P. v. Diblasi

Filed 8/17/06 P. v. Diblasi CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Defendant Frank Diblasi was tried on a seven-count indictment on charges of money laundering, drug possession, and tax evasion. He was convicted by a jury of two of those counts, tax evasion and signing a false tax return. (Rev. & Tax. Code, §§ 19706, 19705, subd. (a)(1).) On appeal, defendant asserts several errors related to the admission of evidence, jury instructions, and sentencing. He further challenges a parole search of his residence and contends that insufficient evidence supports his conviction. We will modify defendant's sentence and otherwise affirm the judgment.

Background

The charges against defendant arose from a parole search of his residence, conducted after a parole officer found him to be late in submitting his monthly parole status report. During the search of the house, which defendant shared with a renter, officers found three pounds of marijuana in the master bathroom and $4,380 in cash in defendant's pants pocket. The officers became suspicious and conducted a more extensive search together with San Jose police officers. They seized income tax returns, bank statements, documents pertaining to defendant's home equity line of credit, and a Rolex watch.

Subsequently, an investigation by the state Employment Development Department (EDD) indicated that defendant had worked for two companies in 2000, one in the first quarter and the other in the second and third quarters of that year. A criminal investigator of disability insurance fraud at EDD testified at trial that the department kept track of only wage sources of income paid by employers; thus, if defendant had been making money from a business or other source, he would not have been required to report those earnings to EDD.

At trial, custodians of records for Washington Mutual Bank and Wells Fargo Bank produced records from defendant's bank accounts. A custodian of records for H & R Block produced defendant's tax returns for 1999 and 2000, and a custodian of records for Green Point Mortgage produced records related to defendant's home equity line of credit during the years 1999 through 2001. In July of 1999, defendant had withdrawn the maximum, $60,000, from his line of credit. He paid half of that back a few months later, and all but $5,000 by June 30, 2000.

At the request of the District Attorney, Kym Jackson, a special agent at the Franchise Tax Board, investigated defendant's tax payment history for the years 1999 and 2000. In 1999, defendant reported income of $45,122 before itemized deductions and $28,406 after deductions. His bank records, however,[1] reflected deposits of $215,900 in 1999. Jackson deducted from this amount deposits attributable to the $60,000 loan, defendant's reported rental income of $12,000, reported interest of $453, and reported tax refunds of $93, resulting in a calculation of $63,801.44 in excess unreported income. For the 2000 tax year, defendant reported gross income of $25,623 and taxable income of $11,688. His bank records showed deposits of $111,530.77, of which $42,204.72 was in cash. Repeating the process of deducting reported income[2] and equity advances, Jackson found $63,728.77 in unreported income for that year.

Defendant was charged by amended indictment with possession of marijuana for sale (count 1), three counts of money laundering (Pen. Code, §186.10, counts 2-4), filing a false or fraudulent tax return with the intent to evade tax for the year 1999 (Rev. & Tax. Code, § 19706, count 5), filing a false or fraudulent tax return with the intent to evade tax for the year 2000 (count 6), and willfully making and subscribing his 2000 tax return without a belief in its correctness as to every material matter (Rev. & Tax. Code, §19705, count 7).

The jury acquitted defendant of all charges except counts 6 and 7. The trial court dismissed one of two prior "strike" convictions and imposed the midterm of two years for count 7, doubled under the three strikes law, plus one year for a prior prison term under Penal Code section 667.5, subdivision (b). The court further imposed a term of four years for count 6, but determined that it should run concurrently with count 7 because of a "[Penal Code section] 654 problem."[3] Defendant thus received a total prison term of five years.

Discussion

1. Admission of Preliminary Hearing Testimony

At trial defendant's mother, Barbara Downey, testified for the defense. She stated that defendant would often use his credit card to buy supplies and materials for his friend, Duane Orsburn, who had a roofing company. Orsburn would pay defendant back and give him "a little token for his troubles." Defendant's sister testified that after his arrest, she continued to buy supplies for Orsburn and receive reimbursement on defendant's behalf.

