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The People v. Wahid Yossuf Nazary

December 13, 2010

THE PEOPLE, PLAINTIFF AND RESPONDENT,
v.
WAHID YOSSUF NAZARY, DEFENDANT AND APPELLANT.



(Super. Ct. No. SCN227608) APPEAL from a judgment of the Superior Court of San Diego County, David A. Brown, Judge. Affirmed.

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

Opinion ordered published January 6, 2011

A jury convicted Wahid Yossuf Nazary of embezzlement by an employee (Pen. Code,*fn1 § 508; count 1) and grand theft by an employee (§ 487, subd. (b)(3); count 2). The trial court sentenced Nazary to two years in prison on count 1 and stayed the sentence on count 2 pursuant to section 654.

Nazary appeals, contending he cannot be convicted of both grand theft and embezzlement because they are the same crime, or alternatively, grand theft is a lesser included offense of embezzlement which must be stricken. He also claims the trial court committed prejudicial error in permitting the prosecutor to play a videotaped confrontation with him in his private workplace office in violation of section 632 and his privacy rights, in denying his motion to strike the testimony of a witness at trial, and in overruling hearsay objections to certain receipts admitted into evidence. Nazary finally asserts the cumulative effect of the multiple evidentiary errors denied him due process and a fair trial. We affirm.

FACTUAL BACKGROUND

From 2002 to the end of 2006, Nazary was the on-site manager for an Atlantic Richfield (ARCO) gas station (the ARCO station or the station) located in Oceanside, California, owned by K.A. Management (K.A.), an investment corporation named after its owners, Kayvan Agahnia (Kevin), Kareem Assi, and Kambiz Agahnia, who also owned and operated other gas stations, convenience stores and car washes in San Diego County. Nazary was charged with the current theft offenses after an investigation revealed large discrepancies between the cash amounts received by the station and those deposited in the station's bank account during the period from January 1, 2005 through November 1, 2006.

At trial, Anthony Casarez, K.A.'s director of operations, who also was the supervisor overseeing Nazary's immediate field supervisor, testified about the unique way business was conducted in the ARCO gas station industry in general as well as the specifics of the discovery and investigation of the theft in this case. Casarez explained that all ARCO franchise stations, including the one in Oceanside, which he had opened for K.A. as manager in 1999, had outside "Pay Island Cashiers" or "PIC" machines on the island where the pumps are located that take cash or debit cards, which enable a customer to either swipe a debit card or place cash directly into the machine and obtain the equivalent amount of gas to fuel their vehicle. Each PIC machine is equipped with a validator that reads the bills to verify the denomination and a computer system that keeps track of the cash which is then deposited into an internal canister. When the canister is removed, the PIC machine stops its running calculation of the cash amount inside its canister and resets to zero. The software in each PIC machine connects it with the main register inside the ARCO station, allowing that register to keep a running tally of all sales for the station.

Casarez noted that due to K.A.'s franchise agreement with ARCO and for security reasons, the eight canisters filled with cash inside the PIC machines at the ARCO station could not be accessed by K.A. employees or the station's manager. Rather, ARCO relied on third party armored transport companies to remove the PIC canisters containing cash and to replace them with empty canisters at their stations. The armored transport company hired to complete these tasks at the ARCO station in this case usually came three times a week to pull and replace the canisters.

When the armored transport company arrived at the station, one of their employees would initially retrieve a set of empty PIC canisters from the manager, then use a key to open the slide bar mechanism on the PIC machines to expose the full canisters containing cash. Neither the manager nor the station employees had a key to open the mechanism to gain access to the canisters in the PIC machines. After removing or pulling all eight canisters, the armored transport company employee would replace them with the empty canisters and generally also print a receipt, which detailed the amount of cash that had registered in each of the canisters since the last time they were pulled, and deliver the full canisters and printed PIC receipt to the station manager's office.*fn2 In exchange, the manager would give the armored transport company employee cash from the previous pull in bank deposit bags to take to the central vault at the Union Bank of California.

Basically, after each visit by the armored transport company, the station manager counted the amount of cash inside each canister to ensure that it matched the corresponding PIC receipt, bagged the money from the PIC machines separately from the "normal" cash deposits from the station's minimart register, and placed it in the station's safe until the armored transport company's next arrival. The manager would sign the PIC receipt and generate a deposit slip indicating the amount of cash removed from the PIC machine canisters to be taken to the bank and also fax a copy of the PIC receipt and deposit slip to K.A.

