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#: 325 Filed: 08/07/12 Page: 1 of 31 PageID #: 5362
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI EASTERN DIVISION UNITED STATES OF AMERICA, Plaintiff, vs. MARTIN T. SIGILLITO, Defendant. ____________________ TABLE OF CONTENTS I. II. III. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 RELEVANT PROCEDURAL BACKGROUND . . . . . . . . . . . . . . . . . . . . 2 RELEVANT TRIAL EVIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. B. Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Scheme to Defraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1. Beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 a. IRA loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 b. Marketing materials . . . . . . . . . . . . . . . . . . . . . . . . 7 c. Loan agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 8 d. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3. Collapse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Legal Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Insufficient evidence of mail fraud . . . . . . . . . . . . . . . . . . 2. Insufficient evidence of intent to defraud . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 12 15 18 No. 11-CR-168-LRR ORDER
MOTION FOR JUDGMENT OF ACQUITTAL . . . . . . . . . . . . . . . . . . 11 A. B. C.
MOTION FOR NEW TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 A. B. Legal Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1. Due process rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Governmental misconduct during trial . . . . . . . . . . . i. Presentation of false testimony . . . . . . . . . . . . ii. References to Bernard Madoff . . . . . . . . . . . . iii. Statement of personal belief . . . . . . . . . . . . . iv. Intimidation of defense witness . . . . . . . . . . . v. Allowing witnesses to discuss testimony . . . . . . vi. Structuring witness testimony . . . . . . . . . . . . b. Governmental misconduct pretrial . . . . . . . . . . . . . . 2. Right to counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Restriction of cross-examination of Mary O’Sullivan . . . . . . 4. Weight of the evidence . . . . . . . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20 21 22 25 26 27 27 28 29 29 30 30
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 I. INTRODUCTION The matters before the court are Defendant Martin T. Sigillito’s “Motion for
[Judgment] of Acquittal” (docket no. 261) (“Motion for Judgment of Acquittal”) and “Motion for New Trial” (docket no. 262) (collectively, “Motions”). II. RELEVANT PROCEDURAL BACKGROUND On April 28, 2011, the government filed a twenty-two count Indictment (docket no. 2) against Defendant, James Scott Brown and Derek J. Smith. Counts 1 through 9 charged Defendant with committing wire fraud in violation of 18 U.S.C. §§ 1343 and 2(b). Counts 10 through 15 charged Defendant with committing mail fraud in violation of 18 U.S.C. §§ 1341 and 2(b). Count 16 charged Defendant, Brown and Smith with conspiracy to commit wire and mail fraud in violation of 18 U.S.C. § 371. Counts 17 through 22 charged Defendant with engaging in and attempting to engage in money laundering transactions in violation of 18 U.S.C. §§ 1957 and 2(b). The Indictment also contained a forfeiture allegation. On September 16, 2011, Brown and Smith pled guilty to Count 16. Defendant elected to proceed to trial. On March 19, 2012, a jury trial on Counts 1 through 22 of the Indictment commenced. On April 9, 2012, at the close of the government’s evidence, the government
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moved to dismiss Counts 14 and 15, and the court granted the motion. Defendant moved for a judgment of acquittal on the remaining counts, which the court denied. On April 11, 2012, at the close of all of the evidence, Defendant again moved for a judgment of acquittal on the remaining counts, which the court again denied. On April 13, 2012, the jury returned guilty verdicts on Counts 1 through 13 and 16 through 22. On May 2, 2012, Defendant filed the Motion for Judgment of Acquittal and Motion for New Trial. On May 17, 2012, the government filed a Resistance (docket no. 271) to the Motion for Judgment of Acquittal and a Resistance (docket no. 273) to the Motion for New Trial. On June 13, 2012, Defendant filed a Reply (docket no. 292) to the Resistance to the Motion for Judgment of Acquittal. On June 14, 2012, Defendant filed a Reply (docket no. 293) to the Resistance to the Motion for New Trial. The Motions are fully submitted and ready for decision. III. RELEVANT TRIAL EVIDENCE1 Viewed in the light most favorable to the government, the trial evidence is as follows: A. Players Defendant is an attorney in the St. Louis, Missouri, area and he is also an American Anglican Bishop. Brown is an attorney in the Kansas City, Kansas, area. Smith is a real estate developer in England. (“Distinctive Properties”). B. Scheme to Defraud From approximately 1999 to 2010, Defendant organized and operated a fraudulent loan program that induced individuals to loan money to Smith and Distinctive Properties Smith owns Distinctive Properties (UK) Limited
When relevant, the court relies on and discusses additional facts in conjunction with its analysis of the law.
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for purported land purchases in England. The loan program was known as the “British Lending Program,” or BLP. 1. Beginning In the late 1990s, an Englishman named Kevin Cooper began soliciting funds to loan to Mark, Gilbert, Morse (“MGM”), a solicitor firm in England that needed working capital. Cooper presented the investment opportunity to Brown, and Brown and his family ultimately invested. In late 1999, Brown, who had previously met Defendant at a continuing legal education program, told Defendant about the investment. Defendant indicated that he wished to present the opportunity to his clients. Together, Brown and Defendant drafted a memorandum describing the investment opportunity, which Defendant intended to use when marketing the opportunity to clients. At trial, Brown testified that the memorandum falsely represented that the loans were secured by real property. In the beginning, the investment program, which ultimately became the BLP, included several borrowers, including MGM, JMJG, Symmtrex and Smith. Eventually, Smith became the primary borrower in the BLP. 2. Operations In general terms, the BLP operated by using new investors’ funds to pay interest and principal to other investors. Defendant sought out potential lenders through family and friends, his church and a St. Louis establishment known as the Racquet Club. The BLP offered, for the most part, one-year loans. The interest rates on the loans were high; on average, between 17.5% and 25%, although some loans offered rates as high as 48%. Defendant made numerous false representations to potential lenders, including, for example, that the purpose of the loan was to invest in land in England; the investment had little to no risk because the borrower had more than sufficient assets to cover his liabilities; and the laws in England were specially suited to allow a lender to collect on a defaulted loan quickly and efficiently.
