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People v. Kenefick

January 15, 2009

THE PEOPLE, PLAINTIFF AND RESPONDENT,
v.
SHELLEY BERNICE KENEFICK, DEFENDANT AND APPELLANT.



APPEAL from the judgment of the Superior Court of San Joaquin County. Richard M. Mallett, Judge. Affirmed as modified. (Super. Ct. No. LF008862A).

The opinion of the court was delivered by: Morrison, Acting P. J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

Defendant was convicted by jury of 18 counts of theft, burglary, selling securities by false statement, and forgery, with an aggravated white collar crime enhancement, and enhancements for taking property in excess of $150,000 in value, after she stole $890,000 from six victims, some elderly, while purporting to run an investment company. Sentenced to 16 years 4 months in prison, she appeals. She contends there is insufficient evidence to support three counts; the trial court erred in permitting a forensic accountant to testify that defendant ran a Ponzi scheme; two of the forgery counts should be vacated and the sentence on the remaining forgery counts should be stayed.

We find merit only in the last two contentions relating to the forgery counts. Multiple forged signatures on a single document constitute but one count of forgery. Two counts of forgery must be vacated. The sentence on the remaining forgery counts is stayed pursuant to Penal Code section 654 because the forgeries were part of a single course of action with a single intent. In all other respects, we affirm the judgment.

FACTS

Defendant's Scheme

Defendant had a business doing bookkeeping and tax returns. In 1999, she started Kenefick Investments. Beginning in 2000, six people, who were clients and friends, invested $890,000 in Kenefick Investments based on defendant's representations that she was going to invest in various real estate or business projects, including first deeds of trust. Some of the investors received promissory notes and one received deeds of trust that were forged. By August 2005, defendant stopped making payments to her investors and some of them went to the police.

Sue Tankersley, an investigative auditor with the Department of Justice, traced over 90 percent of the money invested and determined none of it was invested in real estate. Much of it went to defendant's personal account; defendant used the money to pay down personal lines of credit and to make payments to the Kenefick Ranch account, World Access Communications, and her husband's welding business. Some of the money was used to pay other investors. Instead of an investment company, Tankersley explained, defendant ran a Ponzi scheme, using new money to pay off old investors. The investors' money was not invested as promised. Any payments they received came from no source other than the victims themselves.

Howard Transactions

Donald Howard had known defendant for 12 years. She did his accounting and they socialized; their families went on camping trips together. On one of these trips, around the campfire, defendant mentioned investing. Howard had some IRA's for retirement; they were invested in CD's and getting only one or two percent interest. He mentioned to defendant that he would like to do something else, but he did not want to lose any money as he planned to live on the interest in retirement.

Howard was interested only in first deeds of trust; he told defendant she would not be interested because there was nothing in it for her. Defendant said she would charge a loan fee, collect payments and handle any foreclosure details. Defendant told Howard she had a friend who wanted to borrow $100,000; he would give a first deed of trust on his house, which was worth $250,000. Howard would receive 10 percent interest; defendant guaranteed he would be paid even if the borrower failed to make payments. Howard believed defendant as she was his accountant and friend.

In June 2001, when Howard was 64 years old, he invested $60,000 in Kenefick Investments. He believed he was entering a partnership with defendant, who was also investing $60,000. In return Kenefick Investments received a promissory note for $120,000, secured by a first deed of trust on property on Spy Glass Court in Woodbridge, owned by Dennis and Susan Cunningham. Defendant told Howard it was not necessary for him to go to the title company; she would handle everything and bring him the papers to sign.

The Cunninghams did not borrow the money; their signatures on the note and deed of trust were forged.

Howard received interest payments of $500 per month on his investment. In December 2001, after Howard had turned 65, defendant offered him another investment opportunity. She had a friend who wanted to borrow $100,000 and would give a first deed of trust on his house on Wild Plum Way in Tracy worth $250,000. The interest rate would be 10 percent. Howard invested $100,000 from savings and received a promissory note in the amount of $100,000 from Kristina and Alexander Brachna, secured by a deed of trust.

