Court Opinion

ID: 4690024
Source: CourtListenerOpinion
Date Created: 2021-05-25 23:02:38.806657+00
Date Added: 2024-06-11T08:04:57.698811
License: Public Domain

Filed 5/25/21 P. v. Sidney CA4/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

 THE PEOPLE,                                                          D077136

           Plaintiff and Respondent,

           v.
                                                                      (Super. Ct. No. SCD266565)
 LISA SIDNEY,

           Defendant and Appellant.

         APPEAL from an order of the Superior Court of San Diego County,
Kenneth K. So, Judge. Affirmed.
         John Lanahan for Defendant and Appellant.
         Xavier Becerra and Rob Bonta, Attorneys General, Julie L. Garland,
Assistant Attorney General, Steve Oetting and Kristen Ramirez, Deputy
Attorneys General, for Plaintiff and Respondent.

         For her role in a scheme with her husband to defraud elderly victims,
defendant Lisa Sidney was placed on five years’ formal probation and ordered
to pay more than $2.5 million in restitution. The trial court later revoked her
probation, finding she concealed assets to avoid paying restitution, made
willful misstatements on a statement of assets, and failed to file tax returns.
Sidney contends the trial court erred in revoking probation. We affirm.1
             FACTUAL AND PROCEDURAL BACKGROUND
                          Charges and Guilty Plea
      Sidney and her husband, William Phillips (Husband), defrauded elderly
victims into purchasing gemstones as investments at severely inflated prices.
The prosecution charged Sidney and Husband with seven counts of theft of

more than $950 from an elder (Pen. Code, § 368, subd. (d))2 and three counts
of grand theft (§ 487, subd. (a)). Four of the counts included enhancement
allegations that the theft caused losses exceeding $65,000 (former § 12022.6,
subd. (a)(2)), and four included allegations that the theft caused losses
exceeding $200,000 (ibid., subd. (a)(1)).
      In July 2017, Sidney and Husband pleaded guilty to three counts of
theft from an elder, one count of grand theft, and admitted to two of the
$65,000 enhancement allegations and two of the $200,000 enhancement
allegations. The balance of charges and enhancement allegations were
dismissed.
                          Sentence and Restitution
      In September 2017, the trial court sentenced Husband to a split
sentence of nine years four months, with four years to be served in local
custody and the balance to be served under community supervision.

1     Sidney asserts in a petition for writ of habeas corpus that she received
ineffective assistance of counsel from the deputy public defender who
represented her at the revocation hearing (her retained counsel having
withdrawn about one year earlier). In a separate order, we deny the petition.

2     Undesignated statutory references are to the Penal Code.

                                        2
      At the same time, the trial court placed Sidney on formal probation for
five years, with the condition that she serve 365 days in local custody (120
days in jail, and the balance under house arrest). The court allowed Sidney
to defer the custodial term until after Husband completed his so that one of
them would always be available to care for Sidney’s ailing 99-year-old mother
(Mother).
      The trial court also ordered Sidney and Husband to pay victim
restitution of $2,553,934.95.
      In July 2017, Sidney and Husband sold their residence and applied the
$1,077,000 in proceeds toward restitution.
      In October 2017, the trial court accepted an agreement among Sidney,
Husband, the prosecutor, and the victims, under which Sidney and Husband
would pay only 75 percent of the total restitution amount—thus, about
$1,828,350—if they paid it by April 2018. Sidney and Husband did not meet
this deadline.
      In September 2018, Husband offered to pay off the remaining
restitution in exchange for the prosecution “agree[ing] to reduce his sentence
and spare [Sidney] from some or all of her custodial sanction.” This led the
prosecution to reopen its investigation regarding Sidney and Husband’s
finances. The trial court directed Sidney to file a statement of assets.
      On October 2, 2018, Sidney filed her statement of assets.
                        Petition to Revoke Probation
      In January 2019, the prosecution petitioned the court to revoke
Sidney’s probation. The prosecution maintained Sidney violated her obey-all-
laws probation condition by (1) concealing property to avoid paying
restitution, in violation of section 155.5, subdivision (b); (2) making a willful
misstatement of material fact on her statement of assets, in violation of