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A lender could make either a cash investment or could invest funds through his or her Individual Retirement Account (“IRA”). After a lender made an investment, the lender would receive, by mail, a loan agreement, which described the terms of the loan. After receiving a new lender’s investment, either Defendant or Brown deducted a fee, which was split between Defendant, Brown, Cooper and any “recruiters,” such as Hal Millsap, Roland Baer or Sharon Cobb, who were involved in soliciting the new lender. After fees were deducted, the remaining balance of a new investment was primarily used to pay interest or principal to other investors. Although the program was marketed as the “British” Lending Program, very little money actually crossed the Atlantic—Smith testified at trial that he received little money from the program and he sent no money back to the United States. When a loan matured, Defendant encouraged the lender to rollover the loan, at which point additional fees were deducted. The evidence at trial focused on four areas: (1) IRA loans; (2) marketing materials; (3) loan agreements; and (4) fees. The court shall summarize each in turn. a. IRA loans Defendant solicited loans from IRAs because individuals who made loans from IRAs generally made long-term loans that they renewed annually. This delayed the demand for return of the principal or interest payments. By law, a person using an IRA must have an IRA custodian. Thus, IRA investments in the BLP required a slightly different procedure. First, the lender made a contribution to his or her IRA. That money would be transferred to the custodian of the IRA, and the custodian would then purchase a promissory note or a loan agreement. The money would then be transferred to Defendant or Brown’s account, at which point Defendant or Brown deducted fees and applied the funds just as they would a cash investment. Prior to June 2008, Millennium Trust Company (“Millennium”) served as the custodian for IRA loans in the BLP. Around June 2008, Millennium implemented a new
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policy regarding rollover loans. Under this new policy, prior to any reinvestment of IRA funds in the BLP, Millennium required “receipt of all money due on the note on the maturity date and . . . the original new note.” Government Exhibit 1308 at 1. This new policy posed a problem for the BLP because there was not enough cash in the program to cover such demands. Due to this problem, Defendant sought out a new IRA custodian. On June 2, 2008, Defendant and Paul Vogel, another individual involved in the BLP, met with Marly Gurley, the Senior Vice President and Trust Counsel for Enterprise Bank and Trust (“Enterprise”), to discuss transferring approximately fifty IRAs to Enterprise’s custody. During this meeting, Gurley learned that the purpose of the loans to Distinctive Properties was to purchase real estate in the United Kingdom. Gurley questioned the high interest rate, but she was assured that, despite the real estate collapse in the United States, it was a good time to invest in real estate in the United Kingdom. Following this meeting, Enterprise became the new IRA custodian. Shortly after Enterprise became the new custodian, lenders who had invested their IRAs in the BLP received a letter, which was on Martin T. Sigillito Associates, LTD. letterhead, explaining that “lines of communication” between Millennium and Defendant’s office had broken down and, as a result, Defendant’s office was “strongly urging” lenders to transfer their accounts to Enterprise. Government Exhibit 2568 at 1. Despite Enterprise’s higher administration fee, many lenders initiated the transfer. As custodian, Enterprise performed various duties, including receiving and posting interest payments, making distributions at the direction of its customers and reporting IRS tax information. Also as part of its custodial duties, Enterprise mailed statements to BLP lenders who had their IRAs in Enterprise’s custody. These statements showed the amount loaned, the interest rate and the maturity date for each loan.
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When discussing the program with some lenders, Defendant used marketing materials that were prepared by various individuals, including Brown and Baer, and included his input. These marketing materials contained numerous false representations regarding, among other things, the risk of the loan and the ease of collecting on a defaulted loan. For example, a May 2005 brochure described the purpose of the program as “British real estate-related, either development or redevelopment or rehabilitation of English properties.” Government Exhibit 1115 at 1. According to that brochure, “No [b]orrower is eligible for any loan unless the collateral he offers is more than twice the value of the loan,” and each loan is secured by all of a borrower’s underlying assets, “down to one’s last cufflink.” Id. at 3. As of May 2005, Smith was the only borrower left in the program, and both Smith and Brown testified at trial that Smith did not have this promised asset-to-liability ratio. Another brochure made similar representations regarding Smith’s financial state. This brochure further provided that, not only were the loans secured by Smith’s assets, but a lender could also easily collect on a defaulted loan because “British law is so ‘pro-lender’ versus other countries like the U.S.[;] it allows the lender the confidence to know that if the borrower misses an interest payment, the asset seizure is commenced immediately and assets are sold and monies returned to the borrower within 60 days.” Government Exhibit 1368 at 5. The brochure described the “WORST case scenario” as Smith defaulting on the loan and the lender waiting sixty to ninety days to receive his or her loan principal, along with accrued interest. Id. at 6. However, at trial, Giles Wheeler, a solicitor in Britain, testified that British law was not, in fact, “pro-lender” and that, under British law, it is extremely unlikely to collect on a defaulted loan within sixty to ninety days.
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After a lender invested in the program, he or she would receive a loan agreement. In the earlier years, after a lender made an investment, Brown’s office would prepare an indication of loan terms, which was then sent to Swinburne & Jackson, a solicitor firm in England. Swinburne & Jackson prepared the loan agreement and then sent the agreement to Smith, who would sign the agreement and send it back to Swinburne & Jackson. Swinburne & Jackson then sent the loan agreement to Brown, who forwarded it onto Defendant or another recruiter. In the first few years of the program, Defendant kept the loan agreements in his office. However, that practice changed over time and, eventually, Defendant began mailing the loan agreements to the lenders. By the end of the program, however, Swinburne & Jackson was no longer involved in preparing the loan agreements. Instead, Defendant directed his secretary, Elizabeth Stajduhar, to prepare the loan agreements. Despite the fact that the agreements were being prepared by Defendant’s office, the agreements still initially listed Swinburne & Jackson as the solicitor and Defendant directed Stajduhar to print the agreements on A4 paper, a particular length of paper not typically used in the United States, to give the appearance that the loan agreements had been prepared in the United Kingdom. In the later years, Defendant also stopped sending loan agreements to Smith, as Swinburne & Jackson had done in the earlier years. Instead, as Stajduhar testified, she would send a large lot of signature pages to Smith, who would sign the signature pages and return them to Defendant’s office. Stajduhar would then prepare a loan agreement and attach a signature page without ever sending the entire loan agreement to Smith in England. Each loan agreement described Distinctive Properties as the “Borrower” and Smith as the “Surety.” E.g., Government Exhibit 1708 at 2. The loan agreement specifically stated that Smith and Distinctive Properties borrowed the money “for the business purposes of the Borrower.” E.g., id. At trial, lenders testified that, based on Defendant’s
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representations, they understood their funds were sent to Smith in England to purchase real properties. Each loan agreement included an “Asset & Liabilities Statement,” which it referred to as “[t]he Schedule.” E.g., id. In the loan agreement, the “Surety,” Smith, represented and warranted that “the Schedule is a true, accurate and current statement of his assets and liabilities.” E.g., id. at 6. However, as Smith testified at trial, these Asset & Liabilities Statements substantially overstated Smith’s assets and understated his liabilities. d. Fees After receiving a lender’s investment, either Defendant or Brown would deduct a fee, which was a certain percentage of the loan, pursuant to a Fee Deduction Authority (“FDA”) signed by Smith. The fee was divided either three or four ways. Defendant, Brown and Cooper each received one-fourth of the fee. If another recruiter had solicited the lender, the recruiter would get the remaining one-fourth. If Defendant, Brown or Cooper had solicited the loan, that individual would get the remaining one-fourth. There were three points at which fees were deducted: (1) when the lender first made the loan; (2) if the lender rolled over the loan; and (3) if the lender redeemed the loan when it matured—the so-called back-end fee. Stajduhar, Defendant’s secretary, prepared spreadsheets that tracked the fees. Stajduhar testified that, for many of the years of the BLP, the fee was 32% of the loan amount. Defendant told some investors that he received a fee for his services in the BLP. For example, Phillip Rosemann, one of the investors in the program, testified that Defendant had disclosed that he received a finders fee; however, Defendant represented that this fee was paid by the borrower and that 100% of Rosemann’s investment went to the borrower in England. Other investors were not aware of any fees at all. Charles Davis, one of the investors in the program, testified that he would not have invested in the program had he been aware of the fees.
