Filed 11/17/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

THE PEOPLE,

Plaintiff and Respondent,

v.

YEVGENY SELIVANOV et al.,

Defendants and Appellants.

B252894 consolidated with 

B255166

(Los Angeles County

 Super. Ct. No. BA372244)

THE PEOPLE, 

 Plaintiff and Appellant, 

 v.

YEVGENY SELIVANOV et al., 

 Defendants and Respondents.

 B255166

APPEALS from judgments of the Superior Court of Los Angeles County, Stephen 

A. Marcus, Judge. Affirmed as modified, with directions. 

Kaplan Marino, Nina Marino and Allen G. Weinberg for Defendant, Appellant 

and Respondent Tatyana Berkovich.

Crowell & Moring, Jeffrey H. Rutherford and Nimrod Haim Aviad for Defendant, 

Appellant and Respondent Yevgeny Selivanov.

Young, Minney & Corr, Paul C. Minney, William J. Trinke and Kevin M. Troy; 

California Charter Schools Association, Ricardo J. Soto, Julie Ashby Umansky and 
2

Phillipa L. Altman as Amicus Curiae on behalf of California Charter Schools Association 

in support of Defendants, Appellants and Respondents.

Jackie Lacey, District Attorney, Roberta Schwartz, Serena R. Murillo and 

Matthew Brown, Deputy District Attorneys for Plaintiff and Appellant The People of the 

State of California.

Kamala D. Harris, Attorney General, Gerald A. Engler, Chief Assistant Attorney 

General, Lance E. Winters, Assistant Attorney General, Michael C. Keller and Eric J. 

Kohm, Deputy Attorneys General, for Plaintiff and Respondent The People of the State 

of California.

________________________________

Spouses Yevgeny “Eugene” Selivanov and Tatyana Berkovich founded a charter

school, Ivy Academia, in 2003. In 2006, the Los Angeles Unified School District 

(LAUSD), which issued Ivy Academia’s charter, conducted a random audit of the 

school’s finances. The audit revealed several irregularities, prompting a further 

investigation that ultimately resulted in the filing of a 33-count information charging

Selivanov and Berkovich with numerous financial crimes. After a five-week trial, a jury 

convicted Selivanov and Berkovich of felony embezzlement (Pen. Code, § 504)1and 

felony misappropriation of public moneys (§ 424, subd. (a)). The jury further convicted 

Selivanov of felony false accounting of public moneys (§ 424, subd. (a), money 

laundering (§ 186.10) and filing false tax returns (Rev. & Tax. Code, § 19705, subd. (a)). 

In addition, as to Selivanov, the jury found true the allegation that the total losses 

associated with six of the embezzlement counts exceeded $65,000. (§ 12022.6, subd. 

(a)(1).) 

Selivanov and Berkovich each moved for a new trial. The trial court granted the 

motions as to all of their convictions for misappropriation and false accounting of public 

moneys under section 424, subdivision (a), on the ground that it improperly had

instructed the jury that the funds involved were public moneys. The court sentenced 

 

1 All further statutory references are to the Penal Code unless otherwise indicated. 
3

Selivanov to a total of four years, eight months in state prison, and sentenced Berkovich 

to formal probation on the condition that she serve 45 days in county jail. Both 

defendants were ordered to pay fines, fees, and restitution. 

Selivanov and Berkovich appeal. They jointly challenge one of their 

embezzlement convictions on several grounds, including sufficiency of the evidence and 

the trial court’s failure to give a unanimity instruction. They also seek reversal based on 

the court’s failure to instruct the jury to determine whether the amount embezzled 

exceeded $950, and whether the embezzled funds were public funds within the meaning 

of section 514. Both defendants also contend the court erred by failing to consider 

proffered juror declarations when setting their restitution. Selivanov separately 

challenges the sufficiency of the evidence underlying his other convictions. He also 

challenges the court’s failure to instruct the jury on the claim-of-right defense, the

admission of certain accounting documents, and several aspects of the restitution order.

As we explain more fully below, we conclude the trial court erred in making the 

public funds finding but affirm defendants’ convictions because the error was harmless. 

We do, however, direct the trial court to strike from Selivanov’s restitution order the joint 

and several obligation to pay $22,396.60 in restitution to Ivy Academia in connection 

with his embezzlement conviction in count 2, and strike from Berkovich’s restitution 

order any language making Selivanov jointly and severally liable for it. As modified, the 

judgments of the trial court are otherwise affirmed in full.

The Los Angeles County District Attorney (“the People”) filed a cross-appeal

challenging the trial court’s grant of defendants’ motions for new trial of the section 424 

counts. In their opening brief, the People contend the trial court relied on outdated case 

law to conclude that the jury was required to determine whether a charter school is a 

district; they do not challenge the validity of the actual basis for the court’s ruling, its jury 

instruction on “public moneys.” In their reply, however, the People argue that the trial 

court’s actual basis for granting the motion was erroneous. They urge us to excuse their 

oversight, reverse the trial court’s rulings on the motions for new trial, and reinstate the 

guilty verdicts on all of the section 424, subdivision (a) counts affected by the motions.
4

We decline their invitation to do so and affirm the trial court’s order granting defendants’ 

new trial motions. 

PROCEDURAL HISTORY

On May 4, 2011, the People filed a 33-count information charging defendants with 

various financial crimes.2 Counts 1, 3, 5, 7, and 39 charged both defendants with 

misappropriating public moneys. (§ 424, subd. (a).) Each of those misappropriation 

counts was paired with a charge of embezzlement in excess of $950. (§ 504, counts 2, 4, 

6, 8, and 40, respectively.) The information also charged both defendants with filing 

false personal income tax returns in violation of Revenue and Taxation Code section 

19705, subdivision (a) (counts 27-31). 

Selivanov alone was charged with five additional counts of misappropriating and 

falsely accounting for public moneys. (§ 424, subd. (a), counts 9, 11, 18, 21, and 24.) 

Four of those counts (9, 18, 21, and 24) were paired with a count of embezzlement in 

excess of $950 stemming from the same conduct. (§ 504, counts 10, 19, 22, and 25, 

respectively.) Three of those misappropriation-embezzlement count pairs—18-19, 21-22, 

and 24-25— were further supplemented with a related count of money laundering (§ 

186.10, subd. (a), counts 20, 23, and 26.) The information also alleged that Selivanov 

alone filed false business income tax returns. (Rev. & Tax. Code, § 19705, subd. (a), 

counts 32-36.) Berkovich alone was charged with one count of conflict of interest. (Gov. 

Code, §§ 87100 and 91000, count 38).

The information further alleged, with respect to the misappropriation, 

embezzlement, and money laundering charges in counts 1-8, 18-26, and 39-40, that 

defendants took, damaged, and destroyed property of a value exceeding $65,000 within 

the meaning of section 12022.6, subdivision (a)(1). With respect to most of the 

embezzlement counts, including all of those sounding against Berkovich, namely counts 

 

2

Following the parties’ practice, we refer to the counts by the numbers used in the 

information and not the renumbered counts used at trial. The original criminal complaint 

against defendants had 40 counts, which is why some of the counts discussed herein have 

a number higher than 33.
5

2, 4, 6, 8, 10, 19, and 40, the information alleged that the funds embezzled were “public 

funds” within the meaning of section 514. 

Embezzlement and misappropriation counts 3-6 and 9-10 were dismissed pursuant 

to defendants’ section 995 motions following the preliminary hearing. The court later 

dismissed the conflict of interest charge against Berkovich (count 38) pursuant to the 

People’s motion under section 1385. Defendants pleaded not guilty to the remaining 

charges and denied all of the special allegations. 

Defendants were tried jointly before a jury in February and March 2013. On April 

5, 2013, the jury found Selivanov guilty of seven counts of misappropriating or falsely 

accounting for public moneys (counts 1, 7, 11, 18, 21, 24, and 39), six counts of 

embezzling in excess of $950 (counts 2, 8, 19, 22, 25, and 40), two counts of money 

laundering (counts 23 and 26), and 10 counts of filing false tax returns (counts 27-36). 

The jury acquitted Selivanov of a third money laundering charge (count 20) but found 

true the special allegation that, as to counts 2, 8, 19, 22, 25, and 40, Selivanov in the 

aggregate took money exceeding $65,000 within the meaning of section 12022.6, 

subdivision (a)(1). 

The jury found Berkovich guilty of two counts of misappropriating public moneys 

(counts 1 and 39), one count of embezzling in excess of $950 (count 2), and five 

misdemeanor tax counts that were lesser included offenses of the charged felony tax 

violations (counts 27-31). The jury acquitted Berkovich of one additional count of 

misappropriation (count 7) and two additional counts of embezzlement in excess of $950

(counts 8 and 40). It also found not true the special allegation that she embezzled in 

excess of $65,000 within the meaning of section 12022.6, subdivision (a)(1). The court 

later dismissed Berkovich’s misdemeanor tax convictions at the People’s request, 

pursuant to section 1382. 

Selivanov and Berkovich each moved for a new trial. The court granted the 

motions as to the misappropriation and false accounting counts charged under section 

424, subdivision (a) (counts 1, 7, 11, 18, 21, 24, and 39) and denied the motions in all 

other respects. 
6

At sentencing, at the People’s request and over defendants’ objections, the court 

found that “this case involved public funds” within the meaning of section 514, the 

statute setting out the punishment scheme for embezzlement offenses. The court later 

denied defendants’ motions to strike the finding. 

The court sentenced Selivanov to a total of four years, eight months in state prison, 

calculated as the high term of three years on one of the embezzlement counts (§ 504,

count 8); an additional year for the enhancement on that count (§ 12022.6, subd. (a)); and 

eight months, one-third the midterm, on one of the money laundering counts (§ 186.10, 

subd. (a), count 26). The court imposed concurrent terms on all other counts of 

conviction. After a contested restitution hearing, the court ordered Selivanov to pay a 

total of $271,795.11 in restitution. Of that amount, $227,896.11 was payable to Ivy 

Academia: $126,654.73 was assessed in connection with count 40; $66,795.96 was 

assessed in connection with counts 8, 19, 22, and 25; and a total of $34,445.42 was 

assessed in connection with count 2. The remaining $43,899 of Selivanov’s restitution 

was payable to the Franchise Tax Board in connection with the tax convictions in counts 

27-36. The court also ordered Selivanov to pay a restitution fine of $5,000 and imposed 

and suspended a $5,000 parole revocation restitution fine. 

The court sentenced Berkovich to five years’ formal probation, on the condition 

that she serve the first 45 days in county jail. The court also ordered her to perform 320 

hours of community service. The court found Berkovich jointly and severally liable with 

Selivanov for $22,396.60 in restitution in connection with her sole conviction for 

embezzlement (count 2). The court ordered Berkovich to pay a $1,000 restitution fine. 

Both defendants timely appealed. The People also timely appealed the court’s 

grant of defendants’ new trial motions. The appeals were consolidated for oral argument 

and decision. 

FACTUAL BACKGROUND 

This case concerns obfuscatory and complex financial transactions and accounting 

procedures. In the interest of clarity and brevity, we recite immediately below the facts 

underlying the charged conduct, organized topically. Additional facts pertinent to the 
7

legal issues raised on appeal will be discussed as necessary in connection with those 

issues. 

I. Ivy Academia 

This case centers on defendants’ conduct in their capacities as the founders and 

operators of a charter school, Ivy Academia. Charter schools are “public schools funded 

with public money but run by private individuals or entities rather than traditional public 

school districts.” (Today’s Fresh Start, Inc. v. Los Angeles County Office of Education

(2013) 57 Cal.4th 197, 205.) Though operated independently, charter schools are subject 

to public oversight. (Id. at p. 206.) 

Selivanov was the executive director of Ivy Academia. Berkovich initially served 

as the school’s principal and later became its president. Both defendants continuously 

served on Ivy Academia’s governing board of directors. 

A. Founding and Corporate Organization 

In October 2003, defendants filed a petition to establish Ivy Academia with the 

Charter School Division of the Los Angeles Unified School District (LAUSD), which 

oversees charter schools. LAUSD approved the petition, authorizing Ivy Academia to

begin operations the next fiscal year, July 1, 2004 through June 30, 2005. After the 

charter was approved, Selivanov incorporated Alternative Schools, Inc., a nonprofit 

public benefit corporation, to operate and do business as Ivy Academia. Selivanov also 

filed a fictitious business name statement identifying Ivy Academia as a fictitious name

of Alternative Schools, Inc. 

Defendants also owned another business entity, Academy Just for Kids, LLC 

(“AJFK”). Selivanov changed the name of that business to EGeneration, LLC in April 

2005. 

B. Funding and Finances

1. Charter School Funding Generally

According to prosecution witness Aaron Eairleywine, the central business advisor 

for LAUSD’s Charter School Division, Ivy Academia was considered a public school 

entitled to receive state funds and federal funds that flow through the state. Eairleywine 
8

and Patricia Smith, a representative of the Los Angeles County Office of Education’s 

finance department, testified that the allocations from the state are “designed to fund the 

educational activities,” “instructional program,” and general operation of charter schools. 

Funding is based on charter schools’ average daily attendance and is distributed primarily 

in the form of categorical and general purpose block grants. According to Eairleywine 

and Smith, categorical and general purpose block grants are considered unrestricted funds 

that may be spent “for the overall operation of the agency and its purpose” – i.e., for 

school or educational purposes. Eairleywine and Smith further testified that charter 

schools also receive restricted grants and other funds that must be spent for particular 

purposes, such as purchasing supplies, reducing class sizes, or paying for standardized 

testing. They both noted that LAUSD does not train charter school operators on the 

proper use of categorical or general purpose block grant funds. 

According to Eairleywine, money usually does not begin flowing from the state to 

a new charter school until after the school begins operating. But new charter schools 

need funds at their inception to secure facilities, pay staff, and prepare the school for 

students. For that reason, Eairleywine explained, LAUSD requires charter schools to 

demonstrate access to funding in their initial petitions. Some charter schools obtain these 

initial funds through grants or philanthropic gifts. Others, like Ivy Academia, use loans. 

2. The Start-Up Loan

Ivy Academia obtained a $250,000 loan from the California Department of 

Education. Ivy Academia also obtained a loan from Selivanov and Berkovich, referred to 

at trial as the “start-up loan.” Ivy Academia’s governing board approved the start-up loan 

in August 2004. It documented receipt of the start-up loan by issuing a three-year,

unsecured promissory note payable to Selivanov in the amount of $250,000, plus nine 

percent interest. 

Despite the personal nature of the loan and language in the promissory note 

making it payable to Selivanov personally, the start-up loan was booked in the “Due to 

Academy” account in Ivy Academia’s QuickBooks accounting software. “Academy” 

referred to defendants’ business entity AJFK, Academy Just for Kids. The Due to 
9

Academy account was one of three QuickBooks accounts recording amounts owed to 

Selivanov, Berkovich, and their business entities. The other two, Due to Management 

and Due to EGeneration, will be addressed below. 

The amount initially entered in the Due to Academy account on September 30, 

2004 was approximately $397,000, though both the promissory note approved by the 

board and the audited financial statements Ivy Academia submitted to LAUSD reflected a 

loan of only $250,000. A few weeks later, on October 19, 2004, Ivy Academia made a 

$300,000 payment to AJFK, reducing the amount owed in the Due to Academy account 

to approximately $97,000. However, this payment appeared on Ivy Academia’s audited 

financial statements as a payment of only approximately $74,000. The only people with 

access to Ivy Academia’s QuickBooks accounting software were Selivanov and the 

school’s bookkeeper, Marina Pilyavskaya. Pilyavskaya, who testified under a grant of 

immunity, testified that she did not do the books for defendants’ other business entities. 

The People charged Selivanov with falsifying the accounting of public moneys in 

connection with the discrepancies in the documentation of the start-up loan and its 

repayment (§ 424, subd. (a); count 11)).

3. Deferred Salaries 

During the first year of Ivy Academia’s operation, the school did not have funds 

available to pay salaries to Selivanov and Berkovich. Ivy Academia’s governing board 

voted to defer payment of the salaries, plus nine percent interest, until the school’s 

finances improved. Pilyavskaya entered the deferred salaries owed—$100,000 to 

Selivanov and $80,000 to Berkovich—into another QuickBooks account, “Due to 

Management.” The amount owing in the Due to Management account increased to 

$230,000 after the board approved bonuses for both Selivanov and Berkovich. Ivy 

Academia regularly made payments to defendants to offset the interest accruing on the

Due to Management account, but did not make formal salary payments against this 

account until April 2008, when it issued Selivanov a check for $18,000. The Due to 

Management account reflected two additional salary payments to defendants in 2008 

(another $18,000 to Selivanov and $10,000 to Berkovich) and two to each defendant in 
10

2009. Each defendant received a check for $11,000 in April 2009, and the Due to 

Management account reflected that. The other salary payment each defendant received in 

2009—a check for $7,000—was documented in the Due to Management account as a 

payment of only $1,727.80. No further salary payments were documented in the Due to 

Management account until early 2011, after the board voted to pay down the salary still 

owed to defendants in regular increments. The balance of the Due to Management 

account reached zero in July 2011. 

4. Financial Oversight

Like other charter schools authorized by LAUSD, Ivy Academia was subject to 

examination and audits by the LAUSD Charter School Division. Eairleywine testified 

that charter schools are required to submit preliminary budgets, interim reports, and 

annual audits to the Charter School Division in addition to undergoing on-site reviews. 

Charter schools also are required to hire independent auditors, selected from a list 

approved by the state controller’s office, to prepare annual audited financial statements. 

Although it complied with these requirements, Ivy Academia was the subject of a random 

audit in 2006. That audit led to a lengthy investigation that resulted in the criminal 

charges at issue here. While the investigation was ongoing, in 2008, LAUSD approved 

Ivy Academia’s petition to renew its charter. 

II. American Express Charges and Expenditure of Public Funds

Selivanov and Berkovich each had an Ivy Academia American Express credit 

card. The People alleged that defendants’ use of their American Express cards 

constituted misappropriation of public moneys (§ 424, subd. (a); count 1) and 

embezzlement of public funds (§§ 504, 514; count 2).

Pilyavskaya testified that she was responsible for processing the defendants’ 

charges. When she received the monthly American Express bill, she would prepare 

expense reports and request receipts supporting defendants’ purchases. Pilyavskaya 

attached the receipts to the expense reports and gave them to board member Arthur 
11

Sarkisian for approval.3Sarkisian approved the expense reports and then returned the 

reports and accompanying receipts to Pilyavskaya, who kept them in her office. 

During LAUSD’s investigation of Ivy Academia, LAUSD financial analyst and 

forensic accountant Connie Delos Santos4reviewed Pilyavskaya’s American Express 

records. Delos Santos prepared a spreadsheet showing all charges made to the Ivy 

Academia American Express account from January 2005 through January 2010. She 

highlighted each charge she deemed “questionable” or “disallowed” based on her online 

research into public school spending, her general understanding of the types of purchases 

that have school purposes versus those that are “personal in nature,” and a LAUSD meal

policy. The charges Delos Santos deemed “questionable” totaled $34,445.42. 

According to Delos Santos, the “questionable” charges made on Selivanov’s 

American Express card totaled $12,048.82. These charges included $48.71 for flowers 

purchased on Valentine’s Day and booked into the “Office Supply” account in Ivy 

Academia’s QuickBooks; $59.94 for a business meeting at Crazy Tokyo on a Friday 

night at 9:48 p.m., booked as utilities and housekeeping; and $135.89 at Cheesecake 

Factory on a Saturday afternoon for a business meeting. The “questionable” charges on 

Berkovich’s American Express card totaled $22,396.60. They included $67.38 for two 

“Welcome Baby” floral arrangements, booked as other office supplies; two $42.45 floral 

arrangements for councilman Jack Weiss, booked as teacher appreciation; $631.38 at 

Things Remembered, booked as maintenance supplies; $100 for a Crate and Barrel gift 

card, also booked as maintenance supplies; $995 for a “Tax secrets seminar by Patrick 

James,” booked as other professional development; and various items purchased at 

Costco, including a Speedo bathing suit, shrimp scampi, and Pull-Ups training pants. 

