Filed 10/28/20 P. v. Shaw CA2/8

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

THE PEOPLE,

Plaintiff and Respondent,

v.

KIMBERLY ANNE SHAW et al.,

Defendants;

AERO INSTITUTE,

Real Party in Interest and 

Appellant.

 B298177

 (Los Angeles County

 Super. Ct. No. BA458328)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Mary Lou Villar, Judge. Affirmed.

Law Offices of Russell G. Petti and Russell G. Petti for Real 

Party in Interest and Appellant.
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Jackie Lacey, District Attorney, John Niedermann and 

Kenneth Von Helmolt, Deputy District Attorneys, for Plaintiff 

and Respondent. 

No appearance for Defendants.

____________________

The Los Angeles District Attorney alleged a nonprofit’s 

president and secretary, together with a mayor, schemed illegally 

to divert the nonprofit’s funds. The trial court granted the 

prosecution’s requests for temporary restraining orders freezing 

the nonprofit’s bank accounts under Penal Code section 186.11. 

While the criminal cases were ongoing, the court denied the 

nonprofit’s request to dissolve the injunctions. The nonprofit 

appeals this decision. We affirm. 

All undesignated statutory references are to the Penal 

Code. 

I

The appellant is AERO Institute, a nonprofit with a 

mission of “educating the public regarding aerospace and STEM 

[Science, Technology, Engineering, and Math].” AERO’s main 

source of revenue has been cooperative agreements with the 

National Aeronautics and Space Administration (NASA). 

Kimberly Anne Shaw and Susan Burgess Miller worked for 

AERO. Bank records, corporate documents, and federal tax 

documents call Shaw AERO’s president, president and CEO, or 

operations manager. Those records call Miller AERO’s secretary 

or “Secretary/Treasurer.” 

On June 21, 2017, the People filed a felony complaint 

against Shaw, Miller, and James Coleman Ledford. At the time, 

Ledford was the mayor of the City of Palmdale. 
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The complaint alleged Shaw and Miller conspired with 

Ledford to embezzle, misappropriate, and steal public funds. 

We summarize the alleged multi-part scheme, which 

spanned from 2009 to 2017. Miller siphoned money NASA had 

given AERO to companies she owned. She used some of that 

money to pay Ledford, who performed no substantial work for 

AERO. Ledford lied to conceal the payments, which were over 

three times his mayoral income. He voted to approve a sevenyear, maximum $3.9 million contract between Shaw and 

Palmdale. Palmdale leased property to AERO for $1 a year. 

Amended complaints also alleged Shaw made false statements on 

AERO’s income tax returns. 

The district attorney’s investigator described the funds in 

AERO’s accounts as “public funds” belonging to NASA. 

A February 2019 report from NASA’s Office of 

Investigations questioned how AERO could have lawfully

received revenue from NASA in excess of AERO’s expenses. The 

report addressed several issues. One issue was AERO’s claimed 

expenses being greater than its actual expenses. Another issue 

was AERO’s potentially improper expenses, such as payments to 

Ledford and payments to a consulting company of Shaw’s. 

The case before us centers around AERO’s bank accounts. 

Before we turn to the accounts, we must detour to provide 

background about AERO’s personnel. 

First, we introduce two other AERO employees: Amber 

Abel and Curtis Cannon. Abel began working for AERO in 2009. 

As of September 2018, she was AERO’s business manager. 

Cannon said he has served on AERO’s board since 2009. From 

May 2017 until February 2018, he was AERO’s “Executive 
4

Director.” The district attorney’s investigator said Cannon took 

over after the prosecution filed charges against Shaw and Miller. 

The record does not specify exactly when Shaw and Miller 

stopped working for AERO. As of March 2018, AERO still 

employed Shaw. AERO paid Shaw through at least 2018. 

AERO’s bank statements show payments as late as July 2018 to 

MillerMosely, a company the prosecution alleged Miller 

incorporated. 

We turn to the bank accounts. Shaw and Miller had access 

to AERO’s bank accounts during the period corresponding to the 

prosecution’s charges against them. AERO had accounts with 

two banks: Bank of America and Wells Fargo. Shaw and Miller 

were signatories of AERO’s Bank of America accounts until 

September 2017. Shaw was a signatory of AERO’s Wells Fargo 

account until September 2018. 

As of September 27, 2017, Cannon and Abel were 

signatories for AERO Bank of America accounts. The same 

month, AERO transferred $581,331 from four other accounts into 

one Bank of America account. In October 2017, Cannon and Abel 

opened a Merrill Lynch account and transferred most of AERO’s 

funds, more than $2 million, into it. Shaw and Miller were not 

signatories on this account. 

In August 2018, the People asked the court to issue a 

temporary restraining order freezing AERO’s Bank of America 

and Wells Fargo accounts. The People did not know about the 

Merrill Lynch account yet. On August 22, 2018, the same day as 

Miller’s, Shaw’s, and Ledford’s arraignments, the court issued a 

temporary restraining order freezing certain Bank of America 

and Wells Fargo accounts. The basis of the freeze was section 

186.11, subdivision (d)(2), which allows a court to freeze a 
5

defendant’s assets or property to “prevent dissipation or secreting 

of assets or property.” 