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By approximately June 2009, most of the loans in the program were in default. When lenders requested their overdue interest payments or principal, Defendant gave various excuses as to why the payments were late and assured lenders that payment was forthcoming. For example, on February 22, 2010, Defendant emailed a concerned lender, Kim Walker, and told her that the funds had been delayed because of “banking/exchange control issues” and lamented that “[s]uch is the world of international funding/transfers now.” Government Exhibit 394 at 1. Over a month later, Walker still had not received her funds. Once again, Defendant emailed Walker; this time, Defendant cited various reasons why her funds were still delayed, including a “shortfall in a third-party payment to the borrow[er],” “delays in other matters, primarily as a result of political (i.e., in Israel and Palestine) and unrelated economic events.” Government Exhibit 401 at 2. Walker replied: “Marty, I’m tired of chasing you for our money and more importantly, I’m tired of you ignoring me.” Id. at 1. Rosemann, another lender, was also growing frustrated by delayed payments. In March 2010, after a number of unsuccessful attempts to have Defendant begin legal action on his behalf, Rosemann filed suit against Smith for breach of contract. Defendant contacted Rosemann’s attorney on numerous occasions and requested that he dismiss the lawsuit. Defendant cited concerns that refinancing efforts would fail if a lawsuit “appear[ed] on the public record.” Government Exhibit 2894 at 1. As Rosemann’s attorney continued to investigate, Stajduhar, Defendant’s secretary, became increasingly concerned about the state of the BLP. In the spring of 2010, Stajduhar hired an attorney, who reached out to law enforcement on her behalf. On May 19, 2010, Stajduhar met with the Federal Bureau of Investigation (“FBI”) and the United States Attorneys Office. Following the meeting with Stajduhar, the FBI obtained a search warrant for Defendant’s office. On May 24, 2010, the FBI executed the warrant.
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Defendant was present on the day of the search and met with two FBI agents. During this meeting, Defendant made various statements regarding BLP operations, including that new investors’ money was “sometimes” used to pay back old investors; that 90% of Rosemann’s substantial investment had gone to pay back old investors; that, over the course of the BLP, Smith had received less than $1 million; and that Smith had never sent money back to the United States. Between 2000 and the time the BLP collapsed in 2010, Defendant defrauded approximately 140 individuals out of at least $50 million. See Government Exhibit 102 at 3. Due to limited bank record availability, many of the FBI-prepared financial summaries focused on the 2003 to 2010 period. Between 2003 and 2010, lenders invested approximately $42 million into the program. See Government Exhibit 118 at 1. Of that amount, Smith received only $2.7 million, Brown netted approximately $1.4 million, Defendant netted approximately $6.3 million and approximately $27.9 million was disbursed to other lenders. Id. IV. MOTION FOR JUDGMENT OF ACQUITTAL A. Legal Standard Federal Rule of Criminal Procedure 29 provides that “the court on the defendant’s motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). Such a motion is permitted after trial, in which case the court may set aside the verdict and enter a judgment of acquittal. Id. at 29(c). It is well-settled that jury verdicts are not lightly overturned. See, e.g., United States v. Peneaux, 432 F.3d 882, 890 (8th Cir. 2005); United States v. Stroh, 176 F.3d 439, 440 (8th Cir. 1999). The court must view the evidence in the light most favorable to the government and give the government the benefit of all reasonable inferences. United States v. Peters, 462 F.3d 953, 957 (8th Cir. 2006). The court must uphold the jury’s verdict so long as a reasonable-minded jury could have found the
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defendant guilty beyond a reasonable doubt. Id. Moreover, the court “must uphold the jury’s verdict even where the evidence ‘rationally supports two conflicting hypotheses’ of guilt and innocence.” Id. (quoting United States v. Serrano-Lopez, 366 F.3d 628, 634 (8th Cir. 2004)). It is not the province of the court to evaluate the credibility of witnesses. United States v. Hayes, 391 F.3d 958, 961 (8th Cir. 2004). That task is for the jury. Id. B. Analysis In the Motion for Judgment of Acquittal, Defendant contends: (1) there is insufficient evidence to sustain the jury’s guilty verdicts on Counts 10 through 13, which charged Defendant with mail fraud, because the government failed to prove that Defendant caused the mailings at issue and that the mailings were in furtherance of the scheme to defraud; and (2) there is insufficient evidence to sustain the jury’s guilty verdicts on all counts because the government failed to prove that Defendant had the requisite intent to defraud. The court shall address each argument in turn. 1. Insufficient evidence of mail fraud Counts 10 through 13 charged Defendant with mail fraud arising out of the mailing of Enterprise statements to BLP lenders. In the Motion for Judgment of Acquittal, Defendant argues that these mailings were not caused by Defendant and were not made in furtherance of the scheme to defraud. Specifically, Defendant argues that the statements were not “part of the execution of the alleged fraud” because Enterprise mailed them after the lenders had already made the loans. Motion for Judgment of Acquittal at 2. Furthermore, Defendant contends that the statements were “routine mailings” that would have been made “regardless of the BLP.” Id. (emphasis omitted). For the reasons stated by the government in its Resistance to the Motion for Judgment of Acquittal, the court finds Defendant’s arguments to be without merit. “To establish mail fraud, the government must prove: ‘(1) a scheme to defraud by means of material false representations or promises, (2) intent to defraud, (3) reasonable
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foreseeability that the mail would be used, and (4) [that] the mail was used in furtherance of some essential step in the scheme.’” United States v. Bryant, 606 F.3d 912, 917 (8th Cir. 2010) (footnote omitted) (quoting United States v. Parker, 364 F.3d 934, 943 (8th Cir. 2004)). “Mailings which are designed to lull victims into a false sense of security, postpone inquiries or complaints, or make the transaction less suspect are mailings in furtherance of the fraudulent scheme under the mail fraud statute.” United States v. Tackett, 646 F.2d 1240, 1243 (8th Cir. 1981); see also United States v. Fiorito, 640 F.3d 338, 348 (8th Cir. 2011) (“[M]ailings which occur after the receipt of goods obtained by a fraudulent scheme are within the statute if they were designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailings had taken place.” (quoting United States v. Lane, 474 U.S. 438, 451-52 (1986)) (internal quotation marks omitted)), cert. denied, 132 S. Ct. 1713 (2012). A defendant causes a mailing if the defendant “does an act with the knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not actually intended.” United States v. French, 88 F.3d 686, 688 (8th Cir. 1996) (citing Pereira v. United States, 347 U.S. 1, 8-9 (1954)). In this case, the evidence at trial established that Defendant solicited IRA investments because of their long-term nature. An IRA requires a custodian and, prior to 2008, Millennium served as the custodian for IRAs invested in the BLP. When Millennium implemented a new policy requiring that loan money be returned to the account before it could be rolled over into a new loan, Defendant sought out another custodian, Enterprise. In its role as custodian, Enterprise sent to each individual lender a monthly statement that summarized the lender’s investment. A reasonable jury could find that, although Defendant did not personally mail the statements, it was reasonably foreseeable that Enterprise would mail such statements. See French, 88 F.3d at 688.
