United States v. Graham
| Decision Date | 31 May 2019 |
| Docket Number | No. 16 CR. 786-2 (NSR),16 CR. 786-2 (NSR) |
| Parties | UNITED STATES OF AMERICA, v. JACQUELINE GRAHAM, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Defendant Jacqueline Graham ("Graham" or "Defendant") is charged in a one count Indictment with conspiracy to commit mail fraud, wire fraud and bank fraud in violation of 18 U.S.C. §1349. (ECF No. 2, Indictment). It is alleged that Graham, along with several co-conspirators, as partners of and/or employees of an entity identified as the Terra Foundation ("Terra"), engaged in a scheme to defraud clients of Terra and financial institutions and conspired to commit the underlying offenses of mail fraud, wire fraud and bank fraud in violation of 18 U.S.C. §§ 1341, 1343 and 1344. (Id.) Before the Court are multiple motions in limine from both the Government and Defendant seeking pre-trial rulings on evidentiary and trial procedural issues.1
For the reasons that follow, the Government's and Defendant's Motions are GRANTED in part and DENIED in part.
The Government alleges that from in or about 2011 to in or about 2012 Graham, along with several co-conspirators, solicited mortgage borrowers who were having difficulties making the payments on their loans to be clients of Terra. (Id.) Graham and her co-conspirators told potential clients that, in exchange for a fee, Terra could eliminate their mortgage debt in a three-step procedure that involved: (1) an audit, (2) a qualified written request to the client's mortgage lender, and (3) the filing of a discharge of mortgage in the local clerk's office. (Id.) Graham and her co-conspirators knew the procedure they were marketing was not authorized by law and would not actually result in the satisfaction of the clients' mortgage obligations. (Id.) Graham and her co-conspirators filed nearly sixty (60) false mortgage discharges ("False Discharges"), knowing that the mortgage debts had not been satisfied, with the county clerks in Westchester and Putnam Counties in New York and in Connecticut. (Id.) Each of the False Discharges involved a loan that had been made by a financial institution, the deposits of which were insured by the Federal Deposit Insurance Corporation or other federal deposit insurers. (Id.) The False Discharges purported to discharge the mortgages with an aggregate loan principal of over $33 million and were signed by Graham's co-conspirators, Defendants Bruce Lewis ("Lewis") and Rocco Cermele ("Cermele"). (Id.)
As payment for their services, Graham and her co-conspirators, charged their clients a monthly fee and instructed some of their clients to obtain a second or reverse mortgage secured by the properties from which the original mortgages had been fraudulently discharged. (Id.) Some of these new mortgage loans were federally-insured loans made under the Home Equity Conversion Mortgage Program ("HECM") of the United States Department of Housing and Urban Development's Federal Housing Administration. (Id.) Graham, along with her co-conspirators, retained substantial portions of the proceeds of the new mortgage loans as fees for their services. (Id.) In some instances, theDefendant and her co-conspirators collected fees from their clients for audits which did not take place. (Id.)
"A district court's inherent authority to manage the course of its trials encompasses the right to rule on motions in limine." Highland Capital Mgmt., L.P. v. Schneider, 551 F. Supp. 2d 173, 176-77 (S.D.N.Y.2008) (citing Luce v. United States, 469 U.S. 38, 41 n. 4 (1984)). An in limine motion is intended "to aid the trial process by enabling the Court to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are definitely set for trial, without lengthy argument at, or interruption of, the trial." Palmieri v. Defaria, 88 F.3d 136, 141 (2d Cir. 1996). "Because a ruling on a motion in limine is 'subject to change as the case unfolds,' this ruling constitutes a preliminary determination in preparation for trial." United States v. Perez, No. 09-CR-1153 (MEA), 2011 WL 1431985, at *1 (S.D.N.Y. Apr. 12, 2011) (quoting Palmieri, 88 F.3d at 139 citing Luce v. United States, 469 U.S. at 41(1984)).