Casarez further explained that the sensors inside the PIC machines, which calculated how much money was in each canister at the time of a pull and printed that amount on the receipt, were sensitive and would sometimes malfunction due to the speed and force with which the armored transport company's employee removed them. On those occasions, the printed receipt would not show a count for a canister that had not registered as pulled. However, because the PIC machines kept a running total of cash received in a particular canister until it registered as being pulled, the next time the armored transport company employee pulled the canister and the sensor detected the pull, the receipt would show a cash amount in that canister greater than the actual cash it contained. In addition, the validator in the PIC machines would occasionally not register a bill that had been deposited in a canister, which would result in a slight discrepancy between the PIC machine's running account of the cash inside the canister and the actual amount it contained.

If any of the PIC machine malfunctions was chronic, the manager of the station was instructed to call CETEC Solutions (CETEC) to come service and repair the PIC machines. Further, whenever there was a "pull error" where the PIC receipt indicated that one or several of the canisters had not registered as having been pulled, the station manager was instructed to open the unregistered canisters, count the cash inside each and write that total amount on the receipt for each such canister. At the next canister pull, when the receipt showed the total of the unregistered pull and the registered pull, the manager of the station was supposed to ensure that the numbers added up, with the amount depicted on the most recent receipt equaling what was pulled previously plus what was currently inside the canister. Eventually, the accuracy of these figures, that were in a so-called "suspense account," which accounted for any minor swings in shortages or overages of the PIC machine cash, would be verified by K.A.'s independent accounting firm, Ramineh, Fani & Nowakhtar (RFN).

While Nazary was manager of the ARCO station, Casarez became aware that his counting of the cash from the PIC machine canisters varied slightly from the usual policy employed by K.A of having the manager or assistant manager and another person, i.e., two people, immediately count the cash, put the money in the station's main safe near the register, and both people sign the receipt and deposit slips for the next deposit. Nazary and his assistant manager would often not immediately count the money, usually using both days before the next armored transport company's arrival to count the PIC cash, often had only one person count the money and sign the receipt and deposit slips instead of two, and placed the money in a file cabinet in the closet of the manager's office rather than the station's safe.*fn3 Although Casarez and Nazary's direct supervisor had both asked Nazary to complete the money counting procedure according to company policy, he never complied.

During the first quarter of 2006, RFN, which had completed its 2005 year-end financial analysis for K.A., notified Kevin, one of K.A.'s owners, that there had been a continuous and abnormal growing of the shortages in the suspense account at the ARCO station. Kevin, in turn, contacted Casarez to call CETEC to get third party verification that the PIC system at the station was working properly and asked Bryan Jones, who was the Director of Finance and Administration for K.A. in 2005 and 2006, to conduct an internal financial investigation. After CETEC verified the PIC machines were working properly and Jones's investigation concluded there was probable "employee theft" by Nazary, Casarez and K.A.'s owners contacted the Oceanside Police Department. After discussing the matter with Detective Brian Mahr, who was assigned to the case, Casarez set in motion a "forensic audit" Mahr wanted performed.

In addition, Casarez along with the owners collectively decided "to install video surveillance inside the manager's office" at the ARCO station. Thus while Nazary was on leave during September 2006, three cameras and an audio device were installed in the ceiling of the office without his knowledge so that footage could be recorded, saved and monitored remotely. Casarez also had the locks on the doors in the office changed during Nazary's absence, retaining keys for himself and the owners.

On October 3, 2006, Nazary's first day back at work following his vacation, Casarez gave him a set of the new keys and a letter detailing the status of the business as it was handed back over to his care. Casarez later confirmed that the surveillance cameras were working properly and that he could see and hear what was happening in the manager's office that first day. However, the recording the next day was cut short because Nazary was observed spackling over the holes containing the cameras. Consequently, on October 8, 2006, Casarez had two new cameras installed in the office's ceiling vents without Nazary's knowledge.

Casarez and the owners of K.A. also decided to do a precount of the PIC money from the canisters in an effort to uncover the theft and prevent Nazary from having access to the money. Because the armored transport company had come on October 6, 2006, and was not scheduled to come to the station again until October 11, 2006 due to the Monday Columbus Day holiday, meaning the canisters would have accumulated a larger amount of money than usual, Casarez and the owners planned to start the so-called "precount sting operation" or plan for the October 11th scheduled pickup.

