Over the protests of some named victims and the state prosecutor, a judge approved postponing the fraud trial of Gold Country Lenders CEO Philip Lester and CFO Susan Laferte from April to June.
But the trial’s start date remains in question, as defense attorneys indicated they might move for a change of venue.
Laferte and Lester were indicted in mid-January by a criminal grand jury for allegedly defrauding investors of millions of dollars over a period of eight years. They already had been facing more than 60 felony counts of elder abuse, securities fraud and conspiracy, which had been filed in September by California Deputy Attorney General Maggy Krell. The grand jury indictment handed down against Lester and Laferte supersedes the original complaint against those two defendants.
The charges allege that Lester issued fractional deeds of trust secured by property that he either owned outright or in partnership with other developers, and Laferte solicited money for projects that was used to pay investors on other projects in a risky shell game.
On many of the projects, investors allegedly were not informed that Lester was the property owner, partner, developer, appraiser and/or borrower, as well as the loan broker. Lester allegedly had no money of his own to fund the projects or pay the investors.
Laferte’s court-appointed attorney, Greg Klein, had filed a motion requesting to postpone the trial, which was scheduled to start April 9.
In Nevada County Superior Court Thursday, Klein told Judge Candace Heidelberger that although he had received a transcript of the grand jury proceedings, he had not yet received the associated exhibits.
And without all that information, he said, “It’s hard for us to formulate a strategy.”
Klein said he anticipated “north of 50” witnesses for the trial and cited a half-million pages of discovery.
“The state has had this case for two years,” he said. “For them to suddenly be pushing so hard (for an April trial) doesn’t make sense.”
Klein said that while he understood Krell’s contention that some of the alleged victims are elderly, their “anxiety” should not trump the rights of the defendants. Lester’s court-appointed attorney, Ken Tribby, said he didn’t even want to set a new trial date, advocating for a review date for three or four months from now.
Tribby also floated the idea of requesting a change of venue, a possibility that Krell said would be a “game-changer.”
Krell opposed any continuance, telling Heidelberger the two attorneys have had the majority of the discovery since December.
“We do have multiple elderly victims in this case, six of whom are over 80,” she said.
“Almost all of them are over 75, and several have health issues … The people have a right to a speedy trial.”
Margaret Fowler, one of the victims who was instrumental in bringing the case to the state, spoke out in court against any delay.
“We’d like to see justice now, not two years from now,” she said, adding that some of the older victims “might not be here.”
Heidelberger said she had to balance the rights of the victims to have a speedy trial with the rights of the defendants to have competent representation.
“I do believe a continuance is appropriate, but I do think we should pick a trial date,” she said, noting the trial was expected to last three weeks.
“I think three weeks is shy of the mark,” Tribby said; Klein estimated the trial would last six weeks at minimum.
Heidelberger set a new trial date of June 4 with a pre-trial conference set for March 14.
After the hearing, the alleged victims said they are not that concerned about a possible change of venue — and Fowler said it might actually be a positive.
“With the things that (Lester) has said in the past, I don’t think we’d get a fair trial up here,” she said.
“What matters more is that it doesn’t drag out another year or two.”
The criminal complaint filed by Krell originally also named Lester’s wife, Ellen, as a co-defendant; Krell dismissed two felony counts of conspiracy and securities fraud against Ellen Lester in November.
A fourth co-defendant, Jonathan Blinder, still faces four felony counts of securities fraud, and his preliminary hearing remains set for March 12.
To contact Staff Writer Liz Kellar, email email@example.com or call 530-477-4229.