The prosecutor called Orsburn as a rebuttal witness, but he asserted his Fifth Amendment right against self-incrimination and was deemed unavailable. Over defendant's objection, the trial court permitted the jury to hear Orsburn's preliminary hearing testimony. In that testimony, Orsburn stated that defendant was one of his "better friends." Defendant was not an employee, but when defendant was not working in the union, Orsburn would pay him to help out in Orsburn's roofing business. Orsburn kept no receipts of these payments. He paid defendant in cash to avoid the appearance of an employer-employee relationship, even when he was reimbursing defendant for supplies.

Orsburn explained the informal reimbursement arrangement he had with defendant while the two were working together. Defendant would buy materials with his credit card, and Orsburn would pay defendant back a few weeks later, along with some extra cash, which amounted to a few hundred dollars a week. That way Orsburn would not have to ask his customers for money in advance, as was consistent with his policy. In August of 1999 defendant bought a gutter machine for about $20,000, in the hope that he and Orsburn would enter into a partnership. That plan did not materialize, however, and Orsburn bought the machine from defendant. In September 1999 he paid defendant the first $10,000 and the rest within six to eight months thereafter.

On appeal, defendant renews his objection to the admission of Orsburn's preliminary hearing testimony, asserting a violation of his constitutional right to confront witnesses under the Sixth Amendment to the United States Constitution and article I, section 15 of the California Constitution. He concedes that an exception to the confrontation requirement exists for prior testimony if a witness is unavailable at trial, but he insists that the exception is inapplicable here because at the preliminary hearing he did not have a "complete and adequate" opportunity to cross-examine Orsburn. At the time of the hearing, defendant points out, the charges were money laundering, not tax evasion,[4] so there was no apparent need to ask questions directed at the taxable nature of the money the witness had given defendant.

Defendant similarly challenges the admission of this testimony as a hearsay exception on the ground that he did not have "the right and opportunity to cross-examine the declarant with an interest and motive similar to that which he ha[d] at the hearing." (Evid. Code, § 1291, subd. (a)(2).) Because the charges against him at the preliminary hearing were 10 counts of money laundering (by conducting transactions with the proceeds of marijuana sales), the focus was exclusively on the receipt of profits from criminal activity. Consequently, defendant's "sole purpose in cross examining Orsburn at the preliminary examination was to establish that DiBlasi received no profits from criminal activity, and therefore, was not guilty of money laundering." Whether his profits were taxable was irrelevant at that proceeding. By contrast, the issue at trial was only whether defendant stated false information on his tax returns. Thus, according to defendant, the defense had "diametrically opposed" interests and motives in the preliminary examination than were present at trial.

" 'The confrontation clauses of both the federal and state Constitutions guarantee a criminal defendant the right to confront the prosecution's witnesses. . . . That right is not absolute, however. An exception exists when a witness is unavailable and, at a previous court proceeding against the same defendant, has given testimony that was subject to cross-examination.' [Citation.] Such statements are not made inadmissible by the hearsay rule if the cross-examination was made 'with an interest and motive similar' to that at the prior proceeding. (Evid.Code, § 1291, subd. (a)(2).)" (People v. Harris (2005) 37 Cal.4th 310, 332.)

If tax evasion had been the only issue at trial, we might agree with defendant that his motives in cross-examining Orsburn at trial were sufficiently distinct as to compromise his rights under the Confrontation Clause or Evidence Code section 1291. (See, e.g., People v. Harris, supra, 37 Cal.4th at p. 333 [interest and motive sufficiently similar].) But the prosecutor was also attempting to prove three counts of money laundering at trial. The former testimony was admissible for this purpose, and defendant's motive in rebutting the evidence was the same as it was at the preliminary hearing.

