People v. Shah

• Docket Number: A162676
• Decision Date: 24 October 2023
• Citation: People v. Shah, 96 Cal.App.5th 879, 314 Cal.Rptr.3d 771 (Cal. App. 2023)
• Parties: The PEOPLE, Plaintiff and Respondent, v. Jay C. SHAH, Defendant and Appellant; Craig J. Bassett et al., Claimants and Appellants.
• Court: California Court of Appeals

96 Cal.App.5th 879

314 Cal.Rptr.3d 771

The PEOPLE, Plaintiff and Respondent,

v.Jay C. SHAH, Defendant and Appellant;

Craig J. Bassett et al., Claimants and Appellants.

A162676

Court of Appeal, First District, Division 2, California.

Filed October 24, 2023

Attorney for Defendant and Appellant: By Appointment of the Court of Appeal First District Appellate Project, Edward A. Mahler

Attorneys for Claimants and Appellants: Craig J. Bassett, Pro Se, Law Offices of Craig J. Bassett, Morgan Hill, Benjamin R. Levinson, Law Offices of Benjamin R. Levinson, Campbell, Mark S. Goldrosen, Law Office of Mark S. Goldrosen, San Francisco, Jenny D. Smith, Law Offices of Dek Ketchum

Attorneys for Plaintiff and Respondent: Rob Bonta, Attorney General of California, Lance E. Winters, Chief Assistant Attorney General, Jeffrey M. Laurence, Senior Assistant Attorney General, Catherine A. Rivlin, Supervising Deputy Attorney General, Allen R. Crown, Deputy Attorney General

Markman, J.^* Defendant Jay Shah's appeal attacks the trial court's power to levy property under Penal Code section 186.11, also known as the "Freeze and Seize" law.¹ ( People v. Semaan (2007) 42 Cal.4th 79, 82, 64 Cal.Rptr.3d 1, 163 P.3d 949 ( Semaan ).) The power is a component of California's "aggravated white collar crime enhancement," and is intended to aid in the enforcement of restitution awards in a subset of white collar criminal cases. ( § 186.11, subd. (a)(1) ; Semaan , at p. 86, 64 Cal.Rptr.3d 1, 163 P.3d 949.) It does so by preventing a defendant from disposing of assets pending trial, and then using those assets to pay restitution to victims if the People secure a conviction.

According to Shah, a trial court must seize any properties under section 186.11 by the time of the sentencing hearing and no later. Any later, Shah contends, and the trial court is divested of all jurisdiction to make orders to seize property under section 186.11. The court made the levying order at issue here eight years after Shah's original sentencing. Shah also argues that this court affirmed his conviction in 2016 and did not properly remand the case, and so the trial court lacked jurisdiction to later levy the property.

We reject both of Shah's arguments. Shah proposes a tortured reading of section 186.11 that seeks to import time limitations into the statute that are not there. Shah's proposed interpretation would place restrictions on the trial court's ability to make orders relating to restitution that ignore the legislative purpose of section 186.11 and California's over-arching statutory framework for restitution in criminal cases. Within that framework, trial courts are empowered to make and enforce restitution orders because California recognizes restitution for victims of crime as a constitutional right. This does not change even after the Courts of Appeal decide a criminal case on the merits. The lack of a disposition formally remanding Shah's original appeal for further proceedings was also no bar to the trial court's levying order. We affirm.

BACKGROUND

A. The Criminal Case

Shah's current appeal is the latest of several criminal and civil appeals in the aftermath of a jury's September 2012 verdict against him. The charges and Shah's trial were summarized in this court's decision on Shah's appeal challenging his conviction and sentence. ( People v. Shah (Jul. 8, 2016, A138475) 2016 WL 3766427 [nonpub. opn.] ( Shah ).)

From September 2008 through March 2010, Shah engaged in fraudulent transactions involving three luxury condominiums owned by victim Shirley Hwang. Shah managed to transfer Hwang's property into the name of his codefendant and then use the property to obtain over $2 million in loans for himself.

Shah was convicted of multiple offenses, including conspiracy to commit money laundering ( § 182, subd. (a)(1) ), identity theft ( § 530.5, subd. (a) ), grand theft ( § 487, subd. (a) ), money laundering ( § 186.10, subd. (a) ), burglary ( § 459 ), and filing false deeds including deeds of trust ( § 115, subd. (a) ). Enhancement allegations including taking a property valued over $3.2 million in the commission or attempted commission of a felony pursuant to former section 12022.6, subdivisions (a)(2) through (a)(4), and special findings, including a pattern of white collar crime pursuant to section 186.11, subdivision (a)(2) were also found true.