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Thus, the court finds that there is sufficient evidence that Defendant caused the mailings at issue in Counts 10 through 13. Furthermore, a reasonable jury could find that these statements were intended to reassure lenders that their funds were invested as promised and that they were safe. See Tackett, 646 F.2d at 1243. As the government notes in its Resistance to the Motion for Judgment of Acquittal, “these periodically mailed statements provided objective documentation and a reasonable belief on the part of unsophisticated investors, sent from an apparently reputable and independent source, that the loans to Smith existed and that their investments were growing.” Resistance to Motion for Judgment of Acquittal at 3. Thus, the court finds that there is sufficient evidence that the mailings at issue in Counts 10 through 13 were in furtherance of the fraudulent scheme. In the Motion for Judgment of Acquittal, Defendant cites two cases that he contends are indistinguishable from the instant case: United States v. Pintar, 630 F.2d 1270 (8th Cir. 1980), and United States v. Kwiat, 817 F.2d 440 (7th Cir. 1987). The court disagrees. In Pintar, one of the defendants was convicted of mail fraud that arose out of a scheme in which the defendant directed secretarial staff, who were funded by federal grants, to improperly perform political activities during office hours. 630 F.2d at 1275, 1276-77. The mail fraud charges came about as a result of the defendant’s mailing of paperwork that requested funding for the secretarial positions. Id. at 1279. The Eighth Circuit Court of Appeals held that there was insufficient evidence that the mailings were in furtherance of any scheme to defraud. Id. at 1280. Specifically, the Eighth Circuit noted that there was no indication that the mailings were made in anticipation of the fraud; rather, they “were separate acts completed independent of the diversion of secretarial time for political activity.” Id. The instant case is distinguishable. Here, although the mailed statements were separate from the fraud, a reasonable jury could find that the statements furthered the scheme because they were intended to lull the lenders into believing their investments were safe, thereby encouraging lenders to reinvest.
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The Kwiat case is likewise distinguishable. In that case, the defendants, who were directors of an FDIC-insured bank, arranged for the bank to make a series of improper loans secured by mortgages, which ultimately caused the bank’s shareholders to lose a considerable amount of money. Kwiat, 817 F.2d at 442. The defendants were found guilty of mail fraud. Id. at 443. The mailings at issue were the recorded mortgage deeds, sent from the recorder of deeds to the bank. Id. The Seventh Circuit held that the mailings were not in furtherance of the scheme because the mailings did not make the fraud possible or facilitate it. They did not help [the defendants] rake in money from the [b]ank; they did not reduce the quality of intangible services [the defendants] supplied to the [b]ank; they did not help [the defendants] hide their delicts or postpone the day of reckoning. The mailings [were] offshoots of the loans, but honest services would have produced the same sort of mailings. Id. at 443-44. In the instant case, however, the mailings from Enterprise did facilitate the fraud and “postpone the day of reckoning.” Id. As noted above, a reasonable jury could find that the Enterprise mailings facilitated the fraud by assuring lenders that their funds were safe, thereby lulling lenders into a false sense of security and encouraging them to rollover their loans. Thus, in view of the foregoing, the court finds that a reasonable jury could find that the Enterprise mailings were caused by Defendant and were in furtherance of the scheme to defraud. Thus, the court shall deny Defendant’s Motion for Judgment of Acquittal to the extent it seeks relief on this ground. 2. Insufficient evidence of intent to defraud Next, Defendant argues that there is insufficient evidence to sustain the jury’s guilty verdicts on all counts because the government failed to prove that Defendant had the requisite intent to defraud. Defendant contends that “[t]he evidence submitted clearly establishes that Defendant believed in and relied on the representations made to him by
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Brown, Cooper and Smith in making statements to lenders regarding the BLP.” Motion for Judgment of Acquittal at 4. Specifically, Defendant points to the fact that he invested his own money in the BLP; he encouraged his mother to invest her money in the BLP; he did not pull his own investment out of the BLP “when difficulties arose in 2009”; he “spent well in excess of a million dollars to try to keep the BLP solvent”; he cooperated with the FBI; and, finally, he “testified in his own behalf and affirmatively stated he did not intend to defraud anyone.” Id. at 4-5. “Intent is an essential element of both wire fraud and mail fraud.” United States v. Louper-Morris, 672 F.3d 539, 556 (8th Cir. 2012).2 “‘Intent to defraud may be inferred from all the facts and circumstances surrounding the defendant’s actions.’” United States v. Farrington, 499 F.3d 854, 859 (8th Cir. 2007) (quoting United States v. Schumacher, 238 F.3d 978, 980 (8th Cir. 2001)); accord Louper-Morris, 672 F.3d at 556. In this case, the court finds that there is overwhelming evidence of Defendant’s intent to defraud. The trial evidence established that Defendant knowingly made numerous false representations to individuals to induce them to invest money in the BLP. Significantly, Defendant told potential lenders that Smith’s assets amounted to twice his liabilities and, in the event of default, the laws in Britain were specially suited to protect lenders’ interests. Furthermore, Defendant told potential lenders that the purpose of the loan was to purchase real estate in England. In fact, after Defendant or Brown deducted fees from new investments, the remaining balance was largely used to pay interest and principal to other lenders. A reasonable jury could find from the evidence that Defendant not only knew that the loan money was not sent to England, but that he himself directed how incoming loan money was to be spent. Additionally, as discussed in more detail Defendant is charged with mail fraud, wire fraud, conspiracy to commit mail and wire fraud and money laundering predicated on the mail and wire fraud counts. Thus, intent to defraud is an element of each offense of which Defendant was charged and found guilty.
