Fiscal relief bill at pivotal point as cost for defense in Gold Country Lenders case tops $200K |

Fiscal relief bill at pivotal point as cost for defense in Gold Country Lenders case tops $200K

A state Senate bill that would reimburse Nevada County for the indigent defense costs it has incurred in the Gold Country Lenders fraud case will either move off a “suspense” list in the Assembly Appropriations Committee Thursday — or face a likely death before the last day for a bill to pass, on Aug. 31.

That deadline comes as the current total for the county’s costs has reached $200,710, as noted in the Friday memo released Aug. 8 by County Executive Officer Rick Haffey.

The costs will ramp up sharply when the trial — which has been repeatedly postponed since the arrest of Lester and Laferte in 2012 — starts, in late October.

Nevada County Superior Court Judge Candace Heidelberger has set a trial date for Oct. 28; motions are to be filed by Oct. 3, with a trial readiness conference set for Oct. 10 and jury selection to start Oct. 21.

The next conference is set for Aug. 29, with a deadline for accepting a possible plea agreement this Friday.

Haffey said that the total expense for defending GCL Chief Executive Officer Phil Lester and Chief Financial Officer Susan Laferte is expected to be approximately $600,000.

But Nevada County Public Defender Don Lown said Tuesday he would not be surprised if the costs escalate well beyond that figure.

“I think $600,000 is on the shy side,” Lown said. “They could be in trial for five weeks, eight to 10 hours a day for three days a week, with two attorneys. And I believe they will be bringing in expert witnesses, including a forensic accountant.”

The estimated total cost to the county is based on a lot of unknowns, county financial analyst Ryan Gruver acknowledged.

And he noted that the numerous continuances also have increased the expense.

The complex fraud case has been marked by a number of delays since Lester and Laferte were arrested in September 2012, then were indicted in mid-January 2013 by a criminal grand jury for allegedly defrauding investors of millions of dollars over a period of eight years.

They 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.

Lester’s first court-appointed counsel, Ken Tribby, resigned in July 2013. Heidelberger subsequently appointed Mary Beth Acton to replace Tribby; Laferte continues to be represented by Greg Klein. Earlier this year, Acton hinted she might end up requesting another extension.

According to Gruver, Lown has been instrumental in working with the defense team to control costs, adding that ancillary services such as expert witnesses have to be authorized by the judge. SB 16 would provide fiscal relief

In December 2012, State Senator Ted Gaines, R-Roseville, sponsored a bill — SB 16 — that would allow 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 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 stipulate reimbursement of other types of trials when the state Attorney General is handling investigation and prosecution.

“In indigent cases, part of the cost of prosecution is providing for defense,” Haffey wrote in his Aug. 8 memo. “It is in recognition of this fact that the county feels it is only fair that when the State Attorney General’s office picks up prosecution of a case, they should also pay for the defense. An inequity is created when the county is required to pit its resources against those of the Attorney General’s office.”

SB 16 was passed by the Senate in January, and currently is in the “suspense file” in the Assembly Appropriations Committee. The committee sends any bill with an annual cost of more than $150,000 to the suspense file; those bills are then considered at one hearing after the state budget has been prepared and the committee has a better sense of available revenue.

The chair of the appropriations committee is set to decide Thursday on whether SB 16 will come off that list, and be eligible to be voted out of committee, a staff member for Gaines said.

SB 16 could then move to the Assembly floor for a vote, and must be passed by Aug. 31 — or it will be held in committee and essentially dies, she said.

“We are all hopeful it will be released (out of committee), and keep moving so we can obtain relief for Nevada County — or at least give Nevada County that opportunity,” she said.

“The majority of (this district’s) counties can’t stomach costs like that,” Gaines’ staff person said. “Reimbursement is direly needed.”

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

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