United States’ Motion in Limine No. 3: To Preclude Defendant from Raising Repayment of PPP-Loan and EIDL-Loan Funds — United States v. Lucas (Dkt. 56, D. Utah)

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The United States' Motion in Limine No. 3, filed November 8, 2024, in United States v. Carter Lane Lucas, Case No. 2:23-cr-00405 DBB, in the U.S. District Court for the District of Utah. Citing Fed. R. Evid. 401-403, the motion asks the Court to preclude Lucas and his counsel from raising evidence or argument about his repayment of portions of the Paycheck Protection Program and Economic Injury Disaster Loan proceeds. The government argues that neither repayment nor intent to repay is a defense to wire fraud, and that any argument that repayment earns a credit against loss belongs at sentencing, not at trial. The motion is signed by Special Assistant United States Attorney Sachiko J. Jepson.

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Case 2:23-cr-00405-DBB Document 56 Filed 11/08/24 PageID.306 Page 1 of 4




TRINA A. HIGGINS, United States Attorney (#7349)
TODD C. BOUTON, Assistant United States Attorney (#17800)
SACHIKO J. JEPSON, Special Assistant United States Attorney (#17077)
Attorneys for the United States of America
111 South Main Street, Suite 1800
Salt Lake City, Utah 84111-2176
Telephone: (801) 524-5682
todd.bouton@usdoj.gov; sachiko.jepson@usdoj.gov

                        IN THE UNITED STATES DISTRICT COURT
                                      DISTRICT OF UTAH


  UNITED STATES OF AMERICA,                        Case No. 2:23-cr-00405 DBB

                         Plaintiff,
                                                 UNITED STATES’ MOTION IN LIMINE
                   v.                            NO. 3: TO PRECLUDE DEFENDANT
                                                 FROM RAISING REPAYMENT OF PPP-
  CARTER LANE LUCAS,                             LOAN AND EIDL-LOAN FUNDS

                         Defendant.
                                                  Judge David Barlow



       Pursuant to Fed. R. Evid. 401-403, the United States files this Motion in Limine No. 3 to

preclude Mr. Lucas and his counsel from raising or referencing any evidence or argument

regarding Mr. Lucas’s repayment of portions of the Paycheck Protection Program Loan (“PPP

Loan”) and/or Economic Injury Disaster Loan (“EIDL Loan”) proceeds he fraudulently obtained.

    Case 2:23-cr-00405-DBB Document 56 Filed 11/08/24 PageID.307 Page 2 of 4




        MEMORANDUM OF LAW IN SUPPORT OF MOTION IN LIMINE NO. 3

     1. EVIDENCE REGARDING REPAYMENT SHOULD BE EXCLUDED BECAUSE
        REPAYMENT IS NOT A DEFENSE TO WIRE FRAUD
         A defendant should be precluded from raising improper legal defenses, to avoid confusing

or prejudicing the jury or inviting jury nullification. Fed. R. Evid. 402, 403. In this case, the jury

will be asked to decide whether Mr. Lucas committed wire fraud when he obtained PPP- and

EIDL-Loan funds by representing in his responses to two separate criminal history questions that

he did not have a disqualifying criminal history. 1 Neither repayment nor intent to repay are

defenses to wire fraud. Nevertheless, defense counsel for Mr. Lucas have suggested that they

intend to present testimony at trial regarding Mr. Lucas’s repayment of loan funds. (ECF No. 49,

at 3). 2 Such evidence would cause confusion and should be precluded as irrelevant.

         In United States v. Van Elsen, the Eighth Circuit considered whether a defendant’s

conviction should be reversed because he was barred from presenting evidence to the jury that he

eventually repaid the funds he embezzled. 652 F.3d 955, 955 (8th Cir. 2011). The court affirmed

the conviction, finding that “because the intent to permanently deprive is neither a required element

of, nor a defense to [embezzlement], the district court did not abuse its discretion when it excluded

evidence of [the defendant’s] eventual repayment . . . as irrelevant.” Id. at 962 (internal quotation

marks and brackets omitted; emphasis added). The same logic applies here. Intent to permanently

deprive is not an element of wire fraud, and repayment evidence is irrelevant.




1 For wire fraud, the United States must prove that the defendant (1) devised or intended to devise a scheme to defraud,
(2) acted with specific intent to defraud, (3) used or caused the use of interstate or foreign wire communications
facilities, and (4) that the scheme employed false or fraudulent pretenses, representations, or promises that were
material. 10th Cir. Crim. Pattern Jury Instr’n No. 2.57.
2
 In Mr. Lucas’s Notice of Intent to Use Expert Testimony, defense counsel do not list repayment of funds among the
anticipated categories of testimony. However, their retained expert witness, Josh Mortensen, indicates he will testify
that, “[a]t least as of October 28, 2024, Mr. Lucas was current in repayment of his EIDL Loan.” (ECF No. 49 at 3).

