Defendant Eric Sheppard’s Motion to Dismiss for Prosecutorial Misconduct, or, in the Alternative, for New Trial Under Rule 33 — United States v. Eric Dean Sheppard, No. 22-20290-CR-Bloom/Otazo-Reyes (Dkt. 204, S.D. Fla.)
Summary
Eric Dean Sheppard asks the court in this February 2, 2024 motion to dismiss the charges on which a Southern District of Florida jury found Sheppard guilty, citing prosecutorial misconduct, or to grant a new trial under Rule 33. The superseding indictment it quotes charged that from April 2020 through March 2021 Sheppard submitted fraudulent PPP and EIDL loan applications for HM UP Development Alafaya Trails, LLC, HM Management and HM Four. The motion says prosecutors misrepresented 404(b) evidence, told the jury Sheppard committed uncharged tax violations and misstated the law on aggravated identity theft in closing. It also faults the court for dismissing a juror without cause, admitting evidence of uncharged loans and limiting cross-examination. It calls the verdicts inconsistent and the product of an Allen charge to a jury that had expected to finish before the holiday.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 1 of 18
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FORIDA
CASE No. 22-20290-CR-BLOOM/OTAZO-REYES
UNITES STATES OF AMERICA,
v.
ERIC DEAN SHEPPARD,
Defendant.
____________________________________/
DEFENDANT ERIC SHEPPARD’S MOTION TO DISMISS FOR PROSECUTORIAL
MISCONDUCT, OR, IN THE ALTERNATIVE, FOR NEW TRIAL UNDER RULE 33
Defendant Eric Sheppard, by and through undersigned counsel, hereby moves to dismiss
the charges for which he was found guilty, or in the alternative, for a new trial pursuant to Rule 33
of the Federal Rules of Criminal Procedure. Mr. Sheppard respectfully submits that dismissal is
appropriate given prosecutorial misconduct, and in the alternative, a new trial is warranted because
of the errors that occurred both before and during the trial proceedings. 1
The government committed prosecutorial misconduct throughout the trial and during
closing argument. This included, among other things: (1) misrepresenting critical facts about
404(b) evidence to mislead the Court and poison the jury against Defendant; (2) misusing that
same 404(b) evidence during closing statements to improperly argue propensity; (3) misciting and
misrepresenting case law to the Court; (4) telling the jury Defendant committed uncharged tax
violations during closing argument; and (5) misstating the law on aggravated identity theft during
closing argument.
Further, the Court erred by: (1) admitting 404(b) evidence from Mr. Graff related to certain
Visa application documents, based on the government’s misrepresentations about that evidence in
its pleadings, and then limiting the defense’s cross-examination of Mr. Graff; (2) dismissing a
1
This Motion should not be construed as an abandonment or waiver of any other motions or
objections made prior to or during trial that are not addressed herein. See Rand v. Nat'l Fin. Ins.
Co., 304 F.3d 1049, 1052 (11th Cir. 2002) (it is a “settled rule in federal courts ... that a party may
assert on appeal any question that has been properly raised in the trial court. Parties are not required
to make a motion for a new trial challenging the supposed errors as a prerequisite to appeal.”)
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 2 of 18
juror without cause near the end of trial, over Defendant’s repeated objections; (3) admitting
evidence regarding uncharged loans, resulting in a variance from the Superseding Indictment at
[D.E. 60]; (4) admitting evidence of Defendant’s alleged and uncharged tax violations, as well as
other inadmissible evidence of “bad character”; (5) denying re-cross examination of key witnesses
after the government raised new issues, for the first time, during re-direct examination; and (6)
limiting the defense’s cross-examination of key witnesses on material issues.
The cumulative impact of errors at trial, compounded by the government’s prosecutorial
misconduct and the broken-up trial schedule, resulted in an unfair trial. Relief is warranted.
LEGAL STANDARD
Rule 33 permits a trial judge to “vacate any judgment and grant a new trial if the interest
of justice so requires.” Fed. R. Crim. P. 33(a). The Eleventh Circuit has defined the “interest of
justice” standard as “a broad standard” and not limited to cases where the district court concludes
that its prior ruling was legally erroneous. United States v. Vicaria M.D., 12 F.3d 195, 198 (11th
Cir. 1994). If a district court reviews a ruling it made and believes that it would exercise its
discretion differently, the court may order a new trial if doing so serves the interest of justice.
Appellate courts relying on Vicaria have rejected the notion that district courts may not order new
trials absent an identifiable legal error. United States v. Hatcher, 2011 WL 4425314, *7 (11th Cir.
