(Super. Ct. No. 1258583) (Santa Barbara County)
The opinion of the court was delivered by: Coffee, J.
CERTIFIED FOR PUBLICATION
The "Freeze and Seize Law" of Penal Code section 186.11 permits the court in certain white collar criminal cases to take possession of assets under a defendant's control and preserve them for the payment of restitution.*fn1 (People v. Semaan (2007) 42 Cal.4th 79, 82 (Semaan).) A person who claims an interest in frozen assets may seek their release by filing a verified claim with the superior court. (§ 186.11, subd. (e)(6).) Here, under the facts presented, we decide that the claims of white collar crime victims have priority over a claimant with a child support order seeking the same assets.
Christen Brown is Orson Mozes's former wife. Mozes pled guilty to 17 counts of theft by false pretenses, a white collar crime, and agreed to pay restitution to the victims of his crime.
Following lengthy proceedings concerning the distribution of Mozes's frozen assets, the trial court denied Brown's third party claim that a child support order should receive priority over the victim restitution order. Brown's appeal raises an issue of first impression--whether child support orders must be given priority over white collar crime victim restitution in Freeze and Seize proceedings. We affirm.
Brown and Mozes were married for approximately 25 years. During the 1990's, Mozes worked for an adoption agency until its owner "kicked him out." In 2001, Brown and Mozes formed Adoption International Program, Inc., a Pennsylvania corporation (AIP).
From 2001 through 2004, Brown was president and executive director of AIP, and a member of its board of directors. On October 17, 2003, Brown signed a sworn affidavit declaring that she was the executive director of AIP, and was involved in and oversaw all aspects of its business. With Brown and others, Mozes operated AIP from the Brown-Mozes home, which was in Santa Barbara until they moved to Montecito in 2004.
By 2004, Brown ceased acting as AIP's president and executive director. She remained on its board and remained involved in AIP operations after 2004.
AIP posted photographs of individual children on the internet for viewing by prospective adoptive parents. Most of the children were in Russia, the Ukraine, or Kazakhstan. The AIP contract disclosed that AIP could not guarantee that a child would be placed with the prospective adoptive family. Mozes nonetheless gave prospective adoptive parents assurances that he could "hold" a specific child in a foreign country for them, and that it was "rare" for circumstances to prevent a prospective parent from adopting their selected child. Prospective adoptive parents relied on Mozes's representations, paid AIP thousands of dollars, became attached to their selected child, and invested substantial time and effort to adopt that child. AIP clients often learned that their selected child was not available.
In 2005, AIP client Vanessa Donaher and her family planned to adopt Valena, a child who they understood was being held for them in Kazakhstan. While preparing to go there to meet Valena, the Donahers learned that weeks earlier, she was placed with a family in South Africa. Vanessa wrote to Mozes regarding the "fraudulent scam or gross negligence" surrounding their adoption. Brown responded with an email message to Vanessa stating that AIP's lawyer had "assured [AIP] that Valena would be held" for the Donahers; that "the ministry made a mistake"; and that it was "unthinkable that [AIP] would not refund all of [the Donahers'] money." Brown added "that [another] child [would be] coming Monday," and expressed her hope that Vanessa would "at least look at this girl."
In 2006, Brown and Mozes interviewed applicants for employment with AIP, including employees Kevin Anderson and Jayne Howarth. While working at AIP, Howarth observed Brown deal with "upset" clients. After working there for several months, Howarth realized that something was "very wrong" at AIP and she quit.
Meanwhile, in 2005, Brown and Mozes had started living in separate sections of their home. In July 2006, Brown filed a petition for dissolution of their marriage. (Marriage of Brown and Mozes, Santa Barbara County Superior Court, Case No. 1221158.)
Mozes continued to operate AIP for the balance of 2006 and part of 2007. Anderson worked with him until Mozes left California, his family, and AIP, without advance notice, on June 22, 2007. Brown learned of his departure when his sister advised her of a note he left for Brown. Mozes's note instructed Brown to "pay all [his] debts from the sale of [their Montecito] house," and told her he had left a power of attorney in his desk. The note stated that he was "sure the proceeds from the house [would] adequately pay [his] debts."
When he left, Mozes took the AIP computer and virtually all funds in the AIP accounts. Kathy Lynch, a bookkeeper, estimated that Mozes took $135,817.50 in AIP owner's capital in 2007. Brown later asserted that Mozes withdrew $152,317.50 from the AIP business checking account in the months before he left. Brown worked at AIP with Anderson after Mozes left. She spent substantial time and effort to locate another agency that agreed to accept the remaining AIP clients.
On March 28, 2008, the prosecution filed a complaint charging Mozes with 62 counts of theft by false pretenses, on various dates. (§ 532, subd. (a).) The named victims were prospective adoptive parents. On April 1, 2008, the trial court issued a warrant for Mozes's arrest. On April 14, 2008, it issued an order compelling testimony of, and granting use immunity to, Brown.
The dissolution proceedings continued in Mozes's absence. On August 7, 2008, the family law court issued child support, spousal support, and property distribution orders. It awarded Brown all proceeds of the sale of the marital home and authorized the placement of Mozes's community interest in the ...