Furthermore, in both proceedings a key issue was the source of the funds defendant deposited in his bank accounts. In both, one of the objectives of the defense was to rebut the prosecutor's showing that defendant had received income he had not reported, which allegedly was derived from marijuana sales. "[A] defendant's interest and motive at a second proceeding is not dissimilar to his interest at a first proceeding within the meaning of Evidence Code section 1291, subdivision (a)(2), simply because events occurring after the first proceeding might have led counsel to alter the nature and scope of cross-examination of the witness in certain particulars. [Citation.] The 'motives need not be identical, only "similar." ' " (People v. Harris, supra, 37 Cal.4th 310 at p. 333.) Defendant does not show how the admission of Orsburn's former testimony led the jury to infer that defendant had committed tax evasion, nor does he establish how additional cross-examination with tax evasion in mind would have contributed to his defense at trial by establishing the nontaxable nature of the money that changed hands. We therefore find no Confrontation Clause violation, nor any abuse of discretion in admitting the former testimony under Evidence Code section 1291 as an exception to the hearsay rule. (Cf. People v. Harris, supra, 37 Cal.4th at p. 337.)

2. Orsburn's Testimony as Rebuttal Evidence

The trial court admitted Orsburn's testimony on rebuttal, over a defense objection. The prosecutor represented that Orsburn was "a proper rebuttal witness to show the nature of the employment, the nature of the relationship . . . , the money transactions that he did or did not have with the defendant in those years . . . ." According to the prosecutor, the defense had offered the testimony of defendant's mother and sister, Barbara Downey and Debra DiBlasi, to show that the bank deposits were attributable to reimbursements for the credit card purchases defendant had made for Orsburn. Responding to defense counsel's claim of unfair surprise, the prosecutor added that Orsburn had already testified at the preliminary hearing and had apparently informed defendant the night before that he had just been subpoenaed for trial.

In allowing the testimony, the trial court explained, "Just because you could put something on in your case-in-chief doesn't mean you have to, and your witness has testified about the monies that . . . Mr. DiBlasi apparently spent for roofing materials and that he was subsequently repaid in cash, and I have read the transcripts previously and it was gone into, so you can't say that you're surprised; that you didn't know what he might say about those issues because you've read the transcripts and you knew what he was going to say. . . . You have repeatedly asked questions of people who couldn't possibly have known where the cash deposits were from if they couldn't have been from Mr. Orsburn paying back credit card debts that Mr. DiBlasi got on his behalf. I mean it's been a constant theme of your examination of witnesses, and now of the witnesses that you are putting on . . . and so this has been a main focus of your case, and if the People have now decided that they need to bring somebody in to rebut the focus of that case, I don't see how you can say that is not a proper rebuttal witness." The court advised defense counsel, however, that he would be allowed a continuance if necessary to prepare his cross-examination.

Defendant contends that the court's ruling was an abuse of discretion, because the evidence did not rebut or challenge any of the evidence produced by the defense. According to defendant, there was no new or surprising defense evidence that required rebuttal; at most there was a vague allusion to "a little blessing," or compensation for "his troubles." As Orsburn's testimony was "crucial evidence, directly probative of the crime of tax evasion," it belonged in the prosecution's case in chief, not in a surprise presentation resulting from the prosecutor's afterthought.

Defendant correctly perceives that reversal on this ground is not permitted absent a "'palpable abuse'" of discretion. (People v. Carrera (1989) 49 Cal.3d 291, 323; accord, People v. Smith (2005) 35 Cal.4th 334, 359.) Examined under this standard, the ruling was not erroneous. The defense introduced the testimony of defendant's mother and sister, Barbara Downey and Debra DiBlasi, who explained that some of the income allegedly derived from marijuana sales actually came from payments Orsburn had made to him. The prosecution was entitled to explore this development in order to show that the large amount of the unaccounted-for deposits could not be explained by Orsburn's payments alone. No abuse of discretion has been shown in these circumstances.

