Indictment - United States v. Maurice Fayne related docket

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U.S. District Court for the Northern District of Georgia · No. 1:20-cr-00228-MHC-JKL · Doc. 282 · 2022-07-05 · Docket on CourtListener

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An order on the parties' motions in limine in United States v. Daniel Eric Jay, No. 1:20-cr-00228-MHC-JKL, in the U.S. District Court for the Northern District of Georgia, filed July 5, 2022 as Doc. 282 and ending with the signature block of United States District Judge Mark H. Cohen. It grants the government's motion (Doc. 268), which Jay did not oppose, barring arguments that others were not indicted, that the bank could have been more careful or that victims were culpable, and limiting impeachment with agent interview reports. On Jay's motions (Doc. 269), the court grants exclusion of racial epithets and denies as moot the ruby investment, attorney-client privilege and Brady requests. It denies exclusion of single-party recorded calls and of testimony Jay says could be perjurious, noting that the government intends to call co-Defendant Fayne.

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA
V.
DANIEL ERIC JAY,
Defendant.
CRIMINAL ACTION FILE
NO. 1:20-CR-228-MHC-JKL-2
ORDER
Defendant Daniel Eric Jay has been charged in the Second Superseding
Criminal Indictment with one count of conspiracy to commit wire fraud in
violation of 18 U.S.C. § 1349, two counts of wire fraud in violation of 18 U.S.C.
§ 1343, and one count of bank fraud in violation of 18 U.S.C. § 1344. Second
Superseding Criminal Indictment [Doc. 96]. Trial is set to begin on July 19,2022.
In the Order Resetting Trial [Doc. 264], the parties were directed to file any
motions in limine on or before June 23, 2022, and responses to motions in limine
on or before July 1, 2022. Both parties timely filed their Motions in Limine.
Gov't's Mot. in Limine ("Gov't's Mot.") [Doc. 268]; Def.'s Mots. in Limine
("Def.'s Mot.") [Doc. 269]. Although the Government filed its response to
Defendant's Motion in Limine ("Gov't's Resp.") [Doc. 273], Defendant Jay filed
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no response to the Government's motion.
I. GOVERNMENT9 S MOTION IN LIMINE
A. Argument That Other Participants Were Not Indicted
The Government seeks to prohibit Defendant Jay from arguing that he
should be acquitted because others who may have participated or profited in the
Ponzi scheme were not charged. Gov't's Mot. at 3-6. Defendant Jay does not
oppose the request. Whether other individuals have engaged in similar conduct as
Defendant Jay is irrelevant to the charges against him and therefore inadmissible.
FED. R. EVID. 402. The Government's motion is GRANTED.
B. Argument That the Victim Bank Could Have Prevented the
Fraud If It Had Been More Careful
The Government seeks to prevent Defendant Jay from arguing that he should
be acquitted of bank fraud because United Community Bank, which approved the
loan application under the Paycheck Protection Program ("PPP"), could have
prevented the fraud had it been more careful. Gov'fs Mot. at 6-8. Defendant Jay
does not oppose this request. "[T]he negligence of the victim in failing to discover
a fraudulent scheme cannot be a defense to wire or bank fraud because ' [a]
perpetrator of fraud is no less guilty of fraud because his victim is also guilty of
negligence/" United States v. Teers, 591 F. App'x 824, 844 (11th Cir. 2014)
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(quoting United States v. Svete, 556 F.3d 1157, 1165 (I 1th Cir. 2009)). The
Government's motion is GRANTED.
C. Argument That Victims Are to Blame
The Government seeks to prevent Defendant Jay from arguing that the
victims of the fraud are culpable because they were gullible or greedy. Gov't's
Mot. at 9-10. Defendant Jay does not oppose the request. For the same reasons as
stated in the previous section, the Government's Motion is GRANTED. See also
United States v. Colton, 231 F.3d 890, 903 (4th Cir. 2000) ("If a scheme to defraud
has been or is intended to be devised, it makes no difference whether the persons
the schemers intended to defraud are gullible or skeptical, dull or bright.")
