for Partial Publication.] [*]
Cal.Rptr.3d 695] APPEAL from a judgment of the Superior Court
of Sacramento County, Donald J. Currier, Judge. Affirmed in
part and reversed in part. (Super. Ct. No. 13F07578)
Schaefer, San Diego, under appointment by the Court of
Appeal, for Defendant and Appellant.
Becerra, Attorney General, Gerald A. Engler, Chief Assistant
Attorney General, Michael P. Farrell, Assistant Attorney
General, Julie A. Hokans, Galen N. Farris, Deputy Attorney
General, for Plaintiff and Respondent.
a lengthy jury trial in which he represented himself,
defendant Lonnie Glenn Schmidt was convicted of four counts
of prohibited practices by a foreclosure consultant (counts
1-2, 29-30— Civ. Code, § 2945.4, subds. (a) and (e)),
ten counts of filing false instruments (counts 3, 4, 6, 8,
10, 12, 13, 15, 18, 26— Pen. Code, § 115, subd.
(a)), six counts of identity theft (counts
5, 7, 9, 11, 14, 16— § 530.5, subd. (a)), one count of
second degree burglary (count 17— § 459), one count of
perjury (count 19— § 118, subd. (a)), three counts of
grand theft (counts 20, 27-28— § 487, subd. (a)), and
five counts of attempted grand theft (counts 21-25—
664, 487, subd. (a)). The trial court sentenced defendant to
a total of 28 years in state prison plus one year consecutive
in the county jail.
appeal, defendant argues, and the People concede, that: (1)
insufficient evidence supports the convictions for violations
of Civil Code section 2945.4, subdivisions (a) and (e) in
counts 29 and 30, and (2) the grand theft convictions on
counts 20 or 21, on the one hand, and 27 or 28 on the other,
are barred by the multiple takings doctrine set forth in
People v. Bailey (1961) 55 Cal.2d 514, 518-519, 11
Cal.Rptr. 543, 360 P.2d 39 (Bailey ). We accept the
Peoples concessions and shall reverse the convictions on
counts 20, 28, 29, and 30.
also argues that the evidence does not support the
convictions for violations of section 115, subdivision (a) in
counts 3 and 26. We agree and shall reverse the convictions
on counts 3 and 26 as well.
Defendant also argues the trial court should have stayed his
sentence on counts 17, 20 to 25, and 27 to 28. The People
concede that the sentence should have been stayed on count
21. We accept the concession and remand for resentencing on
count 21. We reject defendants contention that the sentence
should have been stayed on the other enumerated counts.
Defendant also argues, and the People also concede, that the
trial court erred in reducing the conviction for second
degree burglary in count 17 to misdemeanor shoplifting under
Proposition 47, and sentencing [254 Cal.Rptr.3d 696] him to
one year consecutive, rather than eight months. We accept the
Peoples concession and remand for resentencing on count 17.
reject defendants remaining contentions.
Defendant managed a home foreclosure rescue operation, doing
business as Second Opinion Services and Financial Services
Bureau Limited. He hired and supervised Alan, who testified
for the prosecution under a grant of immunity. Neither
defendant nor Alan was a licensed real estate broker, real
estate agent, or attorney, and neither had registered with
the State as a foreclosure consultant.
Defendants "Mortgage Rescission" Program
According to Alan, defendant developed a "mortgage
rescission" program that allowed financially distressed
homeowners to avoid foreclosure and receive "fee simple
title control" of their properties, free and clear of
mortgages. Under the program, homeowners paid an
enrollment fee, and then signed quitclaim deeds transferring
their properties to trusts created by defendant, with
defendant as trustee. At defendants instruction, homeowners
would then stop paying their mortgages (if they had not done
so already) and instead make monthly lease payments to
defendant. Defendant told homeowners that the monthly lease
payments would continue for a period of five years, after
which, he claimed, they would own their homes free and clear.
the trial, the jury heard from multiple prosecution witnesses
that defendants mortgage rescission program failed to work
as advertised. The jury heard evidence about a number of
transactions, involving a number of properties. We describe
two such transactions in detail and provide a more general
overview of the others.
