate Services and that name was its licensed name for insurance business, including the sale of annuities; Fidelity was a marketing business only, and its marketing activities consisted of placing newspaper advertisements and paying the CD bonus interest advertised in those ads from money it received from FEP. Janet also testified Fidelity sold no products and had no source of income or revenue, other than what it received from its parent company, FEP. Ronald likewise testified FEP gave Fidelity the money to pay its investors. During a previous administrative hearing, both Janet and Ronald testified Fidelity had always been merely a marketing entity.
The Reiswigs never informed Cristina that Fidelity never generated any income, had no assets other than office furnishings, and was merely a marketing entity. She would not have invested in the Reiswig companies had she known those facts.
Bank account records showed the checks from Christina totaling $250,000 were deposited into FEP’s bank account. From the date of the deposit, until that account was closed on March 15, 2005, one other deposit was made in the amount of $28,700. During the same time period, the following disbursements were made from that account: $20,000 transferred to the Reiswig Family Trust account; $150,000 transferred to accounts for the Reiswigs; $2,268 paid to Christina; $9,000 transferred into another account at the same bank; $82,000 in unspecified commissions paid to salespeople and others; $14,700 paid to Fidelity and Dash Insurance Service, Inc. (Dash Insurance), another Reiswig owned company; $10,600 paid to another account owned by FEP; and $12,500 paid to Ronald Reiswig. None of the money invested by Cristina was deposited into an investment other than a standard checking or money market account, neither of which would earn 10 percent interest.
C. The $150,000 Investment Dated October 1 and 2, 2005 (the Third Investment)
Cristina had back surgery in June 2005 and stayed at the Reiswigs’ home for six weeks to recuperate. While there, Janet asked her to invest the remaining portion of the home equity line of credit in Reiswig companies.
On September 7, 2005, Cristina withdrew the amount remaining in her home equity line of credit-$149,185.78-and deposited the proceeds into her checking account. The next day, she gave Janet a check in the same amount with the payee information left blank. When the check was negotiated, the payee line had been filled in with Janet Reiswig and Dash Insurance. The check was deposited into Dash Insurance’s bank account at Wells Fargo Bank.
Cristina’s investment was evidenced by a promissory note (the Third Note) and a loan and security agreement (the Third Security Agreement). The Third Note was in the principal amount of $150,000 and provided that Fidelity and FEP would pay Cristina nine percent annual interest in monthly interest only installments of $1,000 for 10 years, beginning November 8, 2005. The principal balance and any unpaid interest were due on February 28, 2011. Fidelity and FEP agreed to make all payments due on Cristina’s home equity line of credit. The Third Note was signed by Ronald as chief financial officer of Fidelity and FEP and by Janet as secretary of Fidelity and FEP.
To secure payment of the $150,000, Ronald, as Fidelity’s chief financial officer, executed the Third Security Agreement, which granted Cristina a security interest in Fidelity’s assets. The Third Security Agreement represented (1) investment proceeds would be used for Fidelity’s “general working capital, ” (2) there was no pending or threatened litigation, or other action seeking an injunction to or other restraining order which could affect the Fidelity’s business, and (3) there was no pending or threatened litigation or governmental litigation against the company.
The Reiswigs did not disclose the Desist and Refrain Order or the pending litigation with the Department of Corporations. If they had, Cristina would not have invested in the Reiswig companies. The Reiswigs had not informed Cristina that Fidelity generated no income and had no assets, other than office furnishings.
Sometime between September 8, 2005 and October 7, 2005, Cristina’s $150,000 investment in Fidelity was deposited into a bank account owned by Dash Insurance. During the same month long period, another $14,590 in commission income was deposited into the Dash Insurance bank account. The following distributions from or checks drawn on the Dash Insurance bank account were made in that period: (1) checks totaling $42,280 were written to Ronald personally, including a $36,000 check with a note stating “Humvee” and “RV”; (2) $50,000 was transferred to an account for the Reiswig Family Trust; (3) $20,345 to pay Reiswig personal expenses; (4) $47,388 to pay business expenses; and (5) $15,710 for unspecified expenses. None of the money invested by Cristina was deposited into an investment other than a standard checking or money market account, neither of which would earn nine percent interest.
III.
Janet Steals Cristina’s Identity and Forges Cristina’s Signature.
In April 2002, Janet offered to act on Cristina’s behalf in health care matters. Cristina accepted her offer and, on April 27, 2002, executed a durable power of attorney for health care in favor of Janet. On the same date, Cristina signed an “Affidavit of Lost Bond.” Janet also had a “Durable Power of Attorney for Management of Property and Personal Affairs, ” purportedly signed by Cristina on April 27, 2002. Although that document bore a signature appearing to be Cristina’s, she denied signing or seeing that document before trial.
The durable power of attorney gave Janet specified powers with the understanding she would exercise them in a fiduciary capacity and only for Cristina’s benefit. The durable power of attorney provided that when signing on her behalf, Janet was to use the following form: “Christina M. Lichtman by Janet Sue Reiswig, her attorney in fact.”
In March 2006, Janet submitted rental and credit applications in Cristina’s name to Premier Business Centers for office space on behalf of U.S. America, Inc., another Reiswig-owned business. The application was signed with Cristina’s name, identified her as the president of U.S. America, and listed the Reiswigs’ home address as Cristina’s address. After the application was approved, Janet submitted an executed lease agreement, also signed with Cristina’s name. Cristina had not signed either the application or the lease agreement, and had not given Janet permission to sign her name or use her personal identifying information to obtain a lease on behalf of U.S. America. Janet did not sign the application or the lease in the form the power of attorney required, and when she submitted the application, did not present the durable power of attorney to Premier Business Centers.
In May 2006, Janet submitted a rental application to Barrister Executive Suites (Barrister) to lease space for Dash Insurance. The application did not include Janet’s name, but identified Cristina as the president and Velva Atkins, Janet’s elderly mother, as the vice president of Dash Insurance. The application included Cristina’s social security number, listed the Reiswigs’ home address as Cristina’s home address, and was signed with Cristina’s name. Janet’s name did not appear on the application. Janet did not submit the durable power of attorney or mention it when she submitted the rental application to Barrister.
Michelle Bailey, who managed Barrister and received the application from Janet, noticed the copy of Cristina’s driver’s license submitted with the application showed a different address than that on the application and believed the signature on the application looked different from the one on the driver’s license. When Bailey told Janet she was going to send the lease to Cristina for her signature, Janet replied she would take the lease to Cristina. Bailey contacted Cristina and asked to send her the lease directly. Cristina said she was not the president of Dash Insurance, had not signed the application, and expressed surprise that Janet had used her identity.
Janet became angry when she learned Bailey had contacted Cristina directly. Only then did Janet provide a copy of the durable power of attorney to Barrister.
When Cristina confronted Janet about the lease application and the use of her identification, she cried and said, “oh, I feel very humiliated, and I am not going to do it again.” Cristina asked Janet to explain why she had used her name and identity. Janet did not answer.
IV.
The Jig Is Up.
Cristina talked to Janet two or three more times over the next several days. When Cristina told Janet that she felt her trust had been betrayed and that she wanted her money back, Janet said the State of California was going to give Ronald and her $10 million and, when they received the money, Cristina would be paid. Within a few days, Cristina learned the Reiswigs had not made the May 2006 payment on her home equity line of credit loan. When she called Janet about it, Janet hung up.
Cristina then called Ronald and told him she wanted her money back, even if she had to pay penalties. Ronald told her that he and Janet could not return all of her the money at once because it was tied up in insurance companies. After assuring Cristina her money was insured by the government, Ronald hung up the phone.
After learning that Janet had opened a credit card in her name, Cristina contacted Equifax and put a fraud alert on her credit file. She contacted the Orange County Sheriff’s Department, which told her to hire a civil attorney. Cristina did just that.
The Reiswigs and their companies never made another payment on Cristina’s home equity loan, and, beginning in June 2006, stopped making the monthly payments due under the three promissory notes.
On July 3, 2006, Janet left a voice-mail message telling Cristina that she would be paid, but if she called her again, either at their home or work, or had a “stupid person, ”-i.e., Cristina’s private investigator-do that for her, Janet would file for bankruptcy. Janet added, “don’t call again and don’t threat[en] us again.” On the same day, Ronald left a voicemail message for Cristina stating, “Cristina don’t hassle us anymore. I’ll pay you as quickly as I can. The more you hassle the slower it’s going to be.”
