Charles S. Hodson walked out of the Ventura County Jail Tuesday, but he isn't exactly a free man. Hodson, 33, is at the center of a grand-theft case that could end up lifting a decade-old restriction on the use of grand juries in criminal matters across the state.
The state Supreme Court last week agreed to a request by Ventura County Dist. Atty. Michael D. Bradbury to delay a preliminary hearing for Hodson and an associate, Robert V. Cole, 50.
Meanwhile, it will decide whether to review the ruling that put a tight lid on the use of grand juries--a ruling decried by prosecutors but generally hailed by defense attorneys, who point to abuses committed in the past by the secret panels.
So far, the legal implications of the case have tended to overshadow the emotional and financial hardships it has caused for more than 25 local residents whom Hodson and Cole are accused of bilking out of $5 million. Prosecutors say the case is one of the largest of its kind in Ventura County's history. Victims allegedly include a Santa Paula rancher, a Camarillo doctor, a retired admiral, a high school teacher, a Roman Catholic priest, an Alzheimer's patient who, ironically, in 1986 was a foreman of the Ventura County Grand Jury.
Prosecutors say the defendants, who are from Ventura, used business associates and family members to gain entree to clients. They also used the cachet bestowed by fancy cars and lavish homes. But Deputy Dist. Atty. John L. Geb, who is prosecuting the case, said that, most of all, Hodson and Cole used "theft, embezzlement, forgery and false pretenses."
Attempts to reach Hodson and Cole through their attorneys were unsuccessful. Both lawyers declined to comment because court action is pending.
Going to the grand jury with the case was a gamble for Ventura prosecutors. Since 1978, when the state Supreme Court ruled in Hawkins vs. Superior Court that all felony defendants have a right to a preliminary hearing before standing trial, grand juries have lost much of their power in criminal cases.
The ruling meant that even defendants indicted by grand juries had a right to a preliminary hearing--a process that district attorneys criticized as costly and repetitive. Most have opted to forgo the grand jury process entirely and head straight for the preliminary hearing.
In 1978, the Supreme Court ruling reflected a widespread concern that grand juries were unfair to defendants because they were secret and allowed no cross-examination of witnesses by the defense. But, 10 years later, Bradbury's office felt that the newly reconstituted, more conservative Supreme Court might be willing to reconsider its ruling.
He was right.
On Nov. 6, after listening to a month of testimony from 80 witnesses and compiling 1,820 pages of evidence, the Ventura County Grand Jury indicted Hodson on 21 counts of grand theft, 24 counts of forgery and one count of filing a false income tax return. Cole was indicted on one count of grand theft and nine counts of forgery. It was the first grand jury criminal indictment in 10 years.
Attorneys for the defendants promptly asked for preliminary hearings. At that point, Bradbury's office triggered the legal challenge by asking the state Supreme Court for permission to go directly to trial.
Regardless of the court's eventual decision, the actions alleged in the case have already damaged a number of Ventura County residents, contributing to medical problems and causing financial hardship.
Take A. E. (Bud) Sloan and his wife, Elsie Sloan, for instance, who own two big ranches in Aliso Canyon near Santa Paula.
One of the Sloan ranches lies next to the ranch of Hodson's father-in-law, Dr. Henry Stoutz. For years, Stoutz has been Bud Sloan's doctor. Stoutz is also a well-known urologist, a former chief of staff at Community Memorial Hospital in Ventura and a partner of a medical firm called the Ventura Community Professional Group.
Court documents show that, in May, 1986, Stoutz asked the Sloans to help Hodson out of a bind by lending him $218,000 for 90 days. Bud Sloan agreed to sign a promissory note as a favor to their doctor.
Cole co-signed on the loan but failed to pay the money back, according to prosecutors. Not only that, Bud Sloan testified, in July he received notice that his ranches had been pledged as collateral for loans to Cole totaling $1 million.
"It's a bunch of crooked stuff . . . a trumped-up deal," Bud Sloan told the grand jury. "I never signed anything except a promissory note" for the initial $218,000, he said.
Prosecutors maintain that Hodson and Cole forged the Sloans' signatures on the subsequent notes and that Cole, a notary public, certified that the Sloans had signed the papers.
But a handwriting expert who testified before the grand jury concurred that all of the Sloans' purported signatures except the one on the $218,000 note were forged.
The Sloans still are trying to straighten out the mess.