The Walnut Avenue Property (Counts 1-3, 18, 20, and 21)
owned a home on Walnut Avenue in Orangevale. Hector fell
behind on his mortgage payments and went into default in
October 2010. He heard about defendants program from a
friend and reached out for help. Defendant told Hector that
he knew a way to save the house and gain title free and clear
of the mortgage, but "it was going to cost [him]."
Defendant explained that Hector would pay an enrollment fee
of $6,500, transfer the property to "an entity,"
and "lease the house back from the entity for $891
monthly" for a period of five years. He would then make
a balloon payment of $75,000, which, defendant said, he could
easily pay by refinancing, as he would now own the house free
paid the $6,500 enrollment fee and signed a quitclaim deed in
February or March 2011 transferring the house to a trust
known as the H&H Barbershop Trust. Although defendant told
Hector that he would have control over the property through
the H&H Barbershop Trust (which was named for Hectors
business), the abstract of trust, which defendant did not
show Hector, identified defendant and Alan as trustees and
gave them "absolute and exclusive power and control over
the management and conduct of the business and affairs of the
trust." Hector would not have signed the quitclaim deed
had he known that he would be ceding control of the property
made monthly lease payments for several months, beginning in
April and ending in September 2011. He stopped making
payments to defendant on the advice of an attorney and
instead resumed [254 Cal.Rptr.3d 697] making monthly payments
to his mortgage lender. Eventually, he managed to obtain a
loan modification which allowed him to keep his house.
Defendant was not involved in the process of securing the
Sometime later, a man appeared at Hectors house. The man
identified himself as an associate of defendant, and claimed
that Hectors house belonged to him. A short time later, in
July 2013, Hector received a letter from defendant, asserting
that defendant was now the owner of the house and claiming
that Hector owed him more than $20,000 in back rent.
still, Hector learned that the quitclaim deed he had signed
in 2011 had been recorded on July 16, 2013. Hector also
learned that a document entitled "assumption
agreement," in which the H&H Barbershop Trust purported
to assume Hectors loan obligations, had been recorded the
next day. Hector was forced to hire an attorney to clear
title to the house. During the trial, the jury heard evidence
that defendant had attempted to sell the Walnut Avenue
property to Don, a real estate speculator who was willing to
find investors for the property, going so far as to open an
escrow for the property with Orange Coast Title Company in
The School Street Property (Counts 26-30)
and Robert owned a home on School Street in Elk Grove. They
ran into some financial difficulty in 2011 and contacted
defendant. They were not living in their home at the time;
rather, they had rented the property, and were traveling the
country in their retirement in a fifth wheel trailer.
were current on their mortgage, but the house was underwater
and they wanted to reduce their mortgage payments. Defendant
told Janet and Robert that there was something wrong with
their loan agreement, which would allow him to cancel their
mortgage. He explained that his program would require them to
transfer their property to a trust, but they would continue
to own the property and could continue to lease it. Defendant
told Janet and Robert that they would no longer make monthly
mortgage payments to their lender, but would instead pay a
reduced amount to another entity over a period of five years,
followed by a balloon payment, which would be paid by
refinancing. Janet and Robert were impressed by defendants
presentation and eager to improve their financial situation.
They signed a contract to join defendants program that very
day. The contract called for a $6,500 enrollment fee, monthly
payments of $951, and a balloon payment of $85,000.
and Robert paid the enrollment fee and signed a quitclaim
deed conveying their interest in the School Street property
to a trust known as the "Forever Blessed Trust."
They stopped making their mortgage payments, signed a lease
agreement with the Forever Blessed Trust, and instructed
their tenants to send monthly rental payments to defendant.
When all was said and done, Janet and Robert paid defendant
more than $18,000. Janet and Robert
were not aware that the
Forever Blessed Trust was governed by an abstract of trust
created by defendant, naming defendant as trustee and
granting defendant "absolute and exclusive control"
over the management and disposition of the property. They
would not have signed the quitclaim deed had they ...