On September 6, 2018, Cannon and Abel authorized a 

transfer of $52,070 from the Merrill Lynch account to Larson 

O’Brien, the law firm representing Shaw. The following day, 

AERO deleted Shaw as a signatory of a Wells Fargo account. As 

of September 7, 2018, Cannon and Abel were signatories on that 

account. 

On September 11, 2018, AERO responded to the People’s 

motion to freeze its bank accounts. Abel submitted a declaration 

with the response stating AERO had removed Shaw and Miller 

as signatories from its Bank of America and Wells Fargo 

accounts. 

On September 26, 2018, at the People’s request, the court 

issued another temporary restraining order expanding the freeze 

to cover the Merrill Lynch account. 

The district attorney’s investigator filed an affidavit in 

support of the freeze. The investigator said the source of the 

funds in the Merrill Lynch account “came from a previously 

identified suspect account.” The investigator described the funds 

in AERO’s account as “public funds” belonging to NASA. 

In total, the two temporary restraining orders froze more 

than $1.85 million, most of which was in the Merrill Lynch 

account. 

On January 24, 2019, AERO moved to unfreeze its 

accounts. It argued there was no basis for the freeze. 

Cannon submitted a declaration in support of AERO’s 

motion explaining Shaw and Miller were no longer signatories on 

AERO’s accounts. 
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Cannon also described AERO’s relationship with NASA. 

NASA and AERO enter “cooperative agreements” for AERO to 

pursue projects. The agreements provide a ceiling of potential 

funding. Cannon said funds remain in a government account 

upon which AERO could draw after completing tasks under the 

agreement. AERO may draw direct costs (the actual costs of 

performing tasks) and indirect costs (a percentage of direct costs 

necessary for operating expenses). AERO ran surpluses on some 

projects and Cannon said AERO owns those funds outright and 

can spend them for any purpose consistent with its mission. 

In their response to the motion to unfreeze, the People said 

any funds retained by AERO belong to the public and any current 

funds subject to the temporary restraining order should remain 

frozen so they will be available for restitution. 

The People submitted the February 2019 NASA Office of 

Investigations report as a supplemental exhibit. The report 

discussed issues with AERO’s expenses, including AERO’s 

claimed expenses being greater than its actual expenses and 

AERO’s potentially unallowable expenses. 

On March 1, 2019, the court heard AERO’s motion. 

At the hearing, AERO denied Shaw or Miller maintained 

any control over AERO. 

The People expressed concern “these funds will be gone if 

this T-R-O is lifted.” The People said AERO’s funds constituted 

third party transfers under section 186.11. They also said 

Cannon and Abel had unclean hands and were accessories who 

helped Shaw “maintain the flow of AERO funds.” AERO delayed 

in removing Shaw as a signatory on the Wells Fargo account 

until September 2018, after the People had filed the criminal 

complaint. AERO transferred funds from other accounts in 
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September 2017, which was also after the People filed the initial 

criminal complaint. The People believed AERO paid Shaw’s 

attorneys without any legal basis. Again, the People asserted the 

money in AERO accounts belonged not to AERO but to the public. 

The court denied the motion to unfreeze. It found the 

People showed “a connection” between the defendants, Shaw and 

Miller, and AERO. 

AERO appealed. 

After AERO filed its opening appellate brief, Shaw and 

Miller negotiated plea deals. On January 16, 2020, Miller 

pleaded guilty to misappropriating public funds (section 424, 

subd. (a)(1)). On January 21, 2020, Shaw pleaded guilty to filing 

a false tax return (Rev. & Tax. Code, § 19705, subd. (a)). The 

People agreed to dismiss remaining counts against Shaw and 

Miller. Pursuant to the pleas, the court placed the defendants on

felony probation for three years each. 

As part of their pleas, Miller and Shaw agreed to surrender 

their interests in the AERO accounts. AERO was not present at 

Miller’s plea but was present at Shaw’s plea. 

The parties discussed restitution at the pleas. 

At Miller’s plea, the prosecution explained, “There will be 

restitution ordered, your honor; however, restitution in this case 

will be satisfied through the money that is currently being held 

under a temporary restraining order that was filed by the People 

on the AERO Institute business accounts.” The total restitution 

would be $341,266. The People explained, “It will be the 

responsibility of the People and representatives of NASA to 

obtain those funds once this case is permanently resolved.” 

As to Miller, the court ordered victim restitution to NASA 

“payable in the amount and manner as directed by the People 
8

and NASA.” The minute order stated, “The restitution is 

satisfied by money previously seized and will be paid by the 

People from the AERO Institute business account.” Additionally, 

“The People indicate that upon completion of this case, if any 

funds remain in the AERO Institute business account they will 

be distributed to NASA.” 