3. Adequacy of Investigation

Defendant next contends that the evidence was insufficient to establish willful tax evasion because the prosecution had failed to conduct an adequate investigation into his bank deposits. The People had employed the "bank deposits" method of proof, which (as in federal prosecutions for tax evasion) is "a circumstantial way of establishing unreported income. It purports to demonstrate that excess income must exist by showing excessive unaccounted[-]for bank deposits." (U.S. v. Hall (9th Cir. 1981) 650 F.2d 994, 997, fn. 4.)[5]

In order to prove guilt using this method, "the government must initially introduce evidence to show (1) that, during the tax years in question, the taxpayer was engaged in an income[-]producing business or calling; (2) that he made regular deposits of funds into bank accounts; and (3) that an adequate and full investigation of those accounts was conducted in order to distinguish between income and non-income deposits." (U.S. v. Morse (1st Cir. 1974) 491 F.2d 149, 152; accord, United States v. Stone (9th Cir.1985) 770 F.2d 842, 844.) [6] It is the third element that defendant questions in this case.

The "adequate and full investigation" called for in the bank-deposits method permits removal of deposits such as transfers between bank accounts. (U.S. v. Boulware (9th Cir. 2004) 384 F.3d 794, 811.) " 'The critical question is whether the government's investigation has provided sufficient evidence to support an inference that an unexplained excess in bank deposits is attributable to taxable income.' . . . Although the government must be especially thorough in its investigation and presentation, 'it is well settled that the government is not obliged to prove the exact amount of a deficiency so long as the taxpayer's understatement of income is substantial.' " (Ibid., quoting United States v. Stone, supra, 770 F.2d 842, 844-845.) Thus, "the government has 'an overall burden to prove that [it] has done the best [it] can to discover, and exclude, all non-income items from the reconstructed income.' . . . The critical question is whether the government's investigation has provided sufficient evidence to support an inference that an unexplained excess in bank deposits is attributable to taxable income." (United States v. Stone, supra, 770 F.2d at pp. 844-845.)

"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. [Citations.] Reversal on this ground is unwarranted unless it appears 'that upon no hypothesis whatever is there sufficient substantial evidence to support [the conviction].' [Citation.]" (People v. Bolin (1998) 18 Cal.4th 297, 331.) Here, there was sufficient circumstantial evidence from which the jury could infer that defendant had received taxable cash income during the year. The testimony of Kym Jackson, the Franchise Tax Board investigator, revealed substantial discrepancies between defendant's bank deposits and the income he reported on his 2000 tax return. Jackson explained that she took a "conservative approach" to the determination of what she deemed to be verifiable cash deposits. She subtracted reported and known nontaxable income -- including wages, rental income, unemployment compensation, and a credit card cash advance -- from the deposit totals to arrive at the unreported amount $63,728.77 for the year 2000. She was careful to exclude all deposits attributable to the equity line of credit. [7] Defendant's mother provided additional evidence regarding gifts that the jury would consider nontaxable, his sister contributed information about money collected from defendant's tenant, and Orsburn's testimony assisted the jury in determining the amounts that were reimbursement for business supplies and equipment. Viewed in the light most favorable to the judgment, the record supports the jury's conclusion that defendant had willfully filed a false tax return in 2000 and declared that false tax return to be true, in violation of Revenue and Taxation Code sections 19706 and 19705.

4. Instruction on "Bank Deposits" Method

At trial defendant objected to the reading of CALJIC No. 7.91, which explains the bank-deposits method of determining the source of income.[8] Defendant specifically took issue with the second sentence, which he contended relieved the People of their burden of proof. That sentence, defendant argued, incorrectly stated that simply showing an excess of deposits over reported income is enough to find that the income came from a taxable source. As an alternative to striking this offending language, defendant proposed an additional admonition that the inference could be rebutted by other evidence, and that the jurors must make up their own minds based on the totality of the evidence presented.

