SAN FRANCISCO — The defense continued its effort to undermine the prosecution’s key witness during the second day of cross-examination in the Seal Rock Inn fraud trial on July 9, pressing the alleged victim on financial oversight at the family-owned motel, his business practices and prior statements that Deputy Public Defender Thomas McMahon argued were inconsistent with earlier testimony. The questioning advanced the defense’s theory that the accused did not secretly embezzle $180,000 but instead acted with the knowledge and authorization of the motel’s general manager, who the defense alleges was engaged in a personal relationship with her.
The accused is charged with embezzling $180,000 from the family-owned Seal Rock Inn, where she worked as a clerk. In his opening statement and throughout cross-examination, DPD McMahon argued that the general hotel manager at the time, referred to as the alleged victim, was having an affair with the accused and consciously authorized the payments at issue as part of that relationship.
At the beginning of the examination, DPD McMahon asked the alleged victim about the new reservation booking system he implemented for the Seal Rock Inn in 2019. The alleged victim testified that he kept the old card reader as a backup despite glitches in the old system.
The alleged victim said the new reservation management system had three tiers of access: clerks had the least access, followed by managers and then owners. The alleged victim testified that he had complete access.
When DPD McMahon questioned why the alleged $180,000 loss was not discovered sooner, the alleged victim said he did not have access to the inn’s bank account. DPD McMahon asked whether the alleged victim’s father was “scared” to give him access to the account.
“Within my family I’m just the point person … the bridge between ownership and the hotel,” the alleged victim said. “I am effectively a partner … they [his family] didn’t look at me as a partner, they looked at me as an in-between.”
DPD McMahon then asked how he and his sister could pay employees and other hotel expenses without bank account access. The alleged victim testified that his sister would physically go to their aunt’s or father’s house to obtain signatures on every check.
When questioned about the hotel’s finances, the alleged victim said his “sister is the one with the purse, so to speak,” and that she handled the finances.
Without bank account access, the alleged victim testified that he relied only on “rough numbers” from the reservation system when comparing bank statements.
During this portion of the proceedings, the accused appeared distressed. She cried and repeatedly blew her nose.
“I only had about twelve interactions with [the accused],” the alleged victim said when questioned by DPD McMahon. He testified that he intentionally did not interact much with clerks because he did not want to “usurp authority” from the hotel manager.
DPD McMahon next questioned the alleged victim and his father’s real estate experience. The alleged victim emphasized that his father never operated a real estate business and that he himself entered the real estate field in 2014.
The alleged victim said he began working at the Seal Rock Inn as a desk clerk. “If you’re curious about my ambivalence,” he said, “my dad told me not to work at the Seal Rock Inn.”
“I’m sure you got lots of family stories,” DPD McMahon replied.
“Your parents are rich, right?” DPD McMahon asked, stating that records showed his parents owned 15 properties over time.
Ultimately, the alleged victim responded, “I think they are doing really well.”
DPD McMahon then referred to prior testimony in which the alleged victim said that “if they lose the Seal Rock Inn, they would be relying on Social Security.”
“That was a lie.”
The alleged victim disagreed, explaining that owners face financial disadvantages and that the Seal Rock Inn pays for his parents’ health care.
“I am a litigator … well, not anymore,” the alleged victim testified.
DPD McMahon asked whether, as a litigator, he coached witnesses to turn toward the jury while testifying.
The alleged victim said he did. DPD McMahon then pointed out that the alleged victim had frequently turned toward the jury during his testimony.
DPD McMahon asked the witness to confirm that he managed $85 million between 2016 and 2024.
“That seems too high,” the alleged victim responded.
The alleged victim testified that in 2016 he managed “under two million dollars.”
“Two million dollars is a ‘small amount of money?'” DPD McMahon asked.
“Yes, in comparison to 85 million,” the alleged victim replied.
DPD McMahon noted that $2 million was still substantially larger than the $180,000 at issue in the case.
“How many businesses have you founded?” DPD McMahon asked.
“I know I am a serial entrepreneur,” the alleged victim replied, adding that he founded “multiple” businesses.
“You’re a money guy,” DPD McMahon suggested.
