People v. Avignone CA4/1
D075948M
| Cal. Ct. App. | Oct 20, 2021Background
- William and Susan Avignone (SABA Financial) solicited investments via promissory notes for purportedly secured Georgia real‑estate (Section 8) projects, promising high regular interest, first‑lien security, and profit sharing.
- Five principal investor victims (Van De Vens, Branch, Wightman, Lopez, Blowers) invested; funds (~$806,000) were largely commingled and diverted to personal and unrelated expenses; only 11 properties were purchased.
- Forensic accounting traced significant personal spending and limited property purchases; estimated victim losses between roughly $425,000–$560,000.
- Defendants withdrew initial guilty pleas, were tried, convicted of multiple counts of grand theft and securities fraud; white‑collar (loss) enhancements found true.
- Sentences: William—13 years; Susan—7 years. Both appealed on multiple grounds (instructional errors, consolidation, unanimity, conspiracy, sufficiency of evidence that notes were securities, equal protection, jurisdiction).
- The Court of Appeal affirmed the convictions and enhancements in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether multiple grand theft counts must be consolidated under Bailey | People: Bailey inapplicable where separate victims, separate transactions; separate counts proper | William: multiple thefts were one continuing scheme and must be aggregated under Bailey | Held: Bailey not applicable; Whitmer limits Bailey—separate victims/transactions support separate theft counts |
| Whether a unanimity instruction was required for the theory of theft (false pretense vs embezzlement) | People: jury must unanimously agree on the unlawful taking (act), not the technical theory | Defendants: jury must agree which theory supported each theft conviction | Held: No error — unanimity as to act satisfied; jurors need not agree on the particular statutory theory |
| Whether giving an uncharged conspiracy instruction improperly allowed conviction based on negligence | People: instruction appropriate; securities statute requires knowledge/willfulness so conspiracy liability consistent | Defendants: conspiracy cannot be based on negligence; instruction allowed legal impossibility | Held: Issue forfeited; on merits rejected — §25401 requires scienter (or criminal negligence as alternate proof of knowledge), so conspiracy liability was proper |
| Whether promissory notes were securities (Howey/risk‑capital tests) | People: notes met Howey (investment of money, common enterprise, profits from others’ managerial efforts) | William: notes were individualized, negotiated loans (like Black) and thus not securities | Held: Substantial evidence supports classification as securities under Howey; Black distinguishable on facts |
| Sufficiency of evidence that Susan personally made or aided/abetted material misstatements | People: Susan participated in pitches, signed/endorsed notes, aided and abetted or conspired; omissions/material misrepresentations proved | Susan: insufficient proof she made or aided material false statements or omissions | Held: Sufficient evidence that Susan was an active partner and liable as principal/aider or coconspirator; materiality supported |
| Equal protection challenge to use of two different tests (risk capital and Howey) to define ‘‘security’’ | People: both tests are uniformly applied to determine regulatory purpose; no unequal classification | Susan: two‑test regime creates arbitrary differential treatment | Held: Rejected — no suspect classification, rational basis exists, tests applied case‑by‑case uniformly |
| Validity of white‑collar loss enhancement instruction (Pen. Code §186.11) | People: instruction correctly permitted inclusion of losses from fraud and grand theft counts | William: instruction allowed reliance on negligence and theft by false pretenses not covered by statute | Held: Forfeited; on merits enhancement proper — grand theft by false pretenses falls under "fraud" and statute's criminal‑negligence language relates to mens rea, not a bar to enhancement |
| Territorial jurisdiction over Arizona victim (Van De Vens) | People: preparatory acts and communications occurred in California (checks, notes, solicitations) so venue/jurisdiction proper | William: transaction occurred in Arizona; CA lacked jurisdiction | Held: CA jurisdiction proper under Penal Code §778a — preparatory acts in California sufficed |
Key Cases Cited
- People v. Bailey, 55 Cal.2d 514 (Cal. 1961) (original articulation of single‑scheme aggregation rule for theft convictions)
- People v. Whitmer, 59 Cal.4th 733 (Cal. 2014) (clarified Bailey; multiple acts under a single scheme may be separate offenses)
- S.E.C. v. W.J. Howey Co., 328 U.S. 293 (U.S. 1946) (formulated federal Howey investment‑contract test)
- People v. Black, 8 Cal.App.5th 889 (Cal. Ct. App. 2017) (one‑on‑one negotiated note held not a security on its facts)
- Richardson v. United States, 526 U.S. 813 (U.S. 1999) (unanimity requirements where statute treats series of violations as distinct elements)
- People v. Nor Woods, 37 Cal.2d 584 (Cal. 1951) (jury need not agree on technical category of theft so long as unlawful taking unanimously found)
- People v. Gonzales, 2 Cal.5th 858 (Cal. 2017) (discussing consolidation of theft statutes and requirement to instruct on applicable theory)
- People v. Syde, 37 Cal.2d 765 (Cal. 1951) (securities law statutory purpose and broad protective scope)