Kristina Brachna and her husband Alejandro Gonzales had lived on Wild Plum Way; they had purchased the house with a loan from Wells Fargo Bank. They did not sign the Howard documents.

Howard continued to receive interest checks on his two investments with Kenefick Investments until August or September 2005, when a $500 check bounced. Defendant's secretary told him to redeposit it, but when he tried he was told the account was closed. He could not get in touch with defendant. He contacted Brachna who told him he did not have a deed of trust on her house. When Howard confronted defendant, she tried to convince him the documents were not false. Howard invested $160,000 and received some interest but none of his principal back.

In connection with these transactions, the jury convicted defendant of first degree burglary (Pen. Code, § 459) with a finding that the offense was violent because Howard was present (Pen. Code, § 667.5(c)(21) (count 3), theft from an elder (Pen. Code, § 368, subd. (d)) and grand theft (Pen. Code, § 487, subd. (a)), with findings that defendant took property exceeding $150,000 in value (Pen. Code, § 12022.6, subd. (a)(2)) (counts 4 and 5), sale of securities by false statements (Corp. Code, § 25401) (count 6), and four counts of forgery (Pen. Code, § 470, subd. (a)) (counts 9, 10, 17 and 18).

Brachna Transactions

Defendant did accounting work and taxes for Kristina Brachna, whose signature defendant forged on one of the notes given to Howard. Brachna had an inheritance invested with Edward Jones. Defendant mentioned her investment company. Defendant told Brachna she would receive 10 percent interest only for three years. Defendant would get two percent and manage the investment. Brachna had no concern about risk because she trusted defendant.

Brachna invested $80,000 in June of 2001 and another $85,000 the following April. Brachna received promissory notes from Kenefick Investments. At one point, Brachna asked for $10,000 of her principal back. It took awhile, but in June 2005, she received it. About that time, it became more difficult to get her monthly interest payments. In August, Howard called about the deed of trust. Brachna felt "like my world just dropped out. I kind of knew from that point that we were screwed." When Brachna went to see defendant to get her money, defendant gave her a sob story.

The jury convicted defendant of grand theft with an enhancement of taking property with a value exceeding $150,000 (count 7) and sale of securities by false statement (count 8).

Valencia Transaction

Carolyn Valencia owned duplexes and defendant provided her accounting and tax services. After Valencia's husband died, she had $40,000 to invest. She spoke with defendant about investing in a housing development. Defendant told Valencia she would receive a monthly check of "free" money that she would not have to declare on her taxes. Valencia gave defendant $40,000 in February 2000, and received a promissory note. Valencia received about $300 per month until January 2002, when she got some of her principal back. Then her monthly payments were about $250 per month. They continued until June 2005; after that she could not reach defendant.

The jury convicted defendant of sale of securities by false statement (count 15) and grand theft (count 16).

Kosta Transactions

The investor who lost the most was Nick Kosta; he lost $275,000. Defendant had provided him tax services since 1999. In January 2003, when Kosta was 68 years old, he invested $45,000 with Kenefick Investments for a housing development in Ripon. Defendant told him she knew a policeman who had inherited a house and wanted to get some money out; Kosta would get a first deed of trust securing the loan. He invested $85,000. Kosta did not receive any paperwork, but trusted defendant.

Defendant told Kosta he should invest in a Franklin money account. He did so and gave defendant deposit slips for that account. Kosta's wife, who had dementia, invested another $85,000 with defendant. After his wife's aunt died, Kosta transferred money from the Franklin account to an account at Edward Jones. His wife then wrote two checks to Kenefick Investments, for $20,000 and $40,000 from the Franklin account without his knowledge. Defendant told Kosta that Edward Jones had invested the $60,000. When Kosta spoke to the representative at Edward Jones, he was told there had been no investment. The $60,000 had been withdrawn from the ...


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