Both defendants also repeatedly charged hundreds of dollars at bowling alleys and 

 

3 At trial, Sarkisian and two other members of the board, Alex Kauffman and 

Marci Adams, each invoked the Fifth Amendment right against self-incrimination. 

Kauffman previously had testified at the preliminary hearing, however, and that 

testimony was read into the record at trial. 

4

The Deputy District Attorney confirmed this spelling of Delos Santos’s name at 

oral argument. 
12

restaurants for “teacher appreciation” events, at least one of which included the purchase 

of alcohol. 

Defendants did not reimburse Ivy Academia for any of these charges, though 

Pilyavskaya testified that Berkovich sometimes wrote “no” or “mine” on receipts to 

indicate items that were not purchased for the school. Defendants did not reduce the 

amount owed to them in the Due to Management account by documenting their 

“questionable” purchases there, and they did not report the purchases as income on their 

personal income taxes. According to former Ivy Academia principal Christina Desiderio, 

however, Berkovich boasted that her Ivy Academia credit card was “unlimited” and 

stated that she wanted to open more charter schools because “it could make you a 

millionaire.”

The independent auditors who prepared financial statements for Ivy Academia 

included a note in their 2006 report that “there was a problem with the credit card use,” 

including inadequate explanations for charges, and expenditures that “appeared to be 

personal in nature.” Prosecution witness Michael Atkinson, a senior investigator with 

LAUSD’s Office of the Inspector General, testified that the audit paperwork included a 

notation that “Selivanov had fought with them about having that information removed 

from the audit report” and another reminding the auditors to “closely review their use of 

credit cards to see if these deficiencies have been corrected.” 

Both the prosecution and the defense presented witnesses who testified about the 

standards governing spending by charter schools. All of the witnesses generally agreed 

that public moneys or funds received by charter schools must be spent on educational or 

school purposes. The witnesses differed, however, on whether or under what conditions

certain expenditures met that standard. Prosecution witnesses Eairleywine and Smith

testified that gifts for teachers and staff, “activities for the pleasure of faculty and 

teachers and staff such as bowling,” and “after hours dinners off campus” would not be 

permissible under any circumstances. Defense witnesses Caprice Young, founder of the 
13

California Charter Schools Association5; Eric Premack, executive director of the Charter 

Schools Development Center; and Roger Lowenstein, the founder and director of a 

charter school; all testified that such expenditures could be appropriate. Premack added 

that a charter school would need to have “reason to believe that it helps the school 

achieve its instructional goals,” and Lowenstein agreed that charter schools have a duty to 

guard public funds. 

III. Rent Increase

In June 2004, defendants’ other business entity, AJFK, entered into a 10-year 

sublease agreement with J & N Amoroso Family Investments, LLC for a property to use 

as Ivy Academia’s campus. Under the sublease, which Selivanov and Berkovich 

personally guaranteed, AJFK agreed to pay rent of $18,390 per month for a 24,520-

square-foot building on De Soto Avenue in Woodland Hills. The rent was adjustable, but 

increases were pegged to the Consumer Price Index and capped at five percent per year. 

Without the knowledge of landlord J & N Amoroso Family Investments, AJFK 

assigned the sublease to Alternative Schools, Inc. (Ivy Academia) on September 1, 2004, 

for a period of two years. Ivy Academia moved into the De Soto Avenue building shortly 

thereafter. Under the terms of the sublease assignment, Ivy Academia became jointly and 

severally liable for AJFK’s obligations under the sublease, including the monthly rent of 

$18,390 per month. 

On October 2, 2008, more than two years after the original sublease assignment 

expired, Selivanov presented the Ivy Academia board with a proposal to approve another 

assignment and assumption of the sublease. The new “Assignment Assumption of 

Lease” would be “made as of July 1st, 2007 by and between Academy Just For Kids

(EGeneration LLC) . . . and Alternative Schools Inc. . . for a period of seven years.” 

Under the terms of Selivanov’s proposed Assignment Assumption of Lease, Alternative 

Schools, Inc. (Ivy Academia) would agree “to make a monthly payment to 

[AJFK/EGeneration], or its designee, in the amount of $43,870.05 for the use of the 

 

5

The California Charter Schools Association filed an amicus curiae brief 

supporting defendants on appeal. 
14

facility and lease guarantees.”6The monthly rent was scheduled to increase five percent 

each year on July 1. Selivanov presented to the board a “Broker Opinion of Value”

prepared by real estate brokerage firm Lee & Associates. That opinion stated that the 

reasonable fair market value of monthly rent for the approximately 27,000-square-foot

building “in its current condition and existing use” as of October 28, 2007 was 

approximately $1.75 per square foot, triple net, or $47,250. 

Defendants recused themselves from voting on the Assignment Assumption of 

Lease. The remaining two board members who were present decided the substantial rent 

increase it contained “was an appropriate risk that the school was taking” and approved 

the Assignment Assumption of Lease. However, one of them, Alex Kauffman, testified 

at the preliminary hearing that he never reviewed the original sublease. Selivanov signed 

the undated Assignment Assumption of Lease on behalf of AJFK/EGeneration, and board 

treasurer Arthur Sarkisian—who had been absent from the meeting at which the proposal 

was presented and approved—signed on behalf of Ivy Academia. 

According to Kauffman’s preliminary hearing testimony as read at trial, the board 

discussed “the fact that Ivy’s monthly payment is only 90% of the fair market value of 

the facilities as determined by Lee & Associates and the school has just rented [a] new 

high school facility at $1.75 per square foot in tremendous competition with another 

 

6

The full text of the pertinent paragraph provided: “Assigner 

[AJFK/EGeneration] was the original Sublessee under the Sublease. Assigner assigned 

the Sublease to Assignee [Alternative Schools, Inc.] for period [sic] of seven years. 

Assignee desires to accept the assignment of the Sublease. Both Assigner and Assignee 

agree as follows: (a) each of them hereby ratifies all the terms and conditions of the 

Sublease, (b) each of them is, and shall hereafter forever remain, jointly and severally 

liable for all Sublessee’s obligations under the Sublease, (c) to the extent necessary 

Assigner approves the assignment of the Sublease to Assignee, and Assignee accepts 

such assignment for period [sic] of seven years, (d) Assignee agrees to sell Assigner 

$520,000 of tenant improvements, in return Assignor [sic] agrees to assume $520,000 of 

Assignee’s bank loan from Western Commercial bank [sic], and (e) Assignee agrees to 

make a monthly payment to the Assigner, or its designee, in the amount of $43,870.05 for 

the use of the facility and lease guarantees; this payment will increase 5% every July 

1st[.]” 
15

charter school.”7 Kauffman further testified that the board also viewed the rent increase 

as the fair market value of the “constant risk” defendants assumed when they obtained a 

loan from Western Commercial Bank to improve the premises. (See IV. Western 

Commercial Bank Loan, post at pp. 16-18.) 

LAUSD investigator Michael Atkinson testified that the effect of the board’s 

approval of the Assignment and Assumption of Lease was an increase in the monthly 

“rent that Ivy Academia has to pay from [$]18,390 per month to $43,870.05 per month,”

an increase of approximately $25,480 per month, or nearly 139 percent. The total net 

amount of increased rent owed from the agreement’s effective date of July 1, 2007 

through June 2, 2008 was approximately $237,000. This amount—$237,000— was 

entered into Ivy Academia’s Due to EGeneration QuickBooks account as a liability to 

EGeneration on June 30, 2008, roughly three months before the board was apprised of 

and approved the Assignment and Assumption of Lease on October 2, 2008. 

Jason Amoroso, a real estate attorney involved with the original sublease between 

J & N Amoroso Family Investments and AJFK, testified that the fair market value of the 

De Soto Avenue property was that originally agreed upon: $18,390 per month, 

increasing each year in step with inflation. He also testified that he was not aware that 

AJFK ever assigned the lease to Ivy Academia. QuickBooks printouts introduced by 

defendants showed that Ivy Academia continued to pay J & N Amoroso Family 

Investments the originally agreed upon rent even after the increase was approved by the 

board and booked into Ivy Academia’s QuickBooks. Amoroso, however, testified that 

“we received checks from Ivy Academia[,] EGeneration, various entities . . . and they 

stated they were involved with the school.” 

Prosecution witness James Balbin, a certified public accountant, opined that the 

rent increase was a “sham transaction” that was “just absurd.” He further testified that 

there was “no business purpose to increase the lease payment due on this rent.” Defense 

 

7

The increased monthly rent of $43,870.05 approved by the board was 

approximately 93 percent of the fair market value stated in the Lee & Associates opinion. 
16

expert Jan Goren, a certified public accountant, countered that the rent increase reflected 

various business risks: the risk that defendants would need to satisfy their guarantee on 

the original sublease, the risk that they would have to remove various leasehold 

improvements from the premises, and the risk that Ivy Academia could lose its charter. 

Selivanov presented testimony from Robert Gutzman, a real estate appraiser. 

Gutzman conducted a historical appraisal of the property, which he determined to be 

27,854 square feet. Gutzman testified that the property was worth $1.66 per square foot, 

or $46,125 per month, as of July 1, 2007 and $1.70 per square foot, or $47,250 per month 

as of October 1, 2008. 

The People alleged that certain payments made to EGeneration after the rent 

increase constituted both misappropriation of public funds (§ 424, subd. (a); count 7) and 

embezzlement of public funds (§§ 504, 514; count 8). 

IV. Western Commercial Bank Loan

In June 2006, Alternative Schools, Inc. (Ivy Academia) obtained a five-year, 

$500,000 loan from Western Commercial Bank to finance “phase two remodeling” of the 

De Soto Avenue premises from a warehouse into a school. In August 2006, the loan 

amount was increased to $600,000. 

In March 2009, when the outstanding balance of the loan stood at $390,000, 

Selivanov asked Western Commercial Bank to change the borrowing entity on the loan 

from Alternative Schools, Inc. to EGeneration, LLC. According to former Western 

Commercial Bank underwriter Jennifer Irrizary, Selivanov made the request because he 

needed some additional write-offs. The bank effectuated the change on March 20, 2009. 

Both defendants signed in their capacity as managers of EGeneration, and Selivanov 

personally guaranteed the loan. 

Just as the rent increase was documented in the Ivy Academia’s QuickBooks 

months before it was presented to and approved by the board, changes to the loan were 

entered into Ivy Academia’s QuickBooks long before Western Commercial Bank 

formally transferred the loan to EGeneration. According to prosecution witnesses 

Atkinson, Delos Santos, and Balbin, Ivy Academia’s QuickBooks documented an “asset 
17

sale” on July 1, 2007, when the loan had an outstanding balance of $520,000. According 

to those witnesses, the asset sale consisted of EGeneration’s assumption of responsibility 

for the $520,000 loan balance in exchange for Ivy Academia’s transfer of $520,000 worth 

of improvements on the De Soto Avenue property to EGeneration. The property 

improvements were not physically transferred to EGeneration, because Ivy Academia 

was using them on its campus. However, the property improvement assets were removed 

from Ivy Academia’s balance sheet and transferred to EGeneration’s along with the loan 

liability. Delos Santos and Franchise Tax Board special agent Rigoberto Salazar both 

testified that EGeneration claimed a depreciation deduction for the assets on its 2007 

Limited Liability Company Return of Income taxation form. 

The asset sale transaction was presented to and approved by the Ivy Academia 

board on October 2, 2008, concurrently with the rent increase. The board minutes, which 

the parties stipulated were admissible as business records, state that the board “noticed 

that the sale of assets is beneficial to Ivy as it allows the school to strengthen its balance

sheet, while EGeneration LLC will only be able to recognize about 30c on $1 benefit 

from this purchase through the depreciation of assets.” The board accordingly approved 

the transaction, which was documented in the same Assignment Assumption of Lease 

that effectuated the rent increase. As noted above (ante, fn. 6), a single sentence in the 

one-page Assignment Assumption of Lease contained both provisions. That sentence 

stated that Ivy Academia “agrees to sell to [EGeneration] $520,000 of tenant 

improvements, in return [EGeneration] agrees to assume $520,000 of [Ivy Academia’s] 

bank loan from Western Commercial bank, and . . . [Ivy Academia] agrees to make a 

monthly payment to [EGeneration], or its designee, in the amount of $43,870.05 for the 

use of the facility and lease guarantees; this payment will increase 5% every July 1st.” 

After liability for the loan was transferred from Ivy Academia to EGeneration, Ivy 

Academia continued to make loan payments directly to Western Commercial Bank. 

According to Delos Santos and Pilyavskaya, these payments—totaling $126,654.73—

were recorded in Ivy Academia’s QuickBooks as rent payments. Pilyavskaya agreed on 

cross-examination that payments on the loan were recorded as rent payments “as of at 
18

least August 16th of 2008,” predating both board approval of the asset sale transaction 

(October 2, 2008) and the formal transfer of the loan to EGeneration (March 2, 2009), but 

post-dating the putative effective date of the asset sale transaction (July 1, 2007).

After the rent increase, Ivy Academia owed $43,870.05 in rent per month. That 

amount, less that month’s payment to J & N Amoroso Family Investments and loan 

payment to Western Commercial Bank, was documented in the Due to EGeneration 

account each month as a liability Ivy Academia owed to EGeneration. According to 

defense expert Goren, this arrangement was a consequence of the “or its designee” clause 

in the Assignment Assumption of Lease the board approved on October 2, 2008: “[Ivy 

Academia] agrees to make a monthly payment to [EGeneration], or its designee, in the 

amount of $43,870.05 for the use of the facility and lease guarantees . . . .” Goren 

explained that, after the rent increase, Ivy Academia owed $43,870.05 in rent to 

EGeneration each month. However, EGeneration named J & N Amoroso Family 

Investments and Western Commercial Bank as its designees to which Ivy Academia 

should make monthly payments in partial satisfaction of the total increased rent. In other 

words, Ivy Academia would pay some portion of the $43,870.05 rent to J & N Amoroso 

Family Investments, and another portion to Western Commercial Bank, at EGeneration’s 

behest. Any remaining amount owed beyond those two payments each month was 

booked as a liability in the Due to EGeneration account. There is no documentary 

evidence formalizing these designations.

The People alleged that the loan payments Ivy Academia made after transferring 

the loan to EGeneration constituted both misappropriation of public moneys (§ 424, subd. 

(a); count 39) and embezzlement of public funds (§§ 504, 514; count 40). 

V. Transfers of Funds to EGeneration

As noted above, Ivy Academia had three QuickBooks accounts recording amounts 

owed to Selivanov, Berkovich, and their business entities: Due to Management, Due to 

Academy, and Due to EGeneration. The latter two accounts, which documented debts to 

both the former (AJFK) and current (EGeneration) names of defendants’ other business 
19

entity, were consolidated in Ivy Academia’s QuickBooks in June 2008. After that point, 

the Due to Academy account was zeroed out. 

Because the Due to Academy and Due to EGeneration accounts were eventually

consolidated, and because AJFK and EGeneration were the same entity, prosecution 

witnesses treated these two accounts as one for purposes of determining the balance Ivy 

Academia owed to AJFK/EGeneration and, ultimately, Selivanov and Berkovich, the 

owners of that entity. Even though the Due to Management account also reflected money 

owed to defendants (their deferred salaries), neither the Ivy Academia QuickBooks nor 

the prosecution combined the Due to Management account with the Due to Academy or 

Due to EGeneration accounts. Defense expert Jan Goren opined that all three accounts 

should have been considered together because the amounts owed to defendants’ business 

entities ultimately were owed to defendants personally. 

Prosecution witnesses Atkinson and Delos Santos testified that the combined 

balance of the Due to Academy and Due to EGeneration accounts reached zero on 

August 1, 2007, meaning that, at that point, Ivy Academia no longer owed money to 

AJFK and/or EGeneration. Ivy Academia subsequently made three large monetary 

transfers to EGeneration, however: $25,000 on August 1, 2007, $20,000 on November 

19, 2007, and $20,000 on December 1, 2007. Shortly after the $25,000 transfer, 

EGeneration issued a $24,000 check to Selivanov, leaving EGeneration with a total of 

$1,540.65 in its bank account. Before the first $20,000 transfer in November 2007,

EGeneration’s bank account balance dipped to $46.80. Following that transfer, 

EGeneration wrote a $7,000 check to Selivanov. Atkinson testified that absent the 

$20,000 transfer from Ivy Academia, EGeneration would not have had enough money to 

make the $7,000 payment. EGeneration’s bank account balance slipped to $3,386.53 

before the final $20,000 transfer in December 2007; shortly after that payment was 

deposited into its bank account, EGeneration issued two checks totaling $15,300. 

On April 1, 2008, the balance in the Due to EGeneration account was negative, 

meaning that EGeneration owed money to Ivy Academia. Ivy Academia nevertheless 

issued a $5,000 check to EGeneration that day.
20

The Due to EGeneration account balance was still negative on June 30, 2008. On 

that date, however, a liability of $237,000 was added to the account, turning its balance

positive; now, the account showed that Ivy Academia owed $208,623 to EGeneration. 

The $237,000 liability was the total net amount of increased rent Ivy Academia owed 

from the effective date of the rent increase, July 1, 2007, through June 30, 2008. This 

additional liability was added to Ivy Academia’s QuickBooks three months before the 

rent increase was presented to and approved by the board. 

After the balance of the Due to EGeneration account was bolstered by the addition 

of the retroactive rent liability, Ivy issued a series of small checks to EGeneration. On 

September 24, 2008, Ivy Academia issued a $5,000 check to EGeneration. It 

subsequently issued three additional checks to EGeneration: a $5,000 check on October 

1, 2008, a $3,000 check on December 20, 2008, and a $5,000 check on March 16, 2009. 

While all of the aforementioned transfers to EGeneration were being made, the 

amount owed to defendants as reflected in the Due to Management account remained

unchanged at approximately $230,000. Prosecution witnesses Atkinson, Delos Santos, 

and Balbin and defense witness Goren all agreed that the amount due to defendants as 

documented in the Due to Management account exceeded the total amounts Ivy 

Academia transferred to EGeneration in 2007 and 2008. The balance of the Due to 

Management account was not reduced when any of the transfers to EGeneration were 

made, however, or at any time prior to 2008 and 2009, when Ivy Academia made several 

deferred salary payments directly to both defendants. Defendants ultimately directly 

received the full $230,000 in deferred salaries that the Due to Management account 

indicated they were owed. 

The People alleged that Selivanov embezzled public funds by making the series of 

$5,000 and $3,000 transfers to EGeneration after the rent increase was added to the Due 

to EGeneration account (§§ 504, 514; count 8). They further alleged that each of the 

three larger transfers in 2007 constituted misappropriation of public moneys (§424, subd. 

(a); counts 18, 21, 24), embezzlement of public funds (§§ 504, 514; counts 19, 22, 25), 

and money laundering (§ 186.10, subd. (a); counts 20, 23, 26). 
21

VI. Taxes

Defendants were charged with filing false personal and corporate income tax 

returns for the years 2004 through 2008. Prosecution witnesses Salazar and Delos Santos 

testified that defendants failed to report on their personal income tax returns the personal 

expenses they charged to their American Express cards from 2005 to 2008. Salazar and 

defense witness Goren both testified that any American Express charges constituting 

embezzlement or personal expenses should have been reported as taxable income, but

proper school expenditures were not required to be reported. Delos Santos testified that 

defendants would have to report as personal income even those charges that did not 

benefit them personally, such as teacher appreciation dinners, because “they are in 

control of the credit card.” Salazar testified that defendants improperly reported $46,000 

they received as payment of their deferred salaries on their 2008 EGeneration tax return 

rather than on their personal income tax return. Salazar further testified that defendants’

personal tax returns would be affected by improprieties on the corporate tax returns filed 

by AJFK/EGeneration, because “any income or losses would flow in to the individual 

return” since defendants were AJFK/EGeneration’s only members.