The court overruled the objection and gave the jury a modified version of CALJIC No. 7.91, as follows: "The People have used circumstantial evidence in a method of reporting unreported income called the bank deposits method. It purports to demonstrate that excess income must exist by showing excessive unaccounted[-]for deposits. Under the bank deposits method, cash expenditures and bank deposits exceeding reported income after adjustment for applicable exemptions and deductions supports an inference that the defendant had unreported income. The People must establish, either directly or inferentially, that the bank deposits were made from a taxable source of income. Evidence of bank deposits is sufficient to raise the inference that the defendant's income came from a taxable source."

On appeal, defendant renews his argument that his due process rights were violated by this instruction because it shifted the burden of proof to the defendant to establish that his deposits were nontaxable, instead of requiring the prosecutor to prove that the money came from a source that made it taxable. Defendant compares this situation to those presented in Sandstrom v. Montana (1979) 442 U.S. 510 and Francis v. Franklin (1985) 471 U.S. 307, where the United States Supreme Court explained that mandatory or conclusive presumptions violate due process if they relieve the government of its burden of persuasion on any element of an offense.

The instruction given here was not improper. The impermissible presumptions discussed in Sandstrom were those that required a finding or shifted the burden of proof or the burden of persuasion to the defendant. (442 U.S. at pp. 515-524.) If a reasonable juror could give a presumption conclusive or burden-shifting effect, it may be deemed invalid. (Id. at p. 519.) The high court distinguished this situation, however, from one involving a purely permissive presumption or inference, which "allows -- but does not require -- the trier of fact to infer the elemental fact from proof by the prosecutor of the basic one and which places no burden of any kind on the defendant." (County Court of Ulster County, N. Y. v. Allen (1979) 442 U.S. 140, 157.) "Because this permissive presumption leaves the trier of fact free to credit or reject the inference and does not shift the burden of proof, it affects the application of the 'beyond a reasonable doubt' standard only if, under the facts of the case, there is no rational way the trier could make the connection permitted by the inference. For only in that situation is there any risk that an explanation of the permissible inference to a jury, or its use by a jury, has caused the presumptively rational factfinder to make an erroneous factual determination." (Ibid.)

In Francis v. Franklin, supra, the court further explained that a permissive inference "suggests to the jury a possible conclusion to be drawn if the State proves predicate facts, but does not require the jury to draw that conclusion." (471 U.S. at p. 314.) A mandatory presumption, whether conclusive or rebuttable, "removes the presumed element from the case once the State has proved the predicate facts giving rise to the presumption. A rebuttable presumption does not remove the presumed element from the case but nevertheless requires the jury to find the presumed element unless the defendant persuades the jury that such a finding is unwarranted." (Ibid., fn. 2.)

When considered in the context of the other instructions given (Estelle v. McGuire (1991) 502 U.S. 62, 72; People v. Cain (1995) 10 Cal.4th 1, 36), the instruction given here does not run afoul of the Due Process clause of the Fourteenth Amendment. The jury was given a complete explanation of circumstantial evidence and inferences, as well as guidance in evaluating circumstantial evidence, in accordance with CALJIC Nos. 2.00 and 2.01. They thus understood that an inference may be drawn from another fact. The challenged instruction clearly identified the "bank deposits method" as a method based on circumstantial evidence, which "purports to demonstrate" excess income, and that excess deposits support--not compel--an inference of unreported income. In its modification the court emphasized that it was the prosecutor's burden to "establish, either directly or inferentially, that the bank deposits were made from a taxable source of income." We thus see no "reasonable likelihood" that the jury understood the charge to require defendant to prove the nontaxable nature of the excess deposits. (Cf. Estelle v. McGuire, supra, 502 U.S. at p. 72.)

