Metropolitan News-Enterprise


Wednesday, October 25, 2023


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Court of Appeal:

Levying Order Need Not Be Made at Time of Sentencing

Opinion Rejects Statutory Interpretation by Perpetrator of White Collar Crimes


By a MetNews Staff Writer


Div. Two of the First District Court of Appeal held yesterday that the seizure of parcels of real property eight years after a perpetrator of white collar crimes was sentenced was not violative of Penal Code §186.11, known as the “Freeze and Seize” law.

In an opinion by Alameda Superior Court Judge Michael M. Markman, sitting on assignment, the panel rejected the assertion of inmate Jay C. Shah—sentenced in 2013 to 20 years in state prison and ordered to pay a $14.1 million restitution fine—that under the statute, a seizure may not take place later than the sentencing hearing.

Sec. 186.11 provides that assets may be seized in white collar crime cases and frozen, then released to the defendant if he or she is acquitted. Under Shah’s reading of §186.11(h)(1)(A), San Francisco Superior Court Judge Alexandra Gordon was without power to make a levying order in 2021 to satisfy a judgment for more than $3.8 million in favor of one of Shah’s real estate fraud victims, Shirley Hwang.

Wording of Provision

That section says, in part:

“If the defendant is convicted...the trial judge shall continue the preliminary injunction or temporary restraining order until the date of the criminal sentencing and shall make a finding at that time as to what portion, if any, of the property or assets subject to the preliminary injunction or temporary restraining order shall be levied upon to pay fines and restitution to victims of the crime.”

Markman said in yesterday’s decision:

“Shah commits laser focus to the provision that the sentencing court ‘shall’ make a finding at the criminal sentencing about what portion of a defendant’s frozen assets it will levy to pay the defendant’s fines and victim restitution. Shah’s argument reads too much into the statute and, in the process, mistakes a procedural rule for a jurisdictional mandate. Simply put, the plain language of section 186.11(h)(1)(A) does not say that prosecutors lose the ability to ask—or that the trial court loses its discretion—to levy a frozen property by failing to undertake the process by the end of the sentencing hearing.”

No Jurisdictional Mandate

The jurist elaborated:

“Despite Shah’s steadfast argument to the contrary, use of the word ‘shall’ in section 186.11(h)(1)(A) is not especially helpful in connection with the timing of the hearing. Nothing in the plain language of the provision suggests that the timing of the postconviction levying order is a jurisdictional mandate. Nor does it contemplate the expiration of the preliminary injunction or TRO at the conclusion of the sentencing hearing. Such alternative language would do what Shah argues the statute does, which is make it impossible to levy property after sentencing. The reality, however, is that the statute is silent concerning what might happen if any frozen properties are not levied by the end of the sentencing hearing. We decline Shah’s suggestion to rewrite it.”

Markman found no significance to the fact that when Shah’s conviction was affirmed on appeal, there was no express order for a remand which, according to Shah, would be necessary to reinvest the trial court with jurisdiction.

“The lack of a disposition formally remanding Shah’s original appeal for further proceedings was…no bar to the trial court’s levying order,” he wrote.

The case is People v. Shah, A162676.

Div. Three of the First District Court of Appeal on Aug. 31, 2021 decided in Commonwealth Land Title Insurance v. Shah, A156674, an unpublished opinion by Acting Presiding Justice Carin T. Fujisaki, that collateral estoppel did not bar the $3.8 million award to Hwang. Shah contended that the determination by the sentencing judge, Charlene Kieselbach, now retired, that Hwang should receive restitution in the amount of $311,000 does not have a preclusive effect because she was not a party to the criminal proceeding.

Review was denied by the California Supreme Court on Dec 22, 2021.


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