According to the plan, Kevin would pick up Nazary at the station and take him to "research" car wash locations in the area while Casarez met the armored transport company employees at the station, received the canisters from the PIC machines, counted the money inside each and replaced the cash inside the canisters so that when Nazary later counted the money, it could be determined whether his figures matched those arrived at in Casarez's precount.

The precount sting on October 11, 2006, however, did not go as planned. Although Nazary was off the premises, Casarez's attempt to gain access to the canisters locked inside the closet in the manager's office failed as his key to the closet would not work. Looking around the office, Casarez then found a receipt from a locksmith indicating that Nazary had had the locks in the office changed again that morning. Casarez called the owners of K.A. and Detective Mahr explaining the situation, and they in turn explained the situation to the locksmith company, which then sent a representative to meet Casarez and give him a copy of the new key. At this point, because there was not enough time to complete the precount of the cash in the canisters, Casarez abandoned the plan and stayed on site to count the large sum of money with Nazary when he returned to the station. Although there were several pull errors that day, no major discrepancies were noted and Casarez took the deposit of roughly $39,000 from the PIC machine canisters directly to the bank.

The second try to execute the plan on October 13, 2006 was successful. After Nazary was taken off-site, Casarez arrived at the station, precounted the cash in the canisters from the PIC machines in view of the surveillance cameras and while he was on the telephone with Kevin, and then replaced the money as it had been inside the various canisters. Nazary was later filmed counting the same canisters. The PIC receipt for this pull, entered into evidence as exhibit 28, showed that canisters 5, 6 and 7 did not register. Casarez's precount total of the amount of cash in canisters 5, 6, and 7 that day was admitted into evidence as exhibit 29.

A similar precount plan was executed on October 16, 2006, with Nazary's direct supervisor doing the precount rather than Casarez while Casarez watched the videotape of the precount and talked with the supervisor by phone. On that date, canisters 5, 6 and 7 appeared on the PIC receipt, which was entered into evidence as exhibits 32 and 33, and exhibit 31 was entered into evidence showing the supervisor's precount totals.

K.A. and Casarez then compared Nazary's counts for October 13 and 16, 2006 to the precounts performed by Casarez and Nazary's supervisor. Both the precounts and Nazary's counts were then compared to the PIC receipts, but Nazary's totals indicated the canisters actually contained $1,570 less than what was indicated on the PIC receipt. For canister 6, again the precount of the accumulated cash matched the October 16 PIC receipt, but Nazary's count showed a loss of $240. For canister 7, the precount showed $1 more than what was indicated on the PIC receipt while Nazary's count demonstrated a loss of $100. In total, Nazary's account of the cash in canisters 5, 6 and 7 written on the receipt on October 13, 2006, was $1,910 less than Casarez's precount total.

The same type of comparison was performed for the PIC receipt from October 6, 2006, which was entered into evidence as exhibit 34 and showed canisters 5, 6, and 7 did not register as pulled, and the receipt for October 11, 2006, which was entered into evidence as exhibit 17 that registered those canisters. Consequently, the total printed on the PIC receipt for such canisters on October 11, 2006 should have equaled the cumulative total of the amounts that were manually counted by Nazary on October 6 for them plus the amounts that were manually counted for those canisters by Nazary and Casarez on October 11, 2006. Instead of matching, Nazary's figures showed a total shortage of $1,911 for canisters 5, 6 and 7.

After the precount comparisons revealed significant discrepancies, Casarez along with two of K.A.'s owners, Kevin and Assi, confronted Nazary in the station manager's office on October 23, 2006, about the shortages. During the confrontation, which was captured on camera, Casarez and the owners told Nazary they knew he had stolen $227,000, showing him the Excel spreadsheets on a laptop that reflected the losses to K.A., and explained about the sting operation of precounts used to prove the theft. Although a redacted videotape of the confrontation was played for the jury, Casarez, who testified about the contents of the conversation, said Nazary denied any involvement in the theft of K.A. funds, and noted that he was sweating, fumbling with his cell phone and slapping himself in the head in disbelief during the confrontation, which ended abruptly when he ran out to his car and left the station.