5. Instruction on Lesser Included Offense

Defendant next contends that the trial court erred by refusing to give the jury an instruction on the violation of Revenue and Taxation Code section 19701, which defines a lesser included offense of section 19706 requiring no "willful" intent. Defendant points out that some of the bank deposits he made were from nontaxable sources, such as disability payments and a gift from his mother. In his view, "[e]ven the 'little blessing' for 'his troubles' was shrouded in mystery as far as whether it was a taxable source or not." The jury could have found that defendant "did not quite know" whether these "nebulous" payments from Orsburn were taxable and therefore lacked willful intent to avoid paying taxes on this income. Thus, defendant believes that there was sufficient evidence to raise a reasonable doubt as to whether he had "willfully" evaded the payment of his 2000 taxes.

A trial court has an obligation to instruct on lesser included offenses if the evidence " 'raises a question as to whether all of the elements of the charged offense are present and there is evidence that would justify a conviction of such a lesser offense. [Citations.]' " (People v. Lopez (1998) 19 Cal.4th 282, 287-288.) "[A] trial court errs if it fails to instruct, sua sponte, on all theories of a lesser included offense which find substantial support in the evidence. On the other hand, the court is not obliged to instruct on theories that have no such evidentiary support." (People v. Breverman (1998) 19 Cal.4th 142, 162.) "Instructions on a lesser included offense are not required whenever there is 'any [supporting] evidence, no matter how weak, . . . but only when the evidence is substantial enough to merit consideration by the jury.' [Citations.] Instructions are therefore required sua sponte only if the proof at trial includes substantial evidence that the lesser offense, but not the greater, was committed; such evidence is 'substantial' only if a reasonable jury could find it persuasive." (People v. Hagen (1998) 19 Cal.4th 652, 672.)

The premise of defendant's argument, that the prosecution had failed to show that he had acted "in voluntary and intentional violation of a known legal duty," is not supported by the record. Orsburn paid defendant "a few hundred [dollars] a week on average" when defendant worked with him in his roofing business. In 2000 defendant used the tax-preparation services of H & R Block. A representative of that organization testified that during a standard client interview the tax preparer would explain what "income" is and ask about what income the client had had during the applicable tax year. The evidence indicated that defendant did not disclose any of the payments he had received for working with Orsburn. No evidence was presented that defendant did not understand the duty to report this income. (Cf. People v. Hagen, supra, 19 Cal.4th at p. 671 [erroneous definition of willfulness harmless where jury could not reasonably have failed to find that defendant intentionally violated a known legal duty].) The requested instruction was therefore not required.

6. Modification of Verdict to Lesser Offense

Defendant asks this court to reduce his conviction to the lesser included offense of violating Revenue and Taxation Code section 19701, which does not require an intent to evade the payment of taxes.[9] He bases his request on the insufficiency of evidence that he had the "willful intent to evade taxes." Because there is substantial evidence that defendant's offense was committed willfully, reduction of the offense is not warranted. (Pen. Code, § 1260.)

7. Parole Search

As noted earlier, the charges against defendant arose from a parole search of defendant's residence, during which officers seized numerous documents along with three pounds of marijuana. Defendant contends that his Fourth Amendment rights were violated because the officers searched his home without a reasonable suspicion that he had engaged in criminal activity or violated the conditions of his parole. He acknowledges that the California standard for finding a parole search invalid does not require reasonable suspicion, but he argues that this measure is superseded by United States v. Knights (2001) 534 U.S. 112. There the United States Supreme Court explained, "The touchstone of the Fourth Amendment is reasonableness, and the reasonableness of a search is determined 'by assessing, on the one hand, the degree to which it intrudes upon an individual's privacy and, on the other, the degree to which it is needed for the promotion of legitimate governmental interests.' [Citation.]" (Id. at pp. 118-119.) A person on probation who is subject to a search condition has "significantly diminished privacy interests," which may be intruded upon when a law enforcement officer has a "reasonable suspicion" that the probationer is engaged in criminal activity. (Id. at p. 121.) The high court applied this principle to the search of a probationer's apartment, concluding, "When an officer has reasonable suspicion that a probationer subject to a search condition is engaged in criminal activity, there is enough likelihood that criminal conduct is occurring that an intrusion on the probationer's significantly diminished privacy interests is reasonable." (Id. at p. 121.)

