People v. Lugashi

• Decision Date: 27 October 1988
• Docket Number: No. B025012,B025012
• Citation: 205 Cal.App.3d 632,252 Cal.Rptr. 434
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE, Plaintiff and Respondent, v. Avraham LUGASHI, Defendant and Appellant.

Page 434

252 Cal.Rptr. 434

205 Cal.App.3d 632

The PEOPLE, Plaintiff and Respondent, v. Avraham LUGASHI, Defendant and Appellant.

No. B025012.

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

Oct. 27, 1988.

Certified for Partial Publication ^*

Review Denied Feb. 16, 1989.

Fischer & Multhaup, and Dennis A. Fischer, Santa Monica, for defendant and appellant

John K. Van de Kamp, Atty. Gen., Steve White, John R. Gorey, Robert C. Schneider, Deputy Attys. Gen., for plaintiff and respondent.

ORTEGA, Associate Justice.

Avraham Lugashi appeals from the judgment (order granting probation) entered following his conviction by the court of grand theft of more than $25,000, and four counts of receiving payment for items falsely represented to credit card issuers as having been furnished. (Pen.Code, §§ 487, subd. 1, 12022.6, 484h, subd. (b).) He contends: "I. The Trial Court Prejudicially Erred in Finding the Prosecution's Foundational Showing Sufficient to Admit Wells Fargo Bank's Computer-Generated Evidence Under Evidence Code Section 1271"; "II. Appellant Was Deprived of His State and Federal Constitutional Rights to a Jury Trial by the Defective Jury Waiver Entered Prior to His Trial by the Court"; "III. The Court Should Have Granted the Motion for Judgment of Acquittal (Penal Code § 1118) Based on Insufficiency of the People's Evidence to Sustain the Charged Offenses"; and "IV. Appellant Cannot Be Convicted for Offenses Under Both Penal Code Section 487 (Grand Theft) and Penal Code Section 484H, Subd. (B) (Credit Card Fraud)."

As discussed below, appellant's contentions lack merit. As discussed in section 5 below, the judgment is modified to stay execution of the concurrent probationary sentence imposed in count II. In all other respects, the judgment (order granting probation) is affirmed.

1. FACTS

Viewed in accordance with the usual rules governing appellate review (People v. Barnes (1986) 42 Cal.3d 284, 303, 228 Cal.Rptr. 228, 721 P.2d 110), the evidence established that in June 1984, six computer tapes containing complete account information for up to 60,000 Bank of America Visa credit card customers were stolen. The stolen information was copied, sold, and reproduced into counterfeit credit cards. The counterfeit cards appeared similar to genuine cards, but lacked certain embossed symbols and the magnetic strip containing correct account information for the actual customers. Between September 12 and October 16, 1984, 44 fraudulent charges totaling over $67,000 were made at appellant's oriental rug stores using counterfeit credit cards without knowledge or consent of the legitimate account holders. Appellant admitted to the police making the sales or completing the paperwork on 37 of those charges.

None of the charges were made by the actual account holders. Moreover, in the expert opinion of Los Angeles Police Department Bunco Forgery Detective Richard Levos, Wells Fargo Bank Special Agent Robert Dodd, and Wells Fargo Loss Control Specialist Jean Norris (Norris), many of appellant's admitted transactions involved additional indicia of fraud. All had invalid identifying drivers license numbers. Twice, large charges were made on the same account on the same or following day at different branches of appellant's business. There were at least 13 instances of double invoicing, i.e., two large charges on the same account on the same day. One account incurred two large charges on successive days, with obviously different signatures and drivers license numbers. At least 10 of the transactions involved "fishing", seeking and being refused credit authorization on an account, then resubmitting the request for increasingly lower amounts until approval is obtained. "Fishing" is officially discouraged by credit card At the time of the alleged "sales," these transactions were entered at appellant's stores on a credit card verification terminal and simultaneously recorded electronically on computers maintained by the issuing banks, third party companies which conduct verification for banks, and Wells Fargo, with which appellant maintained an account into which all credit card sales were deposited. Wells Fargo recouped its losses from residual funds in appellant's account.

issuers, who instruct merchants to refuse any card once credit authorization is refused. One of appellant's sales was for $1,275 although the credit authorization response indicated the card was fraudulent, lost, or stolen, should be retained by the merchant, and approval was given for only $12.75. Although some of this activity could be consistent with legitimate purchases, Wells Fargo viewed it with suspicion, especially as 44 fraudulent transactions occurred at appellant's business in five weeks.

