United States' Response in Opposition to Defendant's Motions in Limine — United States v. Denny Bhakta

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United States' Response in Opposition to Defendant's Motions in Limine (Dkt. 92), filed September 27, 2024, in United States of America v. Denny Bhakta, Case No. 21-CR-3352-JLS, for a hearing on October 4, 2024, at 2:00 p.m. It argues that bank records produced with custodian certifications are admissible, and that a lack of metadata is not a basis to exclude the W-2, 940 and 941 forms. It states that the United States identified 18 PPP loans obtained from 11 banks and produced native versions of 23 documents on June 3, 2024. It asks the Court to deny the motions in limine except those it does not oppose.

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“United States' Response in Opposition to Defendant's Motions in Limine — United States v. Denny Bhakta.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-s-d-cal-no-3-21-cr-03352-dkt-98-s-d-cal-d78ce398d6/, SHA-256 e5b172ea94112064a7df4306b924d2e97927a7d40b46417c17ee70b2c8ac3a21.

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Case 3:21-cr-03352-JLS Document 98 Filed 09/27/24 PageID.495 Page 1 of 16

1 TARA K. MCGRATH
2 United States Attorney
P. KEVIN MOKHTARI
3 ERIC R. OLAH
4 California Bar Nos. 253283 / 295513
Assistant U.S. Attorneys
5 United States Attorney’s Office
6 880 Front Street, Room 6293
San Diego, CA 92101
7 Tel: (619) 546-7540
8 Eric.Olah@usdoj.gov
9 Attorneys for the United States
10
UNITED STATES DISTRICT COURT
11
SOUTHERN DISTRICT OF CALIFORNIA
12
13 UNITED STATES OF AMERICA, Case No.: 21-CR-3352-JLS
14 Plaintiff, UNITED STATES’ RESPONSE IN
15 OPPOSITION TO DEFENDANT’S
v. MOTIONS IN LIMINE (DKT. 92)
16
17 DENNY BHAKTA, Date: October 4, 2024
Time: 2:00 p.m.
18 Defendant.
Courtroom 4D
19
The Honorable Janis L. Sammartino
20
21 The United States of America, by and through its counsel, United States Attorney,
22 Tara K. McGrath, and Assistant United States Attorneys P. Kevin Mokhtari and Eric R.
23 Olah, hereby files its response in opposition to defendant’s motions in limine (Dkt. 92)
24 (“Mot.”).
25 I. RESPONSE IN OPPOSITION TO DEFENDANT’S MOTIONS IN LIMINE:
26 1. Motion to Exclude All W-2, 940 and 941 Forms
27 Bhakta asks the Court to exclude every fraudulent tax document submitted with his
28 various fraudulent Payroll Protection Program (“PPP”) loan applications solely because
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1 “such documents lack metadata indicating the author of such documents.” Mot. at 4. But
2 his argument is legally erroneous.
3 Metadata is data that describes another piece of data. For example, a file may have
4 metadata showing the last date it was saved. A photo may show what camera was used to
5 take the photo. While metadata can help link an individual to a document, the lack of
6 metadata does not mean a document is inadmissible. Nor does it mean a document is
7 inauthentic. That is because any creator of a document can follow “simple steps” to
8 completely “remove metadata” from a document, and following such steps is
9 commonplace. 1 And in many instances, metadata revealing the author of a document is
10 never even created.
11 In connection with some of Bhakta’s PPP loan applications, Bhakta provided falsified
12 tax and wage statements (or purported “summary reports” of alleged W-2 employees).
13 Under the PPP, Bhakta could obtain greater loan amounts if he inflated his alleged payroll
14 costs and the number of employees. The problem for Bhakta, however, was that IRS and
15 EDD records show that Bhakta had no payroll during the relevant period. When banks
16 asked for records to justify the representations made by Bhakta in his loan applications,
17 Bhakta provided things such as falsified IRS documents, wage and earning statements, W2s,
18 IRS Form 941s (quarterly returns), and other documents. Bhakta even claimed as
19 employees many of the same victim-investors he had defrauded as part of the securities
20 fraud scheme. Bhakta submitted the supporting documents to the banks, including at times
21 via his own email address.