                                        3
section 1202.4; and (3) concealing income to evade taxes, in violation of
Revenue and Taxation Code section 19705, subdivision (a)(4).
         The prosecution identified in its petition two sources of income Sidney
failed to disclose. First, a limited liability company in which she and
Husband held interests (Mellmanor LLC) had sold a piece of real property for
$1,155,000, resulting in net sales proceeds of about $310,000. Sidney
promptly withdrew these funds in the form of cash, money orders, and
cashier’s checks. Second, the Department of Veterans Affairs (VA) made
monthly deposits on Husband’s behalf into a bank account he jointly held
with Sidney.
         Sidney opposed the petition, explaining Mother was the true owner of
the property held by the LLC. Sidney handled the sale because she held a
power of attorney for Mother, who was 100 years old, was “not mobile,” and
could “speak[ ] only in limited ways.” Sidney insisted she managed the sales
proceeds “only . . . for the benefit of her mother,” and that her (Sidney’s)
“income and expense[s] remain the same as stated on” her statement of
assets.
                               Revocation Hearing
         After granting a defense request for a continuance, the trial court held
a two-day revocation hearing in August 2019. At the outset, counsel advised
the court they would be focusing on ownership of the property sold by the
LLC because “[o]nce we figure that out, that will likely resolve everything
else.”
Prosecution Evidence
         The prosecution’s primary witness was Gary Helson, an investigator in
the district attorney’s office with about 46 years’ experience. He testified

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about his investigation into the LLC, the property, its sale, and disposition of
the sales proceeds.
      Mellmanor LLC was established in 2003 for the stated purpose of real
estate investment. The LLC’s December 2003 operating agreement stated
that the LLC’s profits and losses were allocated 50 percent to Sidney and 50
percent to Husband. Letters between the LLC and its counsel in that
timeframe confirmed this allocation and clarified that Mother “would have no
ownership. She would only be a nominal member.” Sidney and Husband
made a capital contribution to the LLC of approximately $330,000.
      The property at issue is a four-unit apartment building on Mellmanor
Drive in La Mesa (the Property). In 2003, Sidney provided the $10,000 down
payment for the Property. The balance of the purchase price, which is not
specified in the appellate record, was paid with a mortgage in Mother’s name.
Title to the Property was initially put in Mother’s name, but she transferred
title to Mellmanor LLC two days later.
      An independent loan modifier testified she worked with Sidney in 2014
in an unsuccessful attempt to modify the mortgage on the Property. The loan
modifier determined that although the mortgage was in Mother’s name,
Mellmanor LLC held title to the Property, and Sidney and Husband owned
the LLC equally. The loan modifier testified that Sidney “clearly told” her
not to “let the bank know” the true ownership structure—“[t]hat [Sidney]’s
the owner, not the mom”—“because it’s like opening a can of worms.” During
the attempted loan modification, Mother provided two letters confirming she
had no ownership in Mellmanor LLC, and that Sidney and Husband owned it
equally.3

3     In one letter, Mother wrote that she “ha[s] no ownership, interest, or
percentage in” Mellmanor LLC. In the other, she wrote that she “ha[s] no
                                       5
      Investigator Helson testified that Mellmanor LLC’s records indicated
the Property generated about $103,000 in rental income in 2016. Based on

those records and tenant interviews,4 he believed the Property remained
continuously rented from 2016 until the LLC eventually sold it in 2018.
      In September 2017, Mellmanor LLC nominated Sidney as its
“managing member with authority to act as sole signor . . . on any loan-
related documents.” That same month, the LLC borrowed $320,000 against
the Property from a private lender. Sidney signed all the loan documents as
managing member.
      In February 2018, Mellmanor LLC sold the Property for $1,155,000 to a
relative of the private lender. After paying off loans against the Property, the
LLC received net proceeds of $311,664, which were deposited into the LLC’s
account at Chase Bank (Chase).
      Within approximately one hour of this deposit, Sidney went to a Chase
branch and withdrew more than $310,000 in the following manner: $5,000 in
cash; 15 money orders for $1,000 each, payable to Mother; and 21 cashier’s
checks totaling $290,703, payable to various individuals and entities.

percentage or interest other than managing member. The percentage is
divided 50 percent to Lisa Sidney and 50 percent to [Husband] as an
ownership of the LLC[ ].”