Salazar testified that AJFK/EGeneration’s tax returns for the years 2004 through 

2008 contained numerous improprieties. In 2004, he testified, expenses shown in 

AJFK’s accounting books were both deducted on the AJFK tax return and recorded as 

amounts owing to AJFK in Ivy Academia’s Due to Academy account. Salazar opined the 

deductions taken by AJFK were improper because the expenses were double-booked. He 

also testified that the 2004 AJFK return contained $30,697.35 of deductions for “rent 

expenses,” even though the AJFK QuickBooks showed the amount claimed was spent on 

other items such as “Office Depot expense, Dominoes [sic] Pizza, car insurance, Coffee 

Bean items, [El] Pollo Loco.” According to Salazar, the 2004 AJFK tax return also 

overreported AJFK’s income because it included the October 19, 2004 $300,000 loan 

repayment from Ivy Academia as income, even though loan repayments are not income. 

According to Salazar, the 2005 EGeneration return deducted $11,930 worth of 

“supplies expenses,” which Salazar testified consisted of “items like cheesecake, the car 
22

insurance, Victoria [sic] Secret, you know, the pretzel charges, pediatric care, and 

restaurant.” Salazar testified that the 2006, 2007, and 2008 returns contained similarly 

improper deductions for supplies. According to Salazar, the improperly deducted 

amounts in those years were, respectively, $11,461, $9,125, and $9,367. Salazar also 

testified that the 2007 EGeneration tax return failed to report as income $43,795.96 that 

Ivy Academia paid in excess of the amount it owed to EGeneration that year.

The People alleged that both Selivanov and Berkovich filed personal income tax 

returns that they did not believe to be true and correct as to every material matter in tax 

years 2004, 2005, 2006, 2007, and 2008 (Rev. & Tax. Code, § 19705, subd. (a); counts 

27-31). They further alleged that Selivanov filed tax returns for AJFK/EGeneration that 

he did not believe to be true and correct as to every material matter in tax years 2004, 

2005, 2006, 2007, and 2008 (Rev. & Tax. Code, § 19705, subd. (a); counts 32-36). 

DISCUSSION 

I. American Express Charges Embezzlement Conviction (Count 2)

Both defendants challenge the section 504 embezzlement convictions stemming 

from their use of Ivy Academia American Express cards (count 2). Jointly, they contend 

there was insufficient evidence to establish that their use of the cards was fraudulent. 

They further contend that the court erred by failing to give a unanimity instruction and by 

failing to require the jury to find the amount taken exceeded $950. They argue that the 

cumulative effect of these two instructional errors deprived them of a fair trial. 

Defendants finally contend the court erred by finding at sentencing that the case involved 

“public funds” within the meaning of section 514. We address these contentions in turn. 

A. Sufficiency of the Evidence

“When a defendant challenges the sufficiency of the evidence, ‘“[t]he court must 

review the whole record in the light most favorable to the judgment below to determine 

whether it discloses substantial evidence—that is, evidence which is reasonable, credible, 

and of solid value—such that a reasonable trier of fact could find the defendant guilty 

beyond a reasonable doubt.” [Citation.]’ [Citations.] ‘Substantial evidence includes 

circumstantial evidence and any reasonable inferences drawn from that evidence. 
23

[Citation.]’ [Citation.] We ‘“‘presume in support of the judgment the existence of every 

fact the trier could reasonably deduce from the evidence.’” [Citation.]’ [Citation.]” 

(People v. Clark (2011) 52 Cal.4th 856, 943.) 

The jury found defendants’ use of the Ivy Academia American Express cards

constituted embezzlement within the meaning of section 504. That statute provides: 

“Every officer of this state, or of any county, city, city and county, or other municipal 

corporation or subdivision thereof, and every deputy, clerk, or servant of that officer, and 

every officer, director, trustee, clerk, servant, or agent of any association, society, or 

corporation (public or private), who fraudulently appropriates to any use or purpose not 

in the due and lawful execution of that person’s trust, any property in his or her 

possession or under his or her control by virtue of that trust, or secretes it with a 

fraudulent intent to appropriate it to that use or purpose, is guilty of embezzlement.”

(§ 504.) As the language of the statute makes plain, “[t]he offense of embezzlement 

contemplates a principal’s entrustment of property to an agent for certain purposes and 

the agent’s breach of that trust by acting outside his authority in his use of the property.” 

(People v. Sisuphan (2010) 181 Cal.App.4th 800, 813-814.) It further contemplates a 

relationship of trust and confidence between the perpetrator and the victim (People v. 

Wooten (1996) 44 Cal.App.4th 1834, 1845) and a breach of that trust and confidence by 

“conversion of trusted funds coupled with the intent to defraud” (In re Basinger (1988) 

45 Cal.3d 1348, 1363). 

Defendants contend there was insufficient evidence from which the jury could 

conclude they acted with fraudulent intent or acted outside of their authority when using 

the American Express cards. We disagree.

“‘The intent essential to embezzlement is the intent to fraudulently appropriate the 

property to a use and purpose other than that for which it was entrusted, in other words, 

the intent to deprive the owner of his property . . . .’” (People v. McClain (1956) 140 

Cal.App.2d 899, 900.) “It is well established that intent to defraud may be inferred from 

the circumstances surrounding the transaction in question.” (People v. Eddington (1962) 

201 Cal.App.2d 574, 579; 2 Witkin & Epstein, Cal. Crim. Law 4th (2012) Crimes 
24

Against Property, § 35, pp. 59-60.) The circumstances surrounding the credit card 

transactions identified as “questionable” provided a sufficient basis from which the jury 

could infer defendants acted with fraudulent intent. The People presented evidence that 

defendants used their Ivy Academia credit cards at restaurants to purchase meals for 

“business meetings” that occurred late at night and on weekend afternoons, and that these 

purchases were recorded in Ivy Academia’s accounting books in categories including 

“utilities and housekeeping,” “school supplies,” and “dues and subscriptions.” They also 

presented evidence that defendants charged large sums at bowling alleys and restaurants 

for “teacher appreciation” events, and that such events were not proper “educational 

purposes” for which a charter school permissibly could spend money. Even though 

Pilyavskaya, not defendants, prepared the expense reports and QuickBooks entries 

documenting these charges, she reported to Selivanov, who also had access to the 

QuickBooks, and the reports she prepared bear defendants’ signatures. Additionally, the 

People presented evidence that Berkovich boasted about her “unlimited” credit card and 

her aspirations of becoming a millionaire by opening more charter schools, and that 

Selivanov sought to have Ivy Academia’s independent auditors remove negative 

comments about defendants’ credit card usage from their 2006 report. The jury readily 

could conclude from all of this evidence that defendants acted with fraudulent intent 

when using the American Express cards. 

The jury likewise reasonably could conclude defendants acted outside the scope of 

their authority as Ivy Academia’s operators when making the challenged charges. 

Defendants assert (without citation to authority) that board member Sarkisian’s review 

and approval of the expense reports constituted express authority for the challenged 

charges. Defendants further suggest that LAUSD’s failure to inform them of its concerns

about the credit card charges, and the People’s failure to call Ivy Academia’s auditors as 

witnesses at trial demonstrate defendants’ authority to make the charges. We are not 

persuaded. The People adduced evidence that charter schools operate under the authority 

not only of their own charters and governing boards but also the broader umbrella of the 

LAUSD Charter School Division. According to prosecution witnesses Eairleywine and 
25

Smith, LAUSD and the Los Angeles County Office of Education did not classify 

“activities for the pleasure of faculty and teachers and staff such as bowling,” and “after 

hours dinners off campus” as expenses that charter schools and their operators were 

authorized to make. The jury was entitled to credit this substantial evidence and infer 

from it that defendants lacked the authority to use the credit cards as they did, whether 

the board signed off on the expenditures or not. The jury was not, as defendants suggest, 

required to draw the opposite inference from LAUSD’s silence about its concerns or the 

People’s failure to call Ivy Academia’s auditors as witnesses. 

B. Unanimity Instruction 

Defendants contend the trial court’s failure to give a unanimity instruction on 

count 2 constituted prejudicial error. We review assertions of instructional error de novo. 

(People v. Shaw (2002) 97 Cal. App.4th 833, 838.) Whether the trial court should have 

given a “particular instruction in any particular case entails the resolution of a mixed 

question of law and fact,” which is “predominantly legal.” (People v. Waidla (2000) 22 

Cal.4th 690, 733.) Accordingly, we examine the issue without deference. (Ibid.)

In a criminal case, a jury verdict must be unanimous. (People v. Collins (1976) 17 

Cal.3d 687, 693; Cal. Const., art. I, § 16.) This means that each individual juror must 

agree the defendant committed a specific offense. (People v. Russo (2001) 25 Cal.4th 

1124, 1132.) Thus, “when the evidence suggests more than one discrete crime, either the 

prosecution must elect among the crimes or the court must require the jury to agree on the 

same criminal act.” (Ibid.) The court generally has a sua sponte duty to give a unanimity 

instruction where, as here, the prosecution did not elect among the criminal acts alleged.

(People v. Melhado (1998) 60 Cal.App.4th 1529, 1534; People v. Jennings (2010) 50 

Cal.4th 616, 679.) There are several exceptions to this rule, however. “For example, no 

unanimity instruction is required if the case falls within the continuous-course-of-conduct 

exception, which arises ‘when the acts are so closely connected in time as to form part of 

one transaction’ [citation], or ‘when . . . the statute contemplates a continuous course of 

conduct or a series of acts over a period of time.’ [Citation.] There also is no need for a 

unanimity instruction if the defendant offers the same defense or defenses to the various 
26

acts constituting the charged crime. [Citation.]” (People v. Jennings, supra, 50 Cal.4th 

at p. 679.)

Defendants contend “the way the case was presented to the jury showed [a 

unanimity] instruction was appropriate and required.” They further assert, without

citation to the record, that they “never defended the case as if the transactions were part 

of a single course of conduct.” We disagree.

From the outset of the trial, all parties characterized the American Express charges 

as a single, continuing course of conduct. The People told the jury in their opening 

statement that the credit card charges constituted “basically one series of incidents, one 

course of conduct,” and that they would ask the jury to make “the determination” that the 

expenditures were for “personal purchases that did not benefit the school and were not for 

school purpose.” Defendants similarly characterized the numerous charges 

monolithically in their opening statements. Thus, Selivanov told the jury the evidence 

would show “that he acted in good faith, in the best interest of the school,” and that no 

one—not the board, the independent auditors, or LAUSD—ever informed him “those 

types of purchases were prohibited.” Berkovich took a different tack, but it too was a 

unified one. She asserted that “Everything was a school purpose, and if mistakes were 

made, . . . [t]he evidence is going to show that, but that is not criminal.” 

Opening statements are not argument. But they do ‘“prepare the minds of the jury 

to follow the evidence and to more readily discern its materiality, force, and effect.”’

(People v. Harris (1989) 47 Cal.3d 1047, 1080.) And here, defendants continued to urge 

the jury to find all of the credit card charges permissible under a single theory.

Berkovich told the court at sidebar that her sole defense was “that everything Miss 

Berkovich bought had a school purpose. And if it didn’t have a school purpose, it was a 

recognized mistake that was reimbursed and that is the defense.” She told the jury the 

same thing during her closing argument, arguing that “all these expenses, teacher 

appreciation that the prosecution thinks should not happen, meals, community outreach, 

networking, they are all expenses that are common in the industry.” 
27

Selivanov likewise presented a single defense to all of the credit card charges 

during his closing. He argued that the sole issue was “whether or not Mr. Selivanov 

intended to defraud Ivy Academia with respect to purchasing things on the American 

Express card,” and that “there is no evidence of an intent to defraud.” Both defendants 

emphasized that all of the charges, not merely some subset of them, were reviewed and 

approved by other individuals and entities. In short, they offered essentially the same 

defense to all of the acts. (See People v. Jennings, supra, 50 Cal.4th at p. 679; People v. 

Thompson (1995) 36 Cal.App.4th 843, 851.) 

Defendants claim that the People deviated from the single course-of-conduct 

theory during rebuttal argument, thereby rendering a unanimity instruction necessary. In 

support, they point to four comments, three of which suggested that defense witnesses 

with ties to the charter school movement were biased. We are not persuaded. An 

attorney is permitted “to remind the jurors that a paid witness may accordingly be biased 

and is also allowed to argue, from the evidence, that a witness’s testimony is 

unbelievable, unsound, or even a patent ‘lie.’” (People v. Arias (1996) 13 Cal.4th 92, 

162.) In attempting to characterize defense witnesses as biased, the People were asking 

the jurors to reject their testimony, not presenting multiple arguments as to why the credit 

card charges constituted embezzlement. 

Defendants similarly take out of context the fourth comment, a remark by the 

prosecutor that the $995 Tax Secrets seminar Berkovich purchased with the credit card 

was “an embezzlement in itself.” The People made this statement as part of an apparent 

effort to distinguish between the section 424 misappropriation and section 504 

embezzlement counts stemming from defendants’ usage of the credit cards. The People 

informed the jury that “the embezzlement charge does carry a minimum of $950. So, as 

such, one would have to find that the theft was $950 or more. Which, in this case, we the 

People would submit it is heavily substantiated just in terms of the charges. Now, in 

terms of a misappropriation of funds, there is no minimum limit on that. There is no 

$950 minimum, but we would submit, ladies and gentlemen, in terms of this case here 

that even the Tax Secret, even the Tax Secret item that was bought for $950 [sic], that is 
28

an embezzlement in itself.” These comments do not undermine the People’s general 

approach to the charges, nor do they persuade us a unanimity instruction was necessary.8

C. Value of Embezzled Property

Defendants contend their convictions for felony embezzlement in count 2 must be 

reversed or reduced to misdemeanors because the jury failed to specify a loss greater than 

$950 on the verdict forms. Defendants argue that because the verdict form simply stated 

that the embezzlement was a felony, it “created a de facto directed verdict on an element 

of the offense in violation of [their] equal protection and due process rights.” This error, 

they contend, lessened the People’s burden of proof and therefore requires reversal. In 

the alternative, they contend that the jury’s failure to find that the embezzlement in count 

2 was grand or petty theft, or to determine that the value of the property embezzled 

exceeded $950, requires that their convictions be deemed to be for petty theft and 

reduced to misdemeanors. For this argument they rely on section 1157, which states: 

“Whenever a defendant is convicted of a crime . . . which is distinguished into degrees, 

the jury . . . must find the degree of the crime or attempted crime of which he is guilty. 

Upon the failure of the jury . . . to so determine, the degree of the crime . . . of which the 

defendant is guilty, shall be deemed to be of the lesser degree.” (§ 1157) We do not find 

either argument persuasive.

Section 490a provides that the term embezzlement “shall hereafter be read and 

interpreted as if the word ‘theft’ were substituted therefor.” (§ 490a.) “Theft is divided 

into two degrees, the first of which is termed grand theft; the second, petty theft.” 

(§ 486.) Since embezzlement is theft and theft is divided into two degrees, it follows that 

embezzlement likewise is divided into two degrees. As the court explained in People v. 

 

8 We also find unpersuasive Berkovich’s suggestion that “[t]he fact that appellant 

was acquitted of the vast majority of the charges against her speaks volumes as to 

whether the prosecution’s arguments were given full credit by this jury.” The jury found 

Berkovich guilty of misappropriating public moneys in connection with the same 

conduct, strongly suggesting it found her use of the American Express card improper.

The numerous counts on which she was acquitted pertained to other instances of 

misappropriation and embezzlement that were factually distinct from her use of the 

American Express card. 
29

Stanfill (1999) 76 Cal.App.4th 1137, 1143, “Embezzlement is a form of ‘theft’ (§ 490a) 

and, with exceptions not pertinent here, is made punishable with state prison time only if 

the use value of the subject property exceeds [$ 950].”9

Count 2 of the information alleged that defendants committed felony 

embezzlement in violation of section 504 and that the property embezzled had a “value 

exceeding Nine Hundred Fifty Dollars ($950) to wit: credit card charges made to Ivy 

Academia’s American Express account.” In keeping with the felony allegation, the court 

instructed the jury with a modified version of CALCRIM No. 1806 that effectively 

equated “felony” embezzlement with “grand theft by embezzlement.” That instruction 

read in pertinent part: “The defendant is charged in Counts [sic] with grand theft by 

embezzlement in violation of Penal Code section 504.”10 The court also defined grand 

theft both orally and in writing with CALCRIM No. 1801, which provided in pertinent 

part: “If you conclude that the defendant committed a theft, you must decide whether the 

crime was grand theft or petty theft. The defendant committed grand theft if he or she 

stole property worth more than $950. [¶] . . . [¶] All other theft is petty theft. The 

People have the burden of proving beyond a reasonable doubt that the theft was grand 

theft rather than a lesser crime. If the People have not met this burden, you must find the 

defendant not guilty of grand theft.” 

For each defendant, the court provided two verdict forms for count 2: a guilty 

verdict form and a not guilty verdict form. None of the forms mentioned “grand theft,” 

“petty theft,” or the dollar value $950, or asked the jury to make findings regarding those 

 

9 When Stanfill was decided, the value threshold separating petty theft and grand 

theft was $400. (See former § 487, subd. (a) (1997).) In 2011, the threshold was raised 

to its current level, $950. (See § 487, subd. (a).) One of the “exceptions” not pertinent in 

Stanfill but pertinent here is when the embezzlement is of public funds. (See discussion, 

at pp. 31-34, post.)

10 The written version of CALCRIM No. 1806 did not include count numbers 

despite the court’s statement to counsel that it had handwritten them in. However, while 

orally instructing the jury, the court said, “I should have written in everybody’s thing, let 

me see, 2 [8, 19, 22, 25, and 40] with grand theft by embezzlement violation of Penal 

Code section 504, does everybody have the numbers written in 2, [8, 19, 22, 25, and 40] 

good cause I personally did that [sic].” 
30

terms. Instead, the verdict forms read “We, the jury in the above-entitled action, find the 

defendant . . ., guilty [or not guilty] of the crime of EMBEZZLEMENT BY PUBLIC 

OR PRIVATE OFFICER, in violation of Penal Code Section 504, a felony, as charged 

in Count 2 of the Information.” The jury returned verdicts of guilty as to both 

defendants. 

This combination of instructions and verdict forms did not relieve the prosecution 

of its burden of proof. The People alleged and sought to prove only that defendants 

committed felony embezzlement. The court instructed the jury accordingly, stating that 

defendants were charged in count 2 with “grand theft by embezzlement,” defining grand 

theft as theft of property exceeding $950 in value, and explaining that the jury “must find 

the defendant not guilty of grand theft” if the People failed to prove beyond a reasonable 

doubt that a grand theft occurred. We presume the jury understood and correlated these 

instructions (People v. Martin (2000) 78 Cal.App.4th 1107, 1111), which appeared on a 

single page of the instructions packet and squarely placed on the People the burden of 

proving the charged crime. The verdict forms’ use of the word “felony” did not reduce 

this burden. The verdict forms expressly referred to the information, which also 

described the charged conduct only as a felony. The information also alleged that that the 

property at issue was “credit card charges made to Ivy Academia’s American Express 

account” and that those charges were “of a value exceeding Nine Hundred Fifty Dollars 

($950).”11 These documents did not give the jury an option to convict defendants of 

anything less than grand theft by embezzlement. If the jury determined the People failed 

 

11 The prosecutor also argued to the jury that “the embezzlement charge does carry 

a minimum of $950. So, as such, one would have to find that the theft was $950 or 

more.” These comments underscored the People’s burden and the importance of the 

$950 threshold to a conviction on count 2. Defendants point out that this statement was 

imprecise, for a grand theft conviction requires the value of the property to exceed (rather 

than merely equal) $950. However, the court instructed the jury to follow the court’s 

instructions rather than “anything concerning the law said by the attorneys in their 

arguments.” The court’s instructions correctly articulated the distinction between grand 

and petty theft. 
31

to prove the amount embezzled exceeded $950, the instructions and verdict form properly 

required the jury to find the defendants not guilty on count 2. 

