Government's Objection to Defense Experts — US v. Reis

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U.S. District Court for the Northern District of Texas (Fort Worth Division) · No. 4:24-cr-00287-O · Doc. 260 · 2025-07-25 · Docket on CourtListener

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Government’s Objection to Defense Experts – Page 1 
UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF TEXAS 
FORT WORTH DIVISION 
                                                                 
UNITED STATES OF AMERICA 
 
 
 
 
v. 
 
 
 
 
 
 
No. 4:24-CR-287-O 
 
 
NATHAN REIS (01) 
STEPHANIE HOCKRIDGE (02)  
a/k/a STEPHANIE REIS  
 
 
GOVERNMENT’S OBJECTION TO DEFENSE EXPERTS 
The United States, by and through the undersigned counsel, hereby objects to 
expert testimony proffered by Defendant Nathan Reis on July 21, 2025. See Dkt. 256. 
The proffered testimony is irrelevant to the PPP fraud charged in the indictment and will 
be unhelpful and confusing to the jury. Accordingly, it should be excluded.  
LEGAL STANDARD 
The proponent of expert testimony bears the burden of establishing its 
admissibility. Moore v. Ashland Chem., Inc., 151 F.3d 269, 276 (5th Cir. 1998). The 
Court has “wide latitude in determining the admissibility of expert testimony.” Watkins v. 
Telsmith, Inc., 121 F.3d 984, 988 (5th Cir. 1997). Federal Rule of Evidence 702 provides 
that an expert witness may testify if the expert’s specialized knowledge “will help the 
trier of fact to understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702. 
“Expert testimony is admissible only ‘if it is both relevant and reliable.’” Sec. & Exch. 
Comm’n v. Life Partners Holdings, Inc., 854 F.3d 765, 775 (5th Cir. 2017) (internal 
citations omitted). Even if the expert testimony is relevant, a court may exclude it under 
Rule 403 “if its probative value is substantially outweighed by a danger of one or more of 
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the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, 
wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403.  
ARGUMENT 
I. 
The Court Should Exclude Proffered Expert Testimony by Former FBI 
Special Agent Eric Mills. 
Reis fails to meet his burden to establish that Eric Mills’ proffered expert 
testimony is admissible because it is irrelevant to issues that will arise at trial. Mills is a 
former Special Agent for the FBI and “is currently a Senior White Collar Crime 
Investigator.” Dkt. 256 at 1. According to Reis, Mill’s testimony “will principally entail 
providing his analysis of materials produced by the Government in the course of its 
investigation, as well as offering testimony, based on his experience and investigation, as 
to the public availability (or lack thereof) of certain information relating to borrower 
eligibility for the Paycheck Protection Program (PPP).” Dkt. 256 at 1-2. The attached 
one-page report by Mills indicates that Mills’ expected testimony centers on two issues 
that the government will not discuss in its case-in-chief at trial. Dkt. 256-1. As such, the 
Court should exclude Mills’ irrelevant testimony, which risks confusing the jury about 
the issues.  
According to Mills’ report, his expected testimony centers on the assertions that 
(1) “a borrower’s complete and accurate criminal history or military history (including 
active-duty status) are not, as a general rule, freely and readily retrievable by members of 
the public without access” to certain databases and resources and (2) based on public 
information on the IRS website, “the first two digits of an Employer Identification 
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Number (EIN) indicate the IRS campus that assigned it or whether the applicant applied 
online.” Dkt. 256-1 at 2. 
The Court should exclude Mills’ proffered expert testimony because it is not 
relevant to a determination of Reis’ guilt or innocence but rather is pertinent to 
calculating the amount of the loss caused by the Defendants’ fraud.1 The government 
discussed certain fraud indicators, including military history and EIN, only in the context 
of the Defendants’ loss amounts and sentencing, and the government has repeatedly told 
the Defendants that it does not intend to rely on these indicators to prove the Defendants’ 
guilt at trial. Consistent with these representations, the indictment does not mention these 
fraud indicators, and, as Reis could see through the trial of co-Defendant Stephanie 
Hockridge, the government’s case-in-chief indeed did not raise these indicia of fraud, 
which are pertinent only to sentencing. 
Rather, the indictment and the government’s case against Hockridge focused on 
fraudulent loans that the Defendants were directly involved in submitting or causing to 
submit to the lenders and the SBA. The government has endeavored to help Defendant 
prepare for trial by providing and continuously updating a list of loans that will be the 
focus of its case-in-chief. These loans are not based on the fraud indicators discussed by 
the government in the context of sentencing. Thus, Mills’ proffered testimony, which 
focuses on issues relevant only to sentencing, is irrelevant and will confuse the jury.  
 