4     The trial court allowed the parties to introduce reliable hearsay. (See
People v. Guilford (2014) 228 Cal.App.4th 651, 660 [“Reliable hearsay is
deemed sufficient for purposes of revoking probation . . . .”]; People v. Brown
(1989) 215 Cal.App.3d 452, 454 [“As long as hearsay testimony bears a
substantial degree of trust-worthiness it may legitimately be used at a
probation revocation proceeding.”].) Sidney does not contest the admissibility
of any evidence.

                                       6
      Investigator Helson testified about the disposition of the cashier’s
checks.5 The first check was payable to Sidney and Mother’s landlord for
$49,600 (equivalent to eight months’ rent at $6,200/month), but Sidney
exchanged the check for six other checks—two to the landlord for $6,200
each, and four to Mother totaling $37,200. The checks to Mother appeared to
have been endorsed by Sidney.
      Five checks for $25,000 each ($125,000 in total) were payable to a
construction worker in Los Angeles with whom Sidney had spoken about
working on a home Mother owned there. However, none of these checks were
used for that purpose—one was deposited into Sidney and Mother’s joint
bank account, three remained unnegotiated one year later, and one was
exchanged for two more checks (one for $5,000 payable to Mother, the other
for $20,000 payable to a different construction worker in Los Angeles).6
      Three checks totaling $50,000 (two for $20,000, one for $10,000) were
payable to the IRS. One of the $20,000 checks was never negotiated, and the
other was deposited into an account Sidney jointly controlled. Sidney
exchanged the $10,000 check for a check payable to Mother, which Sidney
deposited into an account she jointly controlled.
      One check for $2,500 was payable to Armando Ibarra, Sr., an
accountant Sidney and Husband hired in 2017 “to update her tax records.”

5     Sidney’s counsel reiterated his view that it was unnecessary to go
through the checks “because if it turns out that [Mother] owns [the
Property], . . . [a]ll the money would be” Mothers and there would be no “need
to spend . . . hours going through . . . checks . . . .”

6    The second contractor told Investigator Helson that Sidney had paid
him $40,000 toward a $90,000 renovation project on Mother’s house. The
work did not include making the house handicapped accessible.

                                       7
However, Ibarra stated he “did not complete any tax record for them” because
Sidney “never provided him the information” he needed.
      Many of the cashier’s checks were stamped on the back with “Not Used
for Purpose Intended,” which banks use “[w]hen the check is not negotiated
by the person it’s made out to.” The funds from these checks generally were
deposited into bank accounts Sidney jointly controlled.
      All told, about $120,000 worth of cashier’s checks remained
unnegotiated one year after Sidney drew them.
      Investigator Helson also testified about apparent inaccuracies in
Sidney’s statement of assets. Sidney disclosed three bank accounts (two joint
with Mother, one joint with Husband) at three different banks with a total
balance of $6,441.54. However, additional banking records obtained through
search warrants revealed that Sidney controlled 13 accounts at four banks,
with assets totaling $24,826.07. Also, a bank statement for the joint account
with Husband showed that about two weeks before Sidney filed her
statement of assets, she deposited and immediately withdrew $74,600.
      The statement of assets also listed Sidney’s only source of income as
$1,566 in monthly social security benefits. However, Investigator Helson
discovered that Husband received a monthly VA benefit of $1,182.52, $500 of
which was allocated to Wife as a dependent.
      Additionally, Sidney checked boxes on the statement of assets form
representing that no one was “holding assets for [her]” and that she had not
“disposed of or transferred any assets since [her] arrest on this matter.” Yet,
Sidney did not disclose the rental income or sales proceeds from the Property,
or that she had deposited $9,000 into Husband’s inmate account at the
county jail over the preceding 10 months.