2011); United States. v. Scroggins, 485 F.3d 824, 831 (5th Cir. 2007) (“A miscarriage of justice
warranting a new trial in certain circumstances may occur even where there has been no specific
legal error.”).
Further, even if a single error, standing alone, is found to be harmless, the cumulative effect
of more than one error may be sufficient to deprive a defendant of a fair trial. United States v.
Pearson, 746 F.2d 787, 796 (11th Cir. 1984); see also United States v. Vasquez, 225 Fed. Appx.
831, 836 (11th Cir. 2007) (“The cumulative effect of several errors that are harmless by themselves
could so prejudice the defendant's right to a fair trial that a new trial might be necessary”) (internal
quotations omitted). Here, the verdict was based on several errors that, alone and together, deprived
Mr. Sheppard of a fair trial. Justice requires vacating Mr. Sheppard’s conviction and a new trial.
ARGUMENT
I. The Court Erred In Its Rulings Regarding 404(b) Evidence
Before trial, at the beginning of trial, and during trial, the defense argued to the Court that
alleged 404(b) evidence from Jeffrey Graff was inadmissible. The defense told the Court that the
2
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 3 of 18
government had misrepresented facts in its 404(b) notice, which the defense knew for certain
because the defense had also interviewed Mr. Graff pre-trial. In conversations with the defense,
Mr. Graff stated material facts contrary to the government’s representations in its 404(b) filings.
The defense requested that prior to the admission of the alleged 404(b) evidence at trial, that it be
permitted to argue its inadmissibility to the Court. The Court overruled the defense request. In
addition, the Court limited the defense’s cross-examination of Mr. Graff on critical and highly
prejudicial portions of his testimony, such that one of his critical claims could not be countered.
The following brief recounting of disclosures to the Court regarding the alleged 404(b)
evidence shows the government’s shifting narrative.
A. The Government’s 404(b) Notice and Defendant’s Response
The government’s original 404(b) notice stated:
J.G. learned that in 2018, the defendant had forged J.G.’s signature
and had misrepresented J.G. as the applicant/sponsor for a non-
immigrant visa application . . .
The misrepresentations and the forged signature of J.G. were
made on a company letter addressed to the United States Embassy
in Mexico, purportedly submitted by J.G., as the Chief Financial
Officer (which he no longer was), and on a form prepared for filing
with the U.S. Department of Homeland Security in which the
defendant’s immigration counsel (not counsel in this case) entered a
notice of appearance on behalf of the applicant/ sponsor, J.G.
The events that J.G. would describe involve making material
misrepresentations to federal agencies – the U.S. Department of
State and the Department of Homeland Security. . .
[D.E. 77] (emphasis added). As shown above, the government originally told the Court that
Defendant forged Mr. Graff’s signature on the Visa application documents—i.e., the company
letter to the Embassy and the form required by Homeland Security. The government did not
mention any engagement letter in the 404(b) notice.
Upon receipt of the 404(b) notice, the defense objected. [D.E. 77]. The defense explained
that the government was misrepresenting the evidence, and beyond that, the evidence was
unnecessary, irrelevant, and prejudicial. [D.E. 77 at 3, 4, and 8]. The defense told the Court plainly,
“it is defense counsel’s representation to the Court that the 404(b) notice does not reflect the
witness’s anticipated testimony.” [Id at 10]. The defense knew this because undersigned counsel
3
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 4 of 18
was also speaking with Mr. Graff, and he disputed the government’s characterizations of the
404(b) evidence in those conversations. Because the defense and the government were getting
different versions of the facts from Mr. Graff, the defense requested an evidentiary hearing to
establish Mr. Graff’s actual testimony.
B. The Government’s Reply Concerning 404(b)
In its reply, the government changed its story completely regarding the 404(b) evidence.
[D.E. 116]. The government alleged in reply that Mr. Graff would say:
• His signature was forged on an engagement letter (never mentioned in the original
notice) and that signature “reflects” Defendant’s handwriting.
• The forged signatures on the Visa application documents, while not Defendant’s
handwriting, would only have been done at Defendant’s direction. [Id. at 3, 8].
• “[Mr. Graff] will testify to having personal knowledge of all the facts described
above.” [Id. at 6].
C. The Court’s Order Permitting 404(b) Evidence
In denying Defendant’s motion to exclude the alleged 404(b) evidence, the Court stated
the evidence would be relevant “[i]f [Graff] can establish . . . how he knows whether someone
would have forged his name at Defendant’s direction.” [D.E. 123 at 8]. The Court also found there
was sufficient proof that Defendant did what the government claimed, based on the government’s
representations about the anticipated testimony. [Id. at 11]. Finally, the Court denied the defense’s
request for a pre-trial evidentiary hearing. [Id. at 16].
