People v. Fulton

• Decision Date: 30 April 1984
• Citation: 155 Cal.App.3d 91,201 Cal.Rptr. 879
• Parties: The PEOPLE of the State of California, Plaintiff and Respondent, v. Jack B. FULTON, Defendant and Appellant. Crim. 14166.
• Court: California Court of Appeals Court of Appeals

Page 879

201 Cal.Rptr. 879

155 Cal.App.3d 91

The PEOPLE of the State of California, Plaintiff and Respondent, v. Jack B. FULTON, Defendant and Appellant.

Crim. 14166.

Court of Appeal, Fourth District, Division 3, California.

April 30, 1984.

Certified for Partial Publication.

As Modified May 22, 1984.

Hearing Denied July 26, 1984.

[155 Cal.App.3d 93] Barbara Z. Baker, Orange, for appellant Jack B. Fulton.

John K. Van de Kamp, Atty. Gen., Michael D. Wellington and John W. Carney, Deputy Attys. Gen., for plaintiff and respondent.

OPINION

CROSBY, Acting Presiding Justice.

Vincent Carrano and Jack Fulton operated Swiss Vaults, a Santa Ana depository for precious metals, from which they embezzled the metals and attempted to cover up the theft by staging a robbery. They were found guilty of conspiracy to commit theft (Pen.Code, §§ 182, subd. 1, 484/487), conspiracy to submit a fraudulent insurance claim (Pen.Code, § 182, subd. 1 and Ins.Code, § 556), and submission of a fraudulent insurance claim (Ins.Code § 556). As the loss exceeded $100,000, they also incurred an enhancement for a great taking (Pen.Code, § 12022.6). Carrano disappeared after posting bond on appeal, and his appeal has been dismissed.

I ^*

II

As Fulton does not attack the sufficiency of the evidence to connect him to the charged offenses, we only briefly summarize the facts. In April 1976 Carrano and Louis Emond purchased two businesses located at 1404 North Grand Avenue in Santa Ana, Swiss Vaults and Bullion Metals International (BMI), a trader in precious metals. Carrano and Fulton were president and vice president respectively of both companies, but Fulton was in charge of the daily operations. Swiss Vaults' customers stored silver and gold medallions, coins, and silver bars inside one of two vaults, in safety deposit boxes, sealed paint cans, or on the floor. Those who so desired received a ten percent return on their deposits in exchange for allowing BMI to speculate with them.

As police later learned, Fulton and Carrano considered several schemes to cover up the embezzlement. In January 1977 they consulted Phillip Kitzer, an international con man, who suggested they sell Swiss Vaults and BMI to a European "buyer," a front for Kitzer and his associate, Jack Elliot, who would then abscond with the remaining assets. In July 1977 Fulton and Carrano adopted a similar expedient; they fabricated a robbery to cover up the embezzlement without Kitzer's assistance.

Police were suspicious of Carrano's account of the robbery at the outset. And when a witness was located who saw three men working in Swiss Vaults at 11:40 p.m. the night before the robbery allegedly occurred, with a car backed up to the building, the truth began to emerge. A check with Swiss Vaults' alarm company revealed it had detected someone in the business at 8:27 that night, and Carrano responded to a telephone call from the company. The alarm computer showed the business closed at 8:39 p.m. and no entry until the next morning. The system could be defeated by taping certain contact points, however. Thus, someone familiar with the security system had deliberately concealed his presence in Swiss Vaults on the evening before the robbery.

Accounting records from Swiss Vaults and BMI were seized pursuant to a search warrant. They indicated BMI sold substantially more silver than it purchased. In particular, BMI's records for May and June 1977 showed a 79 percent gross profit. The prosecution argued the discrepancy between BMI's sales and purchases--and the reason for its astounding profits--was the sale of silver embezzled from Swiss Vaults.

III-IX ¹

X

The major issue in Fulton's appeal arises from preindictment activities of Louis Emond, the co-owner/accomplice who turned prosecution informant. Before either defendant was formally accused and while the grand jury was investigating the Swiss Vaults matter, Emond acquired information concerning defense legal strategy from them. In light of Barber v. Municipal Court (1979) 24 Cal.3d 742, 157 Cal.Rptr. 658, 598 P.2d 818, we asked for and received extensive additional briefing on this alleged Sixth Amendment violation.

On August 24, 1977, the search warrant was served. The affidavit identified Carrano and Fulton as suspects in an alleged embezzlement. In September 1977 local news stories reported police would seek complaints against Carrano and Fulton, as well as Swiss Vaults' previous owner. On October 6, 1977, before any criminal charges were filed, Carrano and Fulton moved to quash the search warrant and for return of the seized records. On October 19, 1977, proceedings commenced before the grand jury with Carrano and Fulton as major targets. They were indicted on January 5, 1978.