William Stegall, a manager/supervisor of CETEC, who was responsible for overseeing the technology of the ARCO gas station point-of-sale systems (the main register inside the minimart) and debit and credit devices as well as the outside PIC machines, testified at trial about being contacted by Casarez about the cash shortage problem at the station in this case. After describing his experience and training for maintaining the hardware both inside and outside the ARCO stations, his familiarity with installation of the software and hardware for all the stations, both the electronic and mechanical side of the various machines used at the stations in the five state area over which he managed, including California, and his daily contact with ARCO's technicians who called him for troubleshooting advice as they worked on the various machines, Stegall explained to the jury the electronic side of the PIC machines and how they mechanically worked in conjunction with the inside point-of-sale system. Stegall's explanations included describing the card reader, printer and cash acceptor and validator for the PIC machines and why the receipt from a machine might reflect a pull error if any of the three switches necessary to activate the pull registering for a particular canister was not working properly.

In response to Casarez's request to check the PIC machines at the station, Stegall had arranged for two of his "top" technicians to test every sensor, every switch and every wire of those machines. Stegall, who then reviewed their paperwork of the inspection and talked with them, explained that his technicians ran a general diagnostic of the entire main board on each device, testing all of the voltages, all of the wires for continuity, every door switch and every other switch in each machine. Although the technicians had found a few switches that needed to be replaced, which probably caused the canister pull error problem, Stegall testified that those problems would not have accounted for the cash shortages at the station. Moreover, even though CETEC did not review the software as part of the inspection, Stegall said that K.A. had not reported any additional problems with cash shortages in the PIC machines since that time.

Jones, who had been asked to conduct an internal investigation of the matter, testified he started by reviewing all of the financial documents from 2005, including those that had been received by K.A. from RFN. After ruling out any accounting or clerical errors, he narrowed down the problem of cash shortages as coming from the PIC machines because the bank deposit information did not correspond with the PIC sales receipts. When Jones contacted CETEC and determined there was no problem with the PIC machine software, he went back and compared all of the PIC receipts with the actual deposits made to the bank. Doing so, Jones discovered that the problem was originating from the times when manual corrections to the PIC receipts were necessary because they did not register certain canister pulls, and the amount of cash had to be written in by hand. Jones created an Excel spreadsheet (exhibit 40) for the period from January 2005 through November 2006, detailing the amount of cash the deposit slips indicated should have been received versus what cash was physically deposited in the bank. He also compared the shortages to Nazary's work schedule and determined that the significant shortages only occurred when Nazary was working, and there were either overages or slight acceptable shortages when he was not working. Jones calculated the total amount of loss suffered by K.A. attributable to the PIC machine issue was $227,000.

Karen Kaseno, a certified public accountant (CPA) and fraud examiner, testified her CPA firm had been contacted by K.A. to perform an extensive forensic audit of the cash flow problem at the ARCO station and to review the financial analysis Jones had prepared regarding the matter. Kaseno was given Jones's spreadsheets, all the deposit slips and PIC receipts from January 2005 to November 2006 and asked to independently determine whether she thought there was a possibility of theft and whether the records K.A. had compiled were correct. After completing her own analysis, including the dates on which Nazary was working and those on which he was not, Kaseno concluded there was no significant cash loss during the times Nazary was not at the station and that the cash loss when he was present matched that found by Jones, totaling $227,000.

Finally, one of the K.A. owners, Kevin, testified in the prosecution case against Nazary, essentially confirming much of Casarez's and Jones's testimony about their suspicions that Nazary was committing theft of cash from the ARCO station's PIC machines and the subsequent investigation involving the surveillance cameras at the station, precount sting operation and confrontation in the manager's office. Kevin added that as Nazary was running to his car after the confrontation, he shouted to him, asking him what was happening and Nazary shouted back as he drove off that he would call him. Nazary did so later that day, telling Kevin, "Give me some time. I'll pay you half the money. Just give me some time." Because Kevin was going out of town, he told Nazary to call owner Assi and "coordinate this thing and do what you say."

Nazary subsequently called Assi requesting a couple of days to allow him to pay back half of the money. Assi gave Nazary a deadline and then called him when he failed to meet that deadline, asking him to call back. When Nazary failed to repay any of the money or call back one of the owners, Kevin contacted the police and talked with ...


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