Tuesday, August 14, 2007
S.C. Takes Broad View of ‘Freeze and Seize’ Law
By a MetNews Staff Writer
A state law allowing seizure of assets of white collar criminals requires prosecutors to prove that the defendants’ controlled the seized assets, not necessarily that they owned them, the state Supreme Court unanimously ruled yesterday.
Reversing a contrary ruling of the Fourth District Court of Appeal’s Div. Two, the justices agreed with the Riverside district attorney and the California District Attorneys Association, which filed an amicus brief, that Penal Code Sec.186.11, also known as the “Freeze and Seize Law,” should be applied in order to effectuate its purposes. The law allows the superior court, in certain white collar criminal cases, to control and preserve a defendant’s assets in order to pay restitution to victims.
Youssef Semaan and his wife Lilliane Seemaan were convicted on 24 counts of grand theft involving over $1.6 million. As part of those proceedings, various assets were seized under Sec. 186.11, including a bank account in the names of Marie Semaan and Elham Cherfan, Youssef Semaans’ sisters-in-law, both of whom reside in Lebanon.
The women filed claims in Riverside Superior Court seeking to have the money released from the frozen account. Elham’s Cherfan’s claim was denied by Judge Gordon Burkhart and she did not seek review in the Court of Appeal.
Marie Semaan, who did appeal, argued that her funds should be released because they were not the product of criminal activity, and specifically, that part of the funds were from the sale of her some property she owned, and her lone witness so testified.
Prosecutors responded by claiming that Youssef and Lilliane Semaan were actually using the Lebanese woman—who did not appear in court or file a declaration, and who never spoke to the accountant who testified as her witness—as a front for their own activities.
They presented evidence that Marie Semaan’s name was used to open six credit card accounts, and that the defendants possessed a drivers license and social security card in Marie Semaan’s name. Checks and ATM withdrawals were made from the account, all while Marie Semaan was outside of the United States.
Burkhart denied the third-party claim, finding that Marie Semaan failed to show that she owned any of the funds.
The Court of Appeal, reversing, said the claimant met her burden of demonstrating legal title to funds from the sale of her property, and therefore, the burden shifted to prosecutors to refute the claim by clear and convincing evidence.
But Justice Kathryn M. Werdegar, writing for the high court, said the Court of Appeal should have affirmed the trial court because the burden of proving ownership was on the third-party claimant and there was substantial evidence supporting Burkhart’s conclusion that she failed to meet that burden.
The Court of Appeal was in error, Werdegar said, in applying Evidence Code section Sec. 662—which provides that an “owner of the legal title to property is presumed to be the owner of the full beneficial title” and that the presumption can only be rebutted by clear and convincing proof…and can only be rebutted by clear and convincing proof—to the case because the section is inapplicable when the title to the property itself is challenged as not genuine.
The justice also noted that there is no requirement that the seized assets be derived from criminal activity. .
Prosecutors, Werdegar said, adequately demonstrated that Marie Semaan’s name was used by the defendants for their own purposes. Control of the account was maintained by the defendants, and not Marie Semaan, the justice noted.
The justice elaborated:
“No witness claimed ever to have seen or spoken with Marie, and no witness attempted to authenticate as Marie’s own signature any of the various, apparently different signatures attributed to her on financial and legal documents. The People’s theory that defendants used Marie’s name as an alias had the support of undisputed evidence that defendants possessed credit cards, a driver’s license, and a Social Security card in her name, that all checks written on her bank account were written while she was out of the country and to pay defendants’ expenses, and that the sale of the Brea house, whose ownership was uncertain, was transacted entirely by defendants.”
“For her part, Marie neither appeared in court nor made any statements under oath claiming ownership of the bank account, the proceeds of the sale of the house, or the Social Security benefits paid in her name. Marie’s expert proved only what was not in dispute, namely, that the proceeds of the sale and Social Security benefits were deposited into the account. Finally, while Marie’s attorney suggested in argument that she may have been ‘as much of a victim as anyone else,’ Marie asserted no claim to restitution for the checks written by defendants on the account.”
The case is People v. Semaan, 07 S.O.S. 5023.
Copyright 2007, Metropolitan News Company