22 As part of this investigation, the United States identified 18 PPP loans obtained from
23 11 banks. In response to subpoenas, the banks produced records related to the loans Bhakta
24 received. The records included, for instance, loan applications, supporting documentation,
25
26 1
See, e.g., University of Michigan, Information and Technology Services, Safe
27 Computing, Consider Metadata When Sending Files, available at
https://safecomputing.umich.edu/protect-privacy/consider-metadata (last accessed Sept. 24,
28 2024).
2
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1 loan notes, and applications for loan forgiveness. The supporting documents varied by the
2 various banks and loans. For example, in addition to falsified IRS and wage records, many
3 of the banks also produced copies of Bhakta’s driver’s license, articles of incorporation for
4 the entity for which the loan was requested, business certifications, and other business
5 receipts. Lastly, each of the banks provided certifications of a records custodian that set
6 forth the foundation necessary to admit at trial such documents under the business records
7 exception to the general bar on hearsay. These records are thus admissible under Rule
8 902(11) of the Federal Rules of Evidence, and the United States has provided to Bhakta
9 proper notice of its intent to introduce such documents at trial.
10 The supporting documents submitted in connection the PPP loans are also highly
11 relevant to prove the bank fraud charges. Indeed, the Superseding Indictment alleges Bhakta
12 “submitted falsified documents to support some of his misrepresentations.” Dkt. 64 at 7;
13 see also id. at 8 (“For example, in support of his misrepresentations about the number of
14 employees, BHAKTA submitted to financial institutions purported W-2 forms for alleged
15 employees that were, in fact, never employees of any of BHAKTA’s entities and never
16 received W-2 forms from the entities.”). These documents are thus relevant and should be
17 admitted as certified bank records. United States v. Siders, 712 F. App’x 601, 602 (9th Cir.
18 2017) (affirming conviction and admission of bank records, where district court granted the
19 government’s motion in limine to admit the records because “the Rule 902(11) certificates
20 properly authenticated the documents as non-hearsay business records”); Fed. R. Evid. 803,
21 Advisory Committee’s Note to the 2000 Amendment (explaining the Rule 803(6)’s
22 requirements can be satisfied “without the expense and inconvenience of producing time-
23 consuming foundation witnesses”).
24 Despite being plainly relevant and admissible, Bhakta nevertheless argues that the
25 records should be inadmissible for three reasons. He claims (1) the United States did not
26 provide native files that would allow forensic examination of the W-2s and 940/941 Forms
27 to determine their origin; (2) that PPP loans were not “regularly conducted business
28
3
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1 activity”; and (3) that the PPP documents he submitted contain “double-hearsay.” Mot. at
2 3-7. Each of his arguments are factually and legally flawed.
3 First, Bhakta claims the supporting tax documents should be excluded because the
4 defense has been unable to identify who authored the documents. Mot. at 4. In response to
5 a defense request, on June 3, 2024, the United States produced native versions 2 of the
6 supporting tax documents that were submitted along with Bhakta’s PPP loans. The
7 suggestion that the United States has not provided the requested documents despite
8 “[r]epeated requests for native files” is simply not true.3 These native records included, for
9 example, IRS Form 940, 941, W-2s, and Payroll Summary Reports, that the banks provided
10 in response to subpoenas.
11 While metadata linking the documents to Bhakta would be highly inculpatory, the
12 lack of metadata in the supporting documents regarding the author of the documents is
13 neither surprising nor a basis to exclude the documents. See United States v. Eiker, 2017
14 WL 6459510, *5 (E.D. Va. Dec. 18, 2017) (denying defendant’s motion to exclude files
15 that “lack the relevant metadata,” explaining the United States can satisfy its “light” burden
16 on authentication of the files without metadata); see also id. (“The burden on the proponent
17 is a light one, as the ultimate determination as to whether a piece of evidence is what its
18 proponent claims rests with the jury.”). And it is axiomatic that Bhakta’s argument goes to
19 the weight not the admissibility of the evidence. See, e.g., United States v. Morel-Pineda,
20
21
Most records received from banks are in the form of PDFs. Native versions mean
2
22 the original, non-bates stamped versions of the documents as they were received from the
23 financial institution.