At Shaw’s plea, the prosecution explained they will seek 

restitution “from the AERO Institute in an appropriate forum” 

and they would be seeking $923,468.70. AERO emphasized, 

“there’s been no adjudication” that AERO is obligated to pay 

restitution. The minute order states the “[p]arties agree that Ms. 

Shaw does not have to pay direct restitution in this case.” 

II

The trial court did not abuse its discretion by refusing to 

unfreeze AERO’s accounts. 

We have jurisdiction because the trial court’s order denying 

AERO’s motion to unfreeze its accounts was an order refusing to 

dissolve an injunction. (Code Civ. Proc., § 904.1, subd. (a)(6) 

[appeal may be taken from an order refusing to dissolve an 

injunction].) 

Refusing to dissolve an injunction rests in the sound 

discretion of the trial court. (Salazar v. Eastin (1995) 9 Cal.4th 

836, 849–850.) We affirm absent an abuse of discretion. (Ibid.) 

The primary purpose of section 186.11 is to facilitate the 

payment of restitution by “prevent[ing] dissipation or secreting of 

assets or property.” (§ 186.11, subd. (d)(2); People v. Semaan

(2007) 42 Cal.4th 79, 86 (Semaan).) The section authorizes 

superior courts to order preliminary relief, including temporary 

restraining orders, to preserve property or assets for restitution. 

(§ 186.11, subd. (d)(2).) 
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Assets or property become subject to the court’s jurisdiction 

on a showing the defendant controls them: “any asset or property 

that is in the control of that person, and any asset or property 

that has been transferred by that person to a third party, 

subsequent to the commission of any criminal act alleged . . . may 

be preserved by the superior court in order to pay restitution and 

fines” pursuant to this section. (§ 186.11, subd. (d)(1).)

Our job is to determine whether the trial court abused its 

discretion on March 1, 2019 when it denied AERO’s request to 

dissolve the restraining orders. 

The purpose of section 186.11 and the context of this case 

guide us. The Legislature passed section 186.11 to prevent the 

“dissipation or secreting” of assets. (Semaan, supra, 42 Cal.4th 

at p. 86.) As of March 1, 2019, the People were in the middle of 

prosecuting a complex criminal case against Miller, Shaw, and 

Ledford. The parties contested who owned AERO’s funds. The 

prosecution asserted the money in AERO’s funds were public 

funds that belonged in part to a victim, NASA, not to AERO. 

Before the court issued the orders, Cannon and Abel had shifted 

money in Aero’s accounts: they had moved most of the money to 

a single Bank of America account and then to a new Merrill 

Lynch account. In 2018, after the criminal prosecution began but 

before the court issued the temporary restraining orders, money 

continued to flow from AERO to entities Shaw and Miller owned. 

In this context, the court decided to maintain the status quo and 

to keep AERO’s accounts frozen. This did not constitute an abuse

of discretion. 

AERO’s request to dissolve the restraining orders said 

there was no legal basis to support the orders. That is incorrect. 
10

We begin with the first temporary restraining order, the 

court’s freeze of the Bank of America and Wells Fargo accounts. 

At the time of this August 22, 2018 order, Shaw remained a 

signatory on a Wells Fargo account and thus she maintained 

control of the account. As to the Bank of America accounts, Shaw 

and Miller controlled the accounts as signatories during their 

alleged criminal acts. AERO changed the signatories but a court 

could properly find this change in control was a transfer to a 

third party sufficient to support the restraining order under 

section 186.11, subdivision (d)(2). 

As to the second restraining order of the Merrill Lynch 

account, the account was created with funds from the Bank of 

America accounts. AERO moved these funds before the court 

issued the temporary restraining order on the Bank of America 

accounts. As we explained, Shaw and Miller had controlled that 

fund and a court could properly find they had transferred control, 

which brought the account within section 186.11, subdivision 

(d)(2). 

Furthermore, the prosecution alleged facts sufficient to 

demonstrate Shaw maintained control over AERO and its 

accounts even after Cannon and Abel removed her as a signatory. 

Shaw remained an AERO employee and accepted a salary from 

AERO at least through 2018. AERO also paid Shaw’s attorney 

from the Merrill Lynch fund. AERO says it is normal for an 

employer to indemnify an employee and this is not evidence of 

Shaw’s control. The trial court found the People proved Shaw 

and Miller had a connection to the accounts sufficient to deny the 

motion to dissolve the restraining order. We can infer the trial 

court thus made a factual finding Shaw maintained control. 
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In its reply brief on appeal, AERO says Miller and Shaw’s 

settlements should affect our analysis but those occurred after 

the order on appeal. We cannot say the trial court’s ruling was 

improper because of events that happened months after its 

ruling. Furthermore, the record contains no evidence the People 

and Ledford have resolved Ledford’s criminal prosecution.

In sum, the trial court did not abuse its discretion by 

refusing to dissolve the injunction freezing the accounts. 

DISPOSITION

The judgment is affirmed.

WILEY, J.

We concur: 

BIGELOW, P. J. 

STRATTON, J.