Moreover, the instructions and verdict form did not violate section 1157 such that 

reduction of the convictions to a misdemeanor is required. The purpose of section 1157 

is to ensure that the jury’s determination of degree is clear when a verdict of varying 

degrees is permissible (People v. Mendoza (2000) 23 Cal.4th 896, 910), so that the 

defendant is protected from the risk that the degree of the crime could be increased after 

the judgment (People v. Goodwin (1988) 202 Cal.App.3d 940, 947). Just as applying 

section 1157 “where jury verdicts correctly permit only a first-degree felony murder 

conviction would do nothing to further this statutory purpose” (People v. Mendoza, 

supra, 23 Cal.4th at p. 910), applying section 1157 here, where the information, 

instructions, and verdict form permitted a conviction only for felony embezzlement, 

would not serve this purpose. “[W]here the trial court properly instructs the jury to find a 

defendant either not guilty or guilty” of felony embezzlement by grand theft, “there is 

simply no degree determination for the jury to make.” (Id. at p. 911.) For that reason, 

requiring application of section 1157 here “would be both absurd and unreasonable, for it 

would require courts to deem a conviction to be of a degree that was never at issue and 

that the jury was neither asked nor permitted to consider.” (Ibid.) Had the information 

alleged, or the verdict form stated, simply “embezzlement,” with no indication of value or 

felony designation, the result might be different. Here, however, the jury’s verdict 

specifically found defendants guilty of embezzlement “as charged in Count 2 of the 

Information,” which required the jury to find that the property exceeded $950 in value to 

return a conviction. The jury implicitly—and necessarily—made the required factual 

findings to support the defendants’ convictions for felony embezzlement.

D. Cumulative Instructional Error

Because we have rejected defendants’ claims of instructional error on count 2, 

there can be no cumulative error stemming from the same claims. (People v. Tully

(2012) 54 Cal.4th 952, 1020.) 
32

E. The Court’s Public Funds Finding

1. Background

The information alleged in count 2 that the charged felonious “embezzlement and 

defalcation was of the public funds within the meaning of Penal Code Section 514.” It 

similarly alleged that public funds were defalcated in embezzlement counts 4, 6, 8, 10, 

19, and 40, but not in embezzlement counts 22 and 25. It is unclear why the allegation 

was not made as to counts 22 and 25, as both were paired with charges of 

misappropriation of public moneys stemming from the same conduct. 12

“Section 514 defines the punishment for one convicted of embezzlement.” 

(Redondo, supra, 19 Cal.App.4th at p. 1434.) It provides in relevant part: ‘“Every 

person guilty of embezzlement is punishable in the manner prescribed for theft of 

property of the value or kind embezzled; . . . if the embezzlement or defalcation is of the 

public funds of the United States, or of this state, or of any county or municipality within 

this state, the offense is a felony, and is punishable by imprisonment in the state prison; 

and the person so convicted is ineligible thereafter to any office of honor, trust, or profit 

in this state.”’

The first clause of section 514 clarifies that embezzlement generally is to be 

punished like its analogues, petty and grand theft. Thus, embezzlement of money or 

 

12 “The term ‘public funds’ is not defined in section 514” or anywhere else in the 

Penal Code. (People v. Redondo (1993) 19 Cal.App.4th 1428, 1434 (Redondo).) 

However, section 426 defines “public moneys” for the purposes of section 424, which 

criminalizes the misappropriation and false accounting of public moneys, as “all bonds 

and evidence of indebtedness, and all moneys belonging to the state, or any city, county, 

town, district, or public agency therein, and all moneys, bonds, and evidences of 

indebtedness received or held by state, county, district, city, town, or public agency 

officers in their official capacity.” Whether the terms “public funds” and “public 

moneys” were intended to have the same or similar meanings is not entirely clear. 

(Redondo, supra, 19 Cal.App.4th at p. 1435.) The Redondo court appeared to equate 

“funds” with “money,” however, holding that a “defendant is not culpable for a felony 

based on embezzlement of public funds under section 504 if what was stolen was not an 

available pecuniary resource of the public.” (Id. at p. 1437.) The parties in this case

likewise have treated the terms “public moneys” and “public funds” as synonyms and 

used them interchangeably. 
33

property valued at $950 or less is punished like misdemeanor petty theft, “by fine not 

exceeding one thousand dollars ($1,000), or by imprisonment in the county jail not 

exceeding six months, or both.” (§ 490.) Embezzlement of money or property valued at 

more than $950, is, like its grand theft counterpart, a “wobbler”—a crime that “in the trial 

court’s discretion, may be sentenced alternately as [a] felon[y] or misdemeanor[].” 

(People v. Superior Court (Alvarez) (1997) 14 Cal.4th 968, 974; see also People v. 

Stanfill, supra, 76 Cal.App.4th at pp. 1144-1145 [embezzlement of property valued 

beyond threshold for grand theft is a “true wobbler for which the court had discretion to 

choose between misdemeanor and felony punishment”].) Section 489, subdivision (c) is 

the source of this discretion. It provides that grand theft, with narrow exceptions not 

applicable here, is punishable “by imprisonment in a county jail not exceeding one year 

or pursuant to subdivision (h) of Section 1170.” (See also 2 Witkin & Epstein, Cal. Crim. 

Law 4th (2012) Crimes Against Property, § 8, p. 30 [“Grand theft is generally a felonymisdemeanor punishable by imprisonment in a county jail for not more than 1 year 

(misdemeanor), or under P.C. 1170(h) . . . .”].)

The second portion of section 514 significantly curtails the trial court’s sentencing

discretion where the property embezzled is “public funds.” Under section 514, the 

embezzlement of public funds “is a felony, and is punishable by imprisonment in the 

state prison” (§ 514), “regardless of the value of the property embezzled” (Redondo, 

supra, 19 Cal.App.4th at p. 1434). The felony-misdemeanor distinction based on value is 

thus eliminated, as is the trial court’s ability to choose misdemeanor punishment 

regardless of the amount embezzled. Additionally, section 514 bars those convicted of 

embezzling public funds from holding certain offices in the future. 

The jury was not given an opportunity to find that the property embezzled in count 

2 (or any of the other embezzlement counts) was public funds. Neither the instructions 

nor verdict forms pertaining to count 2 (or the other embezzlement counts) mentioned 

public funds. At the sentencing hearing, the People asked the court to make “a Penal 

Code section 514 finding . . . in light of them being public officials” and noted that such a 

finding “would have an impact in terms of the sentencing.” The People reiterated their 
34

request later in the hearing, when the court had almost concluded sentencing Selivanov, 

explaining that such a finding “would render the defendants ineligible to hold public 

office.” Over defendants’ “strenuous objection,” the court found “that these were public 

funds and that he embezzled public funds, and the public funds being from the school, 

Ivy Academia, which is a public school.” 

Defendants now contend that the court’s finding violated Apprendi v. New Jersey 

(2000) 530 U.S. 466 (Apprendi) and Alleyne v. United States (2013) 133 S.Ct. 2151 

(Alleyne), which require any fact that increases the statutory maximum (Apprendi) or 

mandatory minimum (Alleyne) punishment to be found by a jury beyond a reasonable 

doubt. They argue that by making the contested finding, the court impermissibly 

increased their penalties “in four distinct ways . . . (1) removal of Penal Code § 504 from 

‘wobbler’ status; (2) mandatory state prison incarceration where probation is denied; (3) 

post-state prison parole; and (4) imposition of a parole revocation restitution fine.”13 We 

need reach only the first of defendants’ alternative arguments as it is correct. The public 

funds finding had the effect of eliminating the court’s discretion to sentence them to a 

misdemeanor sentence to be served in county jail. The finding accordingly should have 

been made by the jury. The error was harmless in this case, however, because the record 

reveals beyond a reasonable doubt that the jury would have made the same finding had it 

been asked to do so. 

2. Applicable Legal Principles

In Apprendi, the United States Supreme Court held that “[o]ther than the fact of a 

prior conviction, any fact that increases the penalty for a crime beyond the prescribed 

statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” 

(Apprendi, supra, 530 U.S. at p. 490.) The Court explained in a footnote that “facts that 

expose a defendant to a punishment greater than the one otherwise legally prescribed 

 

13 Defendants do not argue in their opening brief and only make a cursory 

suggestion in reply that the court’s finding increased their penalties by making them 

ineligible to hold public office. They accordingly have forfeited this contention, and we 

do not consider it here. (People v. Bryant (2014) 60 Cal.4th 335, 408.) 
35

were by definition ‘elements’ of a separate legal offense.” (Id. at p. 483, fn. 10.) A few 

years later, in Blakely v. Washington (2004) 542 U.S. 296, the Court further clarified that 

“the ‘statutory maximum’ for Apprendi purposes is the maximum sentence a judge may 

impose solely on the basis of the facts reflected in the jury verdict or admitted by the 

defendant. [Citations.] In other words, the relevant ‘statutory maximum is not the 

maximum sentence a judge may impose after finding additional facts, but the maximum 

he may impose without any additional findings.” (Blakely, supra, 542 U.S. at p. 303 

[emphases omitted].) 

The Supreme Court initially treated statutory minimums differently. In Harris v. 

United States (2002) 536 U.S. 545 (Harris) the Court held that judicial factfinding that 

increased the mandatory minimum sentence was permissible under the Sixth 

Amendment. However, the Supreme Court extended the reasoning of Apprendi in 

Alleyne, supra, 133 S.Ct. 2151, which overruled Harris and held that any fact that 

increases a defendant’s mandatory minimum sentence must be found by a jury beyond a 

reasonable doubt. (Alleyne, supra, 133 S.Ct. at pp. 2155, 2162-2163.)

In Alleyne, the defendant was convicted of robbery affecting interstate commerce 

(18 U.S.C. § 1951(a)), a crime that carried a penalty of five years to life. A defendant 

who brandished a firearm during that crime was subject to a heightened penalty of seven 

years to life. (Alleyne, supra, 133 S.Ct. at pp. 2155-2156.) Although the jury did not find 

that defendant brandished a firearm, the probation report recommended a sentence of 

seven years based on brandishing. The trial court found brandishing based on a 

preponderance of the evidence and sentenced defendant to seven years in prison. (Id. at 

p. 2156.) The Court of Appeal affirmed based on Harris. (Ibid.) The Supreme Court 

reversed and overruled Harris. It held that “Apprendi’s definition of ‘elements’ 

necessarily includes not only facts that increase the ceiling [of available punishment], but 

also those that increase the floor. Both kinds of facts alter the prescribed range of 

sentences to which a defendant is exposed and do so in a manner that aggravates the 

punishment.” (Id. at p. 2158.) Under Alleyne, “[f]acts that increase the mandatory 

minimum sentence are therefore elements and must be submitted to the jury and found 
36

beyond a reasonable doubt.” (Ibid.) “It is no answer to say that the defendant could have 

received the same sentence with or without that fact.” (Id. at p. 2162.) If a fact increases 

either the punishment floor or ceiling, it must be found by a jury beyond a reasonable 

doubt. 

Alleyne also made clear, however, that “broad sentencing discretion, informed by 

judicial factfinding, does not violate the Sixth Amendment.” (Alleyne, supra, 133 S.Ct. 

at p. 2163.) “‘[E]stablishing what punishment is available by law and setting a specific 

punishment within the bounds that the law has prescribed are two different things.’ 

[Citation.]” (Ibid.) Accordingly, a judge may make factual findings that influence his or 

her sentencing discretion, but may not make factual findings that aggravate the legally 

prescribed punishment. (See id. at pp. 2162-2163.) For instance, “[t]rial judges often 

find facts about the nature of the offense or the character of the defendant in determining, 

for example, the length of supervised release following service of a prison sentence; 

required attendance at drug rehabilitation programs or terms of community service; and 

the imposition of statutorily prescribed fines and orders of restitution. [Citation.] 

Intruding Apprendi’s rule into these decisions on sentencing choices or accoutrements 

surely would cut the rule loose from its moorings.” (Oregon v. Ice (2009) 555 U.S. 160, 

171-172.) 

3. Analysis

Defendants contend that the court’s public funds finding violated Alleyne by 

mandating that the embezzlement be treated as a felony rather than a wobbler. We agree.

However, we conclude that the error was harmless beyond a reasonable doubt. 

The information charged defendants in count 2 with felony embezzlement. This 

wobbler offense, like all others, properly was regarded as a felony throughout trial “for 

all purposes until imposition of sentence or judgment.” (People v. McElroy (2005) 126 

Cal.App.4th 874, 880 [emphasis added].) From the outset of the case, then, defendants 

were subject to punishment for a felony—a custodial term of 16 months, two years, or 

three years—by virtue of the People’s allegation that they embezzled “property being of a 

value exceeding Nine Hundred Fifty Dollars ($950) to wit: credit card charges made to 
37

Ivy Academia’s American Express account.” However, the felony sentencing triad 

represented only the punishment ceiling defendants faced. Because embezzlement is a 

wobbler, the felony designation was applicable only “until imposition of sentence or 

judgment.” At that point, the trial court had the discretion to choose whether defendants 

should be subject to felony or misdemeanor punishment. Thus, the punishment floor 

defendants faced was that provided in section 489, subdivision (c), “imprisonment in a 

county jail not exceeding one year.” Even if it was unlikely that the trial court would 

exercise its discretion to sentence defendants as if they were convicted for misdemeanor 

embezzlement, it had that option.

After the public funds finding was made, however, the trial court lost its discretion 

to sentence defendants to a misdemeanor punishment. Under section 514, the 

embezzlement of public funds “is a felony, and is punishable by imprisonment in the 

state prison.” (§ 514.) The minimum punishment to which defendants were subject 

accordingly rose to the low term of the felony triad, 16 months, based on the trial court’s 

finding. The finding increased the mandatory minimum punishment and therefore under 

Alleyne must be considered an element of the crime required to be submitted to the jury 

and found beyond a reasonable doubt.14

The People argue that “[b]ecause nothing about the section 514 finding exposes a 

defendant to a longer sentence than the one available absent the finding, there is nothing 

 

14 We note that the crime of “embezzlement of public money” has a different 

statute of limitations than embezzlement of non-public money, which lends support to the 

conclusion that a “public funds” finding is an element of a separate crime. (Compare § 

799 [“Prosecution for an offense punishable by death or by imprisonment in the state 

prison for life or without the possibility of parole, or for the embezzlement of public 

money, may be commenced at any time.”] with § 801 [“Except as provided in Sections 

799 and 800, prosecution for an offense punishable by imprisonment in the state prison or 

pursuant to subdivision (h) of Section 1170 shall be commenced within three years after 

commission of the offense.”] and § 801.5 [“Notwithstanding Section 801 or any other 

provision of law, prosecution for any offense described in subdivision (c) of Section 803 

[including grand theft] shall be commenced within four years after discovery of the 

commission of the offense, or within four years after the completion of the offense, 

whichever is later.”].) 
38

inconsistent about the trial court’s rejection of this very argument and the principles 

stated in Alleyne.” This argument ignores express language in Alleyne, which states that 

“It is no answer to say that the defendant could have received the same sentence with or 

without that fact.” (Alleyne, supra, 133 S.Ct. at p. 2162.) It is true that defendants were 

subject to felony punishment with or without the finding. With the finding, however, 

defendants were subject only to felony punishment. “The essential point is that the 

aggravating fact produced a higher range, which, in turn, conclusively indicates that the 

fact is an element of a distinct and aggravated crime. It must, therefore, be submitted to

the jury and found beyond a reasonable doubt.” (Id. at pp. 2162-2163.) 

The People’s analogy to People v. Benitez (2005) 127 Cal.App.4th 1274 also is not 

persuasive. In Benitez, a jury found the defendant guilty of 30 lewd and lascivious acts 

upon victims under the age of 14 and further found that the offenses involved more than 

one victim. Through a series of statutory cross-references, these findings made the 

defendant ineligible for probation. The jury did not separately find the defendant 

ineligible for probation, however, and defendant argued the absence of such a finding 

violated Blakely. (See Benitez, supra, 127 Cal.App.4th at p. 1277-1278.) The Court of 

Appeal rejected defendant’s argument. It held that the proviso in former section 667.61, 

subdivision (c)(7) disqualifying certain sex offenders from probation “is not an element 

of the enhancement to be negated upon proof to a jury.” (Id. at p. 1278.) It reasoned that 

eligibility for probation was not subject to Blakely because “[f]inding a defendant 

ineligible for probation is not a form of punishment, because probation itself is an act of 

clemency on the part of the trial court,” and “a defendant’s eligibility for probation 

results in a reduction rather than an increase in the sentence prescribed for his offenses.” 

(Ibid. [emphasis in original])

Here, the public funds finding increased rather than deceased the range of 

punishments to which defendants were subject. Although the potential for misdemeanor 

sentencing was, like probation, within the trial court’s discretion, it was still a form of 

punishment. The elimination of that possibility raised the sentence prescribed for 

defendants’ offenses. And even if the situations were analogous, the jury in Benitez made 
39

factual findings that eliminated the possibility of probation. Those findings were made 

by the court here. 

Defendants and the People both correctly recognize that Apprendi error is subject 

to harmless error review under Chapman v. California (1967) 386 U.S. 18, 24. (People 

v. Davis (2005) 36 Cal.4th 510, 564.) Thus, “if a reviewing court concludes, beyond a 

reasonable doubt, that the jury, applying the beyond-a-reasonable-doubt standard, 

unquestionably would have found true” the finding in question, “the Sixth Amendment 

error properly may be found harmless.” (People v. Sandoval (2007) 41 Cal.4th 825, 

839.) That standard is met here.

Regardless of whether all funds Ivy Academia possessed were public funds as a 

matter of law there is no question that, had it been presented with the question, the jury 

would have found the money defendants embezzled in count 2 to be public funds as a 

matter of fact. Throughout trial, everyone, including defense counsel and defense 

witnesses, spoke almost exclusively in terms of “public moneys” and “public funds.” 

The only disputes relevant to the American Express charges at issue in count 2 concerned 

whether they were made to advance an educational purpose, a requirement for the 

expenditure of public funds. Defendants did not contest the threshold issue of the 

provenance of the funds used to pay for the American Express charges. As Selivanov 

argued in closing, “[w]e know from the evidence that the funds that were coming to Ivy 

Academia were from two sources primarily, categorical block grant funding and general 

purpose funding, and the evidence was that money that was categorical block grant 

money or general purpose money essentially needed to be spent for school related 

purposes in connection with the operation of the school.” Berkovich put it even more 

explicitly: “[t]his is a private entity receiving public funds.” We are convinced beyond a 

reasonable doubt the jury would have agreed and made the public funds finding had it 

been given the opportunity to do so. Accordingly, any Apprendi error the court may have 

introduced by making the public funds finding was harmless. 
40

II. Other Embezzlement Convictions (counts 8, 19, 22, 25 & 40)

Selivanov challenges his other embezzlement convictions—those stemming from 

the series of $5,000 and $3,000 transfers made to EGeneration in 2008 after the $237,000 

rent liability was booked into the Due to EGeneration account (count 8), the three 

transfers of $25,000, $20,000, and $20,000 made to EGeneration in 2007 (counts 19, 22, 

and 25, respectively), and the approximately $126,000 in loan payments Ivy Academia 

made to Western Commercial Bank after transferring liability for the Western 

Commercial Bank loan to EGeneration (count 40).