24 3
As detailed below, on May 22, 2024, defense counsel for the first time requested in
25 an email “that some of the discovery (W-2s, 940-41s & 1099s) be produced in ‘native’
format” because he wanted “an expert to examine the metadata for those documents.” On
26 June 3, 2024, the United States explained to defense counsel via email that it understood
27 the request for native versions of “the tax records as the banks produced them to the United
States” and would soon be producing 23 such documents; as promised, the United States
28 produced to Bhakta the native versions of the 23 documents the same day.
4
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1 829 F. App’x 187, 191 (9th Cir. 2020) (“Any argument that the messages were sent by some
2 other person [and not defendant] went to weight, not admissibility.”).
3 Moreover, metadata is only one of several possible links between Bhakta and the
4 fraudulent supporting tax records. In fact, in many instances, the fraudulent supporting
5 records correspond with misrepresentations made by Bhakta on the face of his loan
6 applications themselves. In other instances, the fraudulent documents were attached to
7 emails sent by Bhakta—from his email address—to the bank. See United States v. Smith,
8 609 F.2d 1294, 1301 (9th Cir. 1979) (rejecting defendant’s challenge to the admission of
9 hotel records he denied signing, explaining that “[c]ircumstantial evidence connecting
10 [defendant] with the documents was sufficient”).
11 Nor is Rule 1002 a basis to exclude the evidence. The United States may admit copies
12 of records that various banks produced in response to grand jury subpoenas, which are
13 accompanied by certifications that renders the records admissible under Rule 902(11). See
14 Fed. R. Evid. 902(11) (explaining that the “original or a copy of a domestic record that
15 meets the requirements of Rule 803(6)(A)-(C)” is self-authenticating evidence).
16 Similarly unavailing is Bhakta’s argument that the PPP loans were not regularly
17 conducted business activity. Bhakta concedes that business records are admissible under
18 Rule 803(6). Mot. at 5. But he claims all “[r]ecords relating to PPP loans” are not business
19 records under Rule 803(6) because, he contends, “PPP loans were not a regularly conducted
20 activity[.]” Id. As with his prior motion, Bhakta fails to identify any supporting authority.
21 It is the business records custodian—not Bhakta—that certifies the scope of a
22 business and what records are created and kept in the ordinary course of business. And
23 plainly it is within the ordinary course of a bank’s business to receive, evaluate, and process
24 loans. Every PPP loan document that the United States will admit at trial was produced
25 with an accompanying business records certification (that has in turn been produced to
26 Bhakta). Each of those certifications complies with Rule 803(6), including the statement
27 that the record was kept in the course of a regularly conducted activity of the business.
28
5
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1 Because the certifications satisfy Rule 803(6), the records are admissible and self-
2 authenticating under Rule 902(11).
3 Lastly, Bhakta argues that the documents contain inadmissible hearsay within
4 hearsay. He complains that because the banks did not take steps to verify the information
5 contained in the fraudulent tax documents, they should not be admitted. But Bhakta’s
6 argument fundamentally misses the point. The United States is not introducing the
7 fraudulent supporting tax documents to prove the truth of the matter asserted in those
8 documents. To the contrary, the United States does not believe the information contained
9 in those falsified W-2s, IRS Form 940/941s, or summary reports are true at all. Instead,
10 these records are being admitted to demonstrate that Bhakta falsified records in order to be
11 approved for loans and to inflate the amount of the loans under the PPP loan program. There
12 simply is no hearsay issue, because they are not being admitted to prove the truth of the
13 matters asserted therein.
14 Moreover, the fraudulent supporting documents are also admissible for their effect
15 on the listener. In other words, the banks received fraudulent supporting documentation,
16 relied upon those records, and then issued loans. Any statements contained on the fraudulent
17 documents are also admissible as such. Lastly, any statements made on the fraudulent
18 documents are statements made by Bhakta. It is the United States’ position that Bhakta
19 created the fraudulent documents and submitted them to bolster his loan applications. These
20 are therefore statements of a party-opponent. Fed. R. Evid. 801(d)(2)(A).