                                       8
      Based on his “overall investigation,” Investigator Helson concluded
Sidney and Husband conducted their financial affairs in a “very deceitful and
manipulative” manner.
      A special agent from the Franchise Tax Board (FTB) testified about
Mellmanor LLC’s tax history and reporting obligations. The last year for
which the LLC filed tax returns was 2013. The agent explained that an LLC
is required to file an informational return and pay a minimum tax of $800
each year “[j]ust for doing business in California.” Mellmanor LLC would
also be required to report rental income and net proceeds from the sale of
property. Although the agent initially addressed rental income in a
hypothetical question about rental income over $100,000, he testified more
generally that Mellmanor LLC would also have to report rental income
without regard to any threshold. The agent clarified that the FTB deems all
members of an LLC responsible for filing the entity’s tax returns, unless the
members agree otherwise. He noted the Secretary of State suspended
Mellmanor LLC in July 2018, likely because the FTB presumed from the lack
of tax returns that the LLC was no longer operating. To reinstate its status,
Mellmanor LLC would have to file the appropriate tax returns.
Defense Evidence
      During the prosecution case, defense counsel cross-examined
Investigator Helson regarding ownership of Mellmanor LLC. Counsel
presented Exhibit I, which purported to be minutes of Mellmanor LLC’s
annual meeting on May 20, 2016, during which the members “invest[ed] a
hundred percent membership and ownership in [Mother].” Investigator
Helson explained he did not believe the minutes were genuine because he
had not seen them during his investigation, and they indicated the meeting
occurred at the Chula Vista office of accountant Ibarra, whom Sidney hired in

                                      9
2017 (after the date of the purported annual meeting). When defense counsel
insinuated Ibarra suffered from dementia and that his son was therefore
running the firm, Investigator Helson vehemently disagreed: “I’ve
interviewed him in person. I don’t think he has dementia at all. . . . [H]e
seemed to have complete control of his mental faculties.”
      The only witness the defense called was Mother’s caregiver. She
explained that although Mother was unable to talk, she could communicate
by nodding in response to questions. Mother appeared particularly
responsive to Sidney. The caregiver acknowledged, however, that Mother
was physically unable to write.
Prosecution’s Rebuttal Evidence
      On the second day of the evidentiary hearing, the prosecution reopened
its case to present additional testimony from Investigator Helson about the
purported LLC meeting minutes.
      Investigator Helson testified he visited Ibarra at his Chula Vista office
that morning. The accountant “was very coherent and responsive.” Ibarra
confirmed through his records that Sidney and Husband first retained him in
October 2017, and “[h]is office had never had any contact prior to that.”
Ibarra insisted no Mellmanor LLC meetings had ever occurred at his office.
When shown the purported meeting minutes, Ibarra stated he believed the
meeting “never took place, not at [his] address.”
Trial Court’s Ruling and Sidney’s Statement
      After hearing argument, the trial court found Sidney in violation of
probation on the three charged grounds. Although the court clarified it was
“making this ruling . . . apart from the testimony” about the purported
meeting minutes, the court found it “troubling . . . to have a document that
talks about a meeting on May 20th, 2016, when you have testimony

                                      10
indicating [the accountants] weren’t engaged until 2017. That is troubling to
the court.”
      Sidney then addressed the court (against the advice of counsel). Sidney
asserted Mother provided all the funds used to acquire the Property, and,
thus, Mother was entitled to all the sales proceeds. Sidney maintained she
used the sales proceeds only for Mother: “None of it was for me. None of it
went to me personally. It was for my mom because it’s her money.” Sidney
explained she failed to list certain accounts on her statement of assets
because they were essentially dormant and had only nominal balances. And
she asserted the LLC had not paid taxes because the prosecution seized its
records and she could “never, ever get someone to help . . . with the tax
returns.”
      Sidney explained she promptly withdrew the sales proceeds from
Mellmanor LLC’s account because she believed the money belonged to
Mother, and was aware the prosecutor had contacted escrow about seizing
the funds to apply toward restitution. She withdrew the bulk of the proceeds
as cashier’s checks “based on situations [she] could see coming up,” such as
“owing the IRS for the house [she] sold” to pay toward restitution.
      Sidney stated Mother transferred the Property to Mellmanor LLC so
that Mother, Sidney, and Husband would each be one-third owners. Sidney
also explained that about half of the proceeds from the $320,000 private loan
in 2017 went toward caring for Mother, and the other half went toward
Husband’s legal defense fees and restitution.
      Finally, Sidney explained that she and Mother paid $6,200 per month
in rent because it was difficult to find a place to accommodate Mother’s
physical limitations, and most landlords were reluctant to rent to a felon.