The Federal Rules of Evidence provide that only relevant evidence is admissible. Fed. R. Evid. 402. Evidence is relevant if "it has any tendency to make a fact more or less probable than it would be without the evidence . . . and the fact is of consequence in determining the action." Fed. R. Evid. 401 (a)-(b). Relevant evidence may still be excluded by the Court "if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence." Fed. R. Evid. 403. Though the "standard of relevance established by the Federal Rules of Evidence is not high," United States v. Southland Corp., 760 F.2d 1366, 1375 (2d Cir. 1985), the Court has "broad discretion to balance the probative value against possible prejudice" under Fed. R. Evid. 403. United States v. Bermudez, 529 F.3d 158, 161 (2d Cir. 2008).
Evidence of similar bad acts or conduct, not charged in an indictment or information, are typically sought to be introduced pursuant to Fed. R. Evid. 404. Fed. R. Evid. 404(b) provides in relevant part, that:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident ...
Such evidence, if relevant, may not be offered solely to prove character, Huddleston v. United States, 485 U.S. 681, 687 (1988), but not to demonstrate a propensity to commit the charged offense(s). United States v. Mohamed, 148 F. Supp. 3d 232, 239 (E.D.N.Y. 2015). Extrinsic acts evidence has been deemed admissible to establish the truth to a disputed issue, especially when that issue involves the actor's state of mind and the only means of ascertaining that mental state is by drawing inferences from conduct. Huddleston v. United States, 485 U.S. at 685. To determine the admissibility of "evidence of other [similar] crimes, wrongs or acts," under Fed. R. Evid. 404(b), the Court conducts a three-part inquiry. (Id. at 691.) A reviewing court must consider whether the evidence (1) is offered for a proper purpose; (2) is it relevant to a material issue in dispute; and (3) has probative value such that it substantially outweighs its prejudicial effect. (Id. at 691-692). If after conducting the relevant inquiry the evidence is deemed admissible, the Court shall give an appropriate limiting instruction to the jury, if requested by the party opposing its admission. (Id.)
The Government moves in limine asking for the following relief: (1) to preclude the Defendant from introducing documentary evidence which explains or defines what the law is; (2) for a limiting instruction that evidence of the Defendant's views on the law is only relevant to establish a good-faith defense; (3) to preclude the Defendant from offering evidence of Graham's belief that banks and otherfinancial institutions are corrupt and should be wiped out; (4) for the admission of evidence that Graham continued to engage in her fraudulent scheme after her arrest; and (5) for the admission of "other acts" evidence of an electronic funds transfer scheme for debt elimination (the "EFT Scheme").
The Defendant moves in limine asking for the following relief: (1) the exclusion of evidence related to an interaction between a prospective witness, Martin Hopple ("Hopple"), and the Defendant regarding Graham's alleged offer of services which would improve the witnesses credit score; (2) to preclude the introduction of evidence regarding Defendant's alleged participation in a fraudulent scheme in February and March, 2016, wherein she claimed to be able obtain a tax refund from the IRS; and (3) the exclusion of evidence based on speculation.
The Government seeks to preclude the Defendant from presenting copies of laws which are purportedly related to Defendant's alleged beliefs that certain laws allowed Graham and her co-conspirators to be representatives of their alleged victims' banks. Thus, the Government seeks to preclude the Defendant from introducing at trial documentary evidence or copies of laws such as the Federal Administrative Procedures Act, the Uniform Commercial Code or the common law. (Government's Motion at 4.) The Government asserts that documentary evidence regarding the law should be precluded because permitting the Defendant to introduce her version of what the law is would lead to jury confusion and about their own role, as fact-finders, in the trial process. (Id.)
The Court agrees. It is well settled that questions of law are solely within the province of the court to decide, and questions of fact are for the jury. United States v. Kraeger, 711 F.2d 6, 7-8 (2d Cir. 1983); Hygh v. Jacobs, 961 F.2d 359, 364 (2d Cir. 1992) (). Permitting the admission of such evidence would not only undermine the Court's role of instructing the jury on the applicable law but could lead to confusion. United States v. Kraeger,711 F.2d at 8.
The Defendant does not dispute the Government's contention and indicates that she has no intention of offering documentary evidence at trial as to what the law is or should be. (Defendant's Response at 2.) Accordingly, the Government's request is granted.
The Government asserts that should Graham choose to testify, her testimony about what she believed the law to be, should only be elicited for the purpose of asserting a good-faith...
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