STATE OF NEW JERSEY v. PHILIP LEONE

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

STATE OF NEW JERSEY,

Plaintiff-Appellant,

v.

PHILIP LEONE,

Defendant-Respondent.

__________________________________

April 3, 2014

Submitted March 12, 2014 Decided

Before Judges Grall and Waugh.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Indictment No. 12-04-0626.

Christopher J. Gramiccioni, Acting Monmouth County Prosecutor, attorney for appellant (Mary R. Juliano, Special Deputy Attorney General/Acting Assistant Prosecutor, of counsel and on the brief).

Ansell Grimm & Aaron, P.C., attorneys for respondent (Robert A. Honecker, Jr., of counsel and on the brief).

PER CURIAM

The State appeals the Law Division's October 16, 2013 order admitting defendant Philip H. Leone to pretrial intervention (PTI) over the State's objection. We reverse.

I.

We discern the following facts and procedural history from the record on appeal.

In December 2004, Leone approached a longtime friend to solicit an investment in a Bradley Beach apartment complex. The friend convinced his father, brother, and one of his other friends to invest in Leone's venture. They each contributed $25,000. Leone subsequently misappropriated the entire $100,000, after which he continued to lead the investors to believe that the project was ongoing for approximately seven years.1

In 2012, Leone was indicted for second-degree theft by deception, contrary to N.J.S.A. 2C:20-4. On February 21, 2013, he entered into a negotiated plea agreement under which he pled guilty to the indictment as amended to third-degree theft by deception and consented to pay $100,000 in restitution. In exchange, the State agreed to recommend a non-custodial probationary sentence and to permit Leone to submit a late application for entrance into the PTI program.2

Leone was a member of the bar at the time he solicited and received the investment funds, but he denied that he led the victims to believe that he was acting as their attorney with respect to the investment opportunity.3 He admitted that his actions amounted to theft by deception, and had paid the $100,000 restitution by the time he applied for PTI. The Monmouth County PTI director concluded that Leone did not appear to be remorseful for his conduct. On April 8, the PTI director recommended that Leone not be granted entry into the program.

On May 15, the assistant prosecutor who had negotiated the plea agreement wrote a memorandum to the plea judge explaining the reasons for Leone's rejection, citing N.J.S.A. 2C:43-12(e)(2) (facts of the case); N.J.S.A. 2C:43-12(e)(4) and (7) (desire and interests of the victims and society regarding prosecution); and N.J.S.A. 2C:43-12(e)(17) (balancing the need for prosecution against the benefits to society in channeling the offender into a supervisory treatment program). On June 4, 2013, Leone filed a motion appealing the prosecutor's decision rejecting him from PTI.

On July 24, the parties met for an in-chambers conference with a different judge. She directed the assistant prosecutor to prepare a more thorough memorandum regarding the reasons for the State's rejection of his PTI application, assessing each of the relevant factors. The assistant prosecutor submitted the supplemental memorandum, which considered each of the factors established by N.J.S.A. 2C:43-12(e), on September 16. The prosecutor again rejected Leone's application for PTI.

During a hearing on September 18, the judge directed the assistant prosecutor to contact the victims and explain "to them what PTI is, where the case is at this point," adding "I would like them to know that there's an assertion by the defendant that he may lose his position of employment if, in fact, he's denied PTI." She noted that it was important to explain to the victims that Leone's loss of job may impact "their ability to collect on . . . the remaining amount of [the] civil judgment."

On September 26, the assistant prosecutor provided the trial judge with a letter detailing his conversations with the victims. Three of the victims indicated that they were still opposed to Leone's entry into the PTI program. One victim, the friend to whom Leone first proposed the investment, indicated that he would withdraw his objection to Leone's entry into PTI only if he could "improve his position in the line of the defendant's creditors" in connection with Leone's bankruptcy proceedings.

After hearing additional argument on October 16, the judge granted Leone's motion and ordered his admission to the PTI program over the State's objection. She concluded that "the defendant has shown appropriate remorse," and that Leone would likely lose his employment if not admitted to PTI. Leone's concern about the loss of his job would be "sufficient to deter [him] from committing similar offenses in the future." The judge also found "that the State placed too much weight on the nature of the offense and not sufficient weight on the nature and amenability of this particular defendant," and that it would be "in the best interests of all of [Leone's] creditors, including the victims, that [he] be admitted into PTI so that he can continue to work and pay his debt." She opined that the victims were "angry and upset," but "their opposition [to PTI was] not dispositive," especially given that one victim indicated he would not protest PTI if it meant improving his position in line as a creditor. The judge also expressed concern that the same assistant prosecutor who entered into "the plea agreement [that] specifically stated that [Leone] could apply for PTI" was now denying Leone's request. As a result, the judge found that Leone's "rejection from PTI represent[ed] a patent and gross abuse of discretion by the Prosecutor." This appeal followed.