21 Of course, courts routinely admit bank records pursuant to Rules 803(6) and 902(11).
22 See, e.g., United States v. Manibusan, 529 F. Appx. 818, 819 (9th Cir. 2013) (affirming
23 admission of bank information that defendant provided under Rule 803(6) and as a party
24 opponent admissions under Rule 801(d)(2)); United States v. Brown, 2:17-cr-00047(A)-
25 CAS, 2018 WL 739268, *14 (C.D. Cal. Feb. 5, 2018) (granting the United States’ motion
26 in limine to admit self-authenticating bank records pursuant to Rule 902(11)); United States
27 v. Brugnara, No. CR 14–00306 WHA, 2015 WL 1907513, *3 (N.D. Cal. Apr. 23, 2015)
28 (same); United States v. Gardley, No. 2:10–cr–236–GMN–PAL, 2013 WL 4857691 (D.
6
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1 Nev. Sept. 10, 2013 (same). Contrary to Bhakta’s suggestion, Rule 803(6) does not require
2 that a business “verify” the accuracy of information provided to the business. Cf. Siders,
3 712 F. App’x at 603 (rejecting Bhakta’s “contention that records containing false statements
4 cannot be business records under Rule 803(6),” explaining “[t]he content of a record does
5 not impact the way in which it was received, processed, or maintained. And the statements
6 in the records that the government alleges were false were not offered for the truth of the
7 matters asserted—they were proffered precisely because they were false.”)
8 The Court should reject Bhakta’s argument that the certified bank records are
9 inadmissible under Rule 803(6) and should admit the records for the reasons stated in the
10 United States’ motions in limine.
11 2. Motion to Exclude Evidence in the United States’s Opening Statement
12 The United States anticipates calling approximately 20 witnesses and moving to
13 admit at least 100 exhibits at trial. Bhakta has identified three expert witnesses he intends
14 to call, and the parties anticipate the trial taking approximately two weeks. A detailed
15 overview of the anticipated evidence is thus critical to juror’s comprehension of the case.
16 United States v. Dinitz, 424 U.S. 600, 612 (1976) (Burger, C.J., concurring) (explaining the
17 purpose of an opening statement is “to state what evidence will be presented, to make it
18 easier for the jurors to understand what is to follow, and to relate parts of the evidence and
19 testimony to the whole”). The Court should accordingly grant the United States’ motion to
20 allow evidence in opening statement and deny Bhakta’s countervailing motion for the
21 reasons stated in the United States’ motion.
22 The cases Bhakta cites do not support his motion to exclude evidence from the
23 opening statement. To the contrary, they make clear that the entire point of an opening
24 statement is to present anticipated evidence. Of course, the United States will not reference
25 in its opening statements any evidence it does not in good faith believe will be admitted at
26 trial. The Court should therefore deny Bhakta’s motion in limine.
27 / /
28 / /
7
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1 3. Motion to Exclude Bhakta’s Proffer Statement
2 Bhakta seeks to exclude statements he made during a proffer session at the United
3 States Attorney’s Office in February 2022. Consistent with the proffer agreement, the
4 United States will not introduce Bhakta’s statements made during the proffer session in its
5 case-in-chief. Should Bhakta testify, the United States may cross-examine Bhakta with
6 proffer statements, in accord with the proffer agreement.
7 4. Motion to Exclude a Victim’s “Original SEC Report”
8 Bhakta moves to exclude A. Patel’s “original SEC report.” Mot. at 9. The Court
9 should deny this motion as moot as the United States does not intend to introduce such a
10 report at trial.
11 5. Motion to Exclude “Partial Subscription Agreements.”
12 The United States does not understand what Bhakta seeks to exclude with this motion.
13 Preliminarily, the United States believes it has produced to Bhakta “all original investor
14 agreements” in its possession; while Bhakta refers to such agreements as “subscription
15 agreements,” Bhakta (on behalf of Fusion) and investors generally executed contracts
16 labeled “Capital Note and Terms.”