D. Mr. Graff’s Actual Testimony At Trial
On direct, Mr. Graff baselessly speculated that he believed Defendant forged his signature
on an engagement letter for a law firm to work on the Visa application. [12/06/23 AM Tr. 121:19-
122:7]. The government also asked Mr. Graff numerous questions suggesting to the jury that Mr.
Graff’s name would not have been forged on the Visa application documents without being
directed to do so by Defendant. [12/6/23 PM (Graff) 71:5-72:10]. 2 This was a far cry from the
2
The government asked Mr. Graff several improper questions, back-to-back, about whether the
Visa application signatures would only have been done at Defendant’s direction. The defense’s
objections were sustained on these questions. Later, on December 11, the government falsely told
the Court, “With respect to the [Visa application documents], I brought out on direct that he did
not recognize the handwriting on those signatures, but that -- but that, based on his experience,
people who work for Eric Sheppard would not have signed that document without his express
4
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 5 of 18
original 404(b) notice, and Mr. Graff never established any basis for this testimony, as was required
in the Court’s Order.
On cross examination, Graff admitted that he never saw Defendant sign his (Mr. Graff’s)
name and thus was not familiar with what Defendant’s version of his signature would look like,
nor did he have any evidence that the Defendant directed anyone else to sign it. [12/06/23 AM Tr.
at 121:19-122:7]. Beyond that, Mr. Graff admitted this testimony about the engagement letter was
speculation during cross-examination:
DEFENSE: Let’s talk about what you have said about the engagement letter signing. Do
you agree that you have gone back and forth about whether or not it’s your testimony that
Eric signed the engagement letter?
GRAFF: Yes.
DEFENSE: And the reason that you have gone back and forth is because honestly, you’ve
never seen Eric sign your name, right?
GRAFF: Correct.
...
DEFENSE: And you couldn’t for sure swear that he did [sign] like you did with others?
GRAFF: Correct.
[Defense reserves motion with Court based on this testimony].
[12/11/23 (Graff Cross) 121:17-122:10].
Having established that Mr. Graff’s testimony regarding the engagement letter was pure
speculation, the defense then showed the same was true regarding the government’s suggestion
that Mr. Graff’s name would only have been forged on the Visa application documents with
Defendant’s knowledge or at his direction, confirming that the government had misled the Court
in its 404(b) filings regarding the Visa application documents. Mr. Graff admitted: (1) he never
told the government Defendant forged his name on any of the Visa application documents; and (2)
he never had any evidence, and never told the government, that Defendant told anyone to forge his
name on the Visa application documents. [12/06/23 AM Tr. at 117:9-118:6].
direction and authorization. That's what the testimony was.” Mr. Graff never gave this testimony
on direct, as claimed by the government.
5
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 6 of 18
Despite these admissions, Mr. Graff claimed on cross that Defendant’s employees
“normally don’t go rogue.” [12/11/23 Tr. (Graff) at 141: 8-11). On this claim, the defense tried to
ask Mr. Graff several questions about a former project manager of the companies, Scott Fish, with
whom Mr. Graff also worked, and who stole over a million dollars from the companies under the
Defendant’s nose, contrary to Mr. Graff’s testimony about rogue employees. [12/11/23 Tr. 141:17-
142:142:20]. The Court sustained the government’s objections to every single question on this
topic, denying Defendant the opportunity to fully cross-examine Mr. Graff, a key government
witness, in his assertion that nothing happened at the companies without Defendant’s knowledge
or direction. Not only was it error to allow the alleged 404(b) evidence to begin with, but the
prejudice was particularly acute because the Court limited cross examination of the witness.
In sum, this was not proper 404(b) evidence. It did not conform to the government’s 404(b)
filings or the Court’s order allowing the government to introduce the evidence at trial. The
evidence was highly prejudicial and did not meet the standard under 404(b). Nor was this evidence
“inextricably intertwined” with the case, as the government claimed in its reply brief. [D.E. 116 at
4]. This evidence was from years before the loans at issue were applied for. Indeed, Mr. Graff was
not even at the company when the government loans at issue were applied for. The evidence was
wholly unnecessary to complete any story regarding the charges and should not have been
admitted.
As discussed below, the government made matters even worse when it suggested in rebuttal
closing that the alleged Visa application forgeries showed Defendant had forged once before, and
that meant he forged again in connection with the loan applications. [1/11/23 Tr. 148:12-19] (“He
was trying to make it happen. And you know that it was not a mistake. And it was him. Because
you know from the evidence in this case that that is something – as I just showed you he just did
it[,]. . .”) (emphasis added). Mr. Graff’s testimony was used as improper propensity evidence
under Rule 404(b)(1). See infra n.7. Not only that, but this statement was contrary to all evidence.