II.

The State raises the following issue on appeal:

POINT I: THE ORDER ADMITTING DEFENDANT INTO PTI OVER THE STATE'S OBJECTION SHOULD BE REVERSED, BECAUSE THE REJECTION OF DEFENDANT FROM PTI WAS NOT A "PATENT AND GROSS ABUSE OF DISCRETION."

Judicial review of decisions to reject applications for PTI is "'severely limited,'" State v. Nwobu, 139 N.J. 236, 246 (1995) (quoting State v. Kraft, 265 N.J. Super. 106, 111 (App. Div. 1993)), serving to "check only the 'most egregious examples of injustice and unfairness,'" State v. Negran, 178 N.J. 73, 82 (2003) (quoting State v. Leonardis, 73 N.J. 360, 384 (1977)). To set aside a prosecutor's rejection, "a defendant must clearly and convincingly establish that the prosecutor's decision constitute[d] a patent and gross abuse of discretion." State v. Watkins, 193 N.J. 507, 520 (2008) (citations and internal quotation marks omitted); see also State v. Dalglish, 86 N.J. 503, 509 (1981). "[A] party must show that the prosecutor's decision failed to consider all relevant factors, was based on irrelevant or inappropriate factors, or constituted a 'clear error in judgment.'" Nwobu, supra, 139 N.J. at 247 (quoting State v. Bender, 80 N.J. 84, 93 (1979)). To meet this heavy burden, a rejected applicant must show that the prosecutor's error "will clearly subvert the goals underlying Pretrial Intervention." Bender, supra, 80 N.J. at 93.

The statutory criteria for PTI eligibility are as follows:

(1) The nature of the offense;

(2) The facts of the case;

(3) The motivation and age of the defendant;

(4) The desire of the complainant or victim to forego prosecution;

(5) The existence of personal problems and character traits which may be related to the applicant's crime and for which services are unavailable within the criminal justice system, or which may be provided more effectively through supervisory treatment and the probability that the causes of criminal behavior can be controlled by proper treatment;

(6) The likelihood that the applicant's crime is related to a condition or situation that would be conducive to change through his participation in supervisory treatment;

(7) The needs and interests of the victim and society;

(8) The extent to which the applicant's crime constitutes part of a continuing pattern of anti-social behavior;

(9) The applicant's record of criminal and penal violations and the extent to which he may present a substantial danger to others;

(10) Whether or not the crime is of an assaultive or violent nature, whether in the criminal act itself or in the possible injurious consequences of such behavior;

(11) Consideration of whether or not prosecution would exacerbate the social problem that led to the applicant's criminal act;

(12) The history of the use of physical violence toward others;

(13) Any involvement of the applicant with organized crime;

(14) Whether or not the crime is of such a nature that the value of supervisory treatment would be outweighed by the public need for prosecution;

(15) Whether or not the applicant's involvement with other people in the crime charged or in other crime is such that the interest of the State would be best served by processing his case through traditional criminal justice system procedures;

(16) Whether or not the applicant's participation in pretrial intervention will adversely affect the prosecution of codefendants; and

(17) Whether or not the harm done to society by abandoning criminal prosecution would outweigh the benefits to society from channeling an offender into a supervisory treatment program.

[N.J.S.A. 2C:43-12(e).]

At the request of the motion judge, the State submitted an expanded explanation of the reasons for rejecting Leone's PTI application. In rejecting the application, the State relied primarily on the following: (a) Leone, a member of the bar, stole the funds invested by his friends and attempted to "cover his tracks" for seven years "in a pattern of deceit and deception" - 12(e)(1); (b) Leone spent the money on self-indulgent conduct and the owner of the building that was to be purchased with the funds had no recollection of meeting Leone - 12(e)(2); (c) opposition of the victims - 12(e)(4); (d) absence of problems or addictions to be addressed through PTI - 12(e)(5) and (6); (e) concern about negative public perception that Leone stole through deceptive conduct, covered up his theft, and when caught was only required to repay the money - 12(e)(7); (f) even though Leone has no other criminal record, he was disbarred for trust account violations unrelated to this case - 12(e)(9); and (g) "the public's faith in the system, that it operates impartially, not favoring any particular class of people, would be subverted by a defendant being able, through the payment of restitution, to buy his way out of a criminal record" - 12(e)(14) and (17). The State did not rely on any of the negative factors found in N.J.S.A. 2C:43-12(e)(8), (10), (11), (12), (13), (15), and (16).