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above, Defendant took steps to avoid being detected by finding an alternate custodian when Millennium implemented a new policy regarding rollover loans. Finally, a reasonable jury could conclude that Defendant continued to operate this fraudulent scheme to collect fees, which he used to support a lavish lifestyle. Defendant points to the fact that he invested his own money and his mother’s money in the BLP as evidence that he lacked the requisite intent to defraud. As the government notes in its Resistance to the Motion for Judgment of Acquittal, however, Defendant collected fees on his own investment, he “profited far in excess of the amount he purportedly ‘loaned’ to the BLP” and he used the fact that he invested in the program as a marketing tool. Resistance to Motion for Judgment of Acquittal at 6. Even if his investment in the BLP is some proof that he believed the BLP would ultimately be successful, that alone does not necessarily indicate that he lacked the requisite intent to defraud. See United States v. Bailey, 327 F.3d 1131, 1143 (10th Cir. 2003) (“[A]n honest belief by [the defendant] that everything would work out does not establish a good faith defense.”); United States v. Mabrook, 301 F.3d 503, 509 (7th Cir. 2002) (“[The defendant’s] good-faith belief that [his company] would eventually be successful is not relevant because that belief did not negate the falsity of his representations to his investors.”). Defendant’s contention that there is insufficient evidence of intent to defraud because he testified on his own behalf and “affirmatively stated he did not intend to defraud anyone” is also without merit. Motion for Judgment of Acquittal at 5. As demonstrated by the jury’s guilty verdicts, the jury did not find Defendant’s testimony credible, and the court may not disturb the jury’s assessment of a witness’s credibility. See United States v. Engler, 521 F.3d 965, 973 (8th Cir. 2008) (“A district court must consider a motion for judgment of acquittal with ‘very limited latitude’ and must neither assess the witnesses’s credibility nor weigh the evidence.” (quoting United States v.
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Johnson, 474 F.3d 1044, 1048 (8th Cir. 2007))); see also United States v. Bradley, 643 F.3d 1121, 1125 (8th Cir. 2011) (“[The defendant’s] arguments are properly characterized as attacks on the jury’s credibility determinations, which are ‘virtually unassailable on appeal.’” (quoting United States v. Samuels, 611 F.3d 914, 917 (8th Cir. 2010), cert. denied, 131 S. Ct. 1583 (2011))). Thus, the court finds that a reasonable jury could find that Defendant had the requisite intent to defraud. The court further finds that the remaining elements of mail fraud, wire fraud, conspiracy to commit mail and wire fraud and money laundering are satisfied. Therefore, the court shall deny Defendant’s Motion for Judgment of Acquittal to the extent it seeks relief on this ground. C. Summary For the foregoing reasons, the court finds that there is sufficient evidence to support the jury’s guilty verdicts on Counts 1 through 13 and 16 through 22. Accordingly, the court shall deny the Motion for Judgment of Acquittal. V. MOTION FOR NEW TRIAL A. Legal Standard Federal Rule of Criminal Procedure 33 provides that, “[u]pon the defendant’s motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires.” Fed. R. Crim. P. 33(a). A district court is granted broad discretion in considering a motion for a new trial. Peters, 462 F.3d at 957. A district court may “weigh the evidence, disbelieve witnesses, and grant a new trial even where there is substantial evidence to sustain the verdict.” United States v. Campos, 306 F.3d 577, 579 (8th Cir. 2002) (quoting White v. Pence, 961 F.2d 776, 780 (8th Cir. 1992)) (internal quotation mark omitted). However, the court “should grant a new trial only if ‘the evidence weighs heavily enough against the verdict that a miscarriage of justice may have
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occurred.’” Peters, 462 F.3d at 957 (quoting United States v. Rodriguez, 812 F.2d 414, 417 (8th Cir. 1987)). A district court enjoys more latitude in granting new trials under Rule 33 than in granting motions for judgment of acquittal under Rule 29; however, “[m]otions for new trials based on the weight of the evidence are generally disfavored.” Campos, 306 F.3d at 579. District courts “must exercise the Rule 33 authority ‘sparingly and with caution.’” Id. (quoting United States v. Lincoln, 630 F.2d 1313, 1319 (8th Cir. 1980)). The court’s standard of review differs from the standard that is applied to a motion for judgment of acquittal. When a motion for new trial is made on the ground that the verdict is contrary to the weight of the evidence, the issues are far different from those raised by a motion for judgment of acquittal. The question is not whether the defendant should be acquitted outright, but only whether he should have a new trial. The district court need not view the evidence in the light most favorable to the verdict; it may weigh the evidence and in so doing evaluate for itself the credibility of the witnesses. If the court concludes that, despite the abstract sufficiency of the evidence to sustain the verdict, the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred, it may set aside the verdict, grant a new trial, and submit the issues for determination by another jury. Lincoln, 630 F.2d at 1319; see also Johnson, 474 F.3d at 1050-51 (reiterating applicable standard). B. Analysis In the Motion for New Trial, Defendant contends that a new trial is warranted on the grounds that: (1) “Defendant was denied his Fifth Amendment right to due process as a result of sustained governmental misconduct”; (2) Defendant was denied his Sixth Amendment right to counsel; (3) the court improperly restricted Defendant’s crossexamination of government witness Mary O’Sullivan; and (4) the evidence preponderates
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heavily against the verdicts. Motion for New Trial at 1, 6, 7, 8. The court shall address each argument in turn.3 1. Due process rights In the Motion for New Trial, Defendant identifies various examples of governmental misconduct and contends that the “collective impact of the government’s misconduct” resulted in a violation of his due process rights, thereby necessitating a new trial. Reply to Resistance to Motion for New Trial at 7-8. “If prosecutorial misconduct allegedly has occurred, a reviewing court looks into its prejudicial impact by assessing the cumulative effect of the misconduct, determining if the court took any curative actions, and gauging the strength of the evidence against the defendant in the context of the entire trial.” French, 88 F.3d at 689. The court will begin by reviewing the alleged instances of governmental misconduct, both during trial and pretrial. Because the court finds that Defendant has failed to establish even a single instance of governmental misconduct, the court need not address the cumulative impact. a. Governmental misconduct during trial Defendant identifies six alleged instances of governmental misconduct during trial. The court shall address each alleged instance in turn.