17 Citing Exhibit I to his motion (a document confusingly labeled “Confidential Private
18 Placement Memorandum” and not bearing the words “subscription agreement”), Bhakta
19 claims the United States “has not produced the first page” of the “projected profit & loss
20 numbers,” which allegedly makes clear that the figures were mere “projections.” Mot. at
21 10. Exhibit I, however, does not have a bates number, and it is unclear whether the United
22 States produced (or ever possessed) the document. See Dkt. 92-1 at 42-44.
23 Thus, the undersigned does not understand the accusation in Bhakta’s motion that the
24 United States has “produced several disjointed fragments of the subscription agreements”
25 or the suggestion that it intends to admit “subscription agreements.” Mot. at 10, 11. At
26 trial, the United States will call multiple victims of Bhakta’s securities fraud scheme. Some
27 of these victims will authenticate emails that Bhakta sent to them and attachments thereto.
28 Notably, several victims received from Bhakta in 2019 a single-page PDF clearly stating
8
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1 profit and loss figures in 2017 and 2018 (without any sort of cover page or claim that the
2 historical figures were mere projections). To the extent the United States intends to admit
3 the entirety of those single-page PDFs, Bhakta’s “rule of completeness” objection is
4 baseless.
5 The Court should deny Bhakta’s motion to exclude “partial subscription agreements.”
6 6. Motion to Exclude Documents Purportedly Created by ARMPVC
7 The United States does not intend to admit in its case-in-chief “materials created and
8 disseminated” by ARMPVC, which consists of a collection of investors that Bhakta
9 defrauded. The Court should deny this motion as moot.
10 7. Motion for Judicial Notice of an Irrelevant Civil Settlement
11 The United States has moved for an order excluding evidence concerning Kabbage’s
12 civil settlement. As explained in the United States’ motion, the Tenth Circuit and at least
13 one district judge in the Ninth Circuit have excluded evidence attacking Kabbage in
14 criminal cases involving PPP fraud. See United States v. Joseph, 108 F.4th 1273, 1281
15 (10th Cir. 2024) (affirming district judge’s exclusion of Kabbage’s conduct and finding
16 “there was no ‘nexus’ between Kabbage’s shortcomings as a lender and Joseph’s intent to
17 defraud federal relief programs”); United States v. McClellon, 2:22-CR-00073-LK, 2023
18 WL 9002865, *6 (W.D. Wash., Dec. 28, 2023) (finding the United States’ investigation of
19 Kabbage “in connection with the facilitation of PPP loan fraud” was “irrelevant and
20 inadmissible” in trial concerning defendant’s fraudulent PPP loan applications).
21 Here, too, the Court should exclude evidence and refuse to take judicial notice of the
22 allegations against and admissions of Kabbage pursuant to Rule 401 and Rule 403. See
23 United States v. Wei Lin, 738 F.3d 1082, 1085 (9th Cir. 2013) (denying defendant’s request
24 to take judicial notice of a police report “irrelevant to our analysis”); United States v.
25 Lumiguid, 499 F. App’x 689, 691 (9th Cir. 2012) (affirming district court’s refusal to take
26 judicial notice of three statutes “because those statutes were not relevant to the issues the
27 jury had to decide in this case”).
28 / /
9
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1 8. Motion to Exclude Witnesses not Included in a Trial Brief
2 The Court should deny Bhakta’s motion. While the United States intends to file a
3 brief identifying all anticipated witnesses, the Local Rules do not require such a filing or
4 otherwise require pretrial disclosure of witnesses. See CrimLR 23.1 (parties “may file a
5 trial brief prior to commencement of trial”) (emphasis added). Further, Bhakta concedes in
6 his motion that ordering pre-trial disclosure of witnesses is discretionary, and that
7 defendants are “not entitle[d]” to such disclosure. Mot. at 14.4
8 9. Motion to Allow Testimony from Bhakta’s Forensic Accounting Expert
9 After missing the deadline for expert disclosure several times, Bhakta provided notice
10 of his forensic accounting expert the evening of September 25, 2024. While the United
11 States is struggling to make sense of Ms. Kessler’s conclusions—and is concerned that her
12 testimony may in part result in “backdoor” admission of Defendant’s self-serving and
13 inadmissible hearsay statements—it does not oppose Bhakta’s motion to at least call her as
14 a witness at trial. 5
15
Although not relevant to any of the motions in limine, the United States disputes
4
16 Bhakta’s claim that the United States has “only identified twelve (12) victims by name
17 during the course of this case.” Mot. at 14.