The issue before the motion judge was not whether she would have evaluated the criteria differently or whether she agreed with the prosecutor's overall conclusions, but whether Leone had "clearly and convincingly establish[ed] that the prosecutor's decision constitute[d] a patent and gross abuse of discretion." Watkins, supra, 193 N.J. at 520 (citation and internal quotation marks omitted). Even if the merits of the judge's reasons for disagreeing with the prosecutor's analysis of the PTI factors could be considered arguable, her conclusion that the prosecutor's decision to reject Leone amounted to "a patent and gross abuse of discretion" under the heightened burden of proof mandated by Watkins is untenable given the record before her.

For example, the judge discounted the prosecutor's concerns about Leone's status as a member of the bar. She emphasized that he was acting as a "friend" when he defrauded the victims and then covered up his actions for years. The Supreme Court has made clear, however, that integrity is expected from a member of the bar in both "private and professional" conduct. In re Gillespie, 124 N.J. 81, 86 (1991). Leone was a member of the bar when the criminal activity underlying the indictment took place, both the initial fraudulent conduct and the lengthy efforts to avoid detection. We see no basis to exclude consideration of his status as an attorney or the fact that his disbarment was for financial misconduct as factors in evaluating his PTI application under N.J.S.A. 2C:43-12(e)(9) and (17).4

Even if Leone's status as an attorney were disregarded, the circumstances and result of his conduct as a "friend" do not support his admission to PTI. The individual whom he persuaded to invest in his scheme, and who then persuaded others to invest, described Leone's conduct and its impact on his life as follows:

Having been swindled by someone who I thought was a friend and involving my father, brother and best friend in this "investment," I cannot find any sympathy for the defendant. He continue[d] this fraud for several years while continuing to socialize with me and my family. There were several instances when he attended a social function at my house, eating my food, drinking my liquor, knowing full well that he scammed me and my family. He made a fool of me, jeopardized my relationships with my family and friend[s]. I remain responsible and feel guilty for involving them in what turned out to be a fraud. We intended to use the proceeds to pay for college tuitions for our children. But instead, we have had to take out loans.

Although that victim was eager for complete restitution through collection of the judgment, rather than just the return of his original investment, he forcefully articulated harm beyond the mere loss of money. The motion judge largely disregarded the views of the victims, which she had instructed the assistant prosecutor to solicit, and substituted her own determination that they would be better off if Leone were to be admitted to PTI. Her decision was based, in large part, on Leone's unsupported assertion that acceptance to PTI "is the only way [he] can retain [his] employment."

The judge also expressed concern that the same assistant prosecutor who allowed Leone to make a late application for PTI then opposed his admission. The judge cited no support for the proposition that an assistant prosecutor who agrees to allow a defendant to apply for PTI is precluded from opposing the application. And, as the record reflects, it was the Monmouth County PTI director who first recommended against Leone's admission, based in part on what he perceived to be his lack of remorse during his PTI interview.5 The prosecutor supported that recommendation and amplified the reasons when requested by the judge.

In summary, we conclude that the motion judge erred by interjecting herself into the process of weighing applicable factors pertinent to the PTI application. She predicated her decision upon her own assessment of the PTI factors, rather than determining whether the prosecutor failed to consider all relevant factors, considered inappropriate factors, or clearly erred in judgment. She compounded her error by disregarding the State's declared interest in advancing a broader social value in prosecuting this type of crime to avoid giving the appearance of allowing defendants like Leone to buy their way out of criminal responsibility for serious criminal activity. Even if reasonable minds could differ in analyzing and balancing the applicable factors in this case, judicial disagreement with a prosecutor's reasons for rejection does not equate to "a patent and gross abuse of discretion" based on "clear and convincing evidence."

1 The victims eventually obtained a civil judgment against Leone for $194,310, which represented their initial investment, plus interest and costs. Leone filed for bankruptcy listing the victims as unsecured creditors.

2 The court rules "contemplate[] that the issue concerning enrollment into PTI shall be resolved before or at the pretrial conference and, in any event, before a plea or verdict." State v. Moraes-Pena, 386 N.J. Super. 569, 578 (App. Div.), certif. denied, 188 N.J. 492 (2006).

3 Leone was disbarred in June 2010 for trust account violations not related to the indictment. In re Leone, 202 N.J. 127 (2010).

4 While the State does not rely on N.J.S.A. 2C:43-12(e)(8), Leone's criminal conduct in this case and the trust violations that led to his disbarment could be considered "part of a continuing pattern of anti-social behavior."

5 The motion judge, in contrast, found him to be remorseful based on the assertions in his certification and his willingness to pay restitution, which was a condition of both admission to PTI or probation, as well as the reduction from a second-degree crime, which includes a presumption of incarceration, to a third-degree crime, which does not.