B. Pre-Conviction Section 186.11 Proceedings

Early in the criminal case, prosecutors linked Shah to at least four properties: a 106-acre "ranch" in Santa Clara County (the ranch property) and three properties in Los Banos in Merced County (the Los Banos properties). In mid-2010, Shah transferred the ranch property to his parents. In September 2010, the court ordered a temporary restraining order (TRO) barring "the sale, encumbrance, or disposal of the ranch and the Los Banos properties." ( § 186.11, subd. (d)(2) [prosecuting agency may seek TRO to "prevent dissipation or secreting of assets or property"].)

When the court entered the TRO, prosecutors recorded a lis pendens against each of the properties.² In October 2010, however, the court ordered a release of the Los Banos properties from lis pendens for the limited purpose of allowing Shah to withdraw up to $96,500 in equity through first or second mortgages to pay for "reasonable legal fees in connection with the criminal proceeding, and reasonable and appropriate living expenses." ( § 186.11, subd. (f)(4).)

The court replaced the TRO with a preliminary injunction in November 2010. ( § 186.11, subd. (d)(2) [relief may include TRO, preliminary injunction, or "any other protective relief necessary to preserve the property or assets"].) The preliminary injunction specifically identified Shah, as well as Shah's parents and third party Craig Bassett (Shah's former attorney), as restrained parties. The court ordered that the "preliminary injunction shall remain in effect until further order of the court."

As a condition of its order giving Shah access to equity in his properties to pay living and legal expenses, the court had ordered him to provide the district attorney with "an accounting of his expenditures and funds disbursed." He never did. The court also provided that the People could "re-record notices of lis pendens against the properties upon completion of the financing provided for in this order." They never did.

In May 2011, Shah used third party Denise Wood separate property trust (Wood trust) to refinance a loan to "Megan & Kasi Properties" (which Shah controlled as its principal), in the amount of $92,000 secured by one of the Los Banos properties. In June 2011, Shah also obtained a $92,000 loan from the "Rathkey Trust" secured by one of the Los Banos properties.

C. Sentencing, Restitution, and Resentencing

In March 2013, Shah was sentenced to 20 years in state prison and ordered to pay a $14.1 million restitution fine. The parties and the court did not discuss the preliminary injunction at the sentencing hearing.

The People subsequently moved to modify the sentence to include an order for victim restitution pursuant to section 1202.4, subdivision (f). The court held a series of restitution hearings in 2015. On August 20, 2015, the trial court issued an order for Shah to pay $311,767.05 plus interest to Hwang.

In 2016, this court concluded in Shah that some of the sentencing enhancements were improperly imposed but affirmed the judgment in all other respects. ( Shah, supra , A138475 [disposition as modified striking two section 12022.6, subdivision (a)(2) enhancements and staying sentence on another].) It stated that Shah's sentence shall be reduced by a total of 24 months.

The trial court re-sentenced Shah at a hearing on February 17, 2017. The court stated that it had jurisdiction and would follow the instructions of the appellate court. It reduced Shah's sentence by 24 months, and ordered the two enhancements stricken and stayed the sentence on the third. It directed the clerk to prepare a new abstract of judgment. No one objected to conducting a resentencing hearing. Nor did anyone mention the preliminary injunction at this hearing.

After Shah's resentencing, the litigants and court focused on the collection of the restitution owed by Shah. At a hearing on August 9, 2017, the prosecution served Shah with Judicial Council CR-115 form seeking information concerning his assets. No one mentioned the preliminary injunction at this hearing (or the next hearing on January 11, 2018).

At a hearing on March 26, 2018, the prosecution asked for modification of the earlier restitution order to account for Hwang's attorney fees incurred trying to enforce the original restitution award and associated legal proceedings. The prosecution mentioned the frozen ranch property and Los Banos properties at that hearing. Again, no one suggested that the trial court needed to void the preliminary injunction or otherwise "unfreeze" the subject properties. During one of several continuances on its request, the prosecution noted: "Restitution has been pending since 2015." On October 29, 2020, the court issued a supplemental restitution order awarding Hwang an additional $704,203.79 plus interest for attorney fees.

D. Hwang's Civil Action

While the criminal case against Shah was proceeding, Hwang filed a civil action against Shah for various tort claims, including conversion, trespass, concealment, and slander of title. The trial court consolidated Hwang's civil action with another case filed against Shah by Commonwealth Land Title Insurance Company (the insurer of loans Shah and his coconspirators had secured with Hwang's properties).

In September 2018, Hwang prevailed in her civil action. She secured a substantial civil judgment—over $3.8 million, including $1.6 million in punitive damages. The judgment was affirmed in the nonpublished opinion Commonwealth Land Title Insurance Company v. Shah (Aug. 31, 2021, A156674) 2021 WL 3878688.

Hwang also prevailed on her postjudgment motion to (1) amend the...