18 5
To give some examples of hearsay in Ms. Kessler’s report: (1) she claims victims
19 “loaned Fusion Hospitality Corporation money to develop the software platform,” a fact
obviously unsupported by the bank records and inconsistent with anticipated victim
20 testimony that Bhakta repeatedly stated their money would be (and was in fact) used for a
21 different purpose—to pay for hotel rooms that would be (and were) resold to a large airline
for a profit; (2) despite not citing any supporting loan documents, Ms. Kessler claims
22 “Bhakta loaned his personal funds to Fusion”; and (3) she categorizes Bhakta’s use of money
23 at casinos as “lender repayments” (again, without citing any citing any supporting loan
documents).
24 Bhakta was clearly the source of these and other statements, as the “methodology”
25 section of Ms. Kessler’s admits her analysis was based in part on “comments from Mr.
Bhakta[.]” Cf. Wi-LAN Inc. v. Sharp Electronics Corp., 992 F.3d 1366, 1375 (Fed. Cir.
26 2021) (affirming district court’s finding that party was “attempting to use Rule 703 as a
27 ‘backdoor’”—that is “using its expert as a substitute for a fact witness to circumvent the
rules of evidence to admit otherwise inadmissible evidence”); Marvel Characters, Inc. v.
28 Kirby, 726 F.3d 119, 136 (2d Cir. 2013) (affirming exclusion of expert testimony, explaining
10
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1 The United States will reserve on whether Ms. Kessler should be designated an expert
2 until after it has had the opportunity to voir dire her qualifications.
3 10. Motion to Allow Testimony from Bhakta’s Metadata Expert.
4 Subject to the same qualifications just stated, the United States does not oppose
5 Bhakta’s motion to allow the testimony of Mr. Broom. That said, the United States must
6 advise the Court:
7  Based on his report, Mr. Broom reviewed 30 PDFs, then created a table listing
8 the dates on the documents and the dates indicated in the metadata. Two of
9 the PDFs appear twice on Mr. Broom’s list; thus, he appears to have reviewed
10 28 different PDFs.
11  Defense counsel selected the documents Mr. Broom reviewed and apparently
12 (and incorrectly) informed him that the “the government is representing these
13 documents are original documents [that Bhakta] presented in order to receive
14 PPP loans.”
15  As explained above, the United States has produced to Bhakta bates-numbered
16 discovery, generally in PDF.
17  The only documents Bhakta has requested the United States produce in native
18 format are the tax documents submitted with his PPP loan applications.
19 Specifically, in an email defense counsel sent on May 22, 2024, he for the first
20 time “ask[ed] that some of the discovery (W-2s, 940-41s & 1099s) be produced
21 in ‘native’ format” because he wanted “an expert to examine the metadata for
22 those documents.” And again, on June 3, 2024, the United States explained it
23 understood defense counsel’s request for native versions of “the tax records as
24
25
26
27
“a party cannot call an expert simply as a conduit for introducing hearsay under the guise
28 that the testifying expert used the hearsay as the basis of his testimony.”).
11
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1 the banks produced them to the United States” and would soon be producing
2 23 such documents (which were produced the same day). 6
3  Only eight of the PDFs on Mr. Broom’s list are tax documents submitted with
4 Bhakta’s PPP loans.
5  Ten of the PDFs on the list are PPP loan application forms. Bhakta has never
6 disputed the authenticity of the PPP loan applications (as opposed to the
7 supporting documents that he claims the banks fabricated). In fact, at the most
8 recent hearing before the Court, defense counsel confirmed that Bhakta both
9 applied for and received the PPP loans.
10 To the extent Bhakta intends to use Mr. Broom’s testimony to challenge Bhakta’s
11 connection to the PPP loan application forms, and although never requested by defense
12 counsel, the United States will promptly produce to defense counsel “native” versions of
13 loan application forms.