Later, when Cristina filed a civil lawsuit to recover her money, the Reiswigs countersued for $3 million, claiming she had ruined their reputations. The countersuit was dismissed, and Cristina obtained a judgment against the Reiswigs.
On July 11, 2007, agents of the United States Secret Service, Regional Fraud Task Force, the Orange County District Attorney’s Office, and the Escondido Police Department went to the Reiswigs’ home and arrested Janet and Ronald. A search of the home uncovered many documents, including one in which Cristina’s signature and been traced over.
V.
Defense Evidence
Ronald did not present a defense.
Lane Carpenter, a notary public called by Janet, testified that on April 27, 2002, he notarized three documents for a person whose California driver’s license identified her as Maria Cristina Lichtman. The documents were an “Affidavit of Lost Bond, ” a “Durable Power of Attorney, ” and a “Power of Attorney for Healthcare.”
Janet also called Orange County Sheriff’s Department Deputy Manuel Fregoso, who testified that on June 20, 2006, Cristina reported that Janet had fraudulently obtained a credit card and lease agreement in her name. Fregoso testified that Cristina did not mention anything to him about a 2001 loan or two loans in 2005.
Department of Insurance investigator Edwin Tracy, who interviewed Cristina for about three hours on August 14, 2006, testified: “We discussed a number of transactions, and the discussion was rather disjointed, not sequential. Although I attempted to have it in sequence, but the victim, the witness, was not able to do that somehow.”
The interview was recorded, and the recording was transcribed. Parts of the interview were played and read to the jury. At one point during the interview, Tracy asked Cristina if Janet had ever used the word “annuity.” Cristina answered she believed Janet mentioned annuity for the first transaction, when Cristina invested about $163,000. Although Janet might have mentioned the word annuity, Cristina did not believe “annuity” appeared in the First Note or First Security Agreement. In the interview, Cristina described the second and third investments as loans to the Reiswigs.
Discussion
I.
The Evidence Was Sufficient to Support the Verdict of Guilt on Counts 4 through 6.
A. Fraud in Connection with the Sale of a Security
The Reiswigs were convicted of three counts (counts 4 6) of fraud in the sale of a security in violation of Corporations Code section 25401. The Reiswigs argue those convictions must be reversed because the evidence was insufficient to show they made a material misrepresentation or omission with respect to any of the three investments.
Corporations Code section 25401 prohibits the sale of a security “by means of any written or oral communication which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.”
“The question of materiality, it is universally agreed, is an objective one, involving the significance of an omitted or misrepresented fact to a reasonable investor.” (TSC Industries, Inc. v. Northway, Inc. (1976) 426 U.S. 438, 445.) Under both state and federal securities law, “‘[a] fact is material if there is a substantial likelihood that, under all the circumstances, a reasonable investor would consider it important in reaching an investment decision.’ [Citation.]” (Insurance Underwriters Clearing House, Inc. v. Natomas Co. (1986) 184 Cal.App.3d 1520, 1526.)
B. Evidence of Misrepresentations and Omissions
1. November 2001 Investment-Count 4
Count 4 was based on misrepresentations and omissions made in connection with the Lichtmans’ November 2001 investment in Fidelity. That investment was evidenced by the First Note in the amount of $163,447, the pledge of stock, and the First Security Agreement granting a security interest in Fidelity’s assets. The evidence was sufficient to establish Janet and/or Ronald made these material misrepresentations or omissions: (1) Fidelity did not generate income, had no assets other than office furniture, and always been merely a marketing entity; (2) Janet was the subject of a civil judgment for engaging in conduct amounting to a conflict of interest; and (3) the investment proceeds would be used for Fidelity’s working capital when in fact most were diverted to the Reiswigs’ personal use.
The evidence established the Reiswigs failed to disclose that Fidelity had never generated revenue or income and had no assets other than office furniture. Janet told Cristina that Fidelity acted as brokers and agents for insurance companies, as “investing in all kind[s] of different things, ” and was doing very well. In administrative hearings regarding the Desist and Refrain Order, the Reiswigs testified Fidelity was a marketing business only, sold no products, and had no source of income or revenue, other than what it received from its parent company, FEP. The Reiswigs disclosed none of that information to the Lichtmans before they invested $163,447 in Fidelity in 2001.
The Reiswigs did not disclose the full nature of the 1999 judgment against Janet. Cristina testified she went with Janet to court in 1999 so Janet could “sue a judge.” Cristina’s understanding was that it was “[b]ecause the case of the blind lady that she took advantage of her, and she had a judgment against her.” The Reiswigs did not disclose, and Cristina did not know, the judgment against Janet was for engaging in conduct as a cotrustee amounting to a conflict of interest.
There was sufficient evidence to establish the Reiswigs diverted a substantial portion of the Lichtmans’ investment to their personal use. The Lichtmans’ check for their investment was deposited into FEP’s bank account sometime between October 31 and November 9, 2001. In the same time period, $100,000 was transferred from that account into a bank account for the Reiswig Family Trust.
Janet argues “whether the Lichtmans’ money could be traced into personal and business accounts was not a material fact, especially when there was no evidence presented of what happened to the money after is was transferred to those accounts, i.e., there was no evidence that the funds were not transferred back to the business.” We disagree for two reasons. First, evidence the Reiswigs transferred $100,000 of the monies the Lichtmans’ invested into a personal trust account is sufficient for the jury to draw the inference the Reiswigs diverted the money to their personal use. Second, a reasonable investor would consider it important that investment funds were being transferred into a personal trust account for any reason.
The Reiswigs argue there was no evidence they made a material misrepresentation or omission to Julius. Although Cristina testified he saw the investment documents and wrote a check around the time of the investment, she also testified Julius was “very old and very sick, ” she made the investment decisions, and Julius was not present with her when she entered into the First Security Agreement.
Janet argues Cristina’s testimony was “soundly impeached.” But “[t]he jury is the ultimate judge of credibility.” (People v. Vu (2006) 143 Cal.App.4th 1009, 1029.) The jury apparently believed Cristina. We will not interfere with its assessment of credibility.
2. The February 2005 Investment-Count 5
Count 5 was based on misrepresentations and omissions made in connection with Cristina’s February 2005 investment in Fidelity. The evidence was sufficient to establish Janet and/or Ronald made these material misrepresentations: (1) all pending and material litigation had been disclosed; (2) Cristina’s investment would be used for Fidelity’s and FEP’s general working capital purposes; and (3) Fidelity had sufficient assets to secure the Second Note. In addition, the Reiswigs failed to disclose that Fidelity never generated any income and had no assets, other than office furnishings.
Cristina’s $250,000 investment in the Reiswig companies was evidenced by the Second Note and the Second Security Agreement. Under “Representations and Warranties, ” the Second Security Agreement stated: “Pending litigation has been disclosed to the Borrower, ... which should not, to the best of Borrower’s Knowledge, in the aggregate, have Material Adverse Affect on the Borrower.” The evidence at trial established that representation was false. Cristina testified the Reiswigs had not disclosed to her the pending litigation over the Desist and Refrain Order. If they had, Cristina would not have invested in Reiswig companies.
Janet argues that by signing the Second Security Agreement, Cristina is bound by the representation that all litigation, including the Desist and Refrain Order, had been disclosed to her. In a criminal prosecution, the state is not bound by the written provisions of a civil contract between the defendants and the victim. (People v. Sidwell (1945) 27 Cal.2d 121, 126 [parties’ agreement that transaction is not a security is not binding on state in criminal prosecution for securities fraud].) The prosecution therefore was not bound by the false representation in the Second Security Agreement that the Reiswigs had disclosed the Desist and Refrain Order and ensuing litigation to Cristina.
The Second Security Agreement represented the investment proceeds would be used for Fidelity’s and FEP’s “general working capital purposes.” The evidence was sufficient to establish that representation was false. Bank account records showed the checks from Cristina totaling $250,000 were deposited into FEP’s bank account. From the date of the deposit, until that account was closed on March 15, 2005, one other deposit was made in the amount of $28,700. During the same time period, the following disbursements were made from that account: $170,000 transferred to accounts for the Reiswig Family Trust or the Reiswigs; $2,268 paid to Cristina; $9,000 into another account at the same bank; $82,000 in unspecified commissions to salespeople and others; $14,700 to Fidelity and Dash Insurance; $10,600 to another account owned by FEP; and $12,500 to Ronald Reiswig.
