People v. Katzman

• Decision Date: 13 February 1968
• Docket Number: Cr. 6022
• Citation: 66 Cal.Rptr. 319,258 Cal.App.2d 777
• Parties: PEOPLE of the State of California, Plaintiff and Respondent, v. Julian KATZMAN and Nicholas Sahatl, Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

Page 319

66 Cal.Rptr. 319

258 Cal.App.2d 777

PEOPLE of the State of California, Plaintiff and Respondent, v. Julian KATZMAN and Nicholas Sahatl, Defendants and Appellants.

Cr. 6022.

Court of Appeal, First District, Division 1, California.

Feb. 13, 1968.

Rehearings Denied March 5, 1968.

Hearing Denied April 10, 1968.

George G. Walker, San Francisco, for appellant Julian Katzman.

Stephen Grant, San Francisco, under appointment of the Court of Appeal, for appellant Nicholas Sahati.

Thomas C. Lynch, Atty. Gen., Robert R. Granucci, Jerome C. Utz, Deputy Attys, Gen., San Francisco, for respondent.

MOLINARI, Presiding Justice.

After a jury trial, defendant Katzman was convicted of one count of conspiracy, four counts of grand theft, and seven counts of forgery; and defendant Sahati was convicted of one count of conspiracy, one count of grand theft, and four counts of forgery. Both defendants appeal. Katzman claims that there was a material variance between the indictment, which alleges a single conspiracy, and the proof, which he contends establishes multiple conspiracies; that the trial court erred in failing to instruct the jury Sua sponte that 'willful ignorance' of the victims constitutes consent and that a defendant is not liable for offenses committed by members of the conspiracy before he joined it or after he withdrew from it; and that there was an illegal search of his living quarters. Sahati claims that he was denied his constitutional right to a speedy trial and that the trial court should have instructed the jury Sua sponte that his attempts at repayment ov various allegedly fraudulently obtained loans were evidence that he lacked the intent to defraud. We have concluded that there is no merit to any of these contentions.

Facts

Sahati is business man who before his trial in this case was engaged heavily in stock market activities and other business ventures. He had borrowed and repaid hundreds of thousands of dollars from at least twelve separate banking institutions in San Francisco over the 11-year period preceding the instant trial. Katzman, Sahati's business acquaintance, was thirty-one years old at the time of trial and had worked for several stock brokerage houses. So far as the record shows neither defendant has a record of prior criminal offenses.

Both defendants obtained numerous loans from many San Francisco banks and lending institutions using as collateral stock certificates of a defunct Nevada corporation, Pacific Coast Properties, Inc., on which certificates were forged the names of two officers of a Delaware corporation of the same name. Both defendants represented to the lenders that the stock was listed on the American Exchange, whereas in truth the stock listed on the American Exchange was that of the Delaware corporation.

Robert W. Wilson, one of the original incorporators of the Nevada corporation and a business acquaintance of Sahati, testified that the Nevada corporation was incorporated in 1959 in Reno and had its charter revoked in 1961. No stock was ever issued in that company. Certificates representing about 90,000 shares were signed by Lawrence Keller (the second incorporator) and made out to Thomas Willer (the third incorporator) and were kept in Wilson's San Francisco office. Wilson's secretary once saw Sahati in Wilson's office.

Neither defendant denied using the forged stock to obtain the loans charged. Sahati testified that Katzman had loaned him the stock and that he believed the certificates represented shares in the Delaware corporation listed on the American Exchange. Sahati stated that he promised Katzman not to sell the certificates for purposes of saving capital gains taxes, but that he never knew the stock was worthless until a bank official notified him of that fact on September 31 (sic), 1965. He then destroyed the certificates.

Katzman testified that he obtained all the stock certificates from his roommate, Robert Wilcox, and that he did not know where Wilcox got the stock or the money to buy the stock. He further stated that he loaned the stock to Sahati for a fee. According to Katzman, Wilcox gave him thousands of shares of Pacific Coast Properties, Inc. stock worth between $150,000 and $210,000.

Wilcox, who was Katzman's roommate beginning in October of 1964, testified that he never filled in the stock certificates and never loaned Katzman more than $25, and that he knew nothing about Katzman's transactions with the stock. In his capacity as a cashier for E. F. Hutton & Co., he guaranteed for Katzman certain signatures on alleged transfers of the false stock from one L. H. Mann to Katzman, but he never guaranteed the stock itself. Wilcox found stock certificates of the Nevada corporation in his and Katzman's apartment and turned these over to the police after the fraud was discovered.