14 11/12. Motion to Exclude Witnesses from the Courtroom
15 The parties jointly request that the Court exclude all witnesses from the courtroom
16 during trial, with the exception of their respective investigative aides, pursuant to Rule 615.
17 13. Motion to Exclude Late-Produced Evidence
18 The Court set a discovery disclosure date of September 27, 2024, and the United
19 States has produced over 67,000 pages of discovery before that deadline. While it is
20 unaware of any additional material currently in its possession that is subject to disclosure,
21 the United States opposes the request for blanket exclusion of any evidence produced to
22 Bhakta after September 27, 2024. Rather, in the event the United States seeks to admit at
23 trial material produced after the disclosure date, the United States respectfully requests the
24 Court allow it to explain the basis for any late production before the Court determines
25 whether to admit the item—just as the Court has entertained defense counsel’s multiple
26 requests for extensions of expert disclosure deadlines.
27
The United States will submit this email exchange to the Court if requested by the
6
28 Court or if Bhakta challenges the accuracy of the statements herein.
12
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1 14. “Notice of Intent to Rely on Advice of Counsel Defense.”
2 Defendant’s final motion does not request any sort of relief but instead provides
3 notice of his purported advice of counsel defense. While the United States appreciates the
4 notice, it objects to Defendant’s claim that he will be “entitled to” a jury instruction on the
5 advice of counsel defense let alone present evidence of his purported defense. Mot. at 21.
6 The jury instruction on the defense is warranted only if there is “some foundation in
7 the evidence” that Defendant first “made a full disclosure of all material facts to an attorney”
8 (and then reasonably and good faith followed the attorney’s ensuing advice). Ninth Circuit
9 Model Criminal Jury Instruction No. 4.11—Advice of Counsel, Comment (2022 ed.)
10 (updated June 2024) (“A defendant is entitled to an instruction concerning the advice of
11 counsel if it has some foundation in the evidence.”) (citing United States v. Ibarra-Alcarez,
12 830 F.2d 968, 973 (9th Cir. 1987) (affirming district court’s refusal to give the advice of
13 counsel instruction because Defendant “failed to disclose all the material facts to his
14 attorney”); see also United States v. Scully, 877 F.3d 464, 476 n.5 (2d Cir. 2017) (explaining
15 the advice of counsel “issue is not for the jury’s consideration at all absent some evidence
16 of the required facts”). Defendant’s unsupported, self-serving, and conclusory assertion—
17 in a motion in limine unaccompanied by a declaration from Defendant—that he made the
18 required fulsome disclosure is plainly insufficient.
19 Further, the Court should exclude evidence regarding the defense unless and until
20 Defendant makes the required showing. Where the defendant has simply not satisfied a
21 formal advice of counsel defense, courts have limited or excluded the admission of evidence
22 about the involvement of attorneys. See, e.g., S.E.C. v. Tourre, 950 F. Supp. 2d 666, 684
23 (S.D.N.Y. 2013) (precluding references to the involvement of counsel pursuant to Rules
24 401 and 403, where defendant could not satisfy elements of true advice of counsel defense,
25 because “a lay jury could easily believe that the fact that a lawyer is present at a meeting
26 means that he or she must have implicitly or explicitly ‘blessed’ the legality of all aspects
27 of a transaction. Likewise, the fact that lawyers saw and commented on disclosure language
28 could be understood as ‘blessing’ the sufficiency of that disclosure. This misunderstanding
13
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1 would give the defendant all of the essential benefits of an advice of counsel defense without
2 having to bear the burden of proving any of the elements of the defense.”); United States v.
