Former Sacramento real estate mogul Mike Lyon loses appeal of eavesdropping conviction

An appeals court has denied former Sacramento real estate mogul Mike Lyon’s appeal of his 2018 conviction for secretly recording videos of his interactions with prostitutes.

The 3rd District Court of Appeal in Sacramento issued an opinion Wednesday that rejected Lyon’s contention he was convicted unfairly because prostitutes do not have a reasonable expectation of privacy, an argument his lawyers have made unsuccessfully in the past.

“We decline defendant’s invitation to hold that prostitutes have no objectively reasonable expectation of privacy in their communications during sexual encounters at a client’s residence, regardless of the particular circumstances of the interaction,” the court wrote in a 27-page opinion.

The ruling is the latest legal blow for Lyon, the former chief executive officer of Lyon Real Estate who was once a member of Sacramento’s social elite and a Carmichael Boy Scout Leader until he was packed off to prison.

His legal woes began a decade ago, when he was first accused of secretly taping guests, friends and employees inside his homes using sophisticated video cameras concealed from view.

In March 2011, he pleaded guilty to four counts of eavesdropping based on his recordings of prostitutes at his home. Lyon publicly apologized, agreed to pay $2.5 million to settle a civil lawsuit filed over his secret recordings of friends and spent time in jail and under house arrest.

He also was sentenced to five years probation, and during that period in October 2014 authorities raided his Arden-area home.

Law enforcement seized cell phones, computers and other devices that later turned up evidence that in 2013 and 2014 Lyon “had engaged in sexual relations with prostitutes at his residence and had secretly videotaped these encounters,” the court opinion states.

“The women were not aware that they were being recorded and never gave defendant permission to do so,” the opinion says. “The women learned about the recordings for the first time after the search.

“The recordings were played at trial; some of them captured both words and real time images while others only captured real time images.”

Lyon was convicted in April 2018 and sentenced to six years and four months in state prison.

His lawyers appealed the conviction, arguing that the trial court should have dismissed the eavesdropping charges that led to his conviction.

“He argues that reversal is required because prostitutes, as a matter of law, have no reasonable expectation of privacy in their communications during sexual encounters at a client’s residence,” the court wrote. “We disagree.”

Lyon’s attorneys also argued that his constitutional rights were violated when agents who raided his home seized his electronic devices, despite the fact that he was on searchable probation at the time.

“He argues that no reasonable law enforcement officer could have believed his probation search condition justified the warrantless search of his electronic devices, since the condition makes no mention of electronic devices,” the court wrote. “We disagree.”

The court noted that the raid took place after probation officers received “an anonymous tip that he was regularly in contact with prostitutes and his bedroom ‘contains a lot of illegal activity,’ most of which is captured on hidden cameras.

“During that search, the officers seized numerous electronic devices, including a camcorder, computers, external hard drives, flash drives, cameras, cell phones, and memory cards,” the court wrote.

Lyon’s legal woes continued even as he appealed that conviction.

He was arrested last April on drug and parole violations, a case that online court records show is pending.

This story was originally published February 24, 2021 at 3:01 PM.