In People v. Reyes (1998) 19 Cal.4th 743, 752, our Supreme Court held that a search of a parolee subject to a search condition need not be based on reasonable or "particularized" suspicion as long as the search is not "arbitrary, capricious, or harassing." (Id. at pp. 753, 752.) The court reasoned that "[t]he level of intrusion is de minimis and the expectation of privacy greatly reduced when the subject of the search is on notice that his activities are being routinely and closely monitored. Moreover, the purpose of the search condition is to deter the commission of crimes and to protect the public, and the effectiveness of the deterrent is enhanced by the potential for random searches." (Id. at p. 753; see also People v. Sanders (2003) 31 Cal.4th 318, 335 [search unjustified if officers were unaware of the defendant's parole status and search term].)

Defendant urges us to depart from the Reyes standard, notwithstanding our duty to follow the authority of our state's highest court: "The court's [sic] cannot continue to dodge this issue under the theory that they are bound by the decisions of the California Supreme Court and make no effort to determine [whether] the Supremacy Clause does in fact require that California courts consider and apply the standard found to be reasonable in Knights." We cannot so cavalierly disregard our state's highest authority, however. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.) We therefore are not at liberty to choose instead the holding of Moreno v. Baca (9th Cir. 2005) 400 F.3d 1152, 1160 [random searches not premised on individualized suspicion are not contemplated by the parole conditions].) In Knights the United States Supreme Court specifically declined to decide whether a "suspicionless search" was constitutional, because the search under scrutiny was supported by reasonable suspicion. (United States v. Knights, supra, 534 U.S.at p. 120, fn. 6.) Until the high court addresses this specific issue,[10] we must follow Reyes. (Auto Equity Sales, Inc. v. Superior Court, supra, 57 Cal.2d at p. 455.) In any event, the Ninth Circuit recently rejected its earlier statement in Moreno that reasonable suspicion is required for a valid parole search. (Motley v. Parks (9th Cir. 2005) 432 F.3d 1072, 1088.)

8. Custody Credit

After the seizure of the marijuana from defendant's home in May 2001, his parole was revoked based on a finding of possession of marijuana for sale and defendant's admission of resisting or delaying an officer. In June 2002 parole was again revoked upon a finding that defendant had engaged in money laundering, which had been demonstrated by defendant's high bank balances and assets such as a Rolex watch.[11]

Before sentencing defendant asserted that he was entitled to two years of custody credit for these two parole revocations because they were factually related to the current charges. The trial court rejected the argument, which defendant renews on appeal. He cites Penal Code section 2900.5, which states in subdivision (b) that custody credit "shall be given only where the custody to be credited is attributable to proceedings related to the same conduct for which the defendant has been convicted."

The parties debate the application of People v. Bruner (1995) 9 Cal.4th 1178. There the Supreme Court held that "where a period of presentence custody stems from multiple, unrelated incidents of misconduct, such custody may not be credited against a subsequent formal term of incarceration if the prisoner has not shown that the conduct which underlies the term to be credited was also a 'but for' cause of the earlier restraint. Accordingly, when one seeks credit upon a criminal sentence for presentence time already served and credited on a parole or probation revocation term, he cannot prevail simply by demonstrating that the misconduct which led to his conviction and sentence was 'a' basis for the revocation matter as well." (Id. at pp. 1193-1194.) Under this " 'strict causation' " standard, no credit is allowed "unless the conduct leading to the sentence was the true and only unavoidable basis for the earlier custody." (Id. at p. 1192.) If the presentence custody period results from "multiple, unrelated incidents of misconduct, such custody may not be credited against a subsequent formal term of incarceration if the prisoner has not shown that the conduct [that] underlies the term to be credited was also a 'but for' cause of the earlier restraint. . . . [H]e cannot prevail simply by demonstrating that the misconduct [that] led to his conviction and sentence was 'a' basis for the revocation matter as well." (Id. at pp. 1193-1194.)