1 The government recounted the plea discussions surrounding the loss amount calculation 
and indicia of fraud in detail in its Objections to Defense Experts filed in response to co-
defendant Stephanie Hockridge’s proffered expert testimony. Dkt. 135 at 3-4.  
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II. 
The Court Should Exclude Proffered Expert Testimony by David Abshier. 
The government objects to David Abshier’s proposed expert testimony because it 
is irrelevant and needlessly cumulative; it will confuse the jury; and it could include 
improper opinion testimony. Abshier previously worked at and with financial institutions 
in various roles, including as bank risk manager, chief credit officer, compliance officer, 
regulator, advisor, and consultant. Dkt. 256 at 2. According to Reis, Abshier’s testimony 
“will principally involve providing an overview of the statutes and regulations applicable 
to lenders, borrowers, and others as part of the PPP and describing the roles of the various 
entities in the process of applying for, processing, and issuing PPP loans.” Dkt. 256 at 2. 
Reis attaches a report that focuses mostly on regulations related to PPP loans. Dkt. 256-2.  
A. Abshier’s Proffered Testimony is Irrelevant, Needlessly Cumulative, and 
Confusing. 
As an initial matter, Abshier offers testimony on certain factual matters that are 
simply not in dispute. He opines that lenders were responsible for originating PPP loans 
under relaxed Small Business Administration requirements and describes how lenders 
were held harmless for relying in good faith on the representations of borrowers. The 
government intends to elicit testimony of an SBA employee with significant experience 
and knowledge of the Paycheck Protection Program. Her testimony is expected to cover 
these same topics, including, inter alia, how the SBA delegated authority to lenders, and 
the SBA’s requirements regarding borrower certifications as well as the collection and 
review of application information and documentation. Following that testimony, the 
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Court can evaluate whether Abshier’s proffered testimony on the same points should be 
allowed or rejected as needlessly cumulative and a waste of time. 
Additionally, Abshier’s proffered testimony concerns aspects of Defendant’s 
business that are not at issue in the upcoming trial. As Abshier recognizes, Blueacorn had 
a public-facing business that assisted PPP applicants through its website, as well as a 
referral program, VIPPP, that recruited applicants through individuals such as Eric 
Karnezis. The indictment charges Reis with fraud related to his personal loans, loans to 
others he personally knew were fraudulent, and loans he facilitated despite his and his 
coconspirators’ knowledge that they were fraudulent. Reis is not charged with negligently 
allowing fraudulent applications to slip through the cracks on the public-facing side of 
Blueacorn.  
Thus, whether Blueacorn or Body Politix had any regulatory or contractual “fraud 
detection responsibilities,” see Dkt. 256-2 at 30-31, is irrelevant. So too is the fact that 
lenders had anti-money laundering and fraud screening responsibilities. Id. at 27-28. 
Regardless of any regulatory or contractual obligations on Blueacorn or the obligations of 
Blueacorn’s lending partners, Reis knowingly submitted fraudulent applications and 
conspired with others to solicit and cause to submit fraudulent applications. Abshier’s 
testimony about regulations that applied to the public-facing part of Blueacorn will 
overwhelm the jury with irrelevant information, and it should be excluded. 
Similarly, Abshier offers an irrelevant opinion that it was “not improper for Body 
Politix to assist PPP applicants with compiling tax documents.” Dkt. 256-2 at 31. The 
government does not allege that Reis and his coconspirators were prohibited from 
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assisting applicants with tax documents. Instead, the government alleges that Reis and his 
coconspirators improperly falsified tax documents and other supporting documentation, 
and provided materially false information, in PPP loan applications. See Superseding 
Indictment ¶¶ 16-17. So, the question is not “whether it was reasonable for Body Politix 
to offer support to applicants,” as Abshier posits, but whether Reis and his coconspirators 
were permitted to—and did—make material false representations in documentations and 
information in PPP loan applications.  
Abshier’s proffered opinion that “Body Politix was not responsible for identifying 
potential fraud in the loan applications it referred to Blueacorn 2.0,” Dkt. 256-2 at 30, is 
likewise irrelevant. Defendant is alleged to have “recruited coconspirators to work as 
VIPPP referral agents and coach borrowers on how to submit false PPP loan 
applications.” Superseding Indictment ¶ 16(e). The issue is not whether conspirators 
within the VIPPP pipeline had formal review responsibilities pursuant to the LSPA or 
otherwise. Rather, the issue is whether Reis and his coconspirators were affirmatively 
engaged in committing fraud. Abshier’s proffered opinion in this area is therefore 
irrelevant. 
B. Abshier’s Proffered Testimony Includes Improper Opinion Testimony 
about Laws and Regulations. 
Even assuming Abshier’s opinions concerning PPP regulations applied to the 
charged loans, they would be inadmissible because they would provide no insight into the 
elements of the charged criminal offenses, particularly whether Reis acted with intent to 
defraud. Abshier opines in the abstract that PPP regulations were complicated and 
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changed over time, but he cannot speak to whether Reis understood the changes in the 
rules or whether he was even aware of them.  
Reis is not the first defendant to attempt to improperly use expert opinions about 
the supposed complexity of laws and regulations. For example, in United States v. 
Herzog, 632 F.2d 469 (5th Cir. 1980), a defendant in a criminal tax case sought to 
introduce expert testimony “that the tax laws are complex and that even law students, law 
professors, and attorneys find the subject very difficult.” Herzog, 632 F.2d at 473. The 
district court excluded the expert’s testimony, and the Fifth Circuit affirmed because the 
expert’s opinions about the complexity of tax laws “could not shed any light on whether 
Herzog had been confused by any such complexity at the time he submitted the” relevant 
tax forms. Id. Other courts have similarly excluded expert testimony that broadly 
gestured at the complexity of a regulatory scheme. See United States v. Reed, No. 15-100, 
2016 WL 1105010, at *5-7 (E.D. La. Mar. 22, 2016) (excluding expert’s “custom and 
practice” testimony related to Louisiana’s Campaign Finance Disclosure Act and stating, 
“If Walter Reed wishes to testify regarding his understanding of the prohibitions on his 
campaign expenditures under the CFDA, he may do so, but [the expert’s] testimony will 
not provide insight on Walter Reed’s subjective understanding of the law.”), aff’d, 908 
F.3d 102, 117 (5th Cir. 2018), United States v. Whittemore, 944 F. Supp. 2d 1003, 1010-
12 (D. Nev. 2013) (excluding expert testimony from linguistics professor that campaign 
finance statute was ambiguous), United States v. Hopkins, No. CR 09-863 MCA, 2010 
WL 1169176, at *6-8 (D.N.M. Sept. 22, 2010) (excluding expert testimony from tax 
protestor that “the tax code is complex and that most people do not understand the laws”). 
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If Reis wishes to defend himself by arguing that the complexity of the PPP regulations 
somehow caused him to submit applications he knew were fraudulent, then he can do so 
through his own testimony. He cannot, however, testify through Abshier. 
C. Abshier’s Proffered Testimony Includes Irrelevant, Unreliable, and 
Confusing Opinion Testimony about Agent Fees. 
Finally, Abshier’s opinion that “[t]he fees collected by Body Politix were not 
prohibited under SBA guidance or regulations” should be excluded because it is 
irrelevant and unreliable, and it will confuse the jury. See Dkt. 256-2 at 31-32. On one 
hand, there is no real dispute over the legal regime surrounding agent fees: the 
government and Abshier agree that agents could accept fees but that they could not 
accept fees paid out of the borrower’s loan. Id. at 32. The government does not allege that 
agents were prohibited from collecting fees. But the government does allege and will 
show that Defendant collected kickbacks from the loan proceeds. Since there is no real 
dispute regarding the legal framework governing agent fees, Abshier’s testimony will not 
help the trier of fact understand the evidence or determine a fact in issue. His attempt to 
nevertheless offer a broad conclusion about the legality of the fees that Defendants 
collected through Body Politix is inaccurate and will confuse the jury. It should therefore 
be excluded.  
CONCLUSION 
 