3 Sterritt, 21-CR-193 (KAM), 2023 WL 7386660, *7 (E.D.N.Y. Nov. 8, 2023) (denying
4 securities fraud defendant’s “motion in limine to assert an advice-of-counsel defense” and
5 explaining in part defendant “is precluded from asserting a generalized advice-of-counsel
6 defense”); United States v. Kaneshiro, et al., No. 22-cr-00048-TMB-NC, 2024 WL
7 1183124, at *5 (D. Haw. Mar. 19, 2024) (“[A]n ‘involvement of counsel’ instruction
8 reflecting an incomplete advice-of-counsel defense would be strongly disfavored due to the
9 severe risk of confusion and unfair prejudice.”); S.E.C. v. Lek Sec. Corp., No. 17-cv-1789-
10 DLC, 2019 WL 5703944, at *4 (S.D.N.Y. Nov. 5, 2019) (precluding “references to
11 counsel’s communications” because, among other things, they were “not relevant in the
12 absence of an advice-of-counsel defense” and “any probative value of such references is
13 substantially outweighed” by, among other things, “the risk that such references will sow
14 confusion and mislead the jury by suggesting that counsel … fully informed … approved”
15 a transaction); United States v. Ray, No. 20-cr-110 (LJL), 2022 WL 1004961, *3 (S.D.N.Y.
16 Apr. 1, 2022) (“[N]o defendant is entitled to present evidence of the advice of counsel unless
17 the elements of the advice of counsel defense can be established. ‘If, after the [pretrial]
18 hearing, the court finds that the defendant’s evidence is insufficient as a matter of law to
19 establish the defense, the court is under no duty to give the requested jury charge or to allow
20 the defendant to present the evidence to the jury.’”) (quoting United States v. Paul, 110 F.3d
21 869, 871 (2d Cir. 1997)); United States v. Way, No. 1:14–cr–00101–DAD–BAM–1, 2018
22 WL 3062159, *8 (E.D. Cal. June 19, 2018) (“[T]he court still does not have sufficiently
23 specific information before it to conclude that defendant Way is entitled to present an advice
24 of counsel defense or to a jury instruction with respect to such a defense.”)
25 Finally, as part of the predicate to lodge such a defense, a defendant must produce
26 “all documents concerning their intended advice of counsel defense.” United States v.
27 Crowder, 325 F. Supp. 3d 131, 138 (D.D.C. 2018). “[E]ven otherwise-privileged
28 communications that defendants do not intend to use at trial, but that are relevant to proving
14
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1 or undermining the advice-of-counsel defense, are subject to disclosure ‘in their entirety.’”
2 Id. (citations omitted; emphasis in original); see also United States v. Bilzerian, 926 F.2d
3 1285, 1292 (2d Cir. 1991) (“A defendant may not use the privilege to prejudice his
4 opponent’s case or to disclose some selected communications for self-serving purposes.”);
5 United States v. Manlove, No. CR 15-40-M-DLC, 2017 WL 416842, at *4-5 (D. Mont. Jan.
6 30, 2017) (“The government is entitled to discover information which may support or refute
7 Manlove’s advice of counsel defense. . . . The documents that must be produced include, at
8 minimum, those which are relevant to [Attorney] Cotner’s expected testimony, including
9 those addressing the following issues: (1) Manlove’s disclosure to Mr. Cotner of any and
10 all facts relevant to the proof of claim; (2) Mr. Cotner’s specific advice to Manlove
11 regarding filing the proof of claim; and (3) Manlove’s reception of Mr. Cotner’s advice.”);
12 United States v. Hatfield, No. 6-550, 2010 WL 183522, at *13 (E.D.N.Y. Jan. 8, 2010)
13 (holding that if defendants “intend to rely on an advice of counsel defense” they must
14 “disclose all documents concerning” the defense including “not only those documents
15 which support [their] defense, but also all documents (including attorney-client and attorney
16 work product documents) that might impeach or undermine such a defense”).
17 In sum, the United States respectfully requests an order that Defendant produce to the
18 United States all documents concerning his intended advice of counsel defense, and requests
19 the Court exclude at trial any evidence concerning the defense unless and until Defendant
20 makes the required evidentiary showing.
21 / /
22 / /
23 / /
24 / /
25 / /
26 / /
27 / /
28 / /
15
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1 II. CONCLUSION
2 The United States respectfully requests that the Court deny Bhakta’s motions in
3 limine, except those that the United States does not oppose (motions numbered 4, 6, and 9-
4 12).
5 DATED: September 27, 2024 Respectfully submitted,
6
TARA K. MCGRATH
7 United States Attorney
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/s/ P. Kevin Mokhtari
9 P. KEVIN MOKHTARI
10 ERIC R. OLAH
Assistant United States Attorneys
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