Janet argues the prosecution failed to prove Cristina’s investment funds were not transferred back to Fidelity or FEP at some point in time. The bank records produced by the prosecution showed the bulk or all of Cristina’s investment was transferred to Reiswig personal accounts or paid directly to Ronald. From this evidence, a reasonable jury could draw the inference the bulk or all of Cristina’s investment was not used for the general operation of Fidelity or FEP.
The Reiswigs failed to disclose that Fidelity generated no income and had no assets, other than office furnishings. No evidence was presented at trial of FEP’s income or assets. Those omissions were sufficient in themselves to create liability under Corporation Code section 25401.
In Reiswig, supra, 144 Cal.App.4th at page 332, we stated “[d]uring the six month period between February and August 2004, FEP sold nearly $36 million in annuities, on which it earned commissions of between 6.75 percent and 9.75 percent.” As the Attorney General points out, our opinion was not evidence at trial and cannot be considered in determining the sufficiency of the evidence. Further, the opinion refers to FEP’s annuity sales and commissions for the period between February and August 2004, six months before Cristina made the second investment in February 2005.
In addition, the Reiswigs’ failure to disclose Fidelity’s lack of income and assets rendered statements in the Second Security Agreement misleading. Corporations Code section 25401 prohibits omitting a material fact that is necessary to make representations not misleading under the circumstances under which the representations were made. The Second Security Agreement granted Cristina a lien on Fidelity’s and FEP’s assets described in the agreement. The agreement describes a number of assets including corporate receivables, investment property, and corporate property or equipment. Those representations were misleading under the circumstances because the Reiswigs failed to disclose Fidelity had no such assets other than office furniture.
3. The November 2005 Investment-Count 6
Count 6 was based on Cristina’s November 2005 investment of $150,000. The evidence was sufficient to establish Janet and/or Ronald made these material misrepresentations regarding that investment: (1) all pending and material litigation had been disclosed; (2) Cristina’s investment would be used to for Fidelity’s general working capital purposes; and (3) Fidelity had sufficient assets to secure the Second Note. In addition, the Reiswigs failed to disclose that Fidelity never generated any income and had no assets, other than office furnishings.
The Third Security Agreement represented the investment proceeds would be used for Fidelity’s “general working capital purposes.” The evidence established that representation was false. Bank account records showed that between September 8, 2005 and October 7, 2005, Cristina’s $150,000 investment in Fidelity was deposited into a bank account owned by Dash Insurance. During the same month long period, another $14,590 in commission income was deposited into the Dash Insurance bank account. The following distributions from or checks drawn on the Dash Insurance bank account were made in that period: (1) checks totaling $42,280 were written to Ronald personally, including a $36,000 check with a note stating “Humvee” and “RV”; (2) $50,000 was transferred to an account for the Reiswig Family Trust; (3) $20,345 to pay Reiswig personal expenses; (4) $47,388 to pay business expenses; and (5) $15,710 for unspecified expenses. Thus, the bulk or all of Cristina’s investment was transferred to Reiswig personal accounts, was paid directly to Ronald, was used to pay Reiswig personal expenses, or was used to purchase vehicles for the Reiswigs. From this evidence, a reasonable jury could draw the inference the bulk or all of Cristina’s investment was not used for the general operation of Fidelity or FEP.
The Third Security Agreement represented there was no pending or threatened litigation against Fidelity. That statement was misleading or false. Although the superior court had lifted the Desist and Refrain Order in September 2005, the superior court judgment either had been, or was capable of being appealed when the Third Security Agreement was made. Appellate litigation over the Desist and Refrain Order, if not pending, was threatened. The Reiswigs never disclosed the Desist and Refrain Order or the ongoing litigation at any stage.
Before the Third Note and the Third Security Agreement were made, the Reiswigs still had not disclosed that Fidelity generated no income and had no assets, other than office furnishings. Those facts would have been material to Cristina, or to any reasonable investor. The Third Note and the Third Security Agreement, unlike the Second Note and the Second Security Agreement, were made only by Fidelity. Thus, the failure to disclose Fidelity’s lack of income and assets was particularly material to the decision to make the November 2005 investment because Cristina could look only to Fidelity for repayment of and to secure the note.
In addition, the Reiswigs’ failure to disclose Fidelity’s lack of income and assets rendered statements in the Third Security Agreement misleading under Corporations Code section 25401. The Third Security Agreement granted Cristina a lien on Fidelity’s assets described in the agreement, and it described a number of assets including corporate receivables, investment property, inventory, and corporate property or equipment. Those representations were misleading under the circumstances because the Reiswigs failed to disclose Fidelity had no such assets other than office furniture.
C. Ronald’s Arguments
Ronald argues the evidence was insufficient to sustain the jury verdict against him on counts 4 through 6 because he was not present when the three investments were discussed and the prosecution failed to authenticate his signature on the notes and security agreements. As Ronald argues, the evidence showed that only Janet discussed the investments with Cristina. We conclude, nonetheless, the evidence supported Ronald’s conviction under counts 4 through 6 because his signatures on the documents were sufficiently authenticated and other evidence supported the convictions.
“Authentication of a writing is required before it may be received in evidence.” (Evid. Code, § 1401(a).) Authentication of a document means the introduction of evidence sufficient to sustain a finding that the writing is what the proponent claims it to be. (Id., § 1400.) “A writing may be authenticated by evidence that: (b) the writing has been acted upon as authentic by the party against whom it is offered.” (Id., § 1414(b).) In addition, “[c]ircumstantial evidence, content and location are all valid means of authentication [citation].” (People v. Gibson (2001) 90 Cal.App.4th 371, 383.)
The First Note, the First Security Agreement, and Pledge of Stock all bear a signature in the name of Ronald Reiswig or Ronald E. Reiswig as the president of Fidelity. There is no dispute Ronald was the president of Fidelity and FEP. The Lichtmans’ check for $196,927 was deposited into FEP’s bank account, and $100,000 was transferred to an account owned by the Reiswig Family Trust. The check from FEP used to pay off the Lichtmans’ mortgage is signed by Ronald Reiswig. He acknowledged signing that check.
The Second Note and the Second Security Agreement also bear signatures in the name of Ronald Reiswig as chief financial officer (CFO) of Fidelity and FEP. To make the second investment, Cristina endorsed to FEP a cashier’s check for $200,000 and a cashier’s check for $50,000. Both cashier’s checks were endorsed by Ronald Reiswig for FEP. Ronald accompanied Cristina to the bank and waited outside while she had the checks made. The checks were deposited into FEP’s bank account, and within days $170,000 was transferred to accounts for the Reiswig Family Trust or the Reiswigs, and a check for $12,500 made payable to Ronald was drawn on the account.
The Third Note bears a signature in the name of Ronald E. Reiswig as CFO of Fidelity and FEP, and the Third Security Agreement bears a signature in the name of Ronald E. Reiswig as CFO of Fidelity. Cristina’s $150,000 check used to make the third investment was made payable to Janet and was deposited into a bank account owned by Dash Insurance. Soon thereafter, checks drawn on that account totaling $42,280 were written to Ronald personally, including a $36,000 check with a note stating “Humvee” and “RV”; $50,000 was transferred to an account for the Reiswig Family Trust; and $20,345 was used to pay Reiswig personal expenses.
There was no evidence presented at trial to suggest anyone other than Ronald signed any of the notes and security agreements, nor is there any evidence to explain why someone other than Ronald would sign the documents.
Ronald’s statements to Cristina also are relevant to satisfying authentication requirements. When Cristina called Ronald and asked for her money back, he did not deny he was involved in the investments. He told Cristina: “‘We can’t give you your money back because it’s in insurance companies, insured by the government.’” Later, Ronald left this message on Cristina’s voicemail: “don’t hassle us anymore. I’ll pay as quickly as I can. The more you hassle the slower it’s going to be.”
In People v. Lynn (1984) 159 Cal.App.3d 715, 734, the defendant argued the trial court erred by receiving in evidence two handwritten notes on the ground they had not been authenticated as his. The notes had been received by a man named Morgan while in jail. (Ibid.) The notes, which were not in the handwriting of the defendant or Morgan, were addressed to a “‘Bob, ’” contained exculpatory statements in connection with the charged crime of first degree murder, and advised Morgan his testimony could reduce the crime to second degree murder. (Id. at p. 735.) Morgan turned the notes over to authorities. The defendant told Morgan he had “‘really f[] up, giving the notes over.’” (Id. at p. 735.)
