Defendants Daniel Aldana and Donna Matney were each charged with two counts of grand theft, and one count each of misappropriation of public funds, knowingly keeping false accounts, and altering public records. A jury acquitted Aldana of all but one count. The jury was unable to reach a verdict as to one count against Matney, and similarly acquitted her of all but one of the remaining counts against her. The jury also found not true all sentencing enhancements alleged against Aldana and Matney.
In our original opinion, we concluded there was insufficient evidence to support Aldana's conviction on the single count because, under the relevant statute, Aldana was not an "officer of this state, or of any county, city, town, or district of this state, [or a] person charged with the receipt, safekeeping, transfer, or disbursement of public moneys." (§ 424(a).) Additionally, there was insufficient evidence Aldana knowingly kept a false account or knowingly made a false entry on his timesheets. Therefore, we reversed the judgment against Aldana.
We further concluded the prosecution was required to prove that Matney had knowledge her actions constituted criminal conduct, or that she was criminally negligent in lacking such knowledge. Because proof of Matney's guilty knowledge was insufficient, we reversed the judgment against her.
The California Supreme Court granted review, and transferred the case back to us for reconsideration in light of its opinion in Stark v. Superior Court (2011) 52 Cal.4th 368 [128 Cal.Rptr.3d 611, 257 P.3d 41] (Stark). At our request, the parties filed supplemental briefs addressing the effect of Stark on this case.
As to Aldana, the Attorney General concedes that our original conclusion was not affected by the Supreme Court's opinion in Stark. Therefore, we again hold the judgment against Aldana must be reversed.
As to Matney, the evidence shows the timesheets, as a whole, were not materially false. There is no evidence that any public moneys were misused, lost, misappropriated, or placed at risk, or that anyone was unjustly enriched by virtue of the timesheets. The evidence shows the county paid Aldana less than he was owed for the number of hours he worked. Therefore, we hold there was insufficient evidence to support Matney's conviction, and reverse the judgment against her.
In April 2000, Matney was named the hospital administrator at Riverside County Regional Medical Center (the Medical Center), and assumed full control in January 2001. At the time, the Medical Center faced a deficit of
Aldana was a physician practicing at the Medical Center. He received a salary through his medical group, Riverside Regional Pediatric Medical Group, and served as the head of the pediatric unit at the Medical Center. Aldana received an additional salary from his medical group for his duties as a physician-liaison for hospital risk management.
In December 2000, Matney hired Aldana as an administrative liaison in risk assessment for the Medical Center. Aldana was compensated through the temporary assistance pool program (TAP), which provides county funds so county agencies may hire workers on a temporary basis to fill the agencies' needs. Aldana was paid $81.88 per hour as a TAP employee. He worked for the Medical Center through TAP from December 28, 2000, through July 25, 2002. There is no dispute that Matney had the authority to hire Aldana in that capacity.
TAP required employees to report their actual hours worked during each pay period, and required supervisors to certify the hours the employees worked. Aldana signed blank TAP timesheets, and provided them to Matney, who filled in the number of hours worked each day, on Aldana's behalf, and signed them to indicate her approval. Each timesheet covered a two-week period, and required the TAP employee to fill in the hours worked each day, as well as the total hours worked for the full two-week period.
Both Matney and Aldana
Matney did not keep track of the actual hours Aldana worked. Instead, Matney estimated and averaged the number of hours she recorded on Aldana's timesheets. Matney recorded hours on Aldana's timesheet for days
Aldana was also paid with TAP funds for producing 10 paintings for the Medical Center's pediatric unit. In a letter to the Medical Center's chief operating officer, Aldana stated he had asked Matney to track the time he spent painting, and, in response, Matney reflected those hours on Aldana's timesheets. Matney never asked Aldana how much time he spent painting, as opposed to his administrative tasks, for TAP. Based on investigations of the cost of artwork conducted by her and her assistant, Matney decided Aldana was entitled to $30,000 in total for his 10 paintings, and recorded hours on Aldana's timesheets to reach that figure.
