Filed 5/24/13 P. v. Bermudez CA1/4
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                 DIVISION FOUR


THE PEOPLE,
         Plaintiff and Respondent,
                                                                     A135693
v.
ALEXANDER BERMUDEZ,                                                  (San Francisco County
                                                                     Super. Ct. Nos. 10022384, 10004772)
         Defendant and Appellant.


         Alexander Bermudez challenges the amount of restitution awarded to a victim
who lost his home as a result of Bermudez’s criminal conduct. He contends that the trial
court abused its discretion in calculating restitution based on an appraised value of the
home at the time of the crime. We disagree and affirm the restitution order.
                                                       I.
                                                  BACKGROUND
A. The Criminal Charges and Disposition
         Bermudez was charged in two separate cases with multiple counts of committing a
financial crime against elder or dependent adults (Pen. Code, § 368, subd. (d))1 and grand
theft (§ 487(a)). He negotiated a plea bargain under which he pleaded guilty to two
counts of grand theft, and the remaining charges were dismissed. The trial court
suspended imposition of the sentence and placed Bermudez on probation for five years.
As a condition of probation, the court ordered Bermudez to serve 364 days in jail, which
he had already completed at the time of the court’s order.

1
    All further statutory references are to the Penal Code.

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       The trial court also awarded restitution to Bermudez’s victims. Although
Bermudez did not dispute the amount of restitution sought for three of his four victims,
he challenged the amount sought for his fourth victim, Thomas R. He argued that it was
improper for the court to calculate the amount of Thomas R.’s restitution by using an
appraised value of the home Thomas R. lost through foreclosure rather than by using the
amount of the mortgages Bermudez induced Thomas R. to assume.
B. Victim Thomas R.
       Thomas R. was 59 or 60 years old when he was victimized by Bermudez.
According to an evaluating psychologist, Thomas R. has “borderline intellectual
functioning,” which means that he has a below-average IQ but functions higher than if he
were “mentally retarded.”
       Thomas R. lived in a house in Daly City given to him by his father. The house
was mortgage free. Thomas R. paid for his living expenses by working as a singer and
photographer.
       Sometime in the spring of 2006, Bermudez met Thomas R. by chance at a
barbershop. After overhearing Thomas R. mention a desire for a remodeling loan,
Bermudez introduced himself and said he was in the real estate business. Thomas R. told
Bermudez he wanted $10,000 to $15,000 to remodel his kitchen. On Bermudez’s
invitation, Thomas R. later met Bermudez at his office. At the office, Bermudez
proposed a loan substantially higher than $10,000 to $15,000. Bermudez further
suggested that they go into business together in real estate ventures and a limousine
service.
       So began a series of loans eventually totaling $550,000 that largely benefited
Bermudez but were secured by Thomas R.’s house. The first loan was a bank loan in
July 2006 for $200,000 (the first loan). The application in connection with that loan
stated that the property was worth $700,000. An appraisal prepared shortly after the loan
closed valued the property at $650,000. In November 2006, the bank increased its loan
by an additional $150,000 (the second loan). And a few months later, Bermudez
arranged a third loan for $200,000 from a private investor (the third loan). According to


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the mortgage broker for the third loan, the value of the property at the time of this loan
was $750,000 even though a contemporaneous appraisal reflected a higher value.
       Bermudez, or people associated with him, received at least half of the proceeds
from the first two loans directly from the escrow accounts when the loans closed. The
remaining funds went into a bank account in Thomas R.’s name. This account, however,
was steadily drained in $5,000 to $10,000 increments. According to Thomas R.,
Bermudez would take Thomas R. to the bank, where he would withdraw money in person
and hand it over to Bermudez.
       Thomas R. acknowledged that he received and spent some of the money from the
loans. After the first loan closed, he used some money to remodel his kitchen and to buy
a television. He also withdrew smaller sums (up to $300 at a time) from an ATM for
living expenses.
       By the time of the third loan, Thomas R. had signed a grant deed making
Bermudez a co-owner of the house. When the net proceeds of the third loan
($189,582.97) were disbursed, the entire amount went directly to Bermudez who used the
money to pay off other loans, make payments toward various automobiles, and pay other
expenses for himself and his family members.
       After the three loans were finalized, Bermudez took Thomas R. to an attorney who
prepared an agreement at Bermudez’s direction. The agreement, dated March 28, 2007,
summarized the loans, identified money that supposedly went to Thomas R., and made
Bermudez responsible for repaying the loans. The agreement further provided that
Thomas R. was transferring a 50 percent joint tenancy interest in the property to
Bermudez. Thomas R. signed the agreement.
       Bermudez failed to pay off the loans, and the holder of the mortgage on the first
and second loans foreclosed on the property. The property was sold in November 2009
for $470,000. The private investor who made the third loan lost his principal.
       Before the foreclosure, Bermudez put Thomas R. out on the street. Bermudez
went to Thomas R.’s home one day and told him that he had to move out so the property
could be rented. Thomas R. gathered some clothes and his toothbrush, and Bermudez