15 First, he argues that none of the 

embezzlement convictions was supported by substantial evidence because “all of the 

funds transferred to his account were his own” and he had authority to transfer them. As 

to count 40 specifically, Selivanov argues that the loan payments were made pursuant to 

a legitimate contract and funds never were entrusted to him. Second, he contends that the 

trial court erred by failing to provide the jury with an instruction on the claim-of-right 

defense, thereby precluding him from presenting a defense and violating his right to a fair 

trial. We do not find these contentions persuasive. 

A. Sufficiency of the Evidence 

Selivanov contends that none of his embezzlement convictions was supported by 

substantial evidence. After reviewing the entire record in the light most favorable to the 

verdict (People v. Clark, supra, 52 Cal.4th at p. 943), we conclude that ample evidence 

supports the convictions. 

“‘Embezzlement is the fraudulent appropriation of property by a person to whom 

it has been [e]ntrusted.’ (§ 503.) The elements of embezzlement are: ‘1. An owner 

entrusted his/her property to the defendant; 2. The owner did so because he/she trusted 

the defendant; 3. The defendant fraudulently converted that property for his/her own 

 

15 Selivanov also contends that his money laundering convictions on counts 23 and 

26 (§ 186.10, subd. (a)) are predicated upon the same conduct as the embezzlement 

convictions in counts 22 and 25 and therefore cannot stand if those convictions are 

reversed. Because we affirm the embezzlement convictions, we affirm the money 

laundering convictions as well. 
41

benefit; [and] 4. When the defendant converted the property, he/she intended to deprive 

the owner of its use.’ (CALCRIM No. 1806.)” (People v. Fenderson (2010) 188 

Cal.App.4th 625, 636-637.)

Selivanov contends that counts 8, 19, 22, and 25—the counts involving Ivy 

Academia’s monetary transfers to EGeneration—fail at the first element because one 

cannot be guilty of embezzling his or her own property. According to Selivanov, the Due 

to Management account demonstrated at all relevant times that Ivy Academia owed him 

more than he transferred to his business entity EGeneration, and “[f]or this reason alone,” 

his embezzlement convictions cannot stand. We do not agree. Even if Ivy Academia had 

a legitimate debt to Selivanov as reflected in the Due to Management account, the money 

that Selivanov caused Ivy Academia to transfer to EGeneration did not become his 

property simply by virtue of that indebtedness. It remained the property of Ivy 

Academia, which entrusted Selivanov to allocate the money for the benefit of the school 

rather than for his own personal benefit. The jury readily could have concluded from 

Selivanov’s failure to document these withdrawals as reductions in the amount owing in 

the Due to Management account, his failure to document them as income for tax 

purposes, and his failure to transfer his purported salary to his personal account that 

Selivanov was not in fact recouping the deferred salary he was owed. The People also 

presented evidence that several of the contested transfers were made only after the rent 

increase (which Balbin described as a “sham transaction”) inflated the amounts Ivy 

Academia purportedly owed to EGeneration, and that EGeneration in other instances 

used the transferred funds almost immediately to make payments it otherwise would not 

have been able to afford. The jury could have concluded from this evidence that 

Selivanov was not owed the money he took, and that he took the money with fraudulent 

intent. 

Selivanov also contends there can be no embezzlement because he was authorized 

to repay himself from the funds with which he was entrusted. While it is true that 

Selivanov’s position as the executive director of Ivy Academia vested him with authority 

to handle financial matters, the People presented evidence that the board approved the 
42

final series of salary payments to Selivanov and Berkovich in 2010. The jury could 

conclude from this evidence that board approval was required for such payments, and 

further could conclude from the absence of evidence of any such approval that the board 

did not authorize Selivanov’s previous withdrawals. The People also introduced 

evidence that the board-approved salary payments Ivy Academia made to defendants in 

2008 were documented on 1099 tax forms. The jury could infer from the absence of tax 

forms for the transfers alleged in counts 8, 19, 22, and 25 that these earlier transactions 

were not made via authorized channels. 

As to count 40, Selivanov contends that any funds he “supposedly took from Ivy 

Academia” to pay the Western Commercial Bank loan “were taken under a valid 

contract,” and “one cannot be guilty of embezzling money when he has acquired title to it 

by contract or sale. (People v. Parker (1965) 235 Cal.App.2d 100, 109.)” This is too 

broad a read of People v. Parker, which affirmed the embezzlement conviction of a 

building contractor who used down payments given to him for his own purposes rather 

than depositing them into accounts at a title company as he had promised. (People v. 

Parker, supra, 235 Cal.App.2d at p. 109.) The proposition for which Selivanov cites 

Parker comes from People v. Holder (1921) 53 Cal.App.45, in which the Court of 

Appeal reversed the embezzlement conviction of a building contractor. The contractor in 

Holder used the money his customers paid him for his own purposes rather than to buy 

materials for the homes he was building. The Court of Appeal concluded that the 

contracts governing the contractor’s relationship with his customers were such that the 

money the customers gave to the contractor became his upon receipt. Therefore, the 

money could not be embezzled because it was the defendant’s own property, not the 

property of another that had been entrusted to him. (See People v. Holder, supra, 53 

Cal.App.45 at p. 48.) 

This case is different. The Assignment Assumption of Lease was an agreement 

between Ivy Academia and EGeneration, not between Ivy Academia and Selivanov, or 

between Ivy Academia and Western Commercial Bank. Under the Assignment 

Assumption of Lease, the money in Ivy Academia’s accounts remained the property of 
43

Ivy Academia, which entrusted Selivanov to oversee it. Neither Selivanov nor 

EGeneration nor Western Commercial Bank acquired title to Ivy Academia’s money 

under the contract. Moreover, the People presented substantial evidence that the rent 

increase that purportedly prompted the payments to Western Commercial Bank was a 

sham transaction despite the board’s approval. The jury reasonably could have 

concluded that Ivy Academia had no obligation to continue to make the loan payments it 

was making to EGeneration’s purported “designees,” J & N Amoroso Family 

Investments and Western Commercial Bank, particularly since Amoroso knew nothing of 

the rent arrangement, the board was not informed of the loan transfer until more than a 

year after its effective date, and Western Commercial Bank was not informed about the 

loan transfer for at least five months after the board approved it. 

B. Claim-of-Right Defense Instruction

1. Background

Selivanov’s theory at trial was that the payments Ivy Academia made to 

EGeneration at his direction could not constitute embezzlement as alleged in counts 8, 

19, 22, and 25, because Ivy Academia owed him deferred salary, as reflected in the Due 

to Management account.16 That is, the “transfer of that money was justified because that 

belonged to us.” The court told him it had “no problem with [him] making that 

argument,” but denied his request to instruct the jury on the claim-of-right defense, which 

“provides that a defendant’s good faith belief, even if mistakenly held, that he has a right 

or claim to property he takes from another negates the felonious intent necessary for 

conviction of theft or robbery.” (People v. Tufunga (1999) 21 Cal.4th 935, 938

 

16 Selivanov quotes liberally in his briefing the trial court’s discussion of the 

claim-of-right defense as it applied to count 2, the embezzlement count involving the 

American Express charges. However, Selivanov explicitly stated, both in his briefs and 

at oral argument, that he “did not associate the claim-of-right defense with his AMEX 

Card charges” and is not claiming this particular instructional error on that count. 

Although Berkovich requested a claim-of-right instruction as to count 2, she does not 

now argue that she was entitled to a claim-of-right instruction on count 2 or any other 

embezzlement count, nor does she join Selivanov’s argument to the extent it may be 

applicable to count 2, the only embezzlement count on which she was convicted. 
44

(Tufunga).) Citing People v. Barnett (1998) 17 Cal.4th 1044, the court explained that it 

understood the claim-of-right defense to be applicable only where a defendant claimed 

ownership of specific, identifiable money or property. In the court’s view, “claim of 

right requires you to be able to identify and say this money exactly is my money,” and 

“all this money was flown all over the place, and there is no identifiable money that you 

can point to and say that was the money that I was owed for my salary Due to 

Management account that was the money that I was owed for my loan.” 

Selivanov also asked the court to provide a claim-of-right instruction on count 40, 

the embezzlement count stemming from Ivy Academia’s continued payments on the 

Western Commercial Bank loan. He contended that claim-of-right should be a “slam 

dunk” on that count because “it’s the most open and transparent thing we did,” going 

through the board and the bank and making the payments “openly and validly under a 

claim of right.” The court disagreed, stating, “if you do it openly and validly you usually 

do it before you actually do the transaction.” 

The court gave the jury an instruction regarding good faith. Using the CALCRIM 

instruction for embezzlement, CALCRIM No. 1806, the court told jurors that “A good 

faith belief in acting with authorization to use the property is a defense. [¶] In deciding 

whether the defendant believed that he or she had a right to the property and whether he 

or she held that belief in good faith, consider all the facts known to him or her at the time 

he or she obtained the property, along with all the other evidence in the case. The 

defendant may hold a belief in good faith even if the belief is mistaken or unreasonable. 

But if the defendant was aware of facts that made that belief completely unreasonable, 

you may conclude that the belief was not held in good faith.” The court separately

instructed the jury on mistake of fact: “An act committed or an omission made in 

ignorance or by reason of a mistake of fact which disproves any criminal intent is not a 

crime. [¶] Thus a person is not guilty of a specific intent crime which includes the 

crimes charging Theft by Embezzlement and Money laundering if he or she commits an 

act or omits to act under an actual belief in the existence of certain facts and 
45

circumstances which, if true, would make the act or omission lawful.” (CALJIC No. 

4.35.) 

During his closing argument, Selivanov told the jury that although “much of the 

conduct at issue here is not in dispute,” “there will be a question about what was Mr. 

Selivanov thinking when he entered into certain transactions.” He emphasized that the 

board approved both the rent increase and lease transactions, and that the transactions 

were reviewed by Ivy Academia’s outside auditors. With respect to the transfers of 

money to EGeneration, Selivanov argued that “a debt to EGeneration and AJFK is a debt 

to Mr. Selivanov and Miss Berkovich,” and that because the Due to Management account 

at all relevant times had a balance “easily in excess of the transfers at issue here,” “he 

could take the money back as repayment.” 

The jury found Selivanov guilty on all of the embezzlement counts. It further 

found that Selivanov, “with the intent to do so, took money exceeding $65,000.00, within 

the meaning of Penal Code section 12022.6(a)(1).” 

2. Analysis

The claim-of-right defense originated in the common law as a defense to larceny 

or robbery (Tufunga, supra, 21 Cal.4th at p. 945), which, like embezzlement, require the 

specific intent to permanently deprive another of property. “‘It has long been the rule in 

this state and generally throughout the country that a bona fide belief, even though 

mistakenly held, that one has a right or claim to the property negates felonious intent. 

[Citations.] A belief that the property taken belongs to the taker [citation], or that he had 

a right to retake goods sold [citation] is sufficient to preclude felonious intent. Felonious 

intent exists only if the actor intends to take the property of another without believing in 

good faith that he has a right or claim to it. [Citation.]’ [Citation.]” (People v. Barnett, 

supra, 17 Cal.4th at p. 1143.) 

The Legislature codified the claim-of-right defense in 1872. Unchanged since, 

section 511 provides: “Upon any indictment for embezzlement, it is a sufficient defense 

that the property was appropriated openly and avowedly, and under a claim of title 

preferred in good faith, even though such claim is untenable. But this provision does not 
46

excuse the unlawful retention of the property of another to offset or pay demands held 

against him.” (§ 511.) The good-faith nature of a defendant’s belief in his or her right to 

the property taken is a crucial element; the claim-of-right defense is not available if a 

defendant was aware of contrary facts that rendered his or her belief wholly 

unreasonable. (People v. Stewart (1976) 16 Cal.3d 133, 140.) The claim-of-right defense 

also is inapplicable where a defendant attempts to conceal the taking (id. at p. 141), 

where the claim of right to the property arises from “notoriously illegal” activity (People 

v. Hendricks (1988) 44 Cal.3d 635, 642), or “where an employee unilaterally determines 

that he or she is entitled to certain wages and thereafter, without authorization, 

appropriates the property of the employer in purported payment of such wages” (People 

v. Creath (1995) 31 Cal.App.4th 312, 318).

“‘[A] trial court is not required to instruct on a claim of-right defense unless there 

is evidence to support an inference that [the defendant] acted with a subjective belief he 

or she had a lawful claim on the property.’ [Citations.]” (Tufunga, supra, 21 Cal.4th at 

p. 944.) “‘“In evaluating the evidence to determine whether a requested instruction 

should be given, the trial court should not measure its substantiality by weighing the 

credibility [of the witnesses]. . . . Doubts as to the sufficiency of the evidence to warrant 

instructions should be resolved in favor of the accused. [Citations.]”’ [Citation.]” (Ibid.) 

Selivanov contends the evidence was sufficient to support the requisite inference here. 

We agree.

Selivanov presented testimony supporting his theory that he had a good faith claim 

of right to the funds at issue. Defense expert Jan Goren testified that the Due to 

Management account could be bundled together with the Due to Academy and Due to 

EGeneration accounts, and the evidence showed that the Due to Management account 

reflected a large amount owed to defendants at all relevant times. Of course, other 

evidence showed that Selivanov made the payments to his business rather than to himself,

did not document the transfers in the Due to Management account (though he did 

document them elsewhere in Ivy Academia’s QuickBooks), and did not prepare tax forms 

indicating he received salary payments. However, these conflicts in the evidence were 
47

for the jury to resolve; we cannot, as the People suggest, dismiss Selivanov’s evidence as 

“entirely implausible.” We likewise cannot disregard Selivanov’s evidence that the loan 

payments were made in good faith, pursuant to a legitimate contract, despite the ample 

evidence in the record suggesting otherwise. Nor can we embrace the trial court’s 

rationale that the defense was inapplicable because the money secreted was not 

identifiable as Selivanov’s or Western Commercial Bank’s. The cases it relied upon for 

that principle addressed the defense’s application in the robbery context, where strong 

policy concerns disfavoring self-help through force or violence necessitate a narrow 

construction of the defense. (See Tufunga, supra, 21 Cal.4th at pp. 938, 948-950; People 

v. Barnett, supra, 17 Cal.4th at pp. 1143-1146.)

We disagree with Selivanov, however, to the extent he contends that “the jury was 

left unequipped to consider the ample evidence at trial pointing to [his] lack of guilt” 

under a claim-of-right theory. “[A] failure to instruct where there is a duty to do so can 

be cured if it is shown that ‘the factual question posed by the omitted instruction was 

necessarily resolved adversely to the defendant under other, properly given instructions.’ 

[Citation.]” (People v. Stewart, supra, 16 Cal.3d at p. 141.)17 That showing was made 

here. The court instructed the jury on good faith, a necessary element of the claim-ofright defense, and the jury nonetheless returned guilty verdicts on all of the 

embezzlement counts. By making these findings, the jury demonstrated that it 

necessarily rejected one of the key elements of the claim-of-right defense. 

Selivanov asserts that the court’s instruction on good faith was too narrow, 

because it “only told the jury that acting with authorization could serve as a defense,” 

rather than informing the jury that claim of title was at issue. He relies on People v. 

 

17 “It is not clear what standard applies to cases involving error in instructing on 

the claim-of-right defense. In cases involving other kinds of defenses, courts have 

applied the [People v.]Watson [(1956) 46 Cal.2d 818, 836] standard.” (People v. Russell 

(2006) 144 Cal.App.4th 1415, 1431, overruled in part by People v. Covarrubias (2016) 1 

Cal.5th 838, 874; see also People v. Sojka (2011) 196 Cal.App.4th 733, 738.) We find 

the error harmless even under the more stringent standard set forth in Chapman v. 

California, supra, 386 U.S. at p. 24.) 
48

Threestar (1985) 167 Cal.App.3d 747 (Threestar). There, the defendant was accused of 

embezzlement in connection with his retention and sale of audio speaker stands after the 

business for which he worked disbanded. The prosecution theorized that the defendant 

and the owner of the business agreed that defendant would sell the business’s current 

inventory of stands on a commission basis. Contrary to this arrangement, defendant 

ordered additional stands and sold them without informing the business owner or 

distributing her full share of the profits to her. Defendant claimed that no agreement 

existed. According to his theory, he owned the patent rights to the stands and made 

voluntary payments to the business owner “to help her recoup her losses in the 

corporation.” (See Threestar, supra, 167 Cal.App.3d at pp. 751-752.) He claimed he had 

a good faith belief that he could lawfully sell the speaker stands, and that the trial court 

had a sua sponte duty to instruct the jury on the claim-of-right defense. (Id. at p. 753.) 

We agreed. (Ibid.) We further concluded that the instruction the court delivered could 

have misled the jury. We held that the pertinent part of the instruction, “if one takes 

business proceeds in the good faith belief he has permission to keep such proceeds he is 

not guilty of theft,” did not “address the defense theory of the evidence that no such sales 

agreement existed.” (Id. at p. 756.) We found the error prejudicial because, under the 

instructions given, “the jury did not necessarily find that appellant lacked a good faith 

belief that he was acting pursuant to a lawful ‘claim of title’ based on his patent rights.” 

(Id. at pp. 756-757.) We also noted that the instructions given omitted mention of the 

“open and avowed” element of the claim-of-right defense. (Id. at p. 756.) 

Threestar is distinguishable. There, the instruction the court gave did not “address 

the defense theory of the evidence that no such sales agreement existed.” (Threestar, 

supra, at p. 756.) That is, it “did not advise the jury that [defendant’s] good faith belief 

based on his patent rights could constitute a defense to embezzlement.” (Ibid.) Even if 

the jury credited defendant’s evidence to that effect, the jury instructions did not inform 

the jurors that they could find defendant not guilty. Here, the jury instructions the court 

gave reflected defendant’s theory of the case. The good faith instruction the court 

delivered here, part of the CALCRIM instruction on embezzlement (to which Selivanov 
49

did not object), informed the jury not only that “A good faith belief in acting with 

authorization to use the property is a defense,” but also that a defendant’s belief “that he 

or she had a right to the property” is a defense. Thus, it accurately informed the jury that 

a defendant could negate his or her felonious intent by demonstrating a good faith belief 

that he or she was authorized to use or legally possess the property. Unlike Threestar, 

where the jury instruction was misleading because it did not comport with the 

defendant’s alleged justification for selling the goods and keeping the profits, the good 

faith instruction here aligned with Selivanov’s theory of the case, namely that he had a 

right to the money he transferred to EGeneration because he was owed deferred salary 

payments. 

Selivanov also points to our observation in Threestar that the trial court in that 

case failed to instruct on the “openly and avowedly” element of the claim-of-right 

defense. (See Threestar, supra, 167 Cal.App.3d at p. 756.) This dicta does not compel 

the conclusion that Selivanov was prejudiced here. Even if the omission of the openly 

and avowedly element was the deciding factor in Threestar, which it plainly was not, the 

omission of such an instruction here was not prejudicial to Selivanov. The jury’s 

findings that Selivanov acted with the intent to deprive Ivy Academia of the funds it had 

entrusted to him demonstrate that the jury necessarily would have rejected the claim-ofright defense even if it had concluded Selivanov took the property openly and avowedly. 