Matney testified she had no purpose or intent to defraud, and did not actually defraud, the county.
In an information, Aldana and Matney were each charged with two counts of grand theft (§ 487, subd. (a)), and one count each of misappropriation of public funds (§ 424(a)(1)), knowingly keeping false accounts (§ 424(a)(3)), and altering public records (§ 424(a)(4)). The information alleged as sentencing enhancements that Aldana and Matney had committed two or more related felonies involving fraud or embezzlement which resulted in the theft of more than $100,000 (§ 186.11, subd. (a)(1)), and that Aldana and Matney had taken property in the commission of a felony with intent, causing a loss of more than $150,000 (§ 12022.6, former subd. (a)(2)).
A jury convicted Aldana and Matney only of knowingly keeping false accounts under section 424(a)(3).
"`In assessing the sufficiency of the evidence, we review the entire record in the light most favorable to the judgment to determine whether it discloses evidence that is reasonable, credible, and of solid value such that a reasonable trier of fact could find the defendant guilty beyond a reasonable doubt.' [Citation.]" (People v. Steele (2002) 27 Cal.4th 1230, 1249 [120 Cal.Rptr.2d 432, 47 P.3d 225].) We presume in support of the judgment the existence of every fact that could reasonably be deduced from the evidence. (People v. Kraft (2000) 23 Cal.4th 978, 1053 [99 Cal.Rptr.2d 1, 5 P.3d 68].) We may reverse for lack of substantial evidence only if "`upon no hypothesis whatever is there sufficient substantial evidence to support ...'" the conviction. (People v. Bolin (1998) 18 Cal.4th 297, 331 [75 Cal.Rptr.2d 412, 956 P.2d 374].)
Aldana argues he was not within the class of persons subject to prosecution under section 424(a)(3). The statute applies to "[e]ach officer of this state, or of any county, city, town, or district of this state, and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys." (§ 424(a).) Aldana is not an officer of the county. (See Gov. Code, § 24000; People v. Rosales (2005) 129 Cal.App.4th 81, 85 [27 Cal.Rptr.3d 897].)
In Groat, the defendant prepared and signed her own timecards, and no other signature on the timecards was required for the defendant to be paid.
The parties have cited no case, and we have found none, creating criminal liability under section 424(a)(3) for a public employee who merely signs a timesheet or receives a paycheck, when that employee has no control over the disbursement of the money. If the mere act of a public employee signing or submitting his or her own timesheet for approval were sufficient to create criminal liability under section 424(a)(3), the phrase "charged with" in the statute would be devoid of any meaning. "To charge" means to "entrust with responsibilities or duties." (Black's Law Dict. (9th ed. 2009) p. 265.) Not every public employee is entrusted with responsibilities or duties regarding the receipt, safekeeping, transfer, or disbursement of public moneys, and no evidence was presented in this case that Aldana had any such responsibilities. To the contrary, there was evidence that Matney was the person entitled to authorize Aldana's TAP payments, and Aldana's TAP payments would not have been processed without Matney's signature on his timesheets.
While we agree with the holding and analysis of Groat, and apply them here, we note that Groat describes another case in a way that could lead to confusion and misapplication of section 424. Groat states that, in People v. Evans (1980) 112 Cal.App.3d 607, 615-616 [169 Cal.Rptr. 240], section 424 "was held to apply to a county eligibility worker because her authority to complete emergency check requisitions for clients was the first step in the process of disbursing that public money." (Groat, supra, 19 Cal.App.4th at p. 1233.) People v. Evans actually found criminal liability under section 424 because the county eligibility worker "had the authority to complete the emergent aid requisitions necessary to expedite the issuance of checks to public assistance recipients." (People v. Evans, supra, at p. 616.) This is an important distinction. No case, including Groat, has held that being only the first step in a process that results in the expenditure of public funds is sufficient to establish criminal liability under section 424 absent approval authority. As the Groat court explained, it is the ability to control the public moneys that is key.
