In re Bernard L. Madoff Investment Securities LLC
| Decision Date | 14 July 2021 |
| Docket Number | 20-CV-1029 (JMF) |
| Parties | In re BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Debtor. IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, and Bernard L. Madoff, Plaintiff, v. RAR ENTREPRENEURIAL FUND, LTD., Defendant. |
| Court | United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York |
As stated on the record at the pretrial conference held on July 8, 2021, the Court will issue an order no later than July 16 2021, at or about 5:00 p.m., advising whether this case will proceed to trial on July 20, 2021. If the case proceeds to trial on that date, the parties shall appear for a final pretrial conference on July 19, 2021, at 11:30 a.m., in Courtroom 1105 of the Thurgood Marshall United States Courthouse, 40 Centre Street, New York, NY. The COVID-19 protocols addressed in the Court's Order of June 29 2021, will govern that conference. See ECF No. 83.
By Order entered on July 6, 2021, the Court ruled on most of the parties' motions in limine and reserved judgment on the remainder pending oral argument and further consideration. See ECF No. 86. The Court now rules on the open motions in limine as follows.
1. Defendant's first motion in limine is DENIED subject to particularized objections at trial. With respect to the question of preclusion, the Court notes also that it is well settled that an expert witness may not offer opinions on issues of law. See, e.g., United States v Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991).
2. With respect to Defendant's motion to preclude admission of Mr. Madoff's Form BD, the Court rejects Plaintiff's contention that the contents of the form (as opposed to the blank form itself) are admissible as an SEC business record pursuant to Rule 803(6) of the Federal Rules of Evidence. First, the business records exception does not extend to the contents of a document held in the ordinary course of business where, as here, the contents were provided by a third party and the business took no steps to verify them. See United States v. Lieberman, 637 F.2d 95, 100-01 (2d Cir. 1980). Second, in light of Bernard and Peter Madoff's demonstrated history of falsifying information in SEC filings, “the source of the information” on the Form BD plainly “indicate[s] a lack of trustworthiness.” Fed.R.Evid. 803(6)(E). That said, the Court reserves judgment to trial on whether the contents of the Form can be admitted under Rule 703, as that will depend on whether Plaintiff's expert can and does lay a proper foundation for admission under the Rule. That said, the Court cautions that “a party cannot call an expert simply as a conduit for introducing hearsay.” Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 136 (2d Cir. 2013) (internal quotation marks omitted); accord United States v. Mejia, 545 F.3d 179, 197 (2d Cir. 2008). Moreover, Plaintiff cannot rely on hearsay admitted under Rule 703 as substantive evidence of the facts underlying the expert's opinion. See, e.g., United States v. Lombardozzi, 491 F.3d 61, 72 (2d Cir. 2007) (); accord Fed.R.Evid. 703 advisory committee's note to 2000 amendments.
3. As discussed on the record at the July 6, 2021 conference, Defendant's motion to strike the 2017 JPMC Custodian Declarations is GRANTED in the sense that Plaintiff will not be permitted to introduce, let alone show the jury, the declarations themselves. To the extent that Defendant also moves to preclude admission of the underlying documents, the motion is DENIED as to Declarations I, II, and IV - based on Defendants' concession that the underlying documents are authentic and qualify as business records. By contrast, it is GRANTED as to the documents underlying Declarations III and V - unless, at a minimum, Plaintiff is able to provide authority for the proposition that documents held by one entity (in this case, BLMIS) can qualify as the business records of a different entity (in this case, JP Morgan) and that Ms. Coribello, a representative of JP Morgan, is competent to demonstrate that the records meet the requirements of Rule 803(6) even though they were found in the possession of BLMIS. Additionally, Plaintiff would have to demonstrate that the circumstances of preparation - including but not limited to the fact that the documents were found in the possession of an admitted fraudulent enterprise and that copies of the documents were not found in JP Morgan's records - do not “indicate a lack of trustworthiness.” Fed.R.Evid. 803(6)(E).
1. Plaintiff's motion in limine to admit the plea allocutions of Bernard L. Madoff and Frank DiPascali, Jr. is DENIED. Under Rule 803(22) of the Federal Rules of Evidence “[e]vidence of a final judgment of conviction” is admissible as an exception to the rule against hearsay only if, as relevant here, “the evidence is admitted to prove any fact essential to the judgment.” Fed.R.Evid. 803(22) (emphasis added). At summary judgment the Court admitted the allocutions for the purpose of establishing that BLMIS had engaged in a Ponzi scheme, thus triggering the presumption of fraudulent intent, because “[t]he Madoff and DiPascali Allocutions established the elements of a Ponzi scheme as the predicate for their crimes and for the District Court's acceptance of their guilty pleas.” Picard v. RAR Entrepreneurial Fund, Ltd., No. 20-CV-1029 (JMF), 2021 WL 827195, at *8 (S.D.N.Y. Mar. 3, 2021) (quoting Sec. Inv. Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC (In re Madoff), 608 B.R. 165, 175 (Bankr. S.D.N.Y. 2019)). Now, however, Plaintiff seeks to admit the allocutions for a different purpose: to “provide sworn testimony on the structure of BLMIS as a single firm and confirm the funds at issue were customer deposits.” ECF No. 70, at 3. To the extent that the allocutions speak to those facts, however, they were not “necessarily decided by the conviction...
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