Nearly two years to the day after a jury found Glenn Neasham guilty of felony theft for selling an annuity to an 83-year-old woman, a California appellate court threw out his conviction.
InsuranceNewsNet readers may remember our March 2012 exclusive investigative report, “American Injustice,” in which we revealed the untold story behind Neasham’s arrest, conviction and 60-day prison sentence in connection with the annuity sale.
Neasham, a 53-year-old advisor from Hidden Valley, Calif., had been convicted in October 2011 of felony theft from an elder in a California court for selling an Allianz MasterDex 10 in 2008 to an 83-year-old woman who was later said to have suffered from dementia. Neasham was facing up to four years in prison but the sentence had been reduced to 60 days.
On Oct. 8, the First Appellate District Court reversed the conviction in a decision that seemed to ridicule the prosecution.
“Under the prosecution’s theory of this case, merely cashing a check for a person known to suffer from dementia would support a larceny conviction,” Associate Justice Stuart Pollak wrote in the ruling.
The prosecutor had argued in the original case that Neasham should have known the client, Fran Schuber, had dementia, even though Neasham and his assistants said that they did not notice any cognitive impairment and that Schuber had said in a questionnaire that her health was “good.” At that time, California allowed the sale of that annuity to clients up to age 85.
In their decision, the three appellate justices agreed that the prosecutor did not prove theft because the annuity sale amounted to an exchange of equal value and the state did not prove that there was intent to steal.
The judges’ decision to overturn the conviction of theft in what was a simple annuity sale might have seemed like an obvious outcome to observers, but Neasham has learned the hard way not to assume anything in a court.
After all, Neasham went from making more than $400,000 a year with a thriving insurance business supporting a wife and four children in an elegant house in a northern California lake town to living in a house provided by his in-laws. His wife returned to work as a dental assistant and the family subsisted on food stamps. He went from parsing the details on building a dream house on top of a hill to learning the intricacies of filing for personal bankruptcy. All because of a verdict few thought could have happened in a case that baffled even the most advanced legal experts.
Supporters and lawyers in his appeal told Neasham he had a rock-solid case, but he’s heard that before.
“My attorney in the very beginning said there wouldn’t be a conviction on this and of course there was and I was absolutely shocked,” Neasham said.
Many in his community and in the life insurance industry shared his sense of shock. Even the prosecutor admitted she did not prove that Neasham knew that his client suffered from dementia, which was one of the basic points of her case.
In the original trial, Neasham’s attorney advised him not to testify because he felt the state did not show it even had a case. The decision not to testify is one of the many things Neasham now wishes he could do over.
But a mistake he isn’t repeating is taking things for granted in court. That’s why even though the three-judge appeals court panel seemed to have shredded the prosecution’s case in the September hearing, Neasham was checking the court’s website every 15 minutes for the decision ever since.
On Oct 8., when he saw The People v. Glenn Andrew Neasham, he sat down, calmed himself and opened the file. In the decision, Justice Stuart Pollak point-by-point showed the prosecution hadn’t even come close to proving Neasham committed theft and that the judge erred so badly in his instructions to the jury that the mistake had “constitutional significance.” Pollak seemed to be perplexed even by the prosecution’s definition of theft.
“Under the prosecution’s theory of this case, merely cashing a check for a person known to suffer from dementia would support a larceny conviction,” Pollak wrote.
Larry Nevonen, a longtime proponent of Neasham’s who attended the appeal hearing, said he was almost embarrassed for the state’s attorney.
“The judge asked the hypothetical that if you gave him a hundred-dollar bill and he gave you five twenties would that be theft,” said Nevonen, who is an insurance agent, professor and lawyer. “And she hemmed and hawed and finally said ‘Yes.’ Another judge asked, ‘Are you aware of the implications of what you are saying?’ ”
But Nevonen understood why Neasham, who is unfamiliar with the appellate court process, would have been nervous about the outcome. That’s because Neasham’s lawyer was first in the proceeding and a judge went after him with questions about the client’s ability to consent.
Neasham remembered stiffening at the table as the judge “hammered” at his lawyer.
“My wife and I weren’t sure really what happened,” Neasham said after the hearing. “We’re just hoping.”
The anxieties that filled out the Neasham family’s life since county investigators started asking questions in April 2008 finally unbuckled when he told his wife and mother about the appellate decision.
“We all just started bawling,” Neasham said. “My wife, myself, my mom. We couldn’t say anything. We just cried.”
The next step for Neasham is to try to get his insurance license back, file for bankruptcy and start anew. As he takes stock of his life and future, Neasham said he is thankful for some things that have come out of the ordeal.
“I’ve gotten to know my kids better,” Neasham said. “I am not so concerned with some things anymore. I don’t need the big, fancy house. I don’t need the nice car.”
Neasham said he is also grateful for Nevonen and a core group of supporters who pulled him through. Nevonen said Dick Weber, as president of the Society of Financial Service Professionals (FSP), was instrumental in rallying the association to back Neasham’s case.
Weber, a California insurance advisor, said the implications of the case were clear to him.
“It wasn’t just what was happening to Glenn, but to all of us,” Weber said of the precedence the case represented.
Weber and FSP retained a law firm to file a friend of the court brief that helped support Neasham’s appeal and was cited in the appellate decision. FSP’s attorneys also helped find the law firm that took over Neasham’s appeal free of charge when it appeared that Neasham’s court-appointed attorney was overwhelmed by the case.
Prosecutors can still appeal the decision and retry the case. Nevonen said he thought both were unlikely because the Supreme Court would kick back an appeal due to the faulty jury instruction and a second trial would have to rely on new facts that would damage the prosecution’s case even further.
“So, I don’t think they would have anything to build a new case on,” Nevonen said.
But Neasham has heard that before.
The appellate court ruling said
Prosecutors did not prove Neasham knew of the dementia: “All of the witnesses to the discussions between Schuber and defendant confirm Schuber’s apparent comprehension at the time of their conversations, and prosecution witnesses acknowledged that persons with dementia can have periods of apparent lucidity.” (In an interview with InsuranceNewsNet after the verdict, the prosecutor admitted that she did not prove that Neasham knew Schuber had dementia.)
If Neasham knew of the dementia, the prosecution still did not prove larceny:
“Defendant received Schuber’s cashier check payable to Allianz and transmitted it to the insurance company, which issued her the annuity policy. He did not take her funds or convert her property for his own use or the use of any other person.”
Schuber was not deprived of her money: “The annuity was issued in Schuber’s name and she at all times was the owner of that policy. For 30 days after its issuance, she had the unqualified right to cancel the policy and receive back the full price paid for the policy. While the prosecution placed great emphasis on the penalty she might have incurred had she withdrawn more than 10 percent of the policy value within five years of its issuance, there was no evidence that Schuber had any intention or need to make such a withdrawal, the penalty did not apply if she became hospitalized or moved to a long-term care facility and, most importantly, there was no evidence that this standard term reduced the value of the policy to less than she paid for it.”
After Neasham’s conviction, Allianz refunded Schuber the value of the annuity plus interest promptly after Schuber’s son asked for the money. The Schuber family had not asked for a refund before the conviction. Fran Schuber has since died.
The prosecution can now appeal the verdict or retry the case. An appeal would have to overcome a jury instruction error noted in the ruling. A retrial would also have to grapple with the appellate ruling’s rejection of the basic premise of theft in the prosecution’s initial case.