III. Corporate Tax Convictions (counts 32-36)

The jury found Selivanov guilty of filing false corporate tax returns for AJFK and 

EGeneration for the years 2004-2008. (Rev. & Tax. Code, § 19705, subd. (a).) 

Selivanov contends those convictions must be reversed because the trial court admitted 

QuickBooks records for AJFK and EGeneration absent a proper foundation or exception 

to the hearsay rule. He further argues that the People failed to prove an essential element 

of the crime, namely that he did not believe the statements in the returns were true and 

correct as to every material matter. We do not find either of these contentions persuasive. 
50

A. Admission of AJFK/EGeneration QuickBooks Printouts (Exhibit 105)

1. Background

While LAUSD forensic accountant Delos Santos was on the stand, the People 

identified as Exhibit 105 a collection of AJFK/EGeneration QuickBooks printouts. 

Selivanov objected to the People’s attempt to discuss the printouts with Delos Santos on 

the grounds of “foundation on the business records.” The court overruled the objection, 

stating that expert witnesses “can rely on hearsay in order to reach their opinion.” The 

court explained to the jury that, “at this moment,” Exhibit 105 was “not necessarily 

coming in for the truth of the matter, but it is coming in to help explain what her opinion 

is and you may consider it as such.” Delos Santos proceeded to testify that she was 

familiar with the QuickBook documents, which had been obtained “[f]rom the search 

warrant” of Ivy Academia. Delos Santos also testified that Selivanov told her in 2007 

that there were no accounting books or electronic records for EGeneration. Prosecution 

witness Michael Atkinson previously had testified to the same thing. 

Selivanov objected again when the prosecutor asked Delos Santos if the 

QuickBooks documents appeared to have been produced in the ordinary course of 

business. At sidebar, Selivanov acknowledged that an electronic copy of the QuickBooks 

had been found on an Ivy Academia server but argued that there had been no testimony 

about who prepared them or whether they were kept in the ordinary course of business.18

The People told the court “we want it to come in for the truth” and explicitly invoked the 

business records exception to the hearsay rule as a basis to achieve that aim. The

prosecutor argued that someone like Delos Santos, who was “eminently qualified on 

QuickBooks,” could “testify that all QuickBooks are kept according to the way the 

software directs them to be kept.” The court ruled, “I am allowing them at this moment 

for the expert relied on them and reached their opinions, and it is coming in [for] the truth 

of the matter.” The court deferred ruling on the admissibility of the QuickBook printouts

 

18 Ivy Academia bookkeeper Pilyavskaya testified that she did not do accounting

for defendants’ other business entities. 
51

under the business records exception to the hearsay rule and asked the parties to research 

the issue further. 

During the lunch recess, the court and counsel discussed two cases the court 

located that addressed the business records exception, People v. Dean (2009) 174 

Cal.App.4th 186 and People v. Hovarter (2008) 44 Cal.4th 983. The court opined that 

both cases “seem to speak that you have to have people that can lay a foundation that 

they have some familiarity with the records, not just some person who is an auditor 

looking at records and then laying a foundation based on that.” The court accordingly 

expressed “grave doubts” as to whether the QuickBooks printouts were admissible for 

their truth pursuant to the business records exception. It noted, however, that “one of the 

ways to get around that” might be by arguing that “those are admissions or you know or 

adoptive [admissions] or something like that.” 

Two days later, outside the presence of the jury, the parties again addressed the 

admissibility of the QuickBooks printouts for their truth as business records. Neither side 

presented the court with any case authority, and the People did not accept the court’s 

invitation to argue that the printouts were admissions. Instead, the People suggested that

the printouts were not in accordance with AJFK/EGeneration’s actual expenditures, as 

reflected by a collection of checks and credit card statements identified as Exhibit 106. 

The People contended, without citing any authority, that “the fact that these books are 

going to be shown to be false, meaning they don’t match up to what was filed in the 

return shows they are not being offered for their truth. They are being offered as 

circumstantial evidence that the defendant [Selivanov] knew he was lying on his tax 

returns. It will be tied circumstantially.” The court agreed with “this last argument,”

ruling, “[i]t comes in for non-hearsay to show there is another set of books and whether 

they are true or not. I will allow them in.” 
52

The People subsequently used the QuickBooks printouts,

19 Exhibit 106, and 

various AJFK/EGeneration tax returns with Franchise Tax Board witness Rigoberto 

Salazar. He testified that numerous items booked as rent or supplies expenses in the 

QuickBooks and deducted as such on AJFK/EGeneration’s tax returns were not in fact 

rent or supplies expenses but rather payments on a credit card used to purchase items 

from businesses including Domino’s, El Pollo Loco, Albertsons, and Victoria’s Secret. 

According to Salazar, the information on the tax returns “was based on the QuickBooks.” 

The admissibility of the QuickBooks printouts arose for a third time at the close of 

the People’s case-in-chief. Again, the court ruled the documents were admissible. It 

explained: “I am allowing the records in. I am treating this just like you would receive a 

letter or another item. I had a series of cases on a piece of paper, but basically it is 

coming in for a non-hearsay purpose to show not only that the fact that the records [sic] 

but these kind of records were found in a location and the school run by these people and 

their indicia they knew about these records and had some familiarity or some connection 

with these records cause of the location they were found just like if you found a telephone 

bill or a letter addressed to someone you could then jump from that to the fact that that 

person exercised dominion and control over that location, and I think that the fact that 

they were found on a server at the school, that these people were running, he was the 

executive director, the wife was the president, I will allow it for that reason. . . .” The 

court further stated that it was admitting Exhibit 105 “basically for all purposes because I 

think there is some indicia that this is connected to the defendants,” and explained that if 

it had come in only to support an expert’s opinion, “I might not admit it for the jury to 

look at, and you would just have to rely and argue from the testimony of the witness.” 

 

19 They actually used Exhibit 94, a spreadsheet Franchise Tax Board special agent 

Rigoberto Salazar prepared using data from Exhibit 105. Selivanov objected to Exhibit 

94 “on the basis of the discussion that we had at side-bar earlier,” and the court overruled 

the objection. 
53

2. Analysis 

Hearsay is “evidence of a statement that was made other than by a witness while 

testifying at the hearing and that is offered to prove the truth of the matter stated.” (Evid. 

Code, § 1200, subd. (a).) Hearsay is not admissible unless it meets the requirements of 

one of the exceptions set forth in Evidence Code sections 1220-1390. (Evid. Code, § 

1200, subd. (b); see also People v. DeHoyos (2013) 57 Cal.4th 79, 132.) A trial court’s 

ultimate ruling on admissibility “implies whatever finding of fact is prerequisite thereto; a 

separate or formal finding is unnecessary unless required by statute.” (Evid. Code, § 402, 

subd. (c).) We review the trial court’s conclusions regarding foundational facts for 

substantial evidence and its decision to admit or exclude a hearsay statement for abuse of 

discretion. (People v. DeHoyos, supra, 57 Cal.4th at p. 132.) We review the ruling, not 

the rationale; “[t]he ruling must be upheld if the evidence was admissible under any 

hearsay exception.” (People v. Karis (1988) 46 Cal.3d 612, 635.) 

Our review is complicated by the People’s shifting explanations as to the purpose 

for which the QuickBooks printouts were being offered. Initially, they told the trial court, 

“we want it to come in for the truth” and invoked the business records exception to the 

hearsay rule as the vehicle to accomplish that end. After the court expressed “grave 

doubts” about the applicability of that particular hearsay exception, the People changed 

course and claimed that the QuickBooks printouts “are not being offered for their truth” 

but instead were being offered for their falsity, “as circumstantial evidence that the 

defendant [Selivanov] knew he was lying on his tax returns.” For the sake of 

completeness, we consider both possibilities. 

To the extent the QuickBooks documents were offered to prove their falsity, we 

agree with the People that they were not hearsay. “A statement is not hearsay when 

offered to show the statement is false.” (People v. Ogg (2013) 219 Cal.App.4th 173, 184, 

citing People v. Mendoza (1987) 192 Cal.App.3d 667, 672-673; see also People v. 

Sanchez (2016) 63 Cal.4th 665, 674 [“a hearsay statement is one in which a person makes 

a factual assertion out of court and the proponent seeks to rely on the statement to prove 

that assertion is true”].) The QuickBooks printouts accordingly were admissible for this 
54

purpose so long as they were relevant and not unduly prejudicial (see Evid. Code, §§ 

350-352), points defendants never contested. 

To the extent the QuickBooks documents were being offered for their truth, we 

agree with Selivanov that they were inadmissible hearsay unless they satisfied the 

requirements of one of the exceptions to the hearsay rule. At trial (and now on appeal), 

the People argued that the business records exception was applicable. That exception is 

codified in Evidence Code section 1271, which provides: “Evidence of a writing made as 

a record of an act, condition, or event is not made inadmissible by the hearsay rule when 

offered to prove the act, condition, or event if: [¶] (a) The writing was made in the 

regular course of a business; [¶] (b) The writing was made at or near the time of the act, 

condition, or event; [¶] (c) The custodian or other qualified witness testifies to its identity

and the mode of its preparation; and [¶] (d) The sources of information and method and 

time of preparation were such as to indicate its trustworthiness.” The business records 

exception is based on the premise that records made and relied upon in the regular course 

of business may be regarded as trustworthy without the verification of all persons who 

contributed to them. (See People v. Crosslin (1967) 251 Cal.App.2d 968, 975 (discussing 

predecessor to current Evidence Code section 1271).) It eliminates the need to call each 

witness by simply substituting the record of the transaction instead. (Ibid.) 

“The key to establishing the admissibility of a document made in the regular 

course of business is proof that the person who wrote the information or provided it had 

knowledge of the facts from personal observation.” (Jazayeri v. Mao (2009) 174 

Cal.App.4th 301, 322.) The witness called to present this proof “need not have been 

present at every transaction to establish the business records exception; he or she need 

only be familiar with the procedures followed.” (Ibid.) Here, neither of the two 

witnesses with whom the People discussed Exhibit 105—Delos Santos and Salazar—had 

the requisite knowledge of AJFK’s or EGeneration’s accounting or recordkeeping 

procedures. Though these witnesses may have been knowledgeable about QuickBooks 

and accounting generally, they could not offer the jury any information about the 

“identity and the mode of . . . preparation” (Evid. Code, § 1271, subd. (c)) of the 
55

particular QuickBooks documents offered as Exhibit 105. The closely analogous case of 

Sierra Managed Asset Plan, LLC v. Hale (2015) 240 Cal.App.4th Supp. 1 is instructive.

There, a debt collector acquired the rights to a delinquent credit card account and sued the 

card holder in a limited civil collection case. (Id. at pp. 3-4.) The debt collector 

submitted as evidence a declaration by one of its employees, Mr. Roberts, which included 

as attachments copies of the card holder’s credit card statements. (Id. at p. 4.) The card 

holder challenged the admissibility of the statements on appeal, and the Court of Appeal 

concluded that the trial court abused its discretion in admitting the statements under the 

business records exception. (See id. at pp. 7-9.) The court noted that Mr. Roberts had 

never worked at the credit card company that created the documents, was not a custodian 

of the documents, and lacked personal knowledge about the account and charges in 

question beyond what he learned upon acquiring the documents from the credit card 

company. (Id. at p. 8.) The court ruled that “Mr. Roberts’s declaration and testimony at 

trial simply do not meet the necessary foundation” for the business records exception, 

because “[a]t best” all they established was that the debt collector, “as assignee from the 

creditor, received records originating from Citibank concerning the account in question.” 

(Id. at p. 9.) Delos Santos and Salazar are no different from Mr. Roberts, the 

QuickBooks printouts are analogous to the credit card statements, and the business 

records exception is equally inapplicable in this case.

However, the AJFK/EGeneration QuickBooks printouts fit within the “authorized 

statements” hearsay exception codified in Evidence Code section 1222. That section 

provides that “Evidence of a statement offered against a party is not made inadmissible 

by the hearsay rule if: [¶] (a) The statement was made by a person authorized by the 

party to make the statement or statements for him concerning the subject matter of the 

statement; and [¶] (b) The evidence is offered either after admission of evidence 

sufficient to sustain a finding of such authority or, in the court’s discretion, as to the order 

of proof, subject to the admission of such evidence.” The People presented evidence that 

AJFK/EGeneration was a business owned and operated by Selivanov and Berkovich, and 

that Selivanov was personally involved in the day-to-day financial affairs of 
56

AJFK/EGeneration. They also presented evidence that Selivanov, with assistance from 

Pilyavskaya, was exclusively responsible for preparing and maintaining similar 

QuickBooks accounts at Ivy Academia; that Pilyavskaya had nothing to do with the 

AJFK/EGeneration QuickBooks; that the AJFK/EGeneration QuickBooks were found on 

an Ivy Academia server after Selivanov denied their existence to both Atkinson and 

Delos Santos; that an accountant prepared EGeneration’s taxes in accordance with the 

QuickBooks; and that the accountant had no contact with Berkovich. Collectively, this 

evidence was sufficient to satisfy the authorized statements exception: the jury readily 

could infer that Selivanov either prepared the AJFK/EGeneration QuickBooks himself or 

directed someone else affiliated with AJFK/EGeneration to do so. (See O’Mary v. 

Mitsubishi Electronics America, Inc. (1997) 59 Cal.App.4th 563, 570.)

Although the People did not invoke this hearsay exception below, the trial court 

appears to have considered it. In its ultimate ruling, the court emphasized that it was 

admitting the QuickBooks printouts because they bore indicia that Selivanov had a 

connection with the QuickBooks: he served as executive director of Ivy Academia, and 

the records were recovered from the school’s server after Selivanov denied their 

existence. Whether the QuickBooks printouts were offered for their truth or falsity, we 

are satisfied that the trial court did not abuse its discretion in admitting them for all 

purposes. 

B. Sufficiency of the Evidence

Selivanov argues that the corporate tax convictions must be reversed for an 

additional reason: the evidence failed to establish that he “did not believe the statements 

made in the relevant corporate tax returns were true and correct.” We disagree.

The People charged Selivanov with violating Revenue and Taxation Code section 

19705, subdivision (a)(1), which criminalizes as a felony the willful making and 

subscribing of “any return, statement, or other document, that contains or is verified by a 

written declaration that it is made under penalty of perjury” that the defendant “does not 

believe to be true and correct as to every material matter.” (Rev. & Tax. Code, § 19705, 

subd. (a)(1).) Selivanov contends the record contains no direct evidence that he knew or 
57

believed the AJFK/EGeneration tax returns included false information, and no 

circumstantial evidence that he knowingly misclassified AJFK/EGeneration’s expenses. 

He points out that his accountant and tax preparer was not called to testify, and argues 

that “no attempt was made to show whether Mr. Selivanov provided accurate information 

to his certified public accountant.” He also reiterates that evidence was lacking as to the 

preparation and maintenance of the AJFK/EGeneration QuickBooks. 

These arguments miss the mark in light of the whole record, which we view in the 

light most favorable to the verdict. (People v. Clark, supra, 52 Cal.4th at p. 943.) The 

People presented a 194-page exhibit containing checks and credit card statements that 

illustrated the nature of AJFK/EGeneration’s expenditures and cash flow, and testimony 

from Salazar interpreting those documents. All of the checks were signed by Selivanov, 

and all of the credit card statements were addressed to him. The jury could conclude 

from this evidence that Selivanov was either directly involved in day-to-day financial 

matters at AJFK/EGeneration or had knowledge of them. The People also introduced the 

QuickBooks accounting records for AJFK/EGeneration, along with testimony that the 

entries in those books diverged from the expenditures documented in AJFK 

EGeneration’s checks and credit card statements. As discussed above, the jury could 

infer from all of the circumstances that Selivanov prepared or authorized the preparation 

of the QuickBooks accounts, and therefore was aware that they falsely represented the 

nature of numerous AJFK/EGeneration transactions. Finally, the People introduced the 

tax returns at issue, which Selivanov signed under penalty of perjury and which aligned 

with the QuickBooks rather than the documentary evidence of AJFK/EGeneration’s 

finances. The jury also learned, via stipulation, that the accountant who prepared the 

taxes for EGeneration, a business owned by both Selivanov and Berkovich, never had 

any contact with Berkovich. This evidence is substantial and supports the jury’s 

conclusion that Selivanov knew that AJFK/EGeneration’s tax returns, which tracked the 

AJFK/EGeneration QuickBooks stored on Ivy Academia’s server, contained information 

that was not true and correct. 
58

IV. Personal Tax Convictions (counts 27-31)

The jury convicted Selivanov of violating Revenue and Taxation Code section 

19705, subdivision (a)(1) with respect to his personal income taxes for the years 2004-

2008. Selivanov contends these convictions cannot stand because they were “follow-on 

charges that were wholly dependent on liability for” other substantive charges, the 

embezzlement convictions in counts 2, 19, 22, and 25. That is, the People alleged that 

Selivanov failed to report as income the money he embezzled in counts 2, 19, 22, and 25.

(See People v. Hagen (1998) 19 Cal.4th 652, 671 [“it has long been settled law that 

embezzled funds are taxable income”].) Selivanov argues that reversal of the 

embezzlement convictions also must result in reversal of the convictions for willfully 

filing false or fraudulent personal tax returns. This argument cannot succeed in light of 

our rulings above sustaining the embezzlement counts. 

Selivanov makes an additional argument pertaining to count 27 only. That count 

alleged that Selivanov filed a false personal income tax return in 2004. There is no 

dispute, however, that all of the embezzlement conduct alleged and proven in counts 2, 

19, 22, and 25 post-dates 2004: the American Express charges began in 2005, and the 

other pertinent embezzlements occurred in 2007. Selivanov accordingly contends that 

there is no evidence supporting his conviction for filing a false personal income tax return 

in 2004. In his reply brief and a footnote in his opening brief, Selivanov claims that the 

People failed to present evidence that he underreported income on either his personal or 

corporate income tax returns in 2004. Therefore, he contends, the People failed to prove 

any violation of Revenue and Taxation Code section 19705, subdivision (a)(1) by virtue 

of false statements on the 2004 EGeneration tax return “flowing through” to his personal 

tax return. 

This argument is not persuasive. Our Supreme Court has explained that a false 

statement is “material” for purposes of section 19705 when it has “some objective 

potential for interference with the calculation or monitoring of income or tax liability.”

(People v. Hagen, supra, 19 Cal.4th at pp. 667-668 (emphasis omitted); see also Stark v. 

Superior Court (2011) 52 Cal.4th 368, 401.) Whether it results in the over- or 
59

underreporting of a taxpayer’s income or liabilities, a purposeful false statement on a tax 

return plainly carries the objective potential to interfere with the Franchise Tax Board’s 

ability to calculate and monitor income and tax liability. 

Although Selivanov is correct that the People did not present evidence that he 

failed to report embezzled funds as income in 2004, he overlooks their evidence that 

falsehoods in the form of overstated deductions on the 2004 EGeneration tax return 

flowed through to his personal tax return. Salazar testified that losses or gains reported 

on EGeneration’s tax returns “passed through” or “flow[ed] over into” the personal tax 

returns of its members, Selivanov and Berkovich. Salazar further testified that 

EGeneration falsely reported $59,707 in deductions in 2004, thereby affecting its income 

and that of Selivanov. As discussed above, the record contained substantial evidence 

from which the jury could conclude that Selivanov knowingly subscribed to false 

information on the corporate tax returns; therefore, the jury could conclude he equally 

had knowledge that the same information remained false when carried through to his 

personal returns. 

