Friday, April 26, 2013
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Appeals Court Throws Out Charges in Irwindale Corruption Case
By KENNETH OFGANG, Staff Writer
The Court of Appeal for this district yesterday tossed out embezzlement charges against four current and former officials of the City of Irwindale.
Div. One said the District Attorney’s Office improperly withheld evidence that might have cleared council members Mark Breceda and Manuel Garcia, former council member Rosemary Ramirez, and Abe De Dios, the city’s now-retired finance director.
Breceda, Garcia, and Ramirez were accused of “double-dipping” by accepting $75 a day in city per diem while meeting with bond raters in New York on five occasions between 2001 and 2005. Taking the money—or in De Dios’ case, approving the payments—constituted embezzlement, prosecutors argued, because the defendants were also receiving huge payments from third-party consultants who arranged the trips.
The consultants paid more than $62,000 for the three to stay in swank hotels, attend Broadway shows and baseball games, and eat in top restaurants, witnesses told the grand jury.
Breceda, Ramirez, De Dios and former City Manager Steven Blancarte were originally charged with misappropriation of funds. Blancarte agreed to plead guilty to one count of misappropriation and pay fines and restitution.
New Indictment
The remaining defendants obtained a dismissal of the misappropriation charges on statute-of-limitations grounds. Prosecutors then presented the case to the grand jury, which in a December 2011 indictment charged the three remaining defendants, plus Garcia—who had testified before the grand jury—with five counts of embezzlement.
The grand jury also charged Ramirez with dissuading a witness, based upon an alleged online threat against a local activist who was a potential grand jury witness. That charge is unaffected by yesterday’s ruling.
Justice Jeffrey Johnson, writing for the Court of Appeal, said the defendants were entitled to dismissal of the embezzlement charges because prosecutors never showed the grand jury two key documents, a city council resolution and a memorandum from the city manager to the council members. Those documents tended to be exculpatory, the justice said, because they showed that it was city policy to pay per diem for out-of-town travel related to city business, even if third parties otherwise paid for the trips.
Trial Court Ruling
Los Angeles Superior Court Judge Bob S. Bowers Jr. had denied the defendants’ motion to dismiss. He agreed with prosecutors, who argued that the memorandum wasn’t exculpatory; that the disclosure statute—Penal Code Sec. 939.71—wasn’t violated because the presenting deputies, Max Huntsman and Susan Schwartz, didn’t know about the documents, even though others in the office did; and that the defendants weren’t prejudiced because other evidence regarding city policy was presented and because they possessed criminal intent regardless of the policy.
But Johnson, while finding the acceptance of the consultants’ largesse “shocking” and “an abuse of the public trust,” emphasized that the defendants were charged with embezzlement, not conflict of interest or failure to disclose gifts. Because embezzlement requires a showing of fraud, and fraud requires a showing of specific intent, “the People’s failure to provide exculpatory evidence prevented the jury from exercising its independent evaluation of whether petitioners had the requisite fraudulent intent.”
The jurist also rejected the argument that the disclosure obligation extended only to evidence that Huntsman and Schwartz were aware of.
‘Nature and Existence’
The statute, he noted, provides that “[i]f the prosecutor is aware of exculpatory evidence, the prosecutor shall inform the grand jury of its nature and existence.” The purpose of the legislation, which is to ensure grand jury independence, would not be fulfilled if the phrase “the prosecutor” were interpreted to mean only the deputies who go before the grand jury, Johnson said.
The justice went on to reject the argument that the defendants were not prejudiced because the lavishness of the consultants’ spending established fraudulent intent even if the per diem was allowable under normal circumstances.
That was not the theory under which the case was presented to the grand jury, Johnson said, and even if it was, the defendants would have suffered prejudice.
“[I]f the prosecutors did present a lavish expenditure embezzlement theory, their reliance on the ostensible dishonesty of double dipping was effectively a substitution of the perceived fraudulent intent element of double dipping for the missing fraudulent intent element of a lavish-expenditure embezzlement theory,” the justice wrote. “Where the prosecution had in its possession but failed to produce two documents that could have proven to the grand jury that petitioners acted in accord with city policy when they accepted (or disbursed) a $75 allotment for each day of travel, this de facto transference of fraudulent intent evidence was unfairly prejudicial to petitioners.”
Huntsman told the L.A. NOW blog that the office would consider refiling the charges or asking for Supreme Court review. “We still believe that our case on the merits is strong,” he said.
Attorneys on appeal were Anthony J. Falangetti for Breceda, Daniel V. Nixon for De Dios, Steven Graff Levine for Garcia, Matthew M. Horeczko for Ramirez, and Deputy District Attorneys Roberta Schwartz, Carolyn C. Asayama and Carolyn Nakaki for the prosecution.
The case is Breceda v. Superior Court (People), 13 S.O.S. 2032.
Copyright 2013, Metropolitan News Company