Victims waited years for 3rd District decision to allow restitution

For years, Linda Feutz made a note on her calendar every three months.

Unlike many people her age, she wasn't marking a regular doctor's appointment or visit with grandchildren. Instead, she had to renew her eligibility with the secretary of state's office every 90 days for the Victims of Corporate Fraud Compensation Fund.

Feutz was one of many victims of a securities fraud by James Stanley Koenig. Koenig appealed his nearly 43-year sentence in 2013.

The 3rd District Court of Appeal upheld his sentence this past December, more than seven years later. People v. Koenig, 2020 DJDAR 132315 (Cal. App. 3rd, Dec. 17, 2020).

That decision contained just two mentions of the word "restitution'', specifying what Koenig would pay to make his victims partly whole again. But seeking restitution had already become a major part of Feutz's life. She could not receive payment until Koenig's conviction was considered final.

"I was beginning to wonder if I was going to live long enough to see any resolution," Feutz said. "I did get resolution, but it took forever."

If she'd been "more elderly" or had issues with dementia, Feutz said, she likely would not have been able to stay on top of the paperwork. Finally last month, the retired nurse received a check from the fund for $17,881. Though this was a fraction of the $100,000 she'd invested, Feutz said things turned out better for her than some of Koenig's other victims. Some died while awaiting the court's decision.

"In addition to the financial impact, it has been annoying to keep a huge file to try to keep current on just what has been happening," Feutz said.

A representative of the 3rd District court did not respond to a request for comment.

For months, appellate attorney Jon B. Eisenberg has tried to draw attention to what he said are unreasonable delays in the court. He filed a complaint with the Commission on Judicial Performance and two petitions to the California Supreme Court, both of which were rejected.

The appellate court has since decided many of the criminal appeals Eisenberg cited, usually affirming them. Some of these cases ended up with the court dismissing sentences or enhancements long after defendants had already served them.

But each of those cases usually affected just one defendant. Koenig was convicted of 33 counts of securities fraud and other charges. The Daily Journal was able to reach two other victims of the fraud. Neither would speak on the record, but both backed up many of the details Eisenberg alleged.

One said there were hundreds of victims, some who would be in their 90s or older by now, including several who had died. They also said they had finally been approved for restitution but had yet to receive a check from the state.

Koenig was the first case Eisenberg mentioned in his declaration to the California Supreme Court. He asked the court to order the 3rd District to prioritize 66 delayed criminal appeals. He also referenced about two dozen letters to the court asking it to fast track the case, adding, "Most were substantially identical." Eisenberg wrote many victims were "in their late 70s" with "health issues," and that he knew of at least one who had died.

"The 3rd District's decisional delay in the Koenig appeal harmed the victims of securities fraud in that case by stalling their pending applications for restitution," he wrote in Eisenberg v. Court of Appeal for the Third Appellate District, S269691 (filed July 6, 2021).

The case docket tells a similar story. The case was fully briefed on Dec. 7, 2016. More than a year later, these words appear: "Linda Feutz requesting the court fast track this case for decision." This is one of more than two dozen such letters fraud victims sent to the court between 2018 and 2020, as shown in the docket.

"Most of the claimants were near retirement age at the time of the filed action, and we are now in our late 70s or late 80s and many with health issues," Feutz wrote in her Feb. 5, 2018 letter to the court. "The restitution represents a small fraction of the losses. However, this restitution would substantially increase the quality of my remaining life, and probably for many other claimants."

Shortly after the final "fast track" letter, the court requested digital copies of dozens of exhibits from the attorney general's office, which delivered them about five weeks later. The final ruling came nearly two months after that. The California Supreme Court denied review in March.