A merchant accesses account information by either "swiping" or running the card through a slot on the terminal which automatically reads the information encoded on the magnetic strip, or manually "punching" account information into the terminal keyboard. "Swiping" is more frequent because it is faster and more accurate. Counterfeit cards cannot be "swiped" because they lack proper magnetic strips. All the fraudulent charges made at appellant's stores were accessed by "punching".

Each night, Wells Fargo runs a program known as a "dump" which reorders the entries by customer and merchant account numbers. Shortly thereafter, a tape is made of the "dump" from which a microfiche record is prepared and maintained. Although the actual merchant and bank copies of the fraudulent charges, deposit slips, and appellant's sales invoices were entered in evidence, the merchant queries and system responses were gleaned from printed copies of the microfiche.

Most of the description of the means by which transaction information is generated and recorded, as well as interpretation of the records, came from Norris. She worked for five years in credit card fraud and loss control investigation. All the records were generated by Wells Fargo. Although not a computer expert, she worked with those who did the "dumps", produced the tapes and microfiche, and maintained the microfiche records, and was familiar with the system. She personally produced the offered documents from the microfiche records and knew how to interpret them. Norris collected the bank and merchant copies of the fraudulent transactions and compared them with lists of counterfeit and stolen accounts, as well as with the computer records. No evidence was offered regarding the computer hardware or software, its maintenance or reliability, or any system of internal checks.

On October 23, 1984, Detective Levos served a search warrant on appellant's business during which Betty Strogatz, appellant's bookkeeper, told him the business was changing inventory systems and she could not determine whether any particular carpet was still in stock, or its location in any of appellant's branch stores. As a result, Detective Levos was unable to determine whether carpets allegedly sold in the fraudulent transactions remained in appellant's possession. No counterfeit credit cards or other physical evidence of fraud were found. Appellant claimed the sales were legitimate.

In defense, Ms. Strogatz denied telling Detective Levos she could not trace particular carpets, and claimed a subsequent inventory disclosed that none of the rugs involved in the fraudulent transactions were at the main Sherman Oaks store. She did not know whether those carpets were at appellant's other stores or home. Appellant's partner claimed that while salesmen normally completed paperwork on their sales, someone else might do so Appellant's objection to introduction of the computer generated records because an inadequate foundation had been laid under the business records exception to the hearsay rule codified in Evidence Code section 1271 was overruled. Appellant claimed Norris lacked sufficient knowledge to explain the computer records, and that respondent failed to offer evidence on the reliability of the hardware and software used by Wells Fargo. Appellant's renewed objections during his motion for acquittal pursuant to Penal Code section 1118 and his new trial motion also were denied.

during busy periods. Two of appellant's salesmen claimed "fishing" was a standard sales technique. Jack Ross, representative of the company which provided appellant's terminal, corroborated Norris' explanation of the process by which authorization requests and responses are recorded by computer. Appellant, who did not testify, did not challenge the accuracy of the computer records, but argued the evidence was consistent with innocent behavior. Appellant argued he was victimized by counterfeit card producers who posed as legitimate customers, and to whom he sold merchandise for each fraudulent transaction.

Appellant and his counsel waived jury trial. At his new trial motion, appellant claimed his jury waiver was defective and introduced his trial counsel's declaration that, although he had practiced law for 15 years, he had no felony jury trial experience. He recommended a jury waiver based on conversations with three public defenders familiar with the trial judge who were confident Judge Albracht was the best judge in the courthouse before whom to waive jury. The motion was denied. ¹

Appellant's new trial motion based on insufficiency of the evidence and that he could not be convicted of both grand theft and credit card fraud also was denied.

2. THE COMPUTER DATA WAS PROPERLY ADMITTED AS A BUSINESS RECORD

Appellant contends the trial court abused its discretion in admitting the computer data under the business records exception to the hearsay rule codified in Evidence Code section 1271. ² Claiming California Appellant's contention is unpersuasive. Other California courts, albeit summarily, previously rejected similar claims. Moreover, the majority of other states and some federal courts rejected similar proposals, adopting a better reasoned and more...