Between October 19, 1977 and January 5, 1978, Carrano and Fulton were represented by one set of attorneys, while Emond retained his own. Emond thrice met with Carrano during this period armed with a secret transmitter monitored by the prosecutor. The initial meeting was not overheard because of an equipment malfunction, ² but the second and third, which took place November 7, 1977 and December 5, 1977, respectively, were successfully monitored and recorded. Eventually, the tapes and transcripts of the two meetings were received by the grand jury and in a heavily expurgated form at trial.

It is unclear from the record if Emond was directed to attempt to learn defense legal strategy at the meetings. The prosecutor strongly denied it, and in early suppression hearings, so did Emond. By the time of trial, however, Emond had considerably softened his overall testimony concerning the defendants and was then able to recall that someone on the prosecution team once suggested he should inquire as to what "the defense was up to."

Directed to or not, Emond definitely made inquiries concerning defense legal plans at the first recorded meeting, which took place at a Santa Ana coffee shop. Pertinent passages from the transcript appear in the margin. ³

The second recorded meeting occurred at Swiss Vaults' premises, and Fulton was also present. Emond again sought information concerning defense legal strategy; highlights are set forth in the margin. ⁴

The Attorney General first defends the prosecution's conduct on the basis that the Sixth Amendment right to counsel generally does not attach before the formal filing of criminal charges. (Kirby v. Illinois (1972) 406 U.S. 682, 688, 92 S.Ct. 1877, 1881, 32 L.Ed.2d 411; People v. Bustamante (1981) 30 Cal.3d 88, 102, 177 Cal.Rptr. 576, 634 P.2d 927. ⁵ He argues Fulton and Carrano had yet to be arrested, much less formally charged--although search warrants and subpoenas had been served, the grand jury impaneled, a motion to return seized property filed, and the defendants named as suspects in news reports. (Hoffa v. United States (1966) 385 U.S. 293, 87 S.Ct. 408, 17 L.Ed.2d 374; Massiah v. United States (1964) 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246.) He also notes in Barber and subsequent decisions considering its potential application (see, e.g., People v. Towler (1982) 31 Cal.3d 105, 181 Cal.Rptr. 391, 641 P.2d 1253; People v. Poe (1983) 145 Cal.App.3d 574, 193 Cal.Rptr. 479; In re Pratt (1980) 112 Cal.App.3d 795, 170 Cal.Rptr. 80), the defendants were all under formal accusation. But we do not embrace this distinction. To do so would be to reward misconduct in the obtaining of the accusatorial pleading itself. Defendants' preindictment legal strategy was, in our view, protected by the Sixth Amendment.

However, defendants never moved for more than suppression of the tapes until midway through trial, although Barber appeared much earlier. In People v. Towler, supra, 31 Cal.3d 105, 181 Cal.Rptr. 391, 641 P.2d 1253. "Defendant maintain[ed] that because the trial ... took place before the opinion in Barber was filed, his counsel should not be expected to have anticipated that decision's holding that dismissal is an available sanction for such an intrusion. [Citation.] Although dismissal was not an established sanction before Barber, the defendants in Barber itself did, of course, seek such a dismissal in the trial court before trial and pursued that issue to this court by a pretrial writ. If Towler believed that the district attorney's conduct had undermined or prejudiced his defense, he did not need Barber to suggest that a motion for dismissal was the logical move." (Id., at pp. 121-122, 181 Cal.Rptr. 391, 641 P.2d 1253.)

Defendants here failed to seek dismissal--even post-Barber--until after the prosecution rested. Moreover, with all the potential prejudice readily visible, they were unable to convince the trial judge any prejudice sufficient to warrant dismissal existed. We concur with this conclusion.

The prejudice can be evaluated by simply examining the Emond transcripts; and having carefully done so, we have concluded the damage was minimal. The prosecution did learn bits and pieces of the defense strategy concerning the motion to traverse the search warrant, but that motion had already been filed. As the Attorney General correctly argues, the burden on a motion to suppress involving a search with a warrant is on the defense; and the defense did file exhaustive paperwork in support of the various motions to suppress, all disclosing what was overheard in the monitored conversations--and much more.

Towler explains, "[Barber ] concluded that an exclusionary sanction would not adequately protect the defendants' rights, in part because in order to enforce that sanction the defendants would have been forced to divulge the full contents of conversations to which the police informant, but not the prosecutor, had been privy. [Citation.] Here, however, defendant would not have had to provide any information that the prosecutor did not already know because the confidential information was contained in a written document that the prosecutor had seized. Moreover, unlike the situation in Barber, here it...