Aldana also argues there was insufficient evidence he knowingly kept a false account or knowingly made a false entry in an account. The evidence
For all of these reasons, and under the weight of these authorities, we conclude there was insufficient evidence to convict Aldana of violating section 424(a)(3), and reverse the judgment against him.
Matney argues there was insufficient evidence that Aldana's timesheets were false within the meaning of section 424(a)(3). She concedes, as she must, given the evidence, that the hours Aldana worked each day as a TAP employee were not accurately recorded. Matney contends she cannot be liable under section 424(a)(3), however, unless the timesheets were materially false.
The tort of civil fraud requires proof that the misrepresented fact be material. (Gonsalves v. Hodgson (1951) 38 Cal.2d 91, 100-101 [237 P.2d 656]; Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1557 [127 Cal.Rptr.3d 569].) Nothing in the law justifies imposing liability for a form of criminal fraud without proof of materiality. Indeed, in the petition for rehearing of our original opinion, the Attorney General conceded that materiality of the falsity of the records is a necessary element of a violation of section 424(a)(3), and that there was insufficient evidence the timesheets were materially false. In the petition for rehearing, the Attorney General argued our original opinion was in error for requiring the prosecution to prove Matney either had knowledge her actions constituted criminal conduct, or was criminally negligent in lacking such knowledge. (As noted, ante, that issue was resolved by Stark.) At the same time, however, the Attorney General agreed that the reversal of Matney's conviction was appropriate because there was insufficient evidence of the materiality of any false statements in the timesheets. "[The Attorney General] does not disagree with the Court's conclusion that the evidence was insufficient to convict appellant Matney of a violation of [section 424,] subdivision (a)(3). As the court noted, Aldana worked more hours than Matney reflected on his time sheets. The only purpose of the time sheets was to fix Aldana's pay. Thus, to the extent the time sheets included `false' or inaccurate entries, those entries were not material. That is to say, the false entries did not result in the loss or misappropriation of public funds, did not compromise reliance on a public record, nor did they result in the unjust enrichment of anyone. Necessarily, subdivision (a)(3), which defines a felony offense, must imply a materiality element and that is what was missing in the record below."
The evidence in this case shows the timesheets, as a whole, were not materially false. Aldana's timesheets, which were admitted in evidence at trial, show that, over two-week periods, Aldana performed 80 hours of work. Though the hours claimed on any individual day might not have been
Although there was evidence that Aldana received public moneys in his paycheck for working on particular days that he did not actually perform any work, the evidence was undisputed that, in total, Aldana worked many more hours under TAP than the hours recorded on the timesheets for which he was compensated. In this case, there is no evidence that any public moneys were misused, lost, misappropriated, or put at risk, or that Aldana, Matney, or anyone else was unjustly enriched by virtue of the false or inaccurate timesheets. The evidence shows the county might actually have paid Aldana less than the amount he was owed for the number of hours he worked.
The jury acquitted Aldana and Matney of grand theft, and acquitted Aldana of misappropriation of public funds.
We conclude there was insufficient evidence that Matney knowingly kept a materially false account or knowingly made a materially false entry in an account. The judgment against her for violating section 424(a)(3) must be reversed.
This conclusion is consistent with the purpose of section 424 — to protect the public purse. "[T]he subject matter and the language of section 424 clearly indicate that the legislative mind was intently concerned with the single, specific subject of the safekeeping and protection of public moneys and the duties of public officers in charge of the same." (People v. Dillon (1926) 199 Cal. 1, 6 [248 P. 230].) A conviction for authorizing a timesheet that is technically false, although the falsity is not material and does not negatively affect the public purse, would not further the statute's purpose and intention. We note, however, that our holding does not insulate from criminal liability the acts of a person covered by this statute whose material false accounts or material false entries put monies of the state or a municipality at risk of loss, even if a profit is made.
The judgments are reversed, and the trial court is directed to enter judgments of acquittal in favor of Aldana and Matney.
Aronson, Acting P. J., and Ikola, J., concurred.