People v. Schrauben, Docket No. 323170.

• Decision Date: 26 January 2016
• Docket Number: Docket No. 323170.
• Citation: 314 Mich.App. 181,886 N.W.2d 173
• Parties: PEOPLE v. SCHRAUBEN.
• Court: Court of Appeal of Michigan — District of US

314 Mich.App. 181

886 N.W.2d 173

PEOPLE

v.SCHRAUBEN.

Docket No. 323170.

Court of Appeals of Michigan.

Submitted Nov. 3, 2015, at Grand Rapids.

Decided Jan. 26, 2016, at 9:00 a.m.

Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Matthew Schneider, Chief Legal Counsel, and Linus Banghart–Linn, Assistant Attorney General, for the people.

Alane & Chartier, PLC, Lansing (by Mary Chartier ), for defendant.

MARKEY, P.J., and OWENS and RONAYNE KRAUSE, JJ.

OWENS

, J.

Defendant appeals as of right his jury trial convictions of eight counts of uttering and publishing, MCL 750.249

, four counts of forgery, MCL 750.248, and four counts of fraudulent insurance acts, MCL 500.4511. He was sentenced to serve nine months in jail for the forgery convictions, 11 months in jail for the uttering and publishing convictions, and 16 months in prison for the fraudulent insurance acts convictions.

The jury also convicted defendant of one count of conducting a criminal enterprise (CCE), MCL 750.159i(1)

, one count of receiving the proceeds of a criminal enterprise (CCE proceeds), MCL 750.159i(3), and eight counts of embezzlement, MCL 750.174, which the trial court dismissed when it granted defendant's motion for a directed verdict of acquittal. The prosecution cross-appeals the trial court's order granting defendant's motion for a directed verdict of acquittal. We affirm defendant's convictions and sentences and the trial court's order granting defendant's motion for a directed verdict of acquittal.

Defendant and Michael Lehman jointly owned two funeral homes in Portland and Ionia, where they sold prepaid funeral plans. In 2005, Lehman bought out defendant's shares in the business and defendant began to operate a country club. Lehman testified that he and his wife discovered some financial irregularities after defendant left, but they did not give them much consideration. In December 2007, defendant talked to Lehman about returning to work for the funeral homes as an employee, which Lehman agreed to, but testified that defendant was not allowed to have any direct financial responsibilities. According to Lehman, if a customer arranged for a prepaid funeral plan with defendant, Lehman was to handle the transaction, which included bank deposits. Lehman managed the Portland chapel while defendant worked at the Ionia chapel.

Lehman testified that after defendant had been working at the Ionia chapel for at least two years, he learned defendant had been making deposits himself, which caused Lehman to investigate further. Lehman discovered that customers who had intended to purchase prepaid funeral plans had actually written checks to Schrauben Management, which was a holding company for the country club owned by defendant and had nothing to do with the funeral home business. In addition, several of the escrow accounts and insurance policies used to fund the prepaid funerals had been paid out before the deaths of the individuals who had purchased those plans. According to Lehman, his name was forged on checks originally made payable to the funeral home and then signed over to Schrauben Management.

Defendant first argues on appeal that the trial court abused its discretion by denying defendant's motion for a new trial based on Lehman's perjured testimony. We review the trial court's decision to deny defendant's motion for a new trial for an abuse of discretion. People v. Cress, 468 Mich. 678, 691, 664 N.W.2d 174 (2003)

.

The trial court held an evidentiary hearing to address the perjury allegations against Lehman, during which many inconsistencies in Lehman's testimony were exposed. Defendant argues that these inconsistencies show Lehman perjured himself and warrant a new trial. “It is well settled that a conviction obtained through the knowing use of perjured testimony offends a defendant's due process protections guaranteed under the Fourteenth Amendment.” People v. Aceval, 282 Mich.App. 379, 389, 764 N.W.2d 285 (2009)

. “If a conviction is obtained through the knowing use of perjured testimony, it ‘must be set aside if there is any reasonable likelihood that the false testimony could have affected the judgment of the jury.’ ” Id., quoting United States v. Agurs, 427 U.S. 97, 103, 96 S.Ct. 2392, 49 L.Ed.2d 342 (1976).