The Court of Appeal concluded the defendant’s statement to Morgan fulfilled the authentication requirements of Evidence Code section 1414. (People v. Lynn, supra, 159 Cal.App.3d at p. 735.) In addition, the court concluded, the contents of the writings, and the veiled threats to harm Morgan if he testified adversely to the defendant “ma[de] it unlikely anyone other than [the defendant] authored the notes.” (Ibid.)
Similarly here, Ronald’s statements to Cristina and the message he left on her voice mail, together with the content of the notes and security agreements, the circumstances under which they were made, and the disposition of the investment proceeds, satisfy the authentication requirements of Evidence Code section 1414(b), connected Ronald to the crimes, and made it unlikely anybody other than Ronald signed the notes, security agreement, and pledge of stock.
II.
The Trial Court Did Not Err in Sustaining Objections to Impeachment Questions.
Janet argues the trial court prevented her from cross-examining Cristina by sustaining objections to several impeachment questions. The questions asked whether Cristina attended Julius’s funeral, whether she asked Janet to sell Julius’s cemetery plot, and whether Cristina tried to hide an asset from Medi Cal in seeking nursing home benefits for Julius.
A trial court’s decision to exclude impeachment evidence “will not be disturbed except on a showing the trial court exercised its discretion in an arbitrary, capricious, or patently absurd manner that resulted in a manifest miscarriage of justice [citation].” (People v. Rodriquez (1999) 20 Cal.4th 1, 9 10.) The trial court did not abuse its discretion by sustaining the objections to the impeachment questions.
A. Julius Lichtman’s Funeral and Sale of Cemetery Plot
During cross examination of Cristina, Janet’s counsel asked her: “Isn’t it true you didn’t even go to [Julius’s] funeral?” The trial court sustained the prosecutor’s objection that the question was argumentative and elicited evidence subject to exclusion under Evidence Code section 352. Later, Janet’s counsel asked Cristina, “After your husband died, isn’t it true that you asked Janet to sell his memorial plot on E[-]Bay?” The trial court sustained the prosecutor’s objection under Evidence Code section 352 and on the ground the question was irrelevant.
The trial court did not abuse its discretion in sustaining the objections because Cristina’s relationship with Julius was not an issue in the case. Janet argues whether or not Cristina attended Julius’s funeral or asked for Janet’s assistance in selling his cemetery plot “was a reflection on Cristina’s honesty” and “would have discredited her testimony that it was Janet who pushed her into accepting help and income producing schemes.” We disagree. The questions elicited answers that might have reflected poorly on Cristina and her relationship with Julius, but did not elicit answers reflecting Cristina’s honesty in testifying. There was no question that Cristina had asked Janet for assistance in other matters, for example, contesting a medical bill. Whether Cristina asked Janet for assistance in some matters would not discredit Cristina’s testimony that Janet made misrepresentations to induce her into making the three investments.
In neither case did defense counsel request a side bar to make an offer of proof. “Normally, if the trial court excludes evidence on cross-examination, no offer of proof is necessary to preserve the issue for consideration on appeal. [Citation.] However, ‘[c]ross-examination is limited to the scope of the direct examination. [Citation.]’ [Citation.] If the evidence the defendant seeks to elicit on cross examination is not within the scope of direct examination, an offer of proof is required to preserve the issue.” (People v. Foss (2007) 155 Cal.App.4th 113, 127.) It appears the issues whether Cristina attended Julius’s funeral or tried to sell Julius’s cemetery plot were not within the scope of direct examination, so an offer of proof was required. The Attorney General does not, however, raise this argument.
Further, whatever probative value the sought-after testimony might have had was outweighed the probability its admission would “create substantial danger of undue prejudice, of confusing the issues, or of misleading the jury.” (Evid. Code, § 352.)
B. Disclosure of Promissory Note on Medi Cal Application
Cristina testified Janet helped her prepare an application for Medi Cal benefits to help pay for Julius’s nursing home expenses. Under “income, ” the application identified $1,363 in monthly interest payments. In a letter dated February 18, 2003, Medi Cal requested the current value of the First Note. Cristina testified Medi Cal “didn’t know about this [promissory] note” and the letter was “very strange, because they didn’t know nothing about the note.” Janet’s counsel asked Cristina: “Were you trying to hide your asset of this promissory note so [Julius] could qualify for Medi Cal?” The trial court overruled the prosecutor’s objection. Cristina answered, “[t]hey didn’t know about this note. How do they know, who was going to tell them?”
Janet’s counsel then asked, “[s]o you were hiding this asset from them to qualify for Medi Cal.” The trial court sustained the prosecutor’s objection to characterizing the note as an asset.
When the matter was discussed later, Ronald’s counsel argued: “The question that Medi Cal is asking in this letter is to disclose the promissory note. And the reason they’re asking that question is to determine whether or not it is an asset. Because the Lichtmans were receiving some interest income from this promissory note.” The trial court responded: “Well, you’re speculating as to that. I don’t know if that’s true or not. If you come in and show me something to that effect, I might allow it. But I don’t know the reason that Medi-Cal is – whether they’re considering it an asset or whether they’re trying to figure out whether it is or is not an asset. [¶] The gist I get from reading this document is that they’re trying to figure out what it is. I don’t know what the rules are as to Medi Cal, whether it’s an asset or not. So for now I’m going to sustain the objection.”
The trial court got it right. Without evidence the First Note would be considered an “asset” for the purpose of eligibility for Medi Cal nursing home benefits, the question whether Cristina was trying to hide an asset from Medi Cal did not seek relevant evidence and called for a legal conclusion.
In addition, as the Attorney General argues, the Reiswigs suffered no prejudice from the trial court sustaining the objection. Later at trial, the Lichtmans’ Medi-Cal application was produced, and it identified monthly personal property income of $1,363. The “yes” box was checked next to question 45, which asked whether the Lichtmans owned any items such as promissory notes.
III.
The Trial Court’s Jury Instruction Defining a Security Was Not Erroneous, and the Reiswigs Suffered No Prejudice from Trial Counsels’ Failure to Offer an Amplifying Instruction on Investment Contracts.
A. The Trial Court’s Instruction on the Definition of a Security
The trial court instructed the jury with the prosecution’s proposed instruction on the definition of a security. The court instructed: “The term ‘security’ as used in these instructions includes any note, stock, investment contract, interest in a limited liability company, subscription to purchase a security or any evidence of indebtedness. [¶] An investment contract is a contract, transaction or agreement in which a person entrusts money or property to another with the expectation of deriving a profit, income or some financial benefit from a business enterprise the success or failure of which is dependent upon the managerial efforts of the other persons.”
Janet argues that instruction defining a security was erroneous because it permitted the jury to find “any note” to be a security within the meaning of the statute without finding the note also to be an investment contract. Because neither Janet nor Ronald disputed the investments were notes, Janet argues the instruction “was tantamount to a directed [verdict].”
The trial court’s instruction was based on the language of Corporations Code section 25019, which defines a security “by listing numerous transactions and instruments deemed to be securities.” (Reiswig, supra, 144 Cal.App.4th at p. 334.) “The language of a statute defining a crime or defense is generally an appropriate and desirable basis for an instruction, and is ordinarily sufficient when the defendant fails to request amplification.” (People v. Poggi (1988) 45 Cal.3d 306, 327.)
Corporations Code section 25019’s list of transactions and instruments deemed to be securities is “expansive” and a “‘literal interpretation [of the statute] has been uniformly eschewed when to do so would appear to exceed any legitimate legislative purpose.’” (People v. Figueroa (1986) 41 Cal.3d 714, 734 (Figueroa).) “Rather, the California Supreme Court has stated the critical question in resolving whether a transaction comes within the statutory definition of security is ‘whether [the] transaction falls within the regulatory purpose of the law regardless of whether it involves an instrument which comes within the literal language of the definition.’ [Citation.] The purpose of the securities laws is ‘“to protect the public against the imposition of unsubstantial, unlawful and fraudulent stock and investment schemes and the securities based thereon.”’ (Reiswig, supra, 144 Cal.App.4th at p. 334.)
