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The People v. Eneliko Sean Smith

July 19, 2011


(Super. Ct. No. S08CRF0243)

The opinion of the court was delivered by: Butz , J.

P. v. Smith



California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Defendant Eneliko Sean Smith entered a negotiated plea of no contest to embezzling transient occupancy taxes while acting as an agent of the City of South Lake Tahoe (the City), in exchange for dismissal of another count and a grant of probation. The trial court immediately suspended imposition of sentence and granted probation (imposing a jail term equal to time already served--one day--and 320 hours of community service as conditions).

At the restitution hearing, the trial court found that the City was a direct victim of the embezzlement of the transient occupancy taxes. It awarded the amount of the tax delinquency with interest (along with an unpaid tax under the Bus. & Prof. Code for an operating certificate). The court ruled, however, that "investigative costs incurred by governmental agencies are not recoverable as restitution under the Penal Code."

The People appeal from the probation order. (Pen. Code, § 1238, subd. (a)(5); People v. Hamilton (2003) 114 Cal.App.4th 932, 938 [order relating to restitution made after sentencing affects substantial right of the People and thus appealable].) They contend the trial court erred in failing to allow the City to recover its labor costs expended in investigating the extent of defendant's embezzlement. We shall affirm the order granting probation.


In light of the issue, we do not provide more than a brief statement of facts. The parties failed to stipulate to a factual basis for the plea at the time of its entry,*fn1 but the preliminary hearing transcript showed that defendant, who owned and managed a motel located in South Lake Tahoe, had collected occupancy taxes from guests in 2007 and 2008 that the City imposed on his room rates, but did not turn them over to the City until the City performed an audit of his seized records that demonstrated a shortfall of over $100,000. Under the City's ordinance (South Lake Tahoe City Code, § 28A-18), defendant was required to hold these funds in trust for the City and remit them within 15 days of the end of the month following their collection.

A city accountant provided a spreadsheet detailing the tax delinquency and other items for the restitution hearing. After setting forth the underlying amount of tax with interest and penalties, the spreadsheet added "Additional Expenses" of nearly $13,000 for "extraordinary work performed to collect the debt (i.e.: Letters, subpoenas, lines [sic], court appearances, title searches, Hearing to Revoke Tax Certificate and close business, meetings with the Police Dept., Legal, Building and Fire Staff)." The amount was based on the total number of hours of work that six city employees (including the city accountant) spent on the matter, at various hourly rates representing the actual labor cost to the City for their work.

At the restitution hearing, the city accountant stated these figures were "the sum of all of the staff time . . . to bring this case to where it is at now. All of the 'above and beyond' expenses." These labor costs did not represent overtime (because all staff involved were exempt employees) or any outside workers, but she characterized the work on the case as above and beyond the "normal course" or "normal scope" of their jobs. She admitted that her job ordinarily required her to perform ongoing audits of motels to keep track of the occupancy taxes and seek restitution, but "[w]e've never had one that has taken it to this extreme" in which she had to come to court and testify, which she claimed was not among her ordinary job duties.


Where a victim has suffered economic losses as a result of a defendant's actions, a trial court must require the defendant to make restitution. (People v. Phu (2009) 179 Cal.App.4th 280, 283.) We give the right to restitution a broad and liberal construction. (Ibid.) The trial court may consider almost any kind of information in calculating restitution, and we review the court's resulting order for an abuse of discretion. (Id. at pp. 283-284.) An order ...

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