Judge: No new trial in Gold Country Lenders case | TheUnion.com

Judge: No new trial in Gold Country Lenders case

Philip Lester

A Nevada County judge has denied a motion for a new trial for Gold Country Lenders CEO Phil Lester and CFO Susan Laferte, who were found guilty in June 2015 of multiple counts of fraud.

That ruling by Superior Court Judge Candace Heidelberger came after hours of wrangling in court Monday, not just regarding the motion for a new trial, but also over the language in the pre-sentence report compiled by the probation department.

Lester and Laferte were arrested in September 2012 after they allegedly defrauded investors of millions of dollars over a period of eight years. Each had faced 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 financial elder abuse.

Their trial, which was prosecuted by California Deputy Attorneys General Maggy Krell and Randy Mailman, began in Nevada County Superior Court in April 2015. After two weeks of deliberation, a jury found Lester guilty on 57 counts and Laferte guilty on 35 counts. The jury also found true special allegations that both defendants defrauded investors of more than $1.3 million, and of aggravated white-collar crime.

Sentencing was postponed repeatedly because the court-appointed defense attorneys, Greg Klein and Mary Beth Acton, needed all of the trial transcripts to put together the motion to set aside the verdict.

Acton, who represents Lester, requested a new trial due to, among other issues, allegations of juror misconduct, instructional error, erroneous admission of extremely inflammatory and prejudicial evidence, and insufficiency of evidence.

Some of the instances of prosecutorial misconduct alleged by Acton included presenting evidence that was known to be misleading, and allowing witnesses to testify to lies and misrepresent evidence that they knew was false.

During the hearing Monday, Acton stressed that one critical aspect of her motion for a new trial was whether her client actually was guilty of securities fraud. She also requested a separate hearing on juror misconduct.

Klein, who represents Laferte, took Heidelberger to task for actions and statements he characterized as showing bias against the defendants.

“The totality of the circumstances are such that the defendants deserve a new trial,” he said. “I don’t think they got a fair trial.”

Heidelberger chose to stand by a written 12-page ruling denying the defense motion for a new trial. In the ruling, she addressed the issues of judicial misconduct, juror misconduct, instructional error, prosecutorial misconduct, insufficiency of the evidence, and non-statutory grounds including proper jurisdiction and whether witnesses lied on the stand.

“Throughout the trial the jury heard testimony about the deliberate course of conduct undertaken by defendants, in providing complicated and incomplete paperwork, not reviewing it with investors, withholding material information about investments, and investing the money in ‘projects’ that were unlikely to be developed due to undisclosed issues,” Heidelberger wrote. “From the evidence presented, the jury could reasonably conclude the defendants actions amounted to a scheme to defraud in the sale of a security.”

Similarly, Heidelberger found there was sufficient evidence for the jury to find the defendants acted with specific intent to defraud.

The atmosphere in the courtroom became contentious during the discussion over the language in the pre-sentence report.

According to defense counsel, the report was based largely on information from the arrest affidavit, rather than from trial transcripts. Klein argued that the entire report needed to be re-written, but Heidelberger instead parsed out his objections point by point, making some of the requested changes.

Sentencing was set for Oct. 21, and the duo’s defense counsel indicated they plan to file an appeal of Heidelberger’s decision.

To contact City Editor Liz Kellar, email lkellar@theunion.com or call 530-477-4229.

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