We find partial merit in defendant's position. As defendant's first parole revocation was based on resisting or delaying an officer as well as possession of marijuana for sale, it cannot be said that the conduct leading to the sentence was the true and only unavoidable basis for the earlier custody. (People v. Bruner, supra, 9 Cal.4th at p. 1192.) As to that one-year period, defendant has not shown that he would have been free of the presentence confinement but for the same criminal conduct that led to the current convictions and sentence. The second parole revocation, however, arose from an investigation of defendant's assets. The finding of good cause for revocation was based on money laundering, the same conduct that was alleged in counts 2, 3, and 4 of the amended indictment. We therefore agree with defendant that he is entitled to a year of custody credit attributable to the second parole revocation.

Disposition

The judgment is modified to grant defendant one year of additional custody credit. The superior court is directed to prepare an amended abstract of judgment reflecting this modification and to forward a certified copy to the Department of Corrections. As so modified, the judgment is affirmed.

_____________________________

ELIA, J.

WE CONCUR:

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RUSHING, P. J.

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PREMO, J.

Publication Courtesy of San Diego County Legal Resource Directory.

Analysis and review provided by San Diego County Property line attorney.

[1] Defendant had four accounts at Washington Mutual and one account at Wells Fargo.

[2] Defendant reported $11,619 in wages from two employers, $5,980 in unemployment compensation, $20,750 in new equity advances, $9,000 in rental income, $18 in interest income, and $435 from a tax refund. The total of these amounts, $47,802, was subtracted from the deposit total of $111,530.77 to reach $63,728.77.

[3] Although we question why the "654 problem" did not prompt the court to stay the term on count 6, defendant does not take issue with this aspect of sentencing.

[4] The charges of tax evasion and possession of marijuana for sale were added by indictment after the conclusion of the preliminary hearing.

[5] In construing and applying state tax evasion laws we look to precedents established in federal decisions interpreting substantially identical statutes. (People v. Hagen (1998) 19 Cal.4th 652, 661; see also People v. Mojica (2006) 139 Cal.App.4th 1197.)

[6] The First Circuit court described the process more specifically: "The bank deposits for the tax year are totaled, with adjustments made for funds in transit at the beginning and the end of the year. Non-income deposits are then excluded, and non-deposited income is included. This constitutes a reconstructed gross income. Calculation of taxable income then proceeds in the usual way, taking into account the legitimate deductions, exceptions, exclusions, and credits . . . If the resulting figure differs from what the taxpayer has reported, the Government will contend that the difference is unreported taxable income." (U.S. v. Hall, supra, 650 F.2d at p. 997, fn. 4.)

[7] In 1999 the mortgage company had accidentally advanced defendant $58,185 twice. Jackson deducted both amounts from the total deposits made in 1999. In 2000 he received another $20,750 from the line of credit, which Jackson also deducted.

[8] The instruction states: "The People have used a method of proving unreported income called the 'bank deposits' method. Under the 'bank deposits' method, cash expenditures and bank deposits exceeding reported income after adjustment for applicable exemptions and deductions supports an inference that the defendant had unreported income. [¶] Evidence of bank deposits is sufficient to raise the inference that the defendant's income came from a taxable source."

[9] Revenue and Taxation Code section 19701 imposes a fine of up to $5,000 for failing to file a return or supply required information, or who "makes, renders, signs, or verifies any false or fraudulent return or statement, or supplies any false or fraudulent information," whether or not the person had the intent to evade the tax laws or other requirement of the Franchise Tax Board.

[10] As defendant points out, this issue is currently pending before the United States Supreme Court in Samson v. California (Sept. 27, 2005, 04-9728) --- U.S. ---- [126 S.Ct. 34.)

[11] Although the Board of Prison Terms found the watch to be worth $64,000, at trial its worth was determined to be $46,000.