Joseph B. Leonard and Dorothy A. Cole Leonard - Page 10

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          person of money".  Cal. Pen. Code sec. 484 (West 1988).                     
               Petitioners claim that Robert advised Mrs. Leonard that by             
          having access to and using lines of credit he would be able to make         
          profitable investments in his capacity as a stockbroker with                
          Prudential Bache.  Petitioners contend that Robert obtained the             
          money under false pretenses because he did not invest the money on          
          Mrs. Leonard’s behalf, but rather, intended to repay her only the           
          principal.  Petitioners posit that Robert made the offer because            
          prior to 1983, Mrs. Leonard "was experiencing personal financial            
          difficulties due to outstanding obligations which she had incurred          
          from her schooling and opening her private law practice".                   
               The evidence shows that it was Robert, not Mrs. Leonard, who           
          was having financial difficulties.  Mrs. Leonard prepared a                 
          personal financial statement in July 1982 that listed total                 
          liabilities of only $33,400.  In 1981 petitioners’ gross income was         
          $77,671, and in 1982 it was $73,026.  Petitioners had a gross               
          income of nearly $120,000 in 1983.  We believe it unlikely that             
          Mrs. Leonard could have obtained $200,000 in bank credit, half of           
          which was unsecured, if she were  experiencing  financial                   
          difficulties.  On the other hand, Robert and Suzette did have               
          financial difficulties; they filed for bankruptcy in 1981.                  
               In 1982, Mrs. Leonard obtained a 2-month, $75,000 bank loan            
          and provided the proceeds to Robert in order that he could clear            
          mechanic’s liens on the flower shop property, which he was                  
          developing.  Mrs. Leonard admitted that she did not expect to make          
          money on the transaction.  After Robert’s check to repay the bank           

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