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took him to a motel for the night. The next day, Thomas R. returned to his home and
found the locks had been changed. A woman answered the door, said she was renting the
home, and told Thomas R. to leave. For a time, Thomas R. slept on the street a few
blocks from Bermudez’s office. Ultimately, Thomas R. lost everything he owned,
including his dog. He was homeless for over two years.
C. The Restitution Order
       At the restitution hearing, Bermudez argued that the starting point for calculating
Thomas R.’s restitution should be the total amount of the loans ($550,000). From this
starting point, he urged the court to reduce the award first by $185,260 or more because
Thomas R. “acknowledged receiving” this amount in the March 2007 agreement. He
then urged a further reduction of $95,529, which he claimed reflected the total amount
withdrawn from Thomas R.’s bank account in the three months after the first loan.
Bermudez also suggested that Thomas R. gave other people access to his bank account,
and they may have withdrawn money from it.
       The trial court declined to accept Bermudez’s calculation and argument. It
awarded Thomas R. $650,000 in restitution after the district attorney pointed out that
Bermudez’s criminal conduct left Thomas R. homeless and that the appraised value of the
house in July 2006 was $650,000.
                                           II.
                                       DISCUSSION
       With these facts and procedural history in mind, we turn to the law governing
restitution. Our starting point is the applicable standard of review. A trial court’s
restitution order is reviewed for abuse of discretion. (People v. Giordano (2007)
42 Cal.4th 644, 663.) The trial court’s discretion in calculating restitution is broad, but
the method it employs must be rationally designed to determine the victim’s economic
loss. (Id. at pp. 663-664.) “No abuse of that discretion occurs as long as the
determination of economic loss is reasonable, producing a nonarbitrary result.” (Id. at
p. 665.)




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       Restitution is mandatory. “[I]in every case in which a victim has suffered
economic loss as a result of the defendant’s conduct, the court shall require that the
defendant make restitution to the victim or victims in an amount established by court
order, based on the amount of loss claimed by the victim or victims or any other showing
to the court. . . . The court shall order full restitution unless it finds compelling and
extraordinary reasons for not doing so and states them on the record.” (§ 1202.4,
subd. (f).) While the victim’s right to restitution is to be broadly and liberally construed
(People v. Phu (2009) 179 Cal.App.4th 280, 283), restitution should not result in a
windfall (People v. Busser (2010) 186 Cal.App.4th 1503, 1510).
       In this appeal, Bermudez renews the arguments he made below and reiterates that
the proper starting point for calculating Thomas R.’s restitution should be the amount of
the loans. He claims that basing the restitution on the 2006 appraised value of the house,
without taking into consideration the amount Thomas R. received from the loan proceeds,
results in a windfall. We disagree.
       The trial court acted well within its discretion in declining to base its calculation of
the restitution award on the sum of the loans. This sum would not have reflected
Thomas R.’s full loss because the record is clear that Thomas R.’s house, which was
eventually lost in foreclosure as a result of Bermudez’s fraud, was worth substantially
more than the loans. The application for the first loan stated that the house was worth
$700,000, and the mortgage broker at the time of the third loan estimated the value of the
house to be $750,000. This mortgage broker testified that he would not have arranged a
loan for anywhere near the total value of the property, and he believed that it was “safe”
to lend another $200,000. The total encumbrances with the third loan ($550,000) would
amount to less than 75 percent of the property’s estimated value. This evidence makes it
clear that at the time of the loans Thomas R.’s home was worth substantially more than
their sum.
       Bermudez suggests that the trial court’s reliance on just one appraisal report was
speculative. We disagree. Even if we were to conclude that a single appraisal in a case
like this is an insufficient basis to support a restitution order—a conclusion we need not