(citations omitted).
D. Evidence Regarding the Breadth ofPPP Fraud Generally
The Government seeks to prohibit Defendant Jay from eliciting evidence
concerning the regularity ofPPP fraud in general. Gov't's Mot. at 10-11.
Defendant Jay does not oppose the request. The Government's Motion is
GRANTED. See United States v. Powell, 509 F. App'x 958, 967 (11th Cir. 2013)
(holding that whether lenders may have created "an environment of lax lending
standards is irrelevant" to whether a conspiracy to commit wire or mail fraud
occurred).
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E. Use of Agent Interview Reports for Impeachment Purposes
The Government objects to Defendant Jay using law enforcement agent's
interview reports to impeach interviewees if the latter are called as witnesses.
Gov't's Mot. at 11-13. Defendant Jay does not oppose the request.
Rule 613 of the Federal Rules of Evidence permits the use of a witness's
prior statement for impeachment purposes under certain circumstances. FED. R.
EVID. 613. However, interview summary reports are not witness statements under
the Jencks Act. See United States v. Jordan, 316 F.3d 1215, 1252 (11th Cir. 2003)
(stating "an interviewer's raw notes, and anything prepared from those notes (such
as an FBI 302), are not Jencks Act statements of the witness unless they are
substantially verbatim and were contemporaneously recorded, or were signed or
otherwise ratified by the witness."); see also Palermo v. United States, 360 U.S.
343, 350 (1959) (stating it would be "grossly unfair to allow the defense to use
statements to impeach a witness which could not fairly be said to be the witness'
own rather than the product of the investigator's selections, interpretations, and
interpolations."); United States v. Saget, 991 F.2d 702, 710 (1 1th Cir. 1993) ("[W]e
conclude that a witness may not be impeached with a third party's characterization
or interpretation of a prior oral statement unless the witness has subscribed to or
otherwise adopted the statement as his own.").
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Consequently, Defendant Jay may not impeach a Government witness by
use of a law enforcement agent's interview report unless the witness has ratified or
adopt the statement as his or her own. The Government's Motion in Limine is
GRANTED. This does not prohibit Defendant Jay from asking a witness whether
he or she gave a statement to a law enforcement agent and the contents of such a
statement. But the agent's summary is not admissible to impeach that witness
because it is not a statement of the witness (unless otherwise verified as such).
II. DEFENDANT'S MOTIONS IN LIMINE
A. Racial Epithets
Defendant Jay seeks to prohibit the Government from referencing any racial
epithets used by him in any written statements, email or text messages, or digital
recordings, and seeks to have any such references in exhibits redacted. Def.'s Mot.
at 1-3. The Government agrees and intends to instruct its witnesses not to refer to
any such racial epithets and to redact all documents and recordings as needed to
prevent the jury from being exposed to such epithets. Gov't Resp. at 1. Defendant
Jay's Motion is GRANTED.
B. Allegations About a Giant Ruby Investment Scheme
Defendant Jay seeks to prevent the Government from introducing evidence
of a scheme to defraud involving a "giant ruby investment plan" that was not
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charged in the indictment and that would be prejudicial. Def.'s Mot. in Limine at
3-5. The Government responds by stating that, even though it believes the
evidence would be admissible under Rule 404(b), it does not intend to introduce
such evidence at trial. Gov't's Resp. at 2. Defendant Jay's Motion is therefore
DENIED AS MOOT.
C. Emails, Text Messages, or Documents Obtained in Violation of
the Attorney-Client Privilege
"Out of an abundance of caution," Defendant Jay seeks to exclude any
emails, text messages, or documents purportedly seized in violation of the
attomey-client privilege. Def.'s Mot. at 5. The Government responds that it did
not obtain any such written communications and does not intend to offer such
documents into evidence. Gov't's Resp. at 3. Defendant Jay's Motion is
DENIED AS MOOT.
