People v. Tiano, H028956 (Cal. App. 3/15/2010)

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THE PEOPLE, Plaintiff and Respondent, v. ARMAND JOSEPH TIANO et al., Defendants and Appellants.

H028956.

Court of Appeals of California, Sixth Appellate District.

March 15, 2010.

Appeal from the Santa Clara County, Super. Ct. No. 210710.

Not to be Published in Official Reports

PREMO, J.

A jury convicted defendants Matthew Bradley Kellner and Armand Joseph Tiano of conspiracy to commit grand theft (count 1), grand theft (count 2), two counts of embezzlement by a trustee (counts 3-4), perjury (count 9), four counts of tax evasion (counts 12-15), three counts of violating the Unemployment Insurance Code (UIC) (counts 36-38), and two counts of insurance fraud (counts 45-46) unrelated to the other counts. It also convicted Kellner of 10 additional counts of tax evasion (counts 26-35) and three additional counts of violating the UIC (counts 42-44). It also convicted Tiano of three additional counts of embezzlement by a trustee (counts 6-8), one additional count of perjury (count 10), money laundering (count 11), four additional counts of tax evasion (counts 17-20), and two additional insurance-fraud counts and one additional perjury count unrelated to the other counts (counts 47-49). It also convicted defendant George Stuart Kellner¹ of perjury (count 9) and five counts of tax evasion (counts 31-35). The trial court sentenced Matthew to 11 years and four months, Tiano to 17 years and eight months, and George to six years and four months. Defendants appeal from the judgments.

Matthew contends that (1) the trial court abused its discretion by denying his pretrial Marsden² motion, (2) the trial court erred by failing to conduct a Marsden hearing during trial, (3) he received ineffective assistance of counsel because trial counsel displayed hostility toward him before the jury, (4) the trial court engaged in judicial misconduct, and (5) the trial court abused its discretion by admitting a television news story in evidence over objection grounded on Evidence Code section 352 (exclusion of evidence if probative value is substantially outweighed by probability that admission will necessitate undue consumption of time or create substantial danger of undue prejudice, confusion of issues, or misleading the jury).

George contends that (1) the trial court erred by denying his request to associate retained cocounsel, (2) the trial court engaged in judicial misconduct, (3) no substantial evidence supports his perjury conviction, (4) the trial court erroneously instructed the jury as to the perjury count, (5) the trial court erroneously instructed the jury as to the tax evasion counts, and (6) the trial court erred by refusing to entertain his motion for a new trial.

Tiano contends that (1) the trial court erred by giving the jury argumentative instructions relating to the concept of intent to defraud, (2) the trial court erroneously instructed the jury as to the tax evasion counts, (3) the trial court erred by giving the jury argumentative instructions relating to the concept of willfully committing tax evasion, (4) the trial court erroneously instructed the jury as to the UIC counts, (5) the trial court erred by giving the jury argumentative instructions relating to the distinction between employees and independent contractors for purposes of the UIC counts, (6) no substantial evidence supports his perjury convictions, (7) the trial court erroneously instructed the jury as to the perjury counts, and (8) he received improper multiple punishments (Pen. Code, § 654³ [prohibiting multiple punishments for a single act or course of conduct]).

Defendants also advance that, in the event no one error by itself is sufficient to justify reversal, cumulative error requires reversal. And they have joined each other's arguments. (Cal. Rules of Court, rule 8.200(a)(5) ["a party may join in or adopt by reference all or part of a brief in the same or a related appeal."].)⁴

We affirm the judgments.

CONTENTS

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I. background

In 1979, the Kellners incorporated Stuart Bradley Productions (SBP) in Nevada. Matthew served as SBP's president; George served as SBP's chairman and secretary. SBP engaged in commercial fundraising and publishing, primarily for law enforcement organizations and labor unions. In 1983, it opened an office in Walnut Creek, California and contracted with the Santa Clara County Deputy Sheriffs' Association (DSA), the union that represented deputy sheriffs in Santa Clara County. Tiano was president of DSA.⁵ The contract allowed SBP to raise money for DSA by soliciting the general public for charitable donations via telemarketing and selling advertising in an annual crime-prevention and safety publication. For those services, the contract provided that SBP retain 85 percent of the funds raised and pay DSA 15 percent of the funds raised. DSA used its share of the funds raised for officer benevolence, local youth sports, and the like. At some point, the Kellners began diverting DSA's share of the raised money for their own use and paying money secretly to Tiano. Tiano, in turn, used his position to promote SBP to DSA and other law enforcement organizations. In 1989, he admitted to DSA's board that he was being paid by SBP and recused himself from voting on SBP's contracts. Near this time, SBP's accounting to DSA became unreliable and SBP bounced checks to DSA. SBP ultimately amassed a debt to DSA of over $100,000. DSA then asserted monetary control by opening its own bank account for the raised funds, directed SBP to deposit the funds in that account, and agreed to pay SBP from that account.