In the Reply to the Resistance to the Motion for New Trial, Defendant raises a number of new arguments, including that the government knowingly elicited false testimony from Michael Becker, Brown and Smith; the government should have investigated any foreign bank accounts used by Brown and Smith; the United States Attorneys Office for the Eastern District of Missouri should have recused itself completely; and the court erred by instructing the jury on willful blindness. The court, however, need not consider new arguments raised in a reply. United States v. Barraza, 576 F.3d 798, 806 n.2 (8th Cir. 2009) (“Arguments raised for the first time in a Reply Brief need not be addressed.”). Furthermore, the court notes that each new argument does not present a sufficient basis to grant relief.
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Presentation of false testimony
“The prosecution may not solicit perjured testimony to secure a conviction or allow testimony that it knows is false to remain uncorrected.” United States v. Milk, 447 F.3d 593, 601 (8th Cir. 2006) (citing United States v. Martin, 59 F.3d 767, 770 (8th Cir. 1995)). “To establish a constitutional violation arising from the use of false testimony, ‘the testimony must have been perjured, the government must have known it was, and there must have been a reasonable likelihood that the perjured testimony affected the jury’s determinations.’” Id. (quoting United States v. Boone, 437 F.3d 829, 840 (8th Cir. 2006)); see also United States v. Tierney, 947 F.2d 854, 860-61 (8th Cir. 1991) (discussing the different standard that applies when the government innocently uses perjured testimony). Defendant contends that the government knowingly presented false testimony when Stajduhar testified on direct examination that she took only $12,000 from the “ACH account.” Motion for New Trial at 1. Defendant contends that the testimony was false because, in fact, Stajduhar took approximately $81,000 from the account between August 2009 and March 2010. In the Resistance to the Motion for New Trial, the government contends that Stajduhar did not falsely testify and that Defendant has taken her testimony out of context. Upon review of the record, the court agrees with the government that Stajduhar’s testimony was not false. The evidence at trial established that the ACH account was an automatic bank transfer account managed by Michael Houston, an accountant in Arkansas. The ACH account was used solely to pay interest to BLP lenders. In the later years of the BLP, Houston relied on Stajduhar to inform him of who was to receive payment, the amount the person was to receive and the frequency of the payment. By March 2010, Stajduhar was preparing for the collapse of the BLP. Stajduhar wished to hire an attorney, but she did not have the funds to do so. Thus, Stajduhar directed Houston to send her
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$12,000, which she considered to be a partial repayment of the money that she had invested in the BLP. At no time did Stajduhar represent that this was the only time she directed Houston to send her money nor did she represent that the $12,000 was the total amount of money she took from the ACH account. Thus, the court finds that Stajduhar did not falsely testify regarding the amount of money she took from the ACH account. Even if Stajduhar’s testimony on direct examination was incomplete, Defendant extensively cross-examined Stajduhar regarding the total amount of money she took from the ACH account. Defendant introduced into evidence five emails in which Stajduhar directed Houston to send her different amounts of money, including requests for $34,631.30, $9,764.22, $9,750, $9,760.30 and $12,879.25. In response to one of Defendant’s questions on cross-examination, Stajduhar testified that, between August 2009 and March 2010, she took a total of $81,000 from the ACH account. Thus, Defendant had a sufficient opportunity on cross-examination—an opportunity of which he took full advantage—to clarify the total amount of money Stajduhar took from the ACH account.4 Accordingly, the court finds that the government did not elicit false testimony and, furthermore, Defendant had a full and fair opportunity to question Stajduhar regarding the amount of money she took from the ACH account. ii. References to Bernard Madoff During the course of the trial, four witnesses made reference to Bernard Madoff. First, Stajduhar testified that, in 2008, there was media coverage regarding the Madoff Ponzi scheme, and she asked Defendant how the BLP was different from what Madoff did. At trial, Defendant did not object to this reference to Madoff. Second, Cobb testified that her mother, an investor in the BLP, was worried because one of her quarterly distributions The court notes that the jury also heard extensive testimony regarding the $300,000 Stajduhar stole from Defendant between 2005 and 2008. Stajduhar took that money from the office operating account. Thus, the jury had ample evidence that Stajduhar had repeatedly stolen money from Defendant and the BLP.