                                      11
      After hearing from Sidney, the trial court reiterated its findings that
she violated probation by concealing property to avoid restitution, making a
willful misstatement of material facts on her statement of assets, and failing
to file tax returns. Consequently, the court revoked Sidney’s probation.
                     Sentencing Following Revocation
      Between the revocation hearing and the sentencing hearing, Sidney
and Husband paid off the outstanding restitution balance. The court
reinstated Sidney’s original five-year probation term, with the new condition
that she serve 365 days in actual custody and waive any custody credits.
                                 DISCUSSION
      Sidney contends the trial court erred by revoking her probation. We
disagree.
      A court is authorized to revoke probation “if the interests of justice so
require and the court, in its judgment, has reason to believe . . . the person
has violated any of the conditions of their supervision . . . .” (§ 1203.2, subd.
(a).) “The standard of proof in a probation revocation proceeding is proof by a
preponderance of the evidence.” (People v. Urke (2011) 197 Cal.App.4th 766,
772 (Urke).)
      “We review a probation revocation decision pursuant to the substantial
evidence standard of review [citation], and great deference is accorded the
trial court’s decision, bearing in mind that ‘[p]robation is not a matter of right
but an act of clemency, the granting and revocation of which are entirely
within the sound discretion of the trial court. [Citations.]’ [Citation.] [¶]
‘The discretion of the court . . . will not be disturbed in the absence of a
showing of abusive or arbitrary action. [Citations.]’ [Citation.] ‘Many times
circumstances not warranting a conviction may fully justify a court in

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revoking probation granted on a prior offense. [Citation.]’ ” (Urke, supra,
197 Cal.App.4th at p. 773.)
      “ ‘When considering a challenge to the sufficiency of the evidence . . . ,
we review the entire record in the light most favorable to the judgment to
determine whether it contains substantial evidence—that is, evidence that is
reasonable, credible, and of solid value—from which a reasonable trier of fact
could find the defendant guilty beyond a reasonable doubt. [Citation.] We
presume in support of the judgment the existence of every fact the trier of
fact reasonably could infer from the evidence. [Citation.] If the
circumstances reasonably justify the trier of fact’s findings, reversal of the
judgment is not warranted simply because the circumstances might also
reasonably be reconciled with a contrary finding. [Citation.] A reviewing
court neither reweighs evidence nor reevaluates a witness’s credibility.’ ”
(People v. Covarrubias (2016) 1 Cal.5th 838, 890.)
      Substantial evidence supports the findings on which the trial court
revoked Sidney’s probation.
      Regarding the first ground for revocation, substantial evidence
supports the finding that Sidney violated section 155.5 by “sell[ing],
convey[ing], assign[ing], or conceal[ing] . . . her property with the intent to
lessen or impair . . . her financial ability to pay . . . restitution.” (§ 155.5,
subd. (b).) Sidney essentially concedes the ownership issue in her writ
petition, and the appellate record supports the concession.7 Mellmanor