In October 1992, a television news program broadcast stories critical of the Kellners and SBP's fundraising practices. Two days later, the Kellners formed a Nevada corporation called Family Entertainment Group of California, Inc. (FEG), to continue the fundraising business. FEG assumed SBP's debt to DSA and paid DSA $25,000 against the $100,000 debt in exchange for a new fundraising contract, which terminated in 1995 with $67,000 still owing by FEG to DSA.

In 1993, Tiano incorporated business entities with names that sounded as if they were associated with law enforcement organizations and signed contracts with FEG to raise funds on behalf of the entities. Tiano recruited deputy sheriffs to serve on the boards of his entities but there were no meetings or members of the entities. One entity, the Deputy Sheriffs' Athletic League (DSAL), led to a dispute between Tiano and DSA regarding the similarity of DSAL's name to DSA's name. At some point, DSA paid Tiano $7,500 and Tiano changed DSAL's name to the Police and Sheriffs' Athletic League (PSAL).

The telemarketers, employees of FEG, DSAL, and PSAL who were paid in cash, used the names of Tiano's entities to solicit donations from the public. In doing so, the telemarketers misrepresented the entities as legitimate law enforcement organizations and themselves as volunteers for the organizations rather than paid telemarketers. They also misrepresented themselves as authorized, for example under the DSAL or PSAL name, to raise funds for legitimate organizations, such as Ronald McDonald House and Lucile Salter Packard Children's Hospital. The scheme operated from 1994 until 1999 and raised over $3 million. Only $50,000 found its way toward charitable purposes.

The scheme is the basis for the conspiracy, grand theft, and embezzlement convictions. The perjury convictions stemmed from false state regulatory filings signed under penalty of perjury required of commercial fundraisers (FEG) and charitable trusts (PSAL). The money laundering conviction resulted from checks written on the accounts of DSAL and PSAL that were payable to "cash" and endorsed by Tiano. The tax evasion convictions related to failure to file corporate tax returns for PSAL and FEG and failure to report individual income. The UIC convictions stemmed from PSAL, FEG, and Matthew (1) failing to file UIC tax returns, (2) failing to pay payroll taxes, and (3) failing to pay unemployment insurance taxes. The insurance-fraud convictions arose from Tiano's injuries suffered in an automobile accident after which Tiano settled a claim with an insurance company after lying about suffering lost wages from FEG. Tiano's stand-alone insurance-fraud convictions resulted from a work-place accident after which Tiano received permanent-disability workers' compensation benefits though he thereafter participated in truck-race and bench-press competitions. Tiano's related perjury count stemmed from his lawsuit against the owner of the equipment that caused his work-place injury in which Tiano provided false deposition testimony and interrogatory answers and received settlement money from the owner's insurance company.

II. pretrial marsden motion

When a defendant seeks to discharge appointed counsel and substitute another attorney, he must establish that his counsel is "`"`not providing adequate representation'"'" or that he or she and counsel "`"`have become embroiled in such an irreconcilable conflict that ineffective representation is likely to result.'"'" (People v. Barnett (1998) 17 Cal.4th 1044, 1085.) In ruling on such a motion, the court should not rely solely upon courtroom observations but must consider any "`specific examples of counsel's inadequate representation that the defendant wishes to enumerate.'" (People v. Horton (1995) 11 Cal.4th 1068, 1102.) The ultimate decision whether to grant substitution is a matter of judicial discretion. (Ibid.)

"While the concept `abuse of discretion' is not easily susceptible to precise definition, the appropriate test has been enunciated in terms of whether or not the trial court exceeded ` "the bounds of reason, all of the circumstances before it being considered."'" (Troxell v. Troxell (1965) 237 Cal.App.2d 147, 152.) "A decision will not be reversed merely because reasonable people might disagree. `An appellate tribunal is neither authorized nor warranted in...