V. Restitution 

The trial court found Berkovich and Selivanov jointly and severally liable for 

$22,396.60 in restitution to Ivy Academia in connection with the fraudulent American 

Express charges, and further ordered Selivanov alone to pay an additional $205,499.48 to 

Ivy Academia and $43,899 to the Franchise Tax Board. Both defendants contest these

orders. Berkovich contends the court abused its discretion at the restitution hearing by 

declining to accept and consider juror statements and declarations she submitted. 

Selivanov joins this argument. He also argues that he should not be jointly and severally 

liable for the $22,396.60 because he had nothing to do with the charges on Berkovich’s 

American Express card, and there was no evidence that the expenses he charged could be 

considered an economic loss to Ivy Academia. 

Selivanov raises several additional challenges to his restitution order. First, he 

contends that the court erred in ordering him to pay any restitution to Ivy Academia 

because Ivy Academia never made a claim of actual economic loss. Second, he contends 
60

that the court erred in ordering him to pay $126,654.73 in connection with count 40 (Ivy 

Academia’s continued loan payments to Western Commercial Bank). He argues that the 

loan payments Ivy Academia made did not cause it economic loss because they were 

deducted from the increased rent it owed to EGeneration. Finally, Selivanov contends 

there was no factual or rational basis underlying the court’s order that he pay $43,899 in 

restitution to the Franchise Tax Board. We find persuasive only Selivanov’s argument 

regarding his joint and several liability. 

A. Standard of Review

“Generally speaking, restitution awards are vested in the trial court’s discretion 

and will be disturbed on appeal only when the appellant has shown an abuse of 

discretion. [Citation.] ‘“[E]ven though the trial court has broad discretion in making a 

restitution award, that discretion is not unlimited. While it is not required to make an 

order in keeping with the exact amount of loss, the trial court must use a rational method 

that could reasonably be said to make the victim whole, and may not make an order 

which is arbitrary or capricious.”’ [Citation.] ‘“When there is a factual and rational basis 

for the amount of restitution ordered by the trial court, no abuse of discretion will be 

found by the reviewing court.”’ [Citation.]” (People v. Holmberg (2011) 195 

Cal.App.4th 1310, 1320.) “To facilitate appellate review of the trial court’s restitution 

order, the trial court must take care to make a record of the restitution hearing, analyze 

the evidence presented, and make a clear statement of the calculation method used and 

how that method justifies the amount ordered.” (People v. Giordano (2007) 42 Cal.4th 

644, 664.)

B. Juror Statements and Declarations 

1. Background

In connection with her sentencing memorandum, Berkovich’s counsel submitted a 

declaration in which she relayed the contents of post-trial conversations she had with 

three jurors. According to counsel’s declaration, one juror reported that the jury as a 

whole made its own evaluation of which charges on the American Express cards were 

impermissible. The juror further stated that he personally found permissible the various 
61

meals and teacher appreciation events and concluded that less than $1500 of the charges 

were disallowable. Another juror told Berkovich’s counsel that the jury as a whole 

concluded the meals and teacher appreciation events were not criminal and that he 

personally thought the disallowable charges did not exceed $1500-$2000. A third juror 

told Berkovich’s counsel that the jury as a whole agreed the restaurants and teacher 

appreciation events were not takings. This juror also stated that she personally concluded 

that clothing, diapers, and bowling were personal expenses. 

Berkovich’s counsel spoke with three additional jurors and attached their sworn 

declarations for the court. Two of those jurors stated that the jury “ultimately accepted 

all meals, teacher appreciation events, and gifts to teachers and students, and did not 

consider those items “takings” for counts one and two,” while the third stated that the 

jury only accepted “all meals” and “most teacher appreciation events.” All three of these 

jurors elaborated on what they personally considered to be improper personal expenses. 

Berkovich’s counsel referred to the juror statements and declarations at the 

sentencing hearing, prompting the court to state that “None of that is considered by the 

court. Under [Evidence Code section] 1150, you’re not to consider anything that jurors 

say about their deliberations, so I don’t know why you did that.” Berkovich’s counsel 

explained that she did not read Evidence Code section 1150 to preclude the consideration 

of such statements at sentencing. The court reiterated, “I don’t view that as something 

the court should consider, their thinking and thoughts about jury deliberations; otherwise, 

we would have everybody doing that in every case, and they have a specific statute that 

says you are not supposed to do that, so I would prefer that you not address that.” 

Berkovich’s counsel raised the issue of the juror statements and declarations at the 

restitution hearing several weeks later. She again urged the court to consider the 

statements and declarations, which she argued supported her view that Berkovich did not 
62

personally benefit from many of the items charged to the American Express card and 

therefore should owe a lesser amount of restitution.20

The court declined. It explained: “First of all, I would not be inclined to accept 

any various affidavits filed by jurors and separate amounts of what they decided the 

restitution was. If courts were to go that route, I would have 12 different amounts of 

restitution, depending upon what the juror thought was the amount. In addition, I don’t 

have a situation where the jurors have testified in court, they’ve been examined and 

cross-examined. I have no idea why they reached whatever conclusions they reached.

And, finally, I’m absolutely convinced that 1150 prevents any consideration - - even 

though the court has wide latitude when it comes to restitution, I am certain that we are 

not supposed to take a poll of the jury and find out what they thought the amount of 

restitution should be. I have never seen that done. I’ve never heard of it being done, and 

it just does not seem to me to be a reasonable thing to do. I am, rather, more influenced -

- and I did see and hear the evidence in this case, and I’m more influenced by the fact of 

the testimony of the auditors in this case who did conduct an audit and who did prepare 

these records, which have been submitted by the People, but which were also submitted 

as evidence in the case. I think this is an example of having some very strong 

recordations of AmEx charges and other things that were spent that were not for 

educational purposes; they were for the benefit of the defendants.” 

2. Analysis

Both defendants contend the court erred as a matter of law and therefore abused its 

discretion by citing Evidence Code section 1150 as a basis for excluding the juror 

statements and declarations. They argue that Evidence Code section 1150 was not 

applicable at their restitution hearing because they were not seeking to invalidate or 

attack the verdict but rather were submitting the statements and declarations “to give the 

 

20 Selivanov likewise argued that the juror statements and declarations established 

that he should be liable only for $367.27 in restitution on count 2, the total of the charges 

on his credit card for “non-business meals, non-teacher appreciation events and nonteacher gifts.” 
63

trial court relevant and useful information as to the jurors’ perceptions of amount of loss 

in question.” They further contend that the court’s refusal to consider the juror 

statements and declarations deprived them of a full and fair opportunity to test the basis 

for the restitution order. The People recognize that “it is doubtful that the provisions of 

Evidence Code section 1150, prohibiting the use of juror declarations concerning their 

mental processes, were triggered.” They argue that the court’s ruling was supported by 

legitimate policy reasons and therefore did not constitute an abuse of discretion. 

Evidence Code section 1150 provides “(a) Upon an inquiry as to the validity of 

any verdict, any otherwise admissible evidence may be received as to statements made, 

or conduct, conditions, or events occurring, either within or without the jury room, of 

such a character as is likely to have influenced the verdict improperly. No evidence is 

admissible to show the effect of such statement, conduct, condition, or event upon a juror 

either in influencing him to assent to or dissent from the verdict or concerning the mental 

processes by which it was determined. [¶] (b) Nothing in this code affects the law 

relating to the competence of a juror to give evidence to impeach or support a verdict.” 

As the parties all recognize, this statute by its terms “applies only to postverdict inquiries 

into how error or misconduct had affected the juror in reaching the verdict.” (People v. 

Cooper (1991) 53 Cal.3d 771, 838.) Because defendants were not challenging the 

verdict, and were not alleging juror misconduct, Evidence Code section 1150 did not 

prevent the court from considering the proffered juror statements and declarations.

That does not mean the court was required to consider this evidence, however. 

“[T]rial courts have discretion regarding the formalities they follow and the evidence they 

consider at such hearings.” (People v. Millard (2009) 175 Cal.App.4th 7, 42.) 

Defendants fail to recognize that such discretion cuts both ways. Just because a court is 

permitted to consider certain evidence does not mean it is required to do so. Here, the 

court offered at least one valid reason for its refusal to consider the juror statements and 

declarations: it did not want to open the door to the bombardment of sentencing courts 

with up to 12 potentially conflicting juror declarations in every case involving restitution.

(Cf. People v. Arbuckle (1978) 22 Cal.3d 749, 755 [“We cannot be oblivious to the drain 
64

on time and public resources the demands of defendant would impose.”].) This was a 

reasonable, rational basis on which to exclude the declarations, which in this case 

provided varying accounts of the expenditures the jury as whole viewed as criminal. 

Moreover, the divergent nature of the declarations and the inability of the court and the 

People to question the jurors further could have led to the consideration of unreliable or 

even inaccurate information, which itself would have rendered the proceedings 

fundamentally unfair. (People v. Goulart (1990) 224 Cal.App.3d 71, 83.) 

We find unpersuasive defendants’ suggestion that the court’s exclusion of the 

juror statements and declarations deprived them of “the full and fair opportunity to test 

the basis for the restitution order as mandated by law.” “The scope of a criminal 

defendant’s due process rights at a hearing to determine the amount of restitution is very 

limited: ““‘A defendant’s due process rights are protected when the probation report 

gives notice of the amount of restitution claimed . . ., and the defendant has an 

opportunity to challenge the figures in the probation report at the sentencing hearing.’”

[Citations.]” (People v. Cain (2000) 82 Cal.App.4th 81, 86.) A trial court violates these 

rights if the hearing procedures are fundamentally unfair. (Id. at p. 87.) 

The procedures the court used in this case were not fundamentally unfair. The 

People submitted a sentencing memorandum requesting certain amounts of restitution, 

which they supported with trial exhibits. The court afforded defendants the opportunity 

to submit their own sentencing and restitution memoranda and to contest the People’s 

restitution figures in open court. The court’s reasonable refusal to consider the juror 

statements and declarations did not render this process unfair, particularly where the trial 

court presided over the five-week trial and “did see and hear the evidence in this case.” 

Defendants were not precluded from obtaining or submitting alternative evidence in 

support of their positions at the restitution hearing after they learned at the sentencing 

hearing that the court was disinclined to consider the juror declarations and statements. 

In short, they received the process to which they were entitled. 
65

C. Lack of Victim Request for Restitution 

Selivanov contends that his entire restitution order as to Ivy Academia must be 

reversed because “Ivy Academia, the purported victim of Mr. Selivanov’s conduct[,] has 

made no claim for victim restitution.” In his view, a victim is entitled to restitution only 

if he or she initiates and participates in the restitution process by identifying the type of 

loss sustained and its monetary value.21 This view is not in accordance with the law. 

Article I, section 28, subdivision (b)(13)(A) of the California Constitution vests in 

“all persons who suffer losses as a result of criminal activity . . . the right to seek and 

secure restitution from the persons convicted of the crimes causing the losses they 

suffer.” By its very terms, this provision expresses the “unequivocal intention of the 

People of the State of California” (Cal. Const., art. I, § 28, subd. (b)(13)(A)) that “every

victim who suffers a loss shall have the right to restitution from those convicted of the 

crime giving rise to that loss” (People v. Phelps (1996) 41 Cal.App.4th 946, 950 

(emphasis added)). “The only qualification is that the loss must be ‘the result of criminal 

activity.’ [Citation.]” (Ibid.) 

The broad constitutional right to restitution is implemented in section 1202.4, 

which provides in subdivision (a)(1) that “It is the intent of the Legislature that a victim 

 

21 Selivanov asserts that “[r]epresentatives of Ivy Academia were summoned to 

testify in court,” regarding a settlement between the board of directors and defendants, 

“but the trial court refused to hear them.” The court’s refusal to consider such evidence 

was not improper. “[T]he settlement of a civil action and release of the defendant by the 

crime victim does not discharge the defendant’s responsibility to satisfy the restitution 

order: ‘Even when a victim obtains a settlement from a company that insured the 

defendant for civil liability, the court in a criminal action may order the defendant to pay 

victim restitution. This is so because the victim “might rationally chose to accept an 

insurance settlement for substantially less than his or her losses rather than risk the 

uncertain . . . possibility that the defendant will pay the entire restitution amount” 

[citation], and the “victim’s willingness to accept the [insurance settlement] in full 

satisfaction for all civil liability, . . . does not reflect the willingness of the People to 

accept that sum in satisfaction of the defendant’s rehabilitative and deterrent debt to 

society.”’ [Citation.]” (People v. Vasquez (2010) 190 Cal.App.4th 1126, 1133.) “[A] 

release by the victim cannot act to release a defendant from his financial debt to the state 

any more than it could terminate his prison sentence.” (People v. Bernal (2002) 101 

Cal.App.4th 155, 162.) 
66

of crime who incurs an economic loss as a result of the commission of a crime shall 

receive restitution directly from a defendant convicted of that crime.” Subdivision 

(a)(3)(B) of section 1202.4 requires the trial court to order restitution to the victim(s) of a 

defendant’s crime “in accordance with subdivision (f),” which in turn states in pertinent 

part that “in every case in which a victim has suffered economic loss as a result of the 

defendant’s conduct, the court shall require that the defendant make restitution to the 

victim or victims in an amount established by court order, based on the amount of loss 

claimed by the victim or victims or any other showing to the court.” (§ 1202.4, subd. (f) 

(emphasis added).) Like the constitutional provision, these statutory provisions are 

devoid of any language limiting the class of compensable victims to those who 

affirmatively request restitution and must be broadly and liberally construed. (People v. 

Mearns (2002) 97 Cal.App.4th 493, 500-501.) Moreover, section 1202.4, subdivision (f) 

uses disjunctive language to indicate that the amount of restitution may be based either on 

the “amount of loss claimed by the victim or victims” or “any other showing to the 

court,” suggesting that a claim by the victim is not, as Selivanov argues, a “primary 

predicate condition” for the issuance of a restitution order. 

Selivanov looks primarily to People v. Fulton (2003) 109 Cal.App.4th 876, 885-

886 to support his position. In that case, which addressed whether and to what extent 

attorneys’ fees incurred by crime victims are recoverable as restitution, the Court of 

Appeal stated: “At the core of the victim restitution statutory scheme is the mandate that 

a victim who suffers economic loss is entitled to restitution and that the restitution is to be 

‘based on the amount of loss claimed by the victim.’ Thus, a victim seeking restitution 

(or someone on his or her behalf) initiates the process by identifying the type of loss 

[citation] he or she has sustained and its monetary value.” Selivanov reads this language 

to require victims to make a claim for restitution before they are entitled to receive it. We 

do not. The excerpt from People v. Fulton quotes only the first portion of the disjunctive 

language in section 1202.4, subdivision (f), and omits the second portion that permits the 

amount of restitution to be based on “any other showing to the court.” We further note 

that the parenthetical language in the People v. Fulton excerpt—“or someone on his or 
67

her behalf”—clarifies that a crime victim need not personally act on his or her own 

behalf. Instead, “someone,” such as the People, may initiate the restitution process on 

behalf of a victim. 

Selivanov also cites People v. Lai (2006) 138 Cal.App.4th 1227, 1246-1249 and 

People v. Woods (2008) 161 Cal.App.4th 1045, 1049-1053. Those cases are not on point. 

In People v. Lai, we held that “when a defendant is sentenced to state prison, section 

1202.4 limits restitution to losses caused by the criminal conduct for which the defendant 

was convicted.” (People v. Lai, supra, 138 Cal.App.4th at p. 1246.) In doing so, we 

discussed the constitutional and statutory rights to restitution in a manner similar to that 

above (see id. at pp. 1246-1247) and addressed the distinction between restitution orders 

made when a defendant is sentenced to probation and those made when a defendant is 

sentenced to prison (see id. at pp. 1247-1249). Nowhere did we state or suggest that a 

court may order restitution only upon receiving a claim from a victim. The same can be 

said for People v. Woods. There, the Court of Appeal considered whether a defendant 

convicted of being an accessory after the fact to murder lawfully could be ordered to pay 

victim restitution for economic losses stemming from the murder. (See People v. Woods, 

supra, 161 Cal.App.4th at pp. 1049-1053.) Relying heavily on People v. Lai, the court 

concluded that such a restitution order would be improper. (Ibid.) The court did not 

discuss or consider the form of the request for restitution; the case accordingly is 

inapposite to Selivanov’s argument here.

D. Joint and Several Liability

1. Background

The trial court ordered defendants to pay a total of $34,445.42 in restitution in 

connection with count 2, embezzlement via improper use of Ivy Academia’s American 

Express cards. The court ordered Selivanov solely responsible for the $12,048.82 in 

improper charges made on his card, and jointly and severally responsible for the 

$22,396.60 in improper charges made on Berkovich’s card. In doing so, the court 

accepted the People’s argument that Selivanov bore some responsibility for charges 

incurred on Berkovich’s card because he exerted control over Ivy Academia’s finances 
68

and implicitly approved her expenditures by initiating payments on the American Express 

bills. 

2. Analysis

Selivanov contends that the court erred in finding him jointly and severally liable 

for the charges Berkovich made because he “did not participate in the crime causing the 

victim’s economic loss.” In his view, “nothing in the record suggests that Mr. 

Selivanov’s criminal conduct caused Ivy Academia the loss attributed to Ms. Berkovich’s 

AMEX Card expenditures.” We agree and order the judgment modified to strike the 

$22,396.60 joint and several obligation assessed to Selivanov. 

Section 1202.4, subdivision (f) requires courts to order restitution in most cases

“in which a victim has suffered economic loss as a result of the defendant’s conduct.” 

This provision contains a causality requirement: a defendant sentenced to state prison 

may be obligated to pay restitution only for losses stemming from the criminal conduct of 

which he or she was convicted. (People v. Lai, supra, 138 Cal.App.4th at pp. 1246, 

1249.) A defendant may be held jointly and severally liable for losses for which a 

codefendant bears more culpability (People v. Madrana (1997) 55 Cal.App.4th 1044, 

1051), but the criminal conduct of which the defendant was convicted must be at least a 

substantial factor in causing victim’s loss (People v. Holmberg, supra, 195 Cal.App.4th 

at pp. 1321-1322).

The only case Selivanov cites, People v. Leon (2004) 124 Cal.App.4th 620, 

illustrates these principles. In Leon, two defendants wrote and cashed a total of four 

fraudulent checks on a victim’s account while he was hospitalized. (Leon, supra, 124 

Cal.App.4th at p. 622.) Defendant Leon cashed one check for $2,450, while his 

codefendant, Garza, cashed three checks totaling $11,000. (Ibid.) The trial court ordered 

Leon to pay $13,450 in restitution jointly and severally with Garza, and the Court of 

Appeal reversed. (Ibid.) The Court of Appeal held that the trial court lacked authority 

under section 1202.4 to order Leon to pay restitution for a crime he did not commit. It 

reasoned that because “$11,000 of [the victim’s] loss resulted from the crimes of Garza, 

not Leon, and nothing in the record suggests that Leon aided and abetted commission of 
69

Garza’s crimes,” Leon could be liable only for the $2,450 of losses attributable to the 

check he cashed. (Ibid.)

The same is true of the losses attributable to the credit card charges in this case. 

The People presented evidence that $22,396.60 of the $34,445.42 in fraudulent charges 

were made to a card issued to Berkovich, and that $12,048.82 of the charges were made 

to a card issued to Selivanov. The criminal conduct at issue was defendants’ use of the 

cards to make charges unrelated to the educational purpose of Ivy Academia, or, as the 

information put it, “credit card charges made to Ivy Academia’s American Express 

account.” The People distinguished between defendants’ usage of the cards and did not 

present any evidence that Selivanov made the charges on Berkovich’s card or that he 

assisted her in doing so. Like the defendants in Leon who separately wrote and cashed 

fraudulent checks on the same account, Selivanov and Berkovich independently used 

their Ivy Academia credit cards for nefarious purposes.

