Colonies Criminal Case Appears Likely Headed Back To Appeals Court

(August 28) SAN BERNARDINO—Appeals of Judge Michael A Smith’s recent rulings in the Colonies Lawsuit Settlement Public Corruption Prosecution that would delay the matter from going before a jury for as long as another 16 months appear likely to be forthcoming, based on updated online court minute orders.
Smith held seven days of hearings between July 23 and August 6 on motions filed by the defense to dismiss the counts in the indictment upon which the prosecution is based. Those motions cited several grounds, including the statute of limitations, misinstruction of the grand jury that indicted the defendants, lack of probable cause, prosecutorial misconduct in having raided the defense camp and seizing privileged materials crucial to the defense, along with prosecutorial and investigator misconduct in having made misrepresentations to obtain search warrants and hiding information about a witness and exculpatory evidence from the grand jury.
In the indictment, Rancho Cucamonga-based developer Jeff Burum is charged with having threatened and coerced former supervisors Bill Postmus and Paul Biane to settle a lawsuit brought against the county and its flood control district over drainage issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland and then rewarding them with $100,000 donations to political action committees they controlled after they voted, with supervisor Gary Ovitt to confer a $102 million settlement on the Colonies Partners in November 2006.
The Colonies Partners was a consortium of 21 investors, headed by co-managing principals Burum and Dan Richards. In May 2011, Burum, Biane, former sheriff’s deputies’ union president Jim Erwin and Mark Kirk, who had been Ovitt’s chief of staff, were named in a 29-count indictment alleging conspiracy, fraud, conflict of interest, misappropriation of public funds, bribery, perjury and tax evasion. In the indictment Erwin, who had worked as a consultant to the Colonies Partners, was charged with assisting Burum in facilitating Postmus and Biane’s reception of bribes. Kirk was charged with using his influence with Ovitt to convince him to support the $102 million settlement that was approved by the board on a 3-2 vote.
The May 2011 indictment superseded a February 2010 indictment in which Postmus and Erwin had been named. Postmus and Erwin had pleaded not guilty to the charges in the original indictment, but in March 2011, Postmus entered guilty pleas to 14 felony charges against him in the first indictment and turned state’s evidence, testifying as the star witness before the second grand jury impaneled in April 2011 that indicted Burum, Biane, Erwin and Kirk.
In July and August, Smith threw out the conspiracy charge against all four defendants that was central to the indictment. Smith also dismissed perjury and tax fraud charges against Erwin, Biane and Kirk and he further dismissed conflict-of-interest charges against Burum and Erwin, reasoning that Burum was never a public official and Erwin was not a public official at the time of the alleged crimes. Smith nevertheless sustained 18 of the 29 counts in the original indictment, including bribery charges as well as charges of misappropriation of public funds against all four defendants, which he had previously given indication, following defense arguments, he was leaning toward dropping.
Smith gave the prosecution leave to amend the indictment with regard to 12 of the charges contained in the superseding May 2011indictment to clarify that the statute of limitations would not exclude those charges. The prosecution indeed filed an amended indictment on August 8. Notably, however, the prosecution did not excise the conspiracy counts from the amended indictment, which was widely interpreted by legal experts as a signal that the prosecution, consisting of lawyers from both the California Attorney General’s Office and the San Bernardino County District Attorney’s Office, intends to appeal Smith’s ruling with regard to the dismissal of the conspiracy counts. To date, however, the prosecution has not filed that appeal.
The defendants were scheduled to be arraigned on the charges in the amended indictment on August 25.  On that date, however, Smith delayed the arraignment of the defendants. That delay came about at least in part because the attorneys representing Biane and Kirk, David Goldstein and Paul Grech, respectively, are purposed to file motions requesting that their clients be tried separately from Burum and Erwin.
The revelation of the pending motions for separate trials triggered a rash of speculation, ranging from assertions that the move was a meticulously coordinated action involving all of the defense attorneys to complicate the prosecution of the case to a signal that Biane was contemplating entering a negotiated plea. Legal analysts say that separate trials would conceivably benefit all of the defendants, preventing the prosecution from cross-tainting the defendants with testimony and the presentation of evidence about their codefendants, and allowing the defense for Burum and Erwin to vector the jury’s attention to information considered to be exculpatory to their clients exclusively. Conversely, some legal analysts have suggested the separation of the cases could redound to the benefit of the prosecution by allowing them to put on a less convoluted and more concentrated showing of facts that would be less likely to confuse jurors or leave them lost in a sea of minutiae.
Smith gave defense attorneys a September 12 deadline by which to file their motions, and is allowing prosecutors to respond to those motions as late as September 25. He said he will hear oral arguments on those motions on October 1.
The more telling issue in the case, however, is whether the defense or prosecution or both will appeal Smith’s July and August rulings.
Of moment with Supervising Deputy California Attorney General Melissa Mandel and deputy district attorney Michael Abney is the consideration that Smith’s ruling dismissing the conspiracy charges severely complicates their efforts in that those dismissals erase a multitude of overt acts from the indictment upon which much of the case is based. Simultaneously, there could exist what are referred to in legal parlance as “writable” issues with regard to Smith’s sustaining of some of the other charges.
It appears that a delicate stand-off between the prosecution and defense may have ensued. Mandel and Abney would prefer that the defense not appeal any of Smith’s rulings favorable to the prosecution, particularly with regard to the misappropriation of public funds, the most important charge remaining in the case. Of relevance here is that the very same appellate court previously ruled on Judge Brian McCarville’s findings on the defense’s demurer motions related to the case, finding on balance in the defense’s favor.
At the same time, prosecutors are acutely aware that Smith’s ruling throwing out the conspiracy charges removes from the indictment language related to all 43 alleged overt acts, upon which the strongest portion of their case hinges. By leaving the conspiracy charges intact in the amended indictment, prosecutors have not surrendered the option of making their own appeal.
It thus appears that the prosecution may be tacitly offering up the defense a deal, by which it will not pursue an appeal in return for the defense not appealing any of Smith’s rulings, and having the matter proceed toward trial.
The fact that no appeals as of yet have been filed is, in and of itself, telling.
On August 25, Smith affirmed his dismissal of the conspiracy charges against all four defendants on statute limitations grounds. This portends in the defense’s favor, giving grounds for  confidence that Smith’s finding that a three-year statute of limitations applies to the conspiracy charges alleged in the indictment and that his dismissal of the conspiracy charges will withstand a prosecution appeal on those grounds. Nevertheless, the defense may have grounds and the support of case law to support carrying a writ to the Fourth Court of Appeals in Riverside on any errors of law.
If the defense camp pushes through with a challenge to Smith’s rulings, the prosecution will almost certainly file its own appeal.
Based upon the time the Fourth District Court of Appeals spent analyzing the prior appeals related to McCarville’s demurrer rulings in 2011 and 2012, a ruling on further appeals would likely take 12 to 14 months.
Smith set a September 4 status conference for attorneys to spell out their intentions with regard to making an appeal, which must be filed by September 15.

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