                                                           2

    Case 2:23-cr-00405-DBB Document 56 Filed 11/08/24 PageID.308 Page 3 of 4




         Other circuits have followed similar reasoning to find that repayment or intent to repay are

not a defense in the face of wrongfully taken money or property. See e.g., United States v. Miller,

953 F.3d 1095, 1103 (9th Cir. 2020) (“Intent to repay . . . is not a defense to wire fraud.”); United

States v. Ross, 206 F.3d 896, 899 (9th Cir. 2000) (“[T]he district court properly granted the

government’s motion in limine to preclude evidence of the legally unviable defense [of intent to

repay misappropriated funds].”); 3 United States v. Radziszewski, 474 F.3d 480, 485-86 (7th Cir.

2007) (it was not a valid defense that defendant intended to repay bank that was victim of wire

fraud and mail fraud); United States v. White, 846 F.3d 170, 178 (6th Cir. 2017) (“A defendant’s

intention to repay the victims of fraud is no defense”) (quoting United States v. Carter, 483 F.

App’x 70, 75 (6th Cir. 2012) (unpublished)); United States v. Young, 955 F.2d 99, 104 (1st Cir.

1992) (intent to return money or property was not a defense to embezzlement). Mr. Lucas should

not be allowed to present evidence regarding the legally unavailable defense of repayment.

     2. EVIDENCE REGARDING REPAYMENT SHOULD BE EXCLUDED BECAUSE
        IT IS IRRELEVANT TO MR. LUCAS’S INTENT TO COMMIT WIRE FRAUD

         Mr. Lucas may argue that his partial repayment of the EIDL-Loan funds he obtained

suggests that he never intended to commit a fraudulent act. This is unconvincing for at least two

reasons: (1) These were loans, and Mr. Lucas had an obligation to repay them. To the extent that

he did repay a small portion of these funds, he had incentives to do so—just like any other loan

recipient—to avoid civil liability or a negative impact to his credit score; (2) Even if the funds that

he fraudulently obtained had not been in the form of loans, his return of stolen (rather than

borrowed) money still would say nothing about his intent to first wrongfully take the money.




3
  The Ninth Circuit criminal pattern jury instructions for embezzlement state, “The fact that the defendant may have
intended to repay the funds at the time they were taken is not a defense.” (9th Cir. Model Crim. Jury Instr’n No. 23.3).

                                                           3

  Case 2:23-cr-00405-DBB Document 56 Filed 11/08/24 PageID.309 Page 4 of 4




       This second point is illustrated by a Seventh Circuit case. In United States v. Radziszewski,

the defendant appealed his conviction for wire fraud and mail fraud in part because he was

precluded from presenting argument about repayment. The court held, “[i]t is well settled that a

defendant’s ultimate intention to pay off a debt obtained fraudulently is irrelevant to the intent to

obtain the money through deceptive means.” 474 F.3d 480, 485 (7th Cir. 2007) (emphasis added).

See also United States v. Fields, 327 F. App’x 133, 135 (11th Cir. 2009) (unpublished) (“Because

repayment was not relevant to [the defendant’s] intent to deprive the government of its funds . . .

the district court did not abuse its discretion in disallowing evidence of repayment.”). Because

evidence of repayment does not help a jury determine whether Mr. Lucas had the requisite criminal

intent to commit wire fraud, it should be precluded.

   3. IF REPAYMENT HAS ANY RELEVANCE, IT WOULD BE AT SENTENCING

       The Sentencing Guidelines sometimes provide for reductions in the loss amount calculation

if a defendant returns wrongfully taken funds before the “time of detection.” U.S.S.G. § 2B1.1

App. Note (3)(E)(i). But even if Mr. Lucas believes his repayment qualifies for such a credit

against loss, sentencing would be the appropriate time to present such arguments, and not at trial.

   4. CONCLUSION

       Repayment of loan funds has no probative value for a jury deciding if Mr. Lucas committed

wire fraud when he applied for the loan funds. Therefore, the Court should preclude such evidence.

                                              TRINA A. HIGGINS
                                              United States Attorney


                                              /s/ Sachiko J. Jepson________________
                                              SACHIKO J. JEPSON
                                              Special Assistant United States Attorney




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