The fraud was discovered after Sahati, on August 30, 1965, obtained a $45,000 loan from the Fireside Thrift Company in San Francisco on the security of six certificates of stock in Pacific Coast Properties, Inc. A bank official discovered that the certificates were not regular by calling the treasurer of the true Pacific Coast Properties, Inc. and also contacting the Nevada Secretary of State. The official informed Sahati that the stock was spurious and requested repayment of the loan. Sahati came to the bank and tendered cashier's checks for $25,000 and $8,000 and some postdated promissory notes.

There is evidence that Sahati had been making repayments on some of the allegedly fraudulently obtained loans. For example, he repaid $8,000 to the Bank of America, Stonestown Branch, on loans totaling $28,000; $12,000, constituting payment in full, to the Morris Plan; $48,000, again payment in full, to that same institution; and $18,000, payment in full, on loans from the Golden Gate National Bank. So far as the record shows, Katzman only repaid $2,500 on loans totaling upwards of $70,000.

Other facts material to the issues raised on these appeals will be noted later as they became relevant to the contentions of the parties.

Katzman's Appeal

Was there a material variance between the indictment and the proof?

No. A criminal conspiracy may be established by showing that there was an agreement between two or more persons to commit a crime, accompanied by some overt act in furtherance of the objects of the conspiracy. (People v. Aday, 226 Cal.App.2d 520, 533, 38 Cal.Rptr. 199; People v. Jones, 228 Cal.App.2d 74, 83, 39 Cal.Rptr. 302.) The existence of the agreement may be shown by circumstantial as well as by direct evidence. (People v. Aday, supra, 226 Cal.App.2d at p. 534, 38 Cal.Rptr. 199; People v. Massey, 151 Cal.App.2d 623, 651--652, 312 P.2d 365.) It is not necessary that the overt act be criminal; it may be committed by one of the conspirators, and when so committed all members of the conspiracy are bound by such act. (People v. Aday, supra, 226 Cal.App.2d at pp. 533--534, 38 Cal.Rptr. 199; People v. Sica, 112 Cal.App.2d 574, 581, 247 P.2d 72; People v. Buffum, 40 Cal.2d 709, 725, 256 P.2d 317.)

In the present case the indictment charges that Katzman, Sahati, and Charles H. Shaw, ¹ during the period from November 24, 1964 to September 22, 1965, conspired and agreed together to commit grand theft and forgery. Seven overt acts were charged. At the trial the evidence developed that during the period charged in the indictment Katzman loaned or gave the stock to Sahati. The loans obtained by both Katzman and Sahati on this stock were close in time and very numerous; and they both made similar representations to the defrauded banks. The jury could reasonably infer from the foregoing evidence that Katzman and Sahati conspired together to defraud various lending institutions by passing the fraudulent stock off as genuine. Substantial evidence of each of the seven overt acts alleged in the indictment was introduced. It is not contended that this evidence was insufficient. Accordingly, the proof corresponded with the allegations of the accusatory pleading and shows one conspiracy whereby Katzman supplied the Pacific Coast Properties, Inc. stock and Katzman and Sahati both obtained loans on the stock representing it as the stock of the company listed on the American Stock Exchange.

Defendant's reliance upon Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557, is misplaced. There the evidence clearly showed that there was not a single general conspiracy but eight or more different ones of the same sort executed through a common key figure, Simon Brown. There was no connection between the petitioners and the other defendants other than that Brown had been the instrument in each instance for obtaining the loans. In the present case there was sufficient evidence of a connection and relationship between Katzman and Sahati.

We note, moreover, that defendant did not claim uncertainty in the indictment by special demurrer in the trial court, nor does he show any prejudice now. If there is a variance it is immaterial. A variance is not regarded as material unless it is of such a substantive character as to mislead the accused in preparing his defense, or is likely to place him in danger of being twice put in jeopardy for the same offense. (People v. Williams, 27 Cal.2d 220, 225--226, 163 P.2d 692; People v. La Marr, 20 Cal.2d 705, 711, 128 P.2d 345; People v. Jones, supra, 228 Cal.App.2d at p. 88, 39 Cal.Rptr. 302; see People v. Galloway, 233 Cal.App.2d 369, 371, 43 Cal.Rptr. 617; and see Pen.Code, § 960. ² ) In the instant case defendant does not claim that he was misled in the preparation of his defense or that he is likely to be placed in second jeopardy for the same offense.

The gist of defendant's argument appears to be that because the evidence does not show joint participation by him and Sahati in the various loan transactions there could not be a single conspiracy. 'The essence of the crime of conspiracy is the 'evil' or 'corrupt' agreement...