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was late. Cobb emailed Defendant: “My mother is freaking out that something has happened to her money[;] with all the Madoff garbage she has become a bit concerned.” Government Exhibit 1950 at 1. Cobb also testified that she asked Defendant how the BLP was different than the Madoff scheme. Once again, Defendant did not object to this reference to Madoff. Third, Paula Fielder testified that she had jokingly given Defendant a nickname, “Bernie,” in reference to the Madoff scheme. When the government asked Fielder what connection she had drawn between the Madoff case and Defendant, Defendant objected under Federal Rules of Evidence 401 and 403. The court sustained the objection and told the jury that all references to Madoff were stricken and should be disregarded. Finally, the same day that Paula Fielder testified, another government witness, Mark Bernstein, made reference to Madoff. Bernstein was a BLP investor and, in the spring of 2009, two of his loans were due to mature. The government asked Bernstein whether, at that time, he intended to rollover the loans. Bernstein responded that he had some hesitations regarding reinvesting the money and mentioned that, around that time, the Madoff scheme was in the news. Defendant objected. The government stated it would redirect the question and the court once again told the jury that it should ignore any reference to Madoff. In the Motion for New Trial and the Reply to the Resistance to the Motion for New Trial, Defendant concedes that he did not object to the first two references to Madoff. Defendant’s argument, apparently, centers around the last two references to Madoff. Although it is unclear from Defendant’s Motion for New Trial and his Reply to the Resistance to the Motion for New Trial, it appears that Defendant’s argument is twofold: (1) the prejudicial nature of the reference warrants a new trial5; and (2) the government
Defendant includes this argument within his discussion of governmental misconduct. Although it does not implicate Defendant’s Fifth Amendment due process rights, the court finds it appropriate to address the argument in conjunction with its
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engaged in misconduct by eliciting such testimony, “despite the court’s admonition and the obvious prejudicial nature of the elicited testimony,” Reply to the Resistance to Motion for New Trial at 7. The court shall address each argument in turn. First, the court finds that Defendant is not entitled to a new trial on the basis of the prejudicial impact of the Madoff references. “[T]he admission of a prejudicial statement is ordinarily cured by striking the testimony and instructing the jury to disregard the remark.” United States v. Urick, 431 F.3d 300, 304 (8th Cir. 2005) (quoting United States v. Coleman, 349 F.3d 1077, 1087 (8th Cir. 2003)) (internal quotation marks omitted). “However, even if a curative instruction is given, . . . [the court] must evaluate whether a curative instruction was sufficient in the context of the entire trial, and weigh the prejudice against the strength of the government’s evidence.” Id. In this case, following each of the last two references to Madoff, Defendant objected and the court immediately struck the testimony and instructed the jury to disregard the remark. Furthermore, the court notes that Defendant’s trial lasted eighteen days and, over the course of those eighteen days, thirty-eight witnesses testified and over 1,000 exhibits were admitted. In the context of the entire trial, the prejudicial impact of the isolated references to Madoff was minimal, particularly in light of the overwhelming evidence of Defendant’s guilt. Given this minimal prejudicial impact, the court’s curative action was sufficient, especially considering that there is nothing in the record that suggests the jury ignored the court’s directive to disregard all references to Madoff. Second, the court finds that the government did not engage in misconduct when Fielder and Bernstein referenced Madoff. Defendant was on notice long before trial began that the government intended to present evidence that would involve reference to Madoff. For example, Government Exhibit 1950 explicitly referred to Madoff. Defendant,
analysis regarding the alleged governmental misconduct.
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however, did not make any motion to exclude such evidence. Furthermore, Defendant did not object the first two times the government elicited testimony that referenced Madoff. When Defendant did object, the court agreed that the reference was highly prejudicial and told the jury to disregard it. It was at that point, following Fielder’s reference to Madoff, that the government was first on notice that it was not allowed to elicit such testimony. When Bernstein made reference to Madoff, the government informed the court, outside the presence of the jury, that it had not intended to elicit the reference and that Bernstein had not previously mentioned Madoff during interviews or preparations for trial. Upon review of the record, the court finds that there is no evidence that the government intended to elicit the reference to Madoff; the question itself was not improper. See United States v. Johnston, 353 F.3d 617, 624 (8th Cir. 2003) (finding that the government did not engage in misconduct when a witness, in response to a question by the government, violated the district court’s pretrial ruling, and noting that “[t]he government asked an open-ended question” and “the question itself was not improper”). The government elicited no further testimony regarding Madoff for the remainder of the trial. Thus, the court finds that the four references to Madoff, only two of which Defendant argues were improper, were not so prejudicial as to warrant a new trial and the government did not engage in misconduct. iii. Statement of personal belief Defendant next argues that, during the government’s cross-examination of him, the government attorney expressed his belief that defense witness Mindy Finan had lied during her testimony. In its Resistance to the Motion for New Trial, the government states that, “[w]ithout a specific context or a transcript citation, the [g]overnment does not know precisely what . . . [D]efendant’s basis is for this claim, as the cross-examination of . . . [D]efendant was lengthy.” Resistance to Motion for New Trial at 7.
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Upon review of the record, the court finds that the government attorney did not express a personal opinion regarding Finan’s credibility. The government cross-examined Defendant regarding Finan’s investment in the BLP. Specifically, the government asked if Defendant recalled Finan testifying that she had invested $175,000 in the BLP and that she believed her investment had been sent to Smith in England. Defendant responded that he did recall that testimony. The government next asked if Defendant had deceived his wife as to where the money was going. Defendant responded no. The government then asked how she would get that understanding of where the money went if not from Defendant. Defendant responded that he did not know. The government then stated: “She wasn’t making that up, was she?” Tr. of Defendant’s Testimony (docket no. 320) at 115. The government’s question was designed to call into question Defendant’s credibility, not Finan’s credibility. Accordingly, the court finds that the government attorney did not express a personal belief that Finan lied during her testimony. iv. Intimidation of defense witness Defendant claims that the government “consistently intimated that defense expert witness John Laughlin had committed perjury before the grand jury and would therefore necessarily have to assert his Fifth Amendment privilege on cross-examination. The [government’s] position caused Laughlin to request that he not be called as a witness on behalf of . . . Defendant.” Motion for New Trial at 2. In its Resistance to the Motion for New Trial, the government contends that it did not threaten Laughlin with prosecution for perjury. Defendant presents absolutely no evidence as to why Laughlin was not called as a witness. Defendant’s bare assertion that the government threatened Laughlin with Furthermore, Defendant has presented no evidence prosecution for perjury is insufficient. Defendant has not submitted an affidavit from Laughlin attesting to this fact. regarding the substance of Laughlin’s testimony; thus, the court cannot assess whether the