In Figueroa, the Supreme Court recognized that not every note or evidence of indebtedness constitutes a security. (Figueroa, supra, 41 Cal.3d at p. 735.) Rather, whether a note constitutes a security depends on such factors as adequacy of collateral, investor participation in the enterprise, and risk of loss-i.e., whether the note constitutes an investment contract. (Id. at pp. 736 737.) As for jury instructions, the Figueroa court explained the trial court “should... at a minimum, instruct the jury in the statutory definition of a ‘security.’” (Id. at pp. 740 741.) Additional instructions on the meaning of a security should be given if requested by the defendant to conform to the evidence presented at trial. (Ibid.)
“‘[A] party may not complain on appeal that an instruction correct in law and responsive to the evidence was too general or incomplete unless the party has requested appropriate clarifying or amplifying language.’” (People v. Hudson (2006) 38 Cal.4th 1002, 10111012.)
By instructing the jury based on the statutory definition of security, with a paragraph defining investment contract, the trial court in this case complied with the minimum instructional requirement imposed by Figueroa. Janet concedes either paragraph of the instruction standing alone does not misstate the law. Thus, the trial court’s instruction defining a security was not erroneous, and under Figueroa, the Reiswigs had the obligation to request a clarifying or amplifying instruction if they desired one.
Janet’s trial counsel prepared and submitted a lengthy instruction on the definition of a security that nearly verbatim recited all of Corporations Code section 25019. The proposed instruction amplified the instruction ultimately given by expanding the list of investments deemed to be securities and by including a list of investments-notably annuities-deemed not to be securities.
The trial court refused to give the Reiswigs’ proposed instruction, correctly describing it as confusing and difficult to interpret. The proposed instruction was lengthy and included portions of Corporations Code section 25019 that were inapplicable to the evidence presented at trial. More to the point, the proposed instruction did not clarify the definition of security in the manner the Reiswigs now claim to have been necessary to correct the instruction read to the jury. The proposed instruction defined a security to include “note, ” “debenture, ” and “evidence of indebtedness, ” did not include the definition of investment contract, and provided no further clarification of the circumstances in which a note or evidence of indebtedness is deemed a security. Thus, the proposed instruction would have permitted the jury to find any note or evidence of indebtedness constituted a security and to find the investments at issue were securities, without finding they came within the definition of investment contract-precisely the criticism the Reiswigs level at the instruction given to the jury.
B. Ineffective Assistance of Counsel
Janet argues her trial counsel was ineffective by requesting the jury be instructed in the language of Corporations Code section 25019 rather than by offering an instruction requiring the jury to determine whether the three investments constituted investment contracts in order to find they were securities.
To prevail on a claim of ineffective assistance of counsel, the defendant must prove (1) his or her attorney’s representation was deficient in that it fell below an objective standard of reasonableness under prevailing professional standards; and (2) his or her attorney’s deficient representation subjected him or her to prejudice. (Strickland v. Washington (1984) 466 U.S. 668, 687; People v. Cain (1995) 10 Cal.4th 1, 28.) Prejudice necessary to establish ineffective assistance of counsel means “a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.” (Strickland v. Washington, supra, 466 U.S. at p. 694; People v. Salcido (2008) 44 Cal.4th 93, 170.) A reasonable probability means a “probability sufficient to undermine confidence in the outcome.” (Strickland v. Washington, supra, 466 U.S. at p. 694.)
We need not decide whether counsel’s representation was deficient because we conclude the Reiswigs suffered no prejudice. The instruction given at trial defined “investment contract” as a “contract, transaction or agreement in which a person entrusts money or property to another with the expectation of deriving a profit, income or some financial benefit from a business enterprise the success or failure of which is dependent upon the managerial efforts of the other persons.” This is virtually the same as the federal test, which holds an investment contract consists of “an investment of money in a common enterprise with the expectation of profits produced by the efforts of others.” (Reiswig, supra, 144 Cal.App.4th at p. 335.) “The ‘touchstone’ of the federal test ‘is the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.’” (Ibid.)
In Reiswig, we explained: “In determining whether a transaction is an investment contract, California courts have applied, either separately or together, two distinct tests: (1) the ‘risk capital’ test described in Silver Hills Country Club v. Sobieski (1961) 55 Cal.2d 811, 815..., and (2) the federal test described in SEC v. W.J. Howey Co. (1946) 328 U.S. 293, 298-299.... [Citations.] A transaction is a security if it satisfies either test. [Citation.] [¶]... ‘The “risk capital” test requires a consideration of the following factors: (1) whether funds are being raised for a business venture or enterprise; (2) whether the transaction is offered indiscriminately to the public at large; (3) whether the investors are substantially powerless to effect the success of the enterprise; and (4) whether the investors’ money is substantially at risk because it is inadequately secured.’ [Citation.] [¶]... [¶] Under the federal test, an investment contract consists of an investment of money in a common enterprise with the expectation of profits produced by the efforts of others. [Citations.]” (Reiswig, supra, 144 Cal.App.4th at pp. 334 335.)
The Lichtmans and Cristina entrusted the Reiswigs with a total of $563,477 with the expectation of being paid a return of 9 percent or 10 percent on each of the three notes. “[A]n investment scheme promising a fixed rate of return can be an ‘investment contract’ and thus a ‘security’ subject to the... securities laws.’” (SEC v. Edwards (2004) 540 U.S. 389, 397.) The First Note was made by Fidelity; the Second Note and the Third Notes were made by Fidelity and FEP. Expectation of payment of income and principal on the notes depended on the success or failure of those business enterprises. The Second and Third Security Agreements represented the investment proceeds would be invested in those companies for use as working capital. The notes were not FDIC insured. (See Marine Bank v. Weaver (1982) 455 U.S. 551, 557-558 [distinguishing long term debt from a FDIC insured certificate of deposit].)
Lack of investor participation or control in the debtor enterprise is indicia a note is a security. (Figueroa, supra, 41 Cal.3d at pp. 737 739.) It was undisputed that Cristina was never involved in the management of and had no control over either Fidelity or FEP. She depended on the entrepreneurial and managerial skill of the Reiswigs for payment of principal and interest on the notes. Under the pledge of stock used as security for the First Note, the Reiswigs retained voting rights in the pledged shares of Fidelity stock.
The First Note and the Third Note, at the least, were inadequately secured. “Unsecured promissory notes are securities if the investor relies on the skill, services, solvency, success, and services of the issuer to ensure payment.” (People v. Simon (1995) 9 Cal.4th 493, 497, fn. 4.) “The return of any investment which has not been secured with adequate collateral depends on the success of the business. This is true whether the investment contemplates a percentage of the profits or a fixed return.” (Figueroa, supra, 41 Cal.3d at p. 738.) The First Note was secured by a pledge of Fidelity stock, and both the First Note and the Third Note were secured by a security interest in Fidelity’s assets. But Fidelity generated no income to create share value and had no assets to serve as security other than office furniture.
The Second Note is different because the Second Security Agreement granted security interests in the assets of both Fidelity and FEP. There is no evidence in the record of FEP’s assets or income during the relevant timeframe.
It was not reasonably probable the jury would have concluded the three investments were personal loans to the Reiswigs. In soliciting the first investment, Janet did not request a personal loan but suggested to Cristina she invest in Fidelity. The Reiswigs were not personally liable on any of the notes, which were made by Fidelity and/or FEP. The notes were secured-or appeared to be secured-by the assets of Fidelity or FEP, and the Second and Third Security Agreements represented the investment proceeds were used for working capital of Fidelity or FEP.
The investments fall within the regulatory purpose of the securities laws to protect the public from “‘“unsubstantial, unlawful and fraudulent stock and investment schemes.”’” (Reiswig, supra, 144 Cal.App.4th at p. 334.) The evidence established the Reiswigs diverted most of the loan proceeds to their personal use. Little or none of the proceeds was used for the working capital of Fidelity or FEP. The evidence showed the Reiswigs insinuated themselves into the Lichtmans lives, then actively solicited the Lichtmans or Cristina to invest substantial sums in their companies, only to divert the investment proceeds to their own use.
Given the evidence, it is not reasonably probable the jury would have reached a different verdict if it had been instructed that to convict the Reiswigs for securities fraud under counts 4 through 6 it had to find the Lichtmans’ and Cristina’s investments constituted investment contracts.
IV.
The Evidence Did Not Support an Instruction on Annuities.