Defendant does not explain how the prosecution knowingly presented perjured testimony, and, as the trial court found, there is no evidence that the prosecution knew about the potential perjury. Even if the prosecution knowingly presented perjured testimony, the false testimony likely would not have affected the judgment of the jury. While the inconsistencies exposed at the evidentiary hearing certainly cast doubt on Lehman's testimony at trial and raised questions as to his involvement in the fraud, there was other evidence that implicated defendant's guilt. Specifically, the undersheriff discovered approximately 65 checks in the Schrauben Management bank account, maintained by defendant, which came from funeral home clients or the insurance companies. Information taken from defendant's home computer, specifically the Quickbooks program, matched the checks found in the Schrauben Management bank account. The manager of defendant's country club testified that she would often enter deposits into Quickbooks for defendant, and large deposits were commonly allocated under “membership dues.” Evidence showed that these large deposits coincided with the checks that were deposited into the Schrauben Management bank account from the funeral home. Further, two funeral home clients testified that they were directed by defendant to write a check to Schrauben Management when they purchased prepaid funeral policies. The defense's theory at trial was that Lehman was giving the money to Schrauben to pay the debt he owed him for the buyout, but this does not explain why defendant would direct two clients to write their checks to Schrauben Management. Finally, defendant, not Lehman, was the one on trial, and even if the jury were aware that Lehman was involved, it likely would not change the verdict against defendant.

Additionally, although this Court has not specifically ruled on whether a defendant may be entitled to a new trial irrespective of the prosecution's culpability, it has stated that “it is the ‘misconduct's effect on the trial, not the blameworthiness of the prosecutor, [which] is the crucial inquiry for due process purposes.’ ” Aceval, 282 Mich.App. at 390, 764 N.W.2d 285

, quoting Smith v. Phillips, 455 U.S. 209, 220 n. 10, 102 S.Ct. 940, 71 L.Ed.2d 78 (1982) (alteration in Aceval ). The focus “ must be on the fairness of the trial, not on the prosecutor's or the court's culpability.” Aceval, 282 Mich.App. at 390, 764 N.W.2d 285. Therefore, “a conviction will be reversed and a new trial will be ordered, but only if the tainted evidence is material to the defendant's guilt or punishment.” Id. at 389, 764 N.W.2d 285.

Defendant argues that the inconsistencies in Lehman's testimony are material to defendant's guilt because they show that Lehman was the actual perpetrator. As discussed, however, there was concrete evidence presented which implicated defendant, despite the level of Lehman's potential involvement. Although Lehman was a key witness at trial, the deposits into the Schrauben Management bank account maintained by defendant and the records on defendant's home computer strongly implicated defendant, even without Lehman's testimony. Therefore, we conclude that the trial court did not abuse its discretion by denying defendant's motion for a new trial based on perjury.

Defendant next argues that trial counsel was ineffective for failing to introduce exculpatory evidence and develop testimony that would have shown Lehman testified falsely. “The denial of effective assistance of counsel is a mixed question of fact and constitutional law, which are reviewed, respectively, for clear error and de novo.” People v. Brown, 279 Mich.App. 116, 140, 755 N.W.2d 664 (2008)

.

Criminal defendants have a right to the effective assistance of counsel under the United States and Michigan Constitutions. U.S. Const. Am. VI

; Const. 1963, art. 1, § 20. However, effective assistance of counsel is presumed, and the defendant bears a heavy burden of proving otherwise. See People v. Vaughn, 491 Mich. 642, 670, 821 N.W.2d 288 (2012). To establish that a defendant's trial counsel was ineffective, a defendant must show: (1) that counsel's performance fell below an objective standard of reasonableness under prevailing professional norms and (2) that there is a reasonable probability that, but for counsel's error, the result of the proceedings would have been different. Strickland v. Washington, 466 U.S. 668, 688, 694, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984) ; see also Vaughn, 491 Mich. at 669, 821 N.W.2d 288.

Defendant argues that trial counsel was ineffective for failing to introduce exculpatory evidence and develop testimony regarding (1) the timing of Lloyd Dickinson's death, which led Lehman to discover defendant's wrongdoing, and errors on Dickinson's death certificate, (2) the fact that Lehman testified that he confirmed defendant's wrongdoing after visiting Independent Bank, when the banking was actually conducted at Firstbank, and (3) the fact that Lehman never filed claims for many clients that passed away before Lehman allegedly discovered the fraud, despite testimony that he had a tracking mechanism to ensure that he was paid by the escrow companies or the families. These alleged errors, however, do not show that trial counsel's performance fell below an objective standard of reasonableness. Trial counsel testified at the evidentiary hearing that he chose to focus on what he felt were much larger issues than Dickinson's claim and was unaware of the Firstbank account that the Lehmans had. Trial counsel made it clear that, in hindsight, he could have highlighted other issues that cast doubt on Lehman's credibility, particularly the fact that Lehman...