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and do not reach—there is ample evidence in the record supporting the reasonableness of
the trial court’s measurement of Thomas R.’s loss. As mentioned above, the evidence
shows that the value of the house ranged from a low of $650,000 to over $750,000. It
was to Bermudez’s benefit that the trial court selected the lowest of these valuations in
calculating Thomas R.’s restitution, and Bermudez is in no position to dispute these
valuations now after having readily accepted them when profiting from his crime.
       Bermudez also argues that the trial court should not have calculated restitution by
using the home’s value at the time Thomas R. was defrauded and points out that the
property was eventually sold for $470,000. But this sale took place years later, after a
foreclosure, and its distressed price was by no means an accurate measure of Thomas R.’s
full loss. (See People v. Giordano, supra, 42 Cal.4th at p. 658 [object of restitution is to
restore economic status quo]; see also People v. Chappelone (2010) 183 Cal.App.4th
1159, 1181-1182 [trial court could have ordered defendants to pay victim for value of
goods when stolen].)
       We are not persuaded by Bermudez’s contention that the trial court was required
to offset the restitution award by the relatively small amount of the loan proceeds that
Thomas R. received. Once a victim makes a prima facie showing of economic loss, the
burden shifts to the defendant to disprove the amount of loss claimed by the victim.
(People v. Taylor (2011) 197 Cal.App.4th 757, 761; see also People v. Vasquez (2010)
190 Cal.App.4th 1126, 1137 [defendant seeking offset or credit to restitution order had
burden of proof as to each fact essential to claim for relief].) Here, Bermudez has failed
to meet this burden.
       Thomas R. never denied that he received and spent some of the loan money. But
Bermudez’s characterization of that amount as “a significant portion of the loan money”
finds no support in either the preliminary hearing transcript or any evidence introduced at
the restitution hearing. The larger amounts cited by Bermudez—up to $25,000 for
kitchen remodeling expenses and $2,000 for a TV—went for improvements to the house
and personal property that Thomas R. lost when he was removed from his home, and it
was foreclosed upon. The smaller amounts—periodic ATM withdrawals of up to $300—


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did not add up to a substantial sum in relation to the overall loss. Bermudez suggests that
some of these withdrawals may have benefitted people associated with Thomas R. But
these suggestions were never adequately proven and, were it not for Bermudez’s criminal
conduct, these people would never have been able to access the account because it would
not have existed.
       Bermudez argues that the larger ($5,000 to $10,000) withdrawals that Thomas R.
withdrew in person at the bank benefitted Thomas R. In support of his claim, he cites the
March 2007 agreement in which Thomas R. acknowledged receiving $182,260 from the
loan proceeds. This amount was apparently intended to reflect the funds deposited into
Thomas R.’s bank account when the first two loans closed. But the evidence shows that
much of this did not end up in Thomas R.’s pocket. The clear import of the preliminary
examination testimony was that while some loan proceeds went into Thomas R.’s bank
account, most withdrawals from that account were for the benefit of Bermudez. In light
of this testimony, it became Bermudez’s burden—one that he failed to satisfy—to show
with some degree of specificity how much of the money truly went to Thomas R. We
conclude that the trial court acted well within its discretion in disregarding the self-
serving agreement Bermudez had prepared after the loans were made.
       The law does not require that “the restitution order be limited to the exact amount
of the loss in which the defendant is actually found culpable, nor is there any requirement
the order reflect the amount of damages that might be recoverable in a civil action.”
(People v. Carbajal (1995) 10 Cal.4th 1114, 1121.) Here, Bermudez criminally induced
Thomas R. to mortgage his home, used most of the loan proceeds for his personal benefit,
and caused the property to be lost to Thomas R. through a foreclosure. Under these
circumstances, the trial court acted well within its discretion in awarding restitution based
on the appraised value of property at the time of the crime.
                                           III.
                                       DISPOSITION
       The restitution order is affirmed.




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                                _________________________
                                Humes, J.


We concur:


_________________________
Ruvolo, P. J.


_________________________
Rivera, J.




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