The People contend that “Selivanov had control of the finances and instituted 

payment for the improper charges,” and “tried to hide the charges.” That conduct was 

not the basis of Selivanov’s conviction on count 2, however, which rested upon the actual 

“credit card charges made to Ivy Academia’s American Express account.” The People do 

not point to any evidence that Selivanov directed, aided, or endorsed Berkovich’s 

fraudulent use of her card, or that Selivanov was even aware of many of the improper 

charges Berkovich made, such as those for personal items. Nor have they pointed to any 

evidence from which the trial court could have concluded that the charges on Selivanov’s 

card were a substantial factor that contributed to the charges on Berkovich’s card. We 

accordingly conclude the court abused its discretion by holding Selivanov jointly and 

severally liable for the charges made to Berkovich’s card. The trial court is directed to 

modify both defendants’ restitution orders to reflect that Berkovich alone is liable for the 

$22,396.60 in restitution to Ivy Academia associated with count 2.

E. Economic Loss to Ivy Academia

Selivanov contends that the portions of the restitution order directing him to pay 

Ivy Academia $126,654.73 on count 40 (embezzlement in connection with Ivy 
70

Academia’s continued payment of the Western Commercial Bank loan) and $12,048.82 

on count 2 (embezzlement with the American Express card) are unsupported by evidence 

that Ivy Academia sustained economic loss. He argues that the loan payments were 

“fully deducted from Ivy Academia’s lease payment for its use of the De Soto facility” 

and therefore caused no loss to the school, and that the teacher appreciation events and 

business meals he charged on the American Express card “were a benefit” to Ivy 

Academia. We find these contentions unpersuasive. 

At a restitution hearing, the People carry the initial burden of demonstrating the 

amount of the victim’s economic loss. (People v. Sy (2014) 223 Cal.App.4th 44, 63; 

People v. Fulton, supra, 109 Cal.App.4th at p. 886.) Their showing establishes the 

amount of restitution the victim is entitled to receive, and the burden shifts to the 

defendant to prove by a preponderance of the evidence that the loss is other than that

claimed. (People v. Sy, supra, 223 Cal.App.4th at p. 63; People v. Tabb (2009) 170 

Cal.App.4th 1142, 1153.) The People carried their initial burden as to both the loan 

payments and the credit card charges by presenting the court with evidence of Ivy 

Academia’s outlays. 

Selivanov did not present evidence (aside from Berkovich’s juror statements and 

declarations) to refute this showing. Instead, he argued that the continued loan payments 

at worst constituted a “phantom loss” or “paper loss” because Ivy Academia “continued 

to pay on a loan from which it was benefiting, because what the loan paid for were 

building improvements the school was still enjoying,” and that the credit card losses 

should be limited to $367.27, the amount Selivanov charged on “non-business meals, 

non-teacher appreciation events and non-teacher gifts.” The trial court did not abuse its 

discretion in rejecting these arguments, which it noted the jury also rejected. With 

respect to the loan, the trial court stated “it was clear, at least it was clear to me, that what 

Mr. Selivanov did in a very sophisticated manner is he had Ivy Academia pay off loans 

that they were not required to pay off, and as a result of paying off those loans, he 

benefited. So that is the amount on that.” And with respect to the challenged credit card 

charges, the court concluded that none of them was made for a proper educational 
71

purpose. Rather, all were for defendants’ benefit. The court’s conclusions rest upon 

strong factual and rational bases, and we do not disturb them.

F. Restitution to Franchise Tax Board 

1. Background

The court ordered Selivanov to pay a total of $43,899 in restitution to the 

Franchise Tax Board. That total was the sum of three distinct figures: (1) $28,251, the 

Franchise Tax Board’s costs of investigation and prosecution; (2) $14,226, the total of the 

additional personal income taxes owed ($5,450 for 2004, $656 for 2005, $2,122 for 2006, 

$4,392 for 2007, and $1,605 for 2008)22; and (3) $1,422, representing 10 percent interest 

on the back taxes. Selivanov argued at the restitution hearing that, at most, he should be 

liable for the agency’s investigative and prosecution costs, the amount of which he did 

not dispute. He also argued that there was no evidence in the record to support the 

amount of back taxes and interest due, because the Franchise Tax Board did not conduct 

a civil tax audit, and the numbers it presented accordingly were “inherently unreliable.” 

The court rejected these arguments on the grounds that evidence to support the tax 

liabilities “came out in the trial.” 

2. Analysis 

Selivanov contends the “trial court simply accepted the Franchise Tax Board’s 

assertion that such was the tax liability without question or concern,” despite his 

demonstration of “significant deficiencies” in the numbers. The “deficiencies” he points 

out are: (1) the tax liability was calculated based on the purported unreported income of 

both defendants; (2) during trial, Franchise Tax Board agent Salazar “admitted that 

$28,698 out of the claimed unreported income for 2007 was, in fact, reported”; and (3) 

the People simply accepted Salazar’s disallowance of all EGeneration deductions that 

were misclassified or inflated rather than performing an analysis “to ascertain whether the 

misclassified expenses could have been deducted under a different category, or what was 

 

22 These numbers add up to $14,225. Selivanov has not challenged this arithmetic 

error. 
72

the overall tax impact of the misclassifications.” We are not persuaded that these 

putative deficiencies render the numbers found by the court lacking in factual basis. 

All of the personal tax returns in this case were filed jointly and signed by 

Selivanov. We see no basis from which to conclude that Berkovich’s lack of convictions 

on the tax counts reduces the amount of taxes for which Selivanov is liable on the parties’ 

joint returns. Moreover, although Selivanov asserts that “Ms. Berkovich’s supposedly 

unreported income should be removed from the calculation,” he fails to provide even an 

estimate of what that income was, or what its impact on the tax liability would have been. 

Mere suggestion of error is insufficient to undermine the People’s prima facie showing of 

the restitution amount, or to demonstrate that the trial court’s order lacked a factual basis.

The same is true of Selivanov’s other contentions. If Selivanov disagreed with 

Salazar’s testimony regarding reported income in 2007 or believed the calculations the 

People proffered at the restitution hearing did not reflect deductions that properly could 

have been taken, he could have undertaken the analysis himself to provide a basis for the 

court to find a lower number. He did not do so in the trial court and has not done so on 

appeal. The restitution amounts ordered by the court were supported by the record, and 

we will not overturn them on the showing here. 

VI. Grant of Motions for New Trial

A. Background

Count 1 of the information alleged that Selivanov and Berkovich misappropriated 

public funds by making improper charges to their Ivy Academia American Express cards. 

(§ 424, subd. (a)(1).)23 Count 39 alleged that both defendants misappropriated public 

funds by using Ivy Academia funds to make payments on the Western Commercial Bank 

 

23 In pertinent part, section 424, subdivision (a) prohibits “[e]ach officer of this 

state, or of any county, city, town, or district in this state, and every other person charged 

with the receipt, safekeeping, transfer, or disbursement of public moneys” from 

misappropriating, misusing, improperly accounting for, or improperly disposing of public 

moneys. (§ 424, subd. (a); see also 2 Witkin & Epstein, Cal. Crim. Law 4th (2012) 

Crimes Against Property, § 44, p. 69.) Counts 1, 7, 11, 18, 21, 24, and 39 alleged 

violations of section 424, subdivision (a).
73

loan after EGeneration assumed liability for it. (§ 424, subd. (a)(1).) Count 7 also 

pertained to both defendants and alleged that they improperly profited from public 

moneys by virtue of the rent increase. (§ 424, subd. (a)(2).) The remaining counts (11, 

18, 21, and 24) applied only to Selivanov and alleged that he falsely accounted for public 

moneys in the Ivy Academia financial records (§ 424, subd. (a)(3), count 11) and 

misappropriated public moneys by transferring funds from Ivy Academia to EGeneration 

when the latter was not owed money (§ 424, subd. (a)(1), counts 18, 21, 24). 

1. Section 424 Jury Instructions

The court instructed the jury on the section 424 counts using modified versions of 

CALJIC Nos. 7.26.1, 7.26.2, and 7.26.3. The court’s modified CALJIC No. 7.26.1 stated 

in pertinent part: “Defendant Selivanov is accused in Counts [1, 18, 21, 24, and 39] and 

Defendant Berkovich is accused in Counts 1 and [39] of misappropriation of Public 

Funds by a Public Official in violation of section 424, subdivision (a)(1) of the Penal 

Code, a crime. [¶] Every officer of this state, or of any county, city, town, or district of 

this state, and every other person charged with the receipt, safekeeping, transfer, or 

disbursement of public moneys, who without authority of law, appropriates the same or 

any portion thereof, to his or her own use, or to the use of another, is guilty of a violation 

of Penal Code section 424, subdivision (a)(1), a crime. [¶] The phrase, “public moneys” 

as used in this instruction, includes all monies and evidences of indebtedness received or 

held by Ivy Academia Charter public school or its officers in their official capacity. [¶] 

The term “Officer” as used in this instruction includes a charter school operator, 

administrator, executive director and President. [¶] The term “district” as used in this 

instruction includes a charter school.” 

The modified version of CALJIC No. 7.26.2, which pertained to count 7, stated 

that “The phrase, “public moneys” as used in this instruction, includes all moneys and 

evidence of indebtedness received or held by Ivy Academia Charter public school or its 

officers in their official capacity.” The modified version of CALJIC No. 7.26.3, which 

pertained to count 11 and defendant Selivanov only, stated, “The phrase, “public 
74

moneys” as used in this instruction has previously been defined in these instructions.” 

There is no indication in the record that defendants objected to these instructions. 

The jury found defendant Selivanov guilty of all seven of the section 424, 

subdivision (a) counts with which he was charged. The jury found Berkovich guilty of 

misappropriating public funds as alleged in counts 1 and 39 but acquitted her of profiting 

from the rent increase as alleged in count 7. 

2. Motions For New Trial 

In Selivanov’s motion for new trial, which Berkovich joined, he contended these 

instructions were improper for two reasons. First, he argued that “by defining the 

statutory terms “public moneys,” “district,” and “officer” in the manner it did, the Court 

relieved the prosecution of the burden of proving, beyond a reasonable doubt, that Mr. 

Selivanov was indeed a public officer, or that he was in charge of public moneys.” 

Second, Selivanov contended that the definitions the court provided for “public moneys,” 

“district,” and “officer” were incorrect because independent charter schools operated by 

nonprofit organizations are not “counties, cities, towns, or districts in the state of 

California” and their funds are not “moneys belonging to a county, city, town, district or 

public agency therein, or held by an officer of those governmental entities, and therefore 

are not “public moneys” under Penal Code § 426.”24

The court held a lengthy hearing on the new trial motions at which it told the 

parties that the issue it was “most interested in listening to, is the issue on the 424 and the 

issue about misinstruction and that line of cases that say, in essence, that you can’t take 

away from the jury one of the elements of the crime. There’s a whole line of cases that 

have been cited for that. There are others. That is one of my biggest issues that I want to 

hear argument on.” The court further clarified the issue: “Didn’t I instruct or tell the 

jury, basically, that the monies received by the Ivy Academia school were, in fact, public 

 

24 Section 426 states: “The phrase ‘public moneys,’ as used in Sections 424 and 

425, includes all bonds and evidence of indebtedness, and all moneys belonging to the 

state, or any city, county, town, district, or public agency therein and all moneys, bonds, 

and evidences of indebtedness received or held by state, county, district, city, town, or 

public agency officers in their official capacity.” 
75

monies? And doesn’t the instruction in that area lay out that they are supposed to decide 

whether those are public monies or not? Didn’t I direct them that any money received, 

any indebtedness for this school is public money?” After some argument by the parties, 

the court again clarified its thinking: “I’m less troubled by “officer.” I’m more troubled, 

frankly, by public monies, because there is an actual instruction under 726.1 [sic]. I didn’t 

use that instruction. I think one of the reasons I didn’t use it is I’m, in some ways, 

agreeing with the People that I thought, as a matter of law, this was public monies. I 

believe that was my mindset, that it’s not really that big of an issue for the jury. It’s 

public monies. It came from the state; it went to this charter public school: it’s public 

monies. So I didn’t really foreshadow this issue. But now that the issue has been 

brought to my attention, I certainly see it as an issue, whether the definition that should 

have been given to the jury should have been more something that they could choose 

from rather than simply saying that monies received by a charter school are public 

monies.” 

The court ultimately “decided, after thinking about it for endless hours,” that a 

new trial was required on all of the section 424 counts. The court explained: “The 

Constitution gives a criminal defendant the right to have a jury determine beyond a 

reasonable doubt his guilt of every element of the crime with which he is charged. The 

trial court may not direct a verdict of guilt no matter how conclusive the evidence, and I 

don’t believe I can take judicial - - not judicial notice, but find as a matter of law - - I 

believe that the issue of public monies is an element of the crime; you have to prove it. 

And I guess what I ultimately believe is that by instructing the way I did, that I took that 

element away from the jury. . . . If this had just been tweaked a little bit and we had 

thrown in charter school, or charter school is considered a public agency, or something 

like that, I believe there would be no problem. But in reading the cases, I just feel that 

the instruction told them: you have to find this as public monies, because what I told 

them was that monies received by the charter school were public monies, and I don’t 

believe that I could do that.” The court continued, “I will also indicate, just 

parenthetically, that I have no problem with 424 applying to charter schools. I don’t 
76

think that is a valid argument. I reject that argument. The only reason I’m reversing is 

strictly on jury instructional error.” 

The prosecutor asked, “Your honor, is that only as to public money, the statement 

on public money?” The court confirmed that it was. “Right. That was the only thing.” 

Later, the court reiterated that “[t]he issue is whether or not the jury made an independent 

decision of finding that it was public money, because it’s an element of the crime.” It 

further stated “I think there is an issue about whether the jury was directed to find, as a 

matter of law, that the money that flowed to the charter school was public money. I 

know as a reality it’s public money and - - but the next issue is: can I, as a judge, order 

them to find that it’s public money? And I don’t think I can. That is what I’m holding. 

That’s my decision.” 

The People timely filed a notice of appeal pursuant to section 1238, subdivision 

(a)(3). 

B. Discussion 

In their opening brief, the People present a single issue for our consideration: 

“When charter schools are operated by non-profit organizations do they become immune 

from liability for purposes of section 424 and 426 as a matter of law because they are not 

“districts” within the meaning of the statutes?” They spend the entirety of their opening 

brief addressing this issue despite the trial court’s explicit rejection of the defense 

argument to that effect. 

For instance, the People’s lead argument is that People v. Holtzendorff (1960) 177 

Cal.App.2d 788, which Selivanov (and Berkovich, though adoption) relied upon below to 

support the contention that Ivy Academia was not a “district” or “public agency,” “is not 

instructive on the question of whether a charter school is a district within the meaning of 

sections 424 and 426.” The People assert that “the trial court clearly adopted” the 

defense argument that “private non-profit charter schools were immune from the statute 

because the legislature had expressly failed to name them within section 424.” They 

claim this was error: “the court, relying upon the defense’s representation that 

Holtzendorff was the only, and leading, authority on the issue, erred as a matter of law in 
77

granting a new trial as to the section 424 counts on that basis.” The People further 

contend that the court instead should have followed People v. Johnson (2012) 209 

Cal.App.4th 800, which in their view “provides clear authority for criminal liability as a 

matter of law based upon the exhibition of state supervision and regulatory control.” 

In response to these arguments, Selivanov (and Berkovich, through adoption) 

contends that “the People do not address the jury instruction upon which the trial court 

based its new trial order.” He also points us to the trial court’s explanations of its rulings 

(see ante, at p. 76), which indeed make clear that the trial court granted the motion for 

new trial solely on the ground that it took the element of “public moneys” away from 

jury. Selivanov urges us to affirm the trial court’s ruling on this basis. Although he 

contends that “[r]ight or wrong on the issue of whether charter schools are legally 

districts, that issue does not impact the trial court’s new trial order, and thus should not be 

considered by this Court on review of that order,” Selivanov devotes the remainder of his 

brief to opposing the People’s arguments, “[i]n the event this Court wishes to consider 

the People’s irrelevant issue.” 

In their reply brief, the People acknowledge that “[t]he trial court’s order only 

referenced the jury instruction issue,” and that “[t]he court granted a new trial because it 

believed the jury, not the court, needed to decide whether funds belonging to Ivy 

Academia were ‘public moneys’ under Penal Code sections 424 and 426.” They then 

contend for their first time in their reply brief “that this was legally erroneous (i.e., the 

original instruction was correct) because all funds belonging to charter schools are, by 

definition, ‘public moneys,’ and Ivy Academia was a charter school.” They also assert 

for the first time, initially in a footnote and then in the final three paragraphs of their 

reply brief, that the trial court “also misstated the harmless error standard.” 

The People have forfeited both of these belatedly raised arguments. “Withholding 

a point until the reply brief deprives the respondent of an opportunity to answer it . . . . 

Hence, a point raised for the first time therein is deemed waived and will not be 

considered, unless good reason is shown for failure to present it before.” (People v. 

Baniqued (2000) 85 Cal.App.4th 13, 29; see also People v. Tully, supra, 54 Cal.4th at 
78

p., 1075 [“It is axiomatic that arguments made for the first time in a reply brief will not 

be entertained because of the unfairness to the other party.”].) Here, the People indicate 

that they “may have overlooked” these crucial issues in their opening brief because they 

“assumed that the court’s eventual new-trial grant agreed” with the primary arguments set 

forth in defendants’ written submissions rather than those the court discussed and actually 

ruled on at the hearing on the new trial motions. While we appreciate the People’s 

candor, particularly their acknowledgements that Selivanov’s “points regarding the 

framing of the issues . . . are well taken,” their faulty assumptions regarding the substance 

of the trial court’s ruling do not in our view constitute good reason for their failure to 

address the pertinent issue in their opening brief. Moreover, we are not of the opinion 

that justice requires us to reach the issue. (See People v. Masotti (2008) 163 Cal.App.4th 

504, 508; People v. Norwood (1972) 26 Cal.App.3d 148, 152.) The court’s ruling was 

not an acquittal; the People may retry defendants on the challenged counts if they wish.

We thus turn to the arguments the People made in their opening brief, which do 

not address the basis for the court’s ruling or argue why that basis is legally incorrect. 

Although an “order granting new trial will be affirmed on appeal without regard to the 

particular reason given if there is a good and sufficient reason present which is within the 

terms of the motion” (People v. Montgomery (1976) 61 Cal.App.3d 718, 728), such an 

order will not be reversed unless the appellant affirmatively demonstrates—by making 

proper argument in its opening brief—that the ruling is erroneous. “The very settled rule 

of appellate review is a trial court’s order/judgment is presumed to be correct, error is 

never presumed, and the appealing party must affirmatively demonstrate error on the face 

of the record.” (People v. Davis (1996) 50 Cal.App.4th 168, 172.) The People have not 

made that demonstration here. Even if the argument they present in their opening brief is 

correct – that charter schools are by definition “districts” for purposes of sections 424 and 

426 – they have not properly contested the court’s instruction regarding public moneys. 

We accordingly affirm the trial court’s decision to grant defendants’ new trial motions.
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DISPOSITION 

The trial court is directed to modify defendants’ restitution orders as follows: The 

restitution Selivanov owes to Ivy Academia must be reduced to $205,499.48, for which 

Selivanov is solely liable. Berkovich’s order must be modified to strike any language 

making Selivanov jointly and severally liable for her $22,396.60 restitution to Ivy 

Academia. The trial court further is directed to forward copies of the amended restitution 

orders to the California Department of Corrections and Rehabilitation. The judgment of 

the trial court is otherwise affirmed in full. 

CERTIFIED FOR PUBLICATION

COLLINS, J.

We concur:

EPSTEIN, P. J.

MANELLA, J.