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August 16, 2014
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Bill to reimburse Nevada County on legal defense dies in committee

A state Senate bill that would have reimbursed Nevada County for the indigent defense costs it has incurred in the Gold Country Lenders fraud case died in committee Thursday.

Nevada County is already on the hook for more than $200,000 for providing defense attorneys for GCL Chief Executive Officer Phil Lester and Chief Financial Officer Susan Laferte, who allegedly defrauded investors of millions of dollars over a period of eight years.

Lester and Laferte each face 61 counts — one count of using a scheme to defraud, 50 counts of offering securities for sale by means of an untrue statement or omission of a material fact and 10 counts of fraud from an elder adult.

The costs to the county are expected to ramp up sharply — with an estimate of about $600,000 — when their trial starts, potentially in late October.

The deadline for a possible plea agreement — five years for Lester and two years for Laferte — was up on Friday.

Laferte’s attorney, Greg Klein, said Friday afternoon that she was proceeding to trial. Lester’s attorney, Mary Beth Acton, declined to comment, other than stating the plea had been a package deal. The next conference in the case is set for Aug. 29.

The news that SB 16 — which was passed by the Senate in January — did not make it off the “suspense file” in the Assembly Appropriations Committee was “very disappointing,” said Nevada County Chief Fiscal Officer Martin Polt.

“Our hopes have been dashed,” Polt said. “We will have to bear the costs without any fiscal assistance.”

In December 2012, State Senator Ted Gaines, R-Roseville, sponsored SB 16, which would have allowed counties to secure reimbursement for the provision of public defender services for persons prosecuted by the California Attorney General.

Gaines’ bill was introduced after an urgent request for legislative assistance by Nevada County, according to County Executive Officer Rick Haffey.

“The astronomical cost regarding a trial of this nature was not anticipated when the county’s budget was planned and approved, and there was no warning as to the impending charges when the case was filed by the Attorney General,” Haffey said at the time, adding that the county’s budget for all the indigent defense cases that occur each year is about $488,000.

California law currently allows for reimbursement to counties for indigent costs relating to murder trials only. SB 16 would have stipulated reimbursement of other types of trials when the state Attorney General is handling investigation and prosecution.

SB 16 landed in the suspense file because the appropriation committee sends any bill with an annual cost of more than $150,000 there as a matter of course; those bills are then considered after the state budget has been prepared and the committee has a better sense of available revenue.

According to Polt, the bill did not make it off the suspense file due to cost concerns. Polt added that because no costs can be grandfathered in, there would be little point in trying to resurrect the bill for the next fiscal year, as the costs to the county for this year would not be eligible for reimbursement.

“It is a blow,” Polt said. “We put a lot of energy into this bill. The state has a war chest for prosecution … It’s just unfortunate we can’t get financial assistance.”

To contact City Editor Liz Kellar, email or call 530-477-4229.

“Our hopes have been dashed. We will have to bear the costs without any fiscal assistance.”
Nevada County Chief Fiscal Officer Martin Polt

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The Union Updated Aug 25, 2014 10:58AM Published Aug 16, 2014 01:01AM Copyright 2014 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.