Ronald argues the trial court’s instruction defining a security was erroneous because it did not provide a complete definition that would have excluded annuities. The evidence was not sufficient to warrant an instruction that annuities are not securities. (See People v. Montoya (1994) 7 Cal.4th 1027, 1047 [“The trial court is charged with instructing upon every theory of the case supported by substantial evidence”].)
The only evidence Ronald identifies to support his theory the investments were annuities is Cristina’s statement to an investigator that Cristina thought Janet used the term annuity with regard to the first investment. Corporations Code section 25019 states the term security does not include “any insurance or endowment policy or annuity contract under which an insurance company admitted in this state promises to pay a sum of money.... ” The First Note was made by Fidelity. There is no evidence in the record that Fidelity is an insurance company admitted in California.
Ronald relies on this part of the interview, which was read to the jury:
Ronald contends that in Reiswig, supra, 144 Cal.App.4th 327, we found “the CD plus bonus package marketed by the defendants to investors such as Lichtman was not a security and not subject to the regulatory purpose of the securities law, but rather and [undesirable] annuity.” He is wrong. The investment offered to the Lichtmans was not a CD plus bonus or in any way similar to the CD plus bonus package that was the subject of Reiswig. In that case, we did not hold the CD plus bonus package was an annuity; rather, the trial court in that case had “characterized the CD plus bonus package as a classic bait and switch used to bring potential customers before Fidelity sales agents, who could then try to sell annuities.” (Reiswig, supra, 144 Cal.App.4th at p. 342.)
V.
The Trial Court Was Not Required to Instruct the Jury Sua Sponte on Aider and Abettor Liability; Any Error in Failing to Do So Was Harmless.
Ronald argues the trial court erred by failing, sua sponte, to instruct the jury on aider and abettor liability, CALJIC No. 4.01. A trial court has a duty to instruct on aider an abettor liability only if the prosecution elects to rely on that theory and substantial evidence supports giving aider and abettor liability instructions. (People v. Prettyman (1996) 14 Cal.4th 248, 268 269 [duty to instruct on natural and probable consequences doctrine “arises only when the prosecution has elected to rely on the ‘natural and probable consequences’ theory of accomplice liability and the trial court has determined that the evidence will support instructions on that theory”]; People v. Hoang (2006) 145 Cal.App.4th 264, 273.) Ronald was not prosecuted under a aider and abettor theory.
Any error in failing to instruct on aider and abettor liability was harmless beyond a reasonable doubt. (Chapman v. California (1967) 386 U.S. 18.) The jury convicted Ronald of three counts of securities fraud that had been prosecuted under a theory he was a perpetrator or active participant in the crime. As we have concluded, the evidence supported the verdict. Because the evidence supported culpability for perpetrating or actively participating in the crime, failure to give instructions on aider and abettor liability did not, beyond a reasonable doubt, contribute to the verdict. (Id. at p. 24.)
VI.
The Reiswigs Forfeited Objections to the Desist and Refrain Order and Evidence of an Annuity Contract.
Ronald argues the trial court erred by receiving in evidence a redacted copy of the Desist and Refrain Order and by allowing evidence of the annuity contract purchased by the Lichtmans in 1997. He argues this evidence was character evidence inadmissible under Evidence Code section 1101(a).
The Reiswigs failed to preserve an objection under Evidence Code section 1101(a) to the Desist and Refrain Order, and failed to preserve any objection to evidence regarding the annuity contract. “‘[Q]uestions relating to the admissibility of evidence will not be reviewed on appeal in the absence of a specific and timely objection in the trial court on the ground sought to be urged on appeal.’” (People v. Benson (1990) 52 Cal.3d 754, 786, fn. 7; Evid. Code, § 353.)
At trial, the Reiswigs moved to exclude any evidence concerning the 2004 Desist and Refrain Order on the ground it was irrelevant and prejudicial under Evidence Code section 352. They did not raise Evidence Code section 1101(a) as ground for excluding the Desist and Refrain Order. The trial court denied the motion. The Reiswigs did not request a limiting instruction. (See People v. New (2008) 163 Cal.App.4th 442, 472 [trial court has no duty to give limiting instruction unless requested].)
The Reiswigs moved to exclude “untimely [Evidence Code section] 1101(b) evidence and testimony of Ted Koepke, ” but their motion did not include evidence regarding the annuity contract. The trial court granted the motion.
Ronald argues his trial counsel was ineffective by failing to make the necessary objections and request a limiting instruction. There was no ineffective assistance of counsel. Under Evidence Code section 1101(b), character evidence of prior bad acts is admissible when relevant to prove a fact other than the defendant’s disposition to commit such an act. The Desist and Refrain Order was relevant and admissible under counts 5 and 6 to prove the Reiswigs failed to disclose a material fact-that the Reiswigs were involved in litigation. For that reason, the trial court would have overruled an objection based on Evidence Code section 1101(a). (People v. Szadziewicz (2008) 161 Cal.App.4th 823, 836 [“Counsel’s failure to make a futile or unmeritorious motion or request is not ineffective assistance”].)
The trial court took measures to eliminate undue prejudice from admission of the six-page Desist and Refrain Order by redacting all portions except one paragraph describing the Department of Corporations’ findings. The court stated: “[T]he court believes that by limiting it to just that paragraph it prevents the jury from hearing conclusions and other potentially prejudicial factors that the court believes would be more prejudicial than probative. By allowing just the limited paragraphs in each document, the court believes that that is material, is relevant, and those paragraphs are more probative than prejudicial without... increasing the inflammatory value of the rest of the document.” Also to eliminate undue prejudice, the trial court allowed evidence the Desist and Refrain order was set aside in September 2005.
Because the Desist and Refrain Order was admissible and the trial court took measures to eliminate undue prejudice from it, a limiting instruction was unnecessary, and the trial court certainly would have denied a request for one. (People v. Szadziewicz, supra, 161 Cal.App.4th at p. 836.)
The failure of the Reiswigs’ trial counsel to object to evidence of the 1997 annuity contract did not constitute ineffective assistance of counsel because the trial court likely would have overruled any objection to it. Evidence of the 1997 annuity contract was relevant to prove opportunity, intent, preparation, and plan. (Evid. Code, § 1101(b).) It is not reasonably probable exclusion of evidence of the 1997 annuity contract, if irrelevant, would have affected the outcome of trial. (Strickland v. Washington, supra, 466 U.S. at p. 694.) The evidence of guilt was sufficiently strong that it was not reasonably probable the jury was swayed by the brief testimony about the 1997 annuity contract. The evidence showed too that when Cristina complained about the annuity contract’s 50 year term, Janet promptly refunded the Lichtmans’ money, without penalty, and with interest.
VII.
Substantial Evidence Supports the Enhancement Under Section 186.11(a)(2).
The trial court imposed a sentence enhancement based on the jury’s finding, pursuant to section 186.11(a)(2), the Reiswigs engaged in a pattern of related felony conduct involving the taking of more than $500,000.
Ronald argues substantial evidence does not support the finding the crimes involved the taking of more than $500,000 because, in calculating the amount of the taking under section 186.11(a)(2), the sums the Lichtmans or Cristina invested must be reduced by the amount used to pay off the Lichtmans’ mortgage and by the amount of monthly payments made on the notes. We conclude the evidence was sufficient to support the enhancement.
The version of section 186.11(a)(1) in effect when the Reiswigs were sentenced imposed an enhancement when a person “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).” (Former § 186.11(a)(1).) Section 186.11(a)(2) in effect at the time provided: “If the pattern of related felony conduct involves the taking of more than five hundred thousand dollars ($500,000), the additional term of punishment shall be two, three, or five years in the state prison.” (Former § 186.11(a)(2), italics added.) The current version of section 186.11(a)(1) and (a)(2) imposes an enhancement when the pattern of related felony conduct “involves the taking of, or results in the loss by another of” of the specified amount. (See Historical and Statutory Notes, 47 West’s Ann. Pen. Code (2010 supp.) foll. § 186.11, p. 172, italics added.)
“The purpose of the aggravated white collar crime enhancement was to provide a mechanism for greater punishment for criminals who engage in a pattern of fraudulent activity that results in a large amount of accumulated takings.” (People v. Williams (2004) 118 Cal.App.4th 735, 747.)