For the foregoing reasons, the government respectfully requests that this Court 
exclude the proffered expert testimony of Eric Mills and David Abshier. 
 
 
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Government’s Objection to Defense Experts – Page 9 
Respectfully submitted, 
NANCY E. LARSON 
 
 
 
 
ACTING UNITED STATES ATTORNEY 
 
s/ Matthew Weybrecht 
 
MATTHEW WEYBRECHT 
Assistant United States Attorney 
State Bar of Texas No. 24102642  
Telephone: 817-252-5200 
Fax: 817-252-5455 
matthew.weybrecht@usdoj.gov 
 
LORINDA I. LARYEA 
ACTING CHIEF, FRAUD SECTION 
 
s/ Philip Trout 
 
 
 
PHILIP TROUT 
Acting Assistant Chief 
Fraud Section 
U.S. Department of Justice 
 
MARGARET A. MOESER 
CHIEF, MONEY LAUNDERING & ASSET 
RECOVERY SECTION 
Criminal Division, U.S. Department of Justice 
 
s/ Elizabeth R. Carr  
 
  
ELIZABETH R. CARR 
J. RYAN MCLAREN 
Trial Attorneys 
Money Laundering and Asset Recovery Section 
U.S. Department of Justice 
 
 
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CERTIFICATE OF SERVICE 
 
I hereby certify that on July 25, 2025, I electronically filed the foregoing 
document with the clerk for the U.S. District Court, Northern District of Texas, using the 
electronic case filing system of the court. The electronic case filing system sent a “Notice 
of Electronic Filing” to the attorney(s) of record who have consented in writing to accept 
this Notice as service of this document by electronic means. 
 
s/ Elizabeth R. Carr 
 
ELIZABETH R. CARR 
Trial Attorney 
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