D. Single-Party Recorded Conversations IVIade in Violation of State
Laws
Although acknowledging that in many states such as Georgia the consent of
the person who recorded a telephone conversation is sufficient for the call to be
admitted, Defendant Jay "in an abundance of caution" moves to exclude any
single-party consent recorded calls that were made in violation of the state in
which they were recorded. Def.'s Mot. at 6. In response, the Government points
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out that, regardless of the law of the state in which the call was recorded, the calls
are still admissible in a federal criminal trial as long as they were lawfully obtained
under federal law. Gov't's Resp. at 3-4. The Court agrees with the Government.
Under 18 U.S.C. § 2511(2)(d),
[i]t shall not be unlawful .. . for a person not acting under color of law
to intercept a wire, oral, or electronic communication where such
person is a party to the communication or whether one of the parties to
the communication has given prior consent to such interception unless
such communication is intercepted for the purpose of committing any
criminal or tortious act in violation of the Constitution of laws of the
United States or of any State.
According to the Government, the calls in question were recorded when Defendant
Jay lived in Pennsylvania, and the district court in that state has followed federal
court precedent which provides that it is not unlawful under federal law for a
person not acting under color of law to record a telephone call where such person
is a party to the conversation. See United States v. Felton, 592 F. Supp. 172, 193
(W.D. Pa. 1984), rev'd on other grounds, 753 F.2d 256 (3d Cir. 1985) (interpreting
18U.S.C.§251 l(2)(d) to mean that if the taping by a person not acting under
color of law was in violation of state law, that fact would not render the recordings
inadmissible in a federal criminal trial, for as long as federal law is satisfied and
federal standards of reasonableness are met, the evidence is admissible, despite the
fact that the interception was a violation of state law); see also United States v.
7
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Morrison, 153 F.3d 34, 57 f2d Cir. 1998) (same); United States v. Horton, 601
F.2d 319, 323 (7th Cir. 1979) (same)
Accordingly, Defendant's motion is DENIED.
E. Brady Material
In his Motion in Limine, Defendant Jay "renews" his request for exculpatory
material under Brady v. Maryland, 373 U.D. 83 (1963), and impeachment evidence
under Giglio v. United States, 405 U.S. 105 (1972). Def.'s Mot. at 6-8. In his
scheduling order issued on August 14, 2020, Magistrate Judge Larkins directed the
Government
to provide all materials and information that are arguably favorable to
the defendant in compliance with its obligations under Brady . . . ;
Giglio ...; and their progeny. Exculpatory material as defined in Brach
. . . shall be provide sufficiently in advance of trial to allow a defendant
to use it effectively. Impeachment material must be provided no later
than production of the Jencks Act statements."
Pretrial Scheduling Order [Doc. 64] at 7. In its response, the Government states
that it understands and has met its obligations under both Brady and Giglio.
Gov'fs Resp. at 5-6. Defendant Jay's motion is therefore DENIED AS MOOT
but the Government is directed to continue to comply with its obligations under
Brady and Giglio.
8
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F. Perjured Testimony
Finally, Defendant Jay anticipates that the Government will call witnesses
who are either co-Defendants or alleged co-conspirators who have histories of
lying to other people as well as prior convictions related to fraud. Def.'s Mot. at 9.
Defendant Jay moves to exclude testimony that the Government "could reasonably
foresee or suspect" to be perjurious. Id. Defendant Jay cites no authority for such
a request and the Government is certainly aware of its ethical obligations which, at
a minimum, bars an attorney from offering evidence he or she knows to be false.
Rule 3.3 (c) of the Ga. Rules of Professional Conduct.
The Government indicates that it intends to call co-Defendant Fayne as a
witness and perhaps other unindicted co-conspirators. Gov't's Resp. at 9.
Defendant Jay will have ample opportunity to cross-examine and impeach these
witnesses. Defendant Jay's motion is DENIED.
III. CONCLUSION
For the above reasons, it is hereby ORDERED that the Government's
Motion in Limine [Doc. 268] is GRANTED and Defendant Jay's Motions in
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Limine [Doc. 269] are GRANTED IN PART and DENIED IN PART as
discussed in this Order.
IT IS SO ORDERED this 5^ day of July, 2022.
MARK H. COHEN
United States District Judge
10
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