The Reiswigs took from the Lichtmans or Cristina a total of $563,447, the total face value of the notes. The First Note is in the amount of $163,447, the Second Note is in the amount of $250,000, and the Third Note is in the amount of $150,000.
Ronald argues that the “taking” under section 186.11(a)(2) for the first investment was only $123,047 because $73,879.87 of the investment proceeds were used to pay off the Lichtmans’ mortgage. That is not correct. In October 2001, the Lichtmans gave the Reiswigs a check for $196,927. From those funds, $73,879.87 was used to pay off the Lichtmans’ mortgage, leaving a remainder of $123,047. However, the evidence supported a finding the Lichtmans also invested the $43,413.87, paid earlier to the Reiswigs as an annuity premium, making their total investment $163,447.
Ronald argues the amount of the taking under section 186.11(a)(2) must be based on out of pocket loss and, therefore, the amount of loss here must be reduced by the amount of monthly payments made on the notes. The Reiswigs paid $73,602 in monthly payments on the First Note, $30,000 in monthly payments on the Second Note, and $14,000 in monthly payments on the Third Note, for a total of $117,602 in monthly payments. The amount taken by the Reiswigs, if reduced by the amount of the monthly payments, would fall below the $500,000 threshold, making them ineligible for the enhancement of section 186.11(a)(2).
The monthly payments on the First Note were interest-only payments. The Attorney General calculates, and Ronald does not dispute, that of the $30,000 in monthly payments made on the Second Note, only $1,000 was paid to reduce principal, and no principal was paid on the Third Note.
No legislative history or case law sheds light on the meaning of “the taking” under the version of section 186.11(a)(1) and (a)(2) in effect when the Reiswigs were sentenced. In interpreting a statute, we consider the statutory language and give words their usual and ordinary meaning. (Kavanaugh v. West Sonoma County Union High School Dist. (2003) 29 Cal.4th 911, 916.) To us, the usual and ordinary meaning of “the taking of” means the act of bringing into one’s possession or control. It does not mean necessarily mean loss. Indeed, after the Reiswigs were sentenced, the Legislature amended section 186.11(a)(1) and (a)(2) to add the phrase “or results in the loss by another person or entity, ” thereby distinguishing loss from taking.
It is significant too that the amendment was written in the disjunctive, so that current section 186.11 requires “the taking of” or “the loss of” the statutory threshold for enhancement to apply. Thus even under the current version, the enhancement could be imposed against the Reiswigs if they took more than $500,000 from the Lichtmans.
Our interpretation is supported by two cases interpreting similar provisions in section 12022.6, which provides for a sentence enhancement for “any person [who] takes... property in the commission... of a felony, ” and the loss exceeds a prescribed amount. In People v. Ramirez (1980) 109 Cal.App.3d 529 (Ramirez), the defendants argued section 12022.6 covered only out of pocket loss, and, therefore, recovered property and recovered and uncashed checks should not be considered in determining whether the amount taken satisfied the statutory threshold. (Ramirez, supra, 109 Cal.App.3d at p. 539.) The Court of Appeal rejected that interpretation, stating: “We think the Legislature did not intend that the application of section 12022.6 should depend upon the fortuitous circumstances of whether the police were able to recover stolen property or the victim was able to establish a civil claim for the return of property or its proceeds traced by some circuitous route.” (Ramirez, supra, 109 Cal.App.3d at p. 539, fn. omitted.)
In People v. Mellor (1984) 161 Cal.App.3d 32 (Mellor), the defendant argued the evidence was insufficient to support the enhancement under section 12022.6 because he transferred items of personal and real property to the victim, thereby reducing the loss to an amount below the statutory threshold. The Court of Appeal rejected that argument on the ground the word “loss” as used in section 12022.6 in the context of a taking “‘did not require the intent to permanently deprive the owner of property.... ’” (Mellor, supra, 161 Cal.App.3d at pp. 38 39.)
Both Ramirez and Mellor rejected the argument the amount of loss under section 12022.6 should be reduced by the amount recovered by the victim or returned by the defendant. The word “taking” under section 186.11(a)(1) should not be given a more restrictive interpretation. All but $1,000 of the monthly payments on the notes were interest payments. Thus, notwithstanding the monthly payments, the Reiswigs took $563,477 from the Lichtmans and Cristina.
Further, reducing the amount taken by the amount of monthly interest payments would give the Reiswigs use of the Lichtmans’ and Cristina’s money with no penal consequences. That result is inconsistent with the statutory purpose of imposing greater punishment for “criminals who engage in a pattern of fraudulent activity that results in a large amount of accumulated takings.” (People v. Williams, supra, 118 Cal.App.4th at p. 747.)
VIII.
The Trial Court Understood Its Discretion in Imposing the Enhancement Under Section 12022.6
The trial court chose count four as the principal term and selected the midterm sentence of three years. The court imposed the midterm of three years for the enhancement under section 186.11(a)(2) and a consecutive two year term for the enhancement under section 12022.6(a)(2).
Janet argues the trial court mistakenly believed the imposition of the sentence enhancement under section 12022.6(a)(2) was mandatory and therefore failed to exercise its discretion to consider striking that enhancement. We conclude the trial court understood and properly exercised its discretion to impose the enhancement under section 12022.6(a)(2).
The relevant part of section 12022.6(a) states: “(a) 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 two hundred thousand dollars ($200,000), 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.”
As we explained in footnote 3, the version of section 12022.6(a)(2) applicable to the Reiswigs set the threshold loss at $150,000.
Section 1385 grants the trial court discretion to strike an enhancement absent clear legislative direction to the contrary. (§ 1385(c)(1); People v. Rivas (2004) 119 Cal.App.4th 565, 571.)
At the sentencing hearing, in imposing the additional term under section 12022.6(a)(2), the trial court stated: “The court is imposing [section] 12022.6. The court looked at the cases in this – in this section the (b)(2) section basically requires the imposition of that consecutive. And the court read the case[] People v. Lai [(2006)] 138 Cal.App.4th 1227 [(Lai)], which discusses that issue.”
Janet contends this passage demonstrates the trial court believed the additional term under section 12022.6 was mandatory and the court had no discretion to dismiss or strike the enhancement. Janet misreads the court’s remarks. In this passage, the trial court was addressing two issues: (1) should the court impose the additional term under section 12022.6(a)(2), or strike the enhancement, and (2) if the court decides to impose the additional term under section 12022.6(a)(2), is the additional term imposed to be consecutive to other enhancements.
The trial court’s first sentence in the quoted passage answers the first question-the court exercised its discretion to impose the additional term.
The court’s second sentence in the quoted passage concerns only the second issue-is the additional term to be concurrent or consecutive. The (b)(2) to which the trial court referred is section 186.11(b)(2), which states: “The additional prison term provided in paragraph (2) of subdivision (a) shall be in addition to any other punishment provided by law, including Section 12022.6, and shall not be limited to any other provision of law.” Section 186.11(b)(2) thus makes the enhancement under section 186.11(a)(2) expressly cumulative to an enhancement imposed under section 12022.6. Based on section 186.11(b)(2), the trial court correctly concluded the additional terms under section 186.11(a)(2) and under section 12022.6(a)(2) were to be consecutive.
In the third sentence of the quoted passage, the trial court stated it had read Lai, supra, 138 Cal.App.4th 1227. In that case, the court held “when a defendant is subject to the additional prison terms of both sections 186.11, subdivision (a)(3) and 12022.6, subdivision (a) the court must impose both terms, but stay execution of the term imposed under section 12022.6, subdivision (a).” (Lai, supra, 138 Cal.App.4that p. 1234.) The holding of Lai is not applicable here because the enhancements against the Reiswigs were imposed under section 12022.6(a)(2) and section 186.11(a)(2), which are different from section 186.11(a)(3). The trial court apparently relied on Lai for its comment that the additional term provided in section 186.11(a)(2) is cumulative to an additional term under section 12022.6(a)(2), and not for the proposition the trial court lacked discretion to strike the enhancement. (Lai, supra, 138 Cal.App.4th at p. 1243.)
IX.
The Trial Court Did Not Abuse Its Discretion in Setting the Amount of Restitution.
Pursuant to section 1202.4, the trial court ordered restitution under counts 4 through 6 in the amount of $752,075. Of that amount, $563,477 represented the principal amount of the three notes.