The alleged victim responded that he was more of an “asset manager … real estate guy” and was “not a money guy.”
DPD McMahon then questioned the alleged victim about several marijuana businesses he operated, including Firefly Marin, where he worked with a Seal Rock Inn employee, as well as Access Marin, where the alleged victim clarified that he sold “medical cannabis.”
DPD McMahon also highlighted Seal Rock Inn employees who were business partners of the alleged victim and employees who were also tenants at the inn.
DPD McMahon asked the alleged victim to confirm that “employee-employer boundaries were not clearly delineated” at the Seal Rock Inn.
“I agree with that,” the alleged victim responded.
The alleged victim testified that the same was not true with the accused. He said she was “not a personal assistant” and that he interacted with her only “twelve times.”
DPD McMahon referred back to testimony from the previous day, when the alleged victim hesitated after being asked whether other men found the accused attractive.
The alleged victim testified that “there was a complaint related to [an employee] in regards to him flirting with [the accused].”
He said that employee later left the Seal Rock Inn.
“I have a recollection of [the accused] and [a different employee] working at the desk being playful,” the alleged victim testified. “And then the reports came in about [the first employee].”
The alleged victim said he received only in-person reports about the incident and testified that the accused “may have reported” the information to him and that it “may have been” at the front desk.
When the alleged victim testified that “people” found the accused attractive, he clarified that he was referring to the two employees he had mentioned.
The alleged victim testified that he did not know whether the accused or the second employee “did a formal report or not.”
When DPD McMahon pointed out that a formal report would likely appear in the Seal Rock Inn’s records, the alleged victim testified that “[the accused] did not formally report inappropriate behavior.”
“I thought we were talking about playful,” the alleged victim said.
He testified that there was no report because the interaction was “playful” and “mutual,” describing it as “not inappropriate.”
DPD McMahon also questioned why the alleged victim found it notable enough to tell his wife that the accused hugged him during a job interview.
“It’s unusual,” the alleged victim responded, explaining that he had never been hugged during an interview before.
When DPD McMahon asked why he mentioned it to his wife, the alleged victim replied, “Why would I not … we talk.”
“Did you talk to her about your affair with [the accused]?” DPD McMahon asked.
“I did not have an affair,” the alleged victim responded.
On redirect, Deputy District Attorney Chris Peurevelle asked whether the alleged victim had ever been “paid back a dime” of the $180,000.
“No,” the alleged victim replied.
Peurevelle then asked how many hours the alleged victim had spent dealing with the alleged fraud.
“Hundreds of hours,” the alleged victim testified, later estimating that “300 hours” was a rough estimate.
Peurevelle also asked whether the alleged victim experienced any difficulty communicating with the accused in English during her interview. The alleged victim replied that he did not.
During re-cross, DPD McMahon asked whether, as a lawyer, the alleged victim understood that if the accused were convicted, he could receive restitution for both the money allegedly taken and the time and suffering caused by the alleged crime.
The alleged victim answered yes and testified that restitution was one reason he was telling the truth.
DPD McMahon also questioned how the alleged victim was able to gain access to the Seal Rock Inn bank account immediately after the alleged theft was discovered if it had previously been so difficult to obtain access.
“Oh my god, yeah,” the alleged victim said, describing the discovery of the alleged theft as a “come to Jesus moment” and calling the situation “insanity.”
DPD McMahon replied that it was “insanity that you were managing without access to the bank account.”
On re-direct, Peurevelle asked why the alleged victim was telling the truth.
The alleged victim testified that he was “telling the truth because I am under oath,” “telling the truth because we want to see justice done,” and telling the truth so that the same thing would not happen to other San Francisco businesses.
During a final re-cross, DPD McMahon asked whether the alleged victim had gone to the media, filed a lawsuit or alerted the business community after discovering the alleged fraud.
The alleged victim testified that neither he nor his family had taken any of those actions.
DPD McMahon questioned why those steps had not been taken if the alleged victim’s stated goal was to prevent similar incidents from affecting other San Francisco businesses.
After the alleged victim was excused, prosecutors called Ray Tang, an investigator with the San Francisco District Attorney’s Office, to testify.
The trial proceeds in Department 29 of San Francisco Superior Court.
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