Court Vacates Forgery Convictions in Ponzi Scheme

Friday, January 16, 2009

Page 3

Court Vacates Forgery Convictions in Ponzi Scheme

By STEVEN M. ELLIS, Staff Writer

The Third District Court of Appeal yesterday reduced the sentence of a Lodi bookkeeper who stole almost $900,000 in a Ponzi scheme, and ordered some of her convictions vacated.

Limiting Shelley Kenefick’s forgery convictions to the number of documents she forged, rather than the number of signatures, the court reasoned the counts were merely preliminary steps in Kenefick’s plan to steal victims’ money, and ordered sentence stayed to avoid multiple punishment.

Kenefick operated a bookkeeping and tax return business, and obtained the money from six clients and friends, some elderly, on the representation that she was investing in various real estate or business projects, including first deeds of trust. Such deeds secure loans on real property like mortgages, but differ by giving title to the encumbered property to a trustee, who holds it for the lender’s benefit while the borrower retains possession.

An investigative auditor with the Department of Justice traced over 90 percent of the money and determined Kenefick used it for personal bills and to pay earlier investors after later investors went to police in 2005 when Kenefick stopped paying them.

A jury convicted Kenefick of 18 counts of theft, burglary, selling securities by false statement and forgery, and San Joaquin Superior Court Judge Richard M. Mallett sentenced her to 16 years and four months in prison.

However, Justice Fred K. Morrison wrote on appeal that it was error to convict Kenefick of four counts of forgery under Penal Code Sec. 470(a) for four people’s signatures on two promissory notes, because the charge relates to the instrument itself.

“The rule of one count of forgery per instrument is in accord with the essence of forgery, which is making or passing a false document,” he explained.

Morrison similarly opined that Mallett should have stayed sentence on Kenefick’s other forgery convictions under Penal Code Sec. 654’s prohibition on multiple punishments for the same act or omission.

Rejecting the Attorney General’s contention that the crime of forgery, unlike theft, is “concerned with the end (the taking),” and not “the means (signing another’s name),” Morrison agreed with Kenefick that the other forgeries were “part and parcel” of her “single criminal intent—to take [the victim’s] money.”

Justices Ronald B. Robie and Tani Cantil-Sakauye joined Morrison in his opinion.

The case is People v. Kenefick, C055070.