Ronald argues the amount of restitution must be reduced by $191,482 for (1) $73,880 used to pay off the Lichtmans’ mortgage and (2) $117,602 in monthly payments on the notes. He argues those amounts cannot be included in the restitution award for the same reasons he argued they could not be used in determining the amount of the taking under section 186.11(a)(1) and (a)(2).
Section 1202.4(f), provides: “[I]n every case in which a victim has suffered economic loss as a result of the defendant’s conduct, the court shall require that the defendant make restitution to the victim or victims in an amount established by court order, based on the amount of loss claimed by the victim or victims or any other showing to the court.” Restitution under section 1202.4(f)(3) “shall be of a dollar amount that is sufficient to fully reimburse the victim or victims for every determined economic loss incurred as the result of the defendant’s criminal conduct.”
“A restitution order is reviewed for abuse of discretion and will not be reversed unless it is arbitrary or capricious.” (People v. Gemelli (2008) 161 Cal.App.4th 1539, 1542.) The trial court does not abuse its discretion when “there is a rational and factual basis for the amount of restitution ordered.” (Ibid.) “‘“[T]he standard of proof at a restitution hearing is by a preponderance of the evidence, not proof beyond a reasonable doubt.”’” (Ibid.)
The trial court did not abuse its discretion in its determination of the amount of the Lichtmans’ and Cristina’s economic losses. The principal amount of the notes was $563,477, and there was substantial evidence the Lichtmans or Cristina gave that amount to the Reiswigs. As we have explained, the amount used to pay off the Lichtmans’ mortgage did not reduce the $163,477 the Lichtmans gave the Reiswigs for the first investment. All but $1,000 of the monthly payments on the notes was for interest.
The trial court in essence permitted Cristina to recover in restitution the principal value of the notes with interest. Ronald argues the amount of interest provided in the notes-9 percent or 10 percent-was far higher than Cristina could have earned in interest elsewhere and therefore cannot be recovered in restitution. In ordering restitution, the trial court had the discretion to award interest at the rate of 10 percent from the date of the taking. (§ 1202.4(f)(3)(G).) The trial court declined to award this statutory rate of interest and instead awarded restitution in the full principal amount of the notes without reduction for monthly interest payments. The court did not abuse its discretion.
The Attorney General identifies two clerical errors in the order for restitution and abstract of judgment filed on May 29, 2008. It appears the order for restitution and abstract of judgment for Janet lists her as the defendant on the first page and lists Ronald as the judgment debtor on the second page. Conversely, the order for restitution and abstract of judgment for Ronald lists him as the defendant on the first page and lists Janet as the judgment debtor on the second page. It is difficult to tell whether these errors are in the preparation of the order and abstract or in the copying and preparation of the clerk’s transcript. On remand, the trial court can inspect the two orders and abstracts and correct any clerical errors.
X.
Imposition of a Fine Under Section 186.11(c) Was Mandatory.
The Attorney General argues the trial court erred by failing to impose a fine under section 186.11(c). Although the district attorney did not object when the trial court failed to impose this fine, the Attorney General argues the fine is mandatory, and therefore the trial court made an unauthorized sentence subject to correction on appeal.
A sentence is unauthorized if “it could not lawfully be imposed under any circumstance in the particular case.” (People v. Scott (1994) 9 Cal.4th 331, 354.) “A claim that a sentence is unauthorized may be raised for the first time on appeal, and is subject to correction whenever the error comes to the attention of the reviewing court. [Citation.]” (People v. Barnwell (2007) 41 Cal.4th 1038, 1048, fn. 7.)
Section 186.11(c) is written in mandatory language. It states in relevant part: “Any person convicted of two or more felonies, as specified in [section 186.11](a), shall also be liable for a fine not to exceed [$500,000] or double the value of the taking, whichever is greater, if the existence of facts that would make the person subject to the aggravated white collar crime enhancement have been admitted or found to be true by the trier of fact. However, if the pattern of related felony conduct involves the taking of more than [$100,000], but not more than [$500,000], the fine shall not exceed [$100,000] or double the value of the taking, whichever is greater.” In Lai, supra, 138 Cal.App.4th at page 1251, the court stated: “Section 186.11, subdivision (c) requires imposition of a specified fine if the defendant is ‘convicted of two or more felonies, as specified in subdivision (a), ’ and the jury finds true the section 186.11, subdivision (a) allegation.” (Italics added, fn. omitted.)
A trial court’s failure to impose a fine in the mandatory amount constitutes an unauthorized sentence. In People v. Walz (2008) 160 Cal.App.4th 1364, 1368, the trial court imposed a $200 fine against the defendant pursuant to Penal Code section 290.3. That code section provides that when a defendant is convicted of an offense under section 290(c), the trial court must impose a fine of $300 on the first conviction and $500 on the second and subsequent convictions. The Court of Appeal concluded the imposition of a $200 fine constituted an unauthorized sentence because section 290.3 required imposition of a fine of at least $300. (People v. Walz, supra, 160 Cal.App.4th at p. 1368.) “The statute does not authorize a fine of $200, and the language of section 290.3, subdivision (a) is not amenable to an interpretation granting a trial court discretion to impose a fine less than the prescribed amount.” (People v. Walz, supra, . at p. 1369.)
In this case, the jury determined the existence of facts making the Reiswigs subject to the white collar criminal enhancement fine under section 186.11(c). The jury having made that determination, imposition of a fine was mandatory, and the imposition of no fine constituted an unauthorized sentence.
Relying on People v. Tillman (2000) 22 Cal.4th 300 (Tillman), Janet argues the fine under section 186.11(c) is discretionary rather than mandatory. In Tillman, a jury convicted the defendant of forcible copulation and false imprisonment with force or violence. The trial court sentenced the defendant to prison but did not impose fines pursuant to sections 1202.4 and 1202.45. (Tillman, supra, 22 Cal.4th at pp. 300 302.) The restitution fine under section 1202.4 is mandatory unless the trial court finds compelling and extraordinary reasons for not doing so and states those reasons on the records. The restitution fine under section 1202.45 is mandatory when the sentence includes a term of parole, and is suspended until parole is revoked. (Tillman, supra, 22 Cal.4th at pp. 301 302, fn. 1.) The Court of Appeal concluded the fines were mandatory and “amend[ed] the judgment[s] to add restitution fines of $200, the minimum permitted by the statutes.” (Id. at p. 302.)
The Supreme Court reversed the Court of Appeal on the ground of waiver. The Supreme Court explained that in prior cases it held a defendant was barred from seeking correction on appeal to alleged discretionary sentencing errors “after having failed to object in the trial court.” (Tillman, supra, 22 Cal.4th at pp. 302 303.) The court stated the same rationale applied in this case. Thus, by failing to object to the discretionary decision not to impose a restitution fine, the People waived the ability to seek correction of the error on appeal. (Id. at p. 303.)
Tillman does not support Janet’s assertion the district attorney forfeited imposition of the fine under section 186.11(c) by failing to object in the trial court. The trial court’s failure in Tillman to impose the fine under section 1202.4(a)(1) did not constitute an unauthorized sentence because there was a circumstance in which not imposing the fine would be lawful, i.e., if the trial court found compelling and extraordinary reasons for not doing so and stated those reasons on the record. In People v. Talibdeen (2002) 27 Cal.4th 1151, 1153, the Supreme Court described Tillman as holding “appellate courts may not correct a ‘discretionary sentencing choice’ if the People failed to object at sentencing.” Here, in contrast, the sentence was unauthorized because the circumstances as found by the jury were such that the trial court could not lawfully withhold the fine. Under the jury’s verdict, the fine was mandatory.
We therefore will remand the matter to allow the trial court to determine and impose the appropriate fine pursuant to section 186.11(c).
Disposition
The matter is remanded for the trial court to impose the mandatory restitution fine under section 186.11(c) and to inspect the orders of restitution and abstracts of judgment and order correction of any clerical errors in the listings of defendant and judgment debtor. In all other respects, the judgments are affirmed.
WE CONCUR: RYLAARSDAM, ACTING P. J.ARONSON, J.
“Q [investigator] Okay. All right. Did Janet ever use the word annuity?
“A [Cristina] I think she did. I think she did in the beginning of the investment, the first time.
“Q What did she say about annuity?
“A That was going to be annuity, the very first time. [¶]... [¶]
“Q When did she mention the annuities, which time?
“A When I gave her the $163,000. [¶]... [¶] That was in 2001 or 2002.”