7      Sidney acknowledged in her petition: “There was considerable evidence
to support a claim that the property had been converted to the use of Ms.
Sidney and her husband. Ms. Sidney was the managing partner. Documents
filed by Mellmanor, LLC listed her and her husband as each having 50%
ownership, and none to [Mother]. Her mother had given Ms. Sidney power of
attorney in 2009. [Mother] was severely disabled and could not communicate
                                          13
LLC’s records from 2003 established Sidney held a 50-percent ownership
interest; letters from the LLC’s counsel in 2004 confirmed this interest;
Sidney told the loan modifier the same thing in 2014; Mother wrote two
letters in 2014 confirming Sidney still held a 50 percent interest and
disclaiming any interest of her own; and Sidney acknowledged during the
revocation hearing that she once held an interest in the Property.
      Circumstantially, the fact that Sidney and Husband borrowed against
the Property to pay Husband’s legal fees and victim restitution, and that
Sidney earmarked a portion of the sales proceeds for her personal tax liability
strongly support the finding that Sidney held an interest in the Property (or
its sales proceeds) worthy of disclosure.
      In the face of this powerful evidence establishing Sidney’s ownership
interest in the Property, the trial court was rightly “troubl[ed]” by the
seemingly fraudulent LLC meeting minutes that Ibarra refuted outright.
The validity of those minutes is further undermined by Sidney’s baseless
accusation that Ibarra suffered from dementia.
      As for her intent in concealing her interest in the Property, Sidney
expressly told the trial court she promptly withdrew the funds from the
LLC’s bank account to prevent the prosecutor from seizing and applying
them toward restitution. Sidney’s elaborate “shell game” with the 21
cashier’s checks—many of which were not used for their stated purpose, and
about $120,000 worth of which remained unnegotiated one year later—
supports an inference that she was concealing the funds to prevent them
from being applied toward restitution.

with anyone except Ms. Sidney. All of these showed that the Mellmanor
property was controlled by Ms. Sidney, who sold it.”

                                       14
      Regarding the second ground for revocation, substantial evidence
supports the finding that Sidney made willful misstatements on her
statement of assets. (See § 1202.4, subd. (f)(5) [“A defendant who willfully
states as true a material matter that he or she knows to be false on the
disclosure required by this subdivision is guilty of a misdemeanor . . . .”].)
Putting aside her failure to disclose numerous bank accounts and current
balances, Sidney also failed to disclose: rental income from the Property;
$500 in monthly VA benefits that she received through Husband; about
$120,000 in cashier’s checks that remained unnegotiated about one year after
Sidney drew them; $9,000 that she deposited into Husband’s inmate account;
and $74,600 that she cycled through one of her accounts the month before she
filed the statement of assets. And despite the sale of the Property, Sidney
checked a box on the form representing that she had not “disposed of or
transferred any assets since [her] arrest.” It was within the trial court’s
discretion to find these misstatements material and willful.
      Finally, substantial evidence supports the finding that Sidney violated
Revenue and Taxation Code section 19705, subdivision (a)(4), by failing to file
tax returns for rental income and sales proceeds generated by the Property
after she was placed on probation. Investigator Helson testified the Property
generated approximately $103,000 in rental income in 2016. Although this
was before the court placed Sidney on probation, Investigator Helson also
testified that the Property remained consistently rented until it sold in
2018—after Sidney was placed on probation. Thus, it is reasonable to infer
Sidney failed to file tax returns accounting for rental income earned while
she was on probation.
      Sidney’s assertion that there is a $100,000 threshold before rental
income must be reported is based on a misunderstanding of the hypothetical

                                        15
question to the FTB special agent. The agent did not testify that such a
threshold exists, nor has Sidney cited any authority to support the claim.
      Also while she was on probation, Sidney failed to file a tax return
reporting the LLC’s sale of the Property. She argues there is “no support” for
the proposition that the sale of the Property resulted in “reportable income.”
However, the trial court could reasonably infer under the preponderance
standard of proof that the Property appreciated in value over the 15 years the
LLC owned it. And, in any event, the FTB agent testified that the sale
needed to be reported in a tax return.
      Sidney argues that even assuming she was required to file tax returns,
her failure to do so was not willful; rather, she was unable to file them
because the prosecutor had seized her records. However, Sidney has not
shown that she ever asked for the return of the records (or copies of them) so
she could file tax returns. Thus, the trial court could reasonably have found
her failure to be willful.
                                DISPOSITION
      The order is affirmed.

                                                         HALLER, Acting P. J.

WE CONCUR:

GUERRERO, J.

DO, J.

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