Court Reverses 26 of 27 Guilty Verdicts After Swindler Completes His Sentence

Less than a month after convicted swindler Ralph William McDonald finished serving his prison sentence, a state appellate court has reversed guilty verdicts on 26 of 27 felony charges against him.

McDonald was convicted almost four years ago of running an investment fraud scheme which collected $15 million from more than 1,000 investors from 1980 to 1982.

McDonald’s Golden Eagle Investments in El Toro allegedly was operated as a Ponzi scheme, in which new funds are used to pay earlier investors until financial collapse.

Golden Eagle promised tax-free returns of 10% to 20% a month on investments in commercial deals that did not exist. Those who gave McDonald money received about 17 cents on each dollar in a court-approved settlement last July.

An Accountant’s Analysis

The Court of Appeal, sitting in Santa Ana, found that papers reflecting an accountant’s analysis of McDonald’s scheme inadvertently were given to jurors during their deliberations, thus justifying reversal of the convictions.

Although McDonald’s lawyer did not challenge the authenticity of the documents, prosecutors “specifically and inexplicably” failed to offer the papers as evidence, according to the ruling written by Justice Thomas F. Crosby Jr.

When the same argument was made to Orange County Superior Court Judge James K. Turner, he denied the request for a new trial, saying prosecutors had proved McDonald’s guilt “not only beyond a reasonable doubt but beyond all possible doubt.” He concluded the error was not prejudicial to McDonald’s case.

But Crosby noted that the jury foreman and other jurors testified that the documents played a large role in their verdict.

“Improper evidence with respect to a matter that ‘had to be cleared up’ in the mind of the foreman of the jury can hardly be considered harmless,” Crosby wrote in the unanimous three-judge opinion released Thursday.

1 Conviction Affirmed

The justices affirmed a single conviction for conspiracy to commit tax fraud, finding that jurors had decided on conviction before they considered the improper evidence.

McDonald’s convictions were reversed on 18 violations of the state corporations code, seven counts of grand theft and one count of attempted grand theft.

Lawyers from the state attorney general’s office who argued the case could not be reached for comment on a possible appeal. Nor could McDonald be reached.

When McDonald was arrested at his office, police said, they seized $649,890 in cash in his briefcase. According to the opinion, McDonald told police he did not use banks and kept Golden Eagle’s money with him 24 hours a day.

McDonald told police that he earned $1.5 million in 1982 alone, and bought a $600,000 home and 18 exotic cars.