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testimony would have had any potential impact on the jury’s decision. Furthermore, Defendant never alerted the court that the government had allegedly threatened Laughlin or that Laughlin requested not to be called as a witness as a result of the government’s threats; thus, the court had no opportunity to investigate the matter and, in the event it found some sort of governmental misconduct, take any curative action. Thus, because Defendant has presented no evidence of this alleged governmental misconduct, the court finds Defendant’s argument to be unavailing. v. Allowing witnesses to discuss testimony Next, Defendant claims that witnesses were allowed to discuss their testimony with each other. Defendant requests an evidentiary hearing on the matter. For the reasons stated by the government, the court finds that this issue is without merit. Significantly, Defendant fails to link this allegation to any misconduct on the part of the government. After Defendant relayed to the court that witnesses were talking outside of the courtroom on breaks, the court instructed the government to admonish the witnesses not to speak to each other and the government contends that it did so. Furthermore, Defendant has offered no evidence that witnesses in fact discussed their testimony with each other. Defendant cross-examined one witness, Baer, regarding his conversations with other witnesses. Baer maintained that he had not discussed his testimony with any other witness. The court declines to grant Defendant an evidentiary hearing so that he may engage in a fishing expedition. vi. Structuring witness testimony Defendant claims that the government “structur[ed] witness testimony” because the factual stipulation in Brown’s plea agreement, the factual stipulation in Smith’s plea agreement and the Indictment are all similar. Motion for New Trial at 3. Defendant cites no authority in support of his argument, and the court finds his argument to be without merit. Both Brown and Smith signed their respective plea agreements, thereby agreeing
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that the factual basis was accurate. The fact the Indictment is similar to the factual basis in each plea agreement does not suggest governmental misconduct. Accordingly, the court finds no governmental misconduct on this ground. b. Governmental misconduct pretrial In the Motion for New Trial, Defendant also identifies various instances of alleged governmental misconduct that occurred pretrial, including: (1) seizing property pursuant to the July 1, 2010 search warrant without a pre-seizure hearing; (2) “attempting to influence witnesses by providing these witnesses with erroneous information”; (3) intimidating Finan “in an attempt to have her provide evidence against her husband and breed discontent in their marriage”; (4) “filing and executing search and seizure warrants that are such shams that they are defective on their face”; (5) “threatening prosecution to a member of the clergy in Texas, and possible defense witness, simply because he was attempting to raise money for [Defendant’s] defense”; (6) “threatening to speed up the return of an indictment if [Defendant] or his wife talked to ‘potential witnesses’ (lenders in the BLP), even though many of these ‘witnesses’ were friends, family, business associates and social acquaintances”; (7) “implicitly threatening defense counsel with prosecution”; (8) “seizing attorney’s fees in contravention of Department of Justice policy”; and (9) “attempting to influence witnesses in a corresponding civil case in an effort to disqualify counsel for [Defendant].” Motion for New Trial at 5-6 (emphasis omitted). Defendant contends that these acts constitute governmental misconduct and interfered with his due process rights. Defendant further contends that these acts also provide “strong evidence that the governmental misconduct during the trial was not mere negligence or mistake, but part of a consistent pattern of violating [D]efendant’s due process rights.” Id. at 6. The court finds that Defendant’s arguments are without merit. Defendant has failed to present any evidence of these nine alleged instances of governmental misconduct, he has
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failed to show how any of these acts affected his trial rights and he has cited no authority in support of his argument. Accordingly, the court finds that Defendant was not deprived of his due process rights; aside from bare allegations, there is simply no evidence of governmental misconduct, either pretrial or during trial. Therefore, a new trial is not warranted on this ground. 2. Right to counsel Next, Defendant argues that the government interfered with his choice of counsel. Specifically, Defendant argues that the government threatened to prosecute David Helfrey, one of the attorneys Defendant wished to represent him, and that various acts on the part of the government deprived Defendant of his ability to pay for the counsel of his choosing. Defendant also claims that the government acted improperly in trying to disqualify both Helfrey and Douglas Roller, the attorney that ultimately represented Defendant at trial. Defendant contends that the result of the government’s various improprieties was that Defendant was only represented by one attorney at trial and, “[t]he case should have been defended by two attorneys, particularly in light of the government having assigned three prosecutors and the Federal Defender likewise assigning three attorneys.” Motion for New Trial at 7. For the reasons set forth in the government’s Resistance to the Motion for New Trial, the court declines to grant Defendant a new trial on this basis. Significantly, Defendant has presented no evidence to substantiate his claims that the government threatened Helfrey or that the government improperly seized any property or funds. 3. Restriction of cross-examination of Mary O’Sullivan Defendant next argues that the court erred when it ruled pretrial that Defendant could not cross-examine Mary O’Sullivan, a government witness and a BLP lender, regarding her “familial relationship with a supervisor in the United States Attorney’s Office.” Motion for New Trial at 7; see also March 19, 2012 Order (docket no. 166) at
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3-4 (finding such evidence to be inadmissible under Federal Rules of Evidence 402 and 403). Defendant contends that he was deprived of his ability to demonstrate O’Sullivan’s bias and his ability to demonstrate “the reason for the government’s rush to judgment in this case.” Motion for New Trial at 8. The court finds that Defendant’s arguments are unavailing and affirms its prior ruling. Defendant has presented no evidence suggesting that O’Sullivan’s family member was involved in investigating or prosecuting this case. Accordingly, the court finds that such evidence has no impeachment value or any other relevance to this case. See Fed. R. Evid. 401 (defining relevance); Fed. R. Evid. 402 (“Irrelevant evidence is inadmissible.”). Furthermore, even if such evidence had some relevance, the court finds that its probative value is substantially outweighed by the danger of unfair prejudice and confusion of the issues. See Fed. R. Evid. 403. Accordingly, the court shall deny the Motion for New Trial to the extent Defendant argues that the court’s March 19, 2012 Order improperly restricted his right to cross-examine O’Sullivan. 4. Weight of the evidence Finally, Defendant argues that the government failed to prove Defendant had the requisite intent to defraud. For the same reasons discussed with respect to the Motion for Judgment of Acquittal, the court finds that the evidence did not “preponderate sufficiently heavily against the verdict[s].” Lincoln, 630 F.2d at 1319. The government presented overwhelming evidence of Defendant’s guilt and no miscarriage of justice occurred. Accordingly, the court shall deny the Motion for a New Trial to the extent Defendant argues that the weight of the evidence necessitates a new trial. C. Summary Thus, the court finds that the interests of justice do not require the court to grant Defendant a new trial, and, accordingly, the court shall deny the Motion for a New Trial.
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VI. CONCLUSION In light of the foregoing, Defendant’s Motion for Judgment of Acquittal (docket no. 261) and Motion for New Trial (docket no. 262) are DENIED. IT IS SO ORDERED. DATED this 7th day of August, 2012.
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