II. The Court Erred By Admitting Evidence Of Other Uncharged Loans, Creating a
Variance from the Indictment
Per the Superseding Indictment:
• The scheme to defraud ran from April 2020 through March 2021. [D.E. 60 at ¶2].
• Defendant submitted fraudulent PPP and EIDL loan applications on behalf of HM
UP Development Alafaya Trails, LLC (“HM UP”); HM Management and
6
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 7 of 18
Development, LLC (“HM Management”); and HM Four LLC (“HM Four”). [Id.
at 4].
• Defendant was charged with nine counts of wire fraud and five counts of
aggravated identity theft. [Id. at pp. 7-8].
• The companies named in these fourteen counts are the same as those listed in
paragraph 4—HM UP, HM Management, and HM Four (collectively, the
“Indictment Companies”). Id.
• The 4 loans listed in the charges are the HM Four EIDL loan in fall 2020, the HM
UP attempted second draw PPP loan with PayPal in early 2021, the HM UP second
draw PPP loan with Northeast Bank in early 2021, and the HM Management PPP
loan with Cross-River Bank in early 2021 (collectively, the “Charged Loans”).
During trial, the government sought to introduce evidence of numerous additional loans
and attempted loans which were not charged in the Superseding Indictment (the “Uncharged
Loans”). The Uncharged Loans included loans attempted by companies other than the Indictment
Companies, as well as attempted modifications or extensions of loans occurring long after March
2021.
The defense objected and argued, among other things: (a) the government never gave a
404(b) notice concerning these Uncharged Loans; (b) there was a Bill of Particulars in which the
government never mentioned these Uncharged Loans; and (c) there was a Superseding Indictment
in which the government removed several of the Uncharged Loans from the original Indictment,
adding to Defendant’s surprise at trial. [12:12:23 PM T. 149:20-151:8; 12/13/23 PM T. 1:9-7:11;
125:15-129:6]. In other words, the defense reasonably believed that the “scheme to defraud” would
be the four Charged Loans referred to in the counts of the Superseding Indictment.
The government’s response to Defendant’s motion for bill of particulars is particularly
illuminating. In that response, the government represented to the Court that the Indictment
contained “all required information to put [Defendant] on notice of the wire fraud charges”. [D.E.
38 at 2]. Further, the government said it had informed Defendant about the specific loans he was
charged with, identified the dates on which the applications were made, and identified the lending
institutions and the companies on whose behalf the applications were submitted. [Id. at 8]. Despite
these representations, the government, over objection, varied from the Superseding Indictment by
7
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 8 of 18
introducing significant evidence of the Uncharged Loans and drastically expanding the case, to the
detriment and prejudice of Defendant.
During trial, and immediately prior to admission of evidence of the Uncharged Loans, the
government directed the Court to United States v Davis, 172 Fed Appx 175 (9th Cir. 2006), which
it represented on the record was a binding Eleventh Circuit opinion. Defendant had not been
provided the Davis case and was left to search for it on Westlaw, while the government argued it.
Davis is completely distinguishable from the instant case. With respect to the Uncharged Loans,
the defense position was that they were not included in a 404(b) notice. In Davis, there was a
404(b) notice and the question was whether it was sufficient. This was a pivotal argument, but the
defense was barely given enough to read Davis to make an argument. At the government’s
persistent urging, the Court advised it was bound by Davis, “a Fifth Circuit case,” even though
defense counsel, not the government, corrected the government as to it being a Ninth Circuit case.
[12/13/23 PM Tr. 3:7-11; 5:12-17; 6:19-7:3]. Given this finding, the Court ruled that evidence
regarding Uncharged Loans that were applied for during the relevant timeframe would be
admissible, as well as evidence regarding a subset of the Uncharged Loans that fell outside the
timeframe and were attempted “modifications” of Uncharged Loans within the timeframe.
This all resulted in the government presenting a case to the jury of loans and attempted
loans totaling $1.8 million in alleged fraud, as opposed to the $460,000 in four Charged Loans
named in the Superseding Indictment. This was highly prejudicial and misleading to the jury.
These Uncharged Loans became a feature of the case—so much so that after one hour of
deliberations the jury sent out a note asking for the chart the government used in closing that listed
many of these Uncharged Loans. This issue alone warrants a new trial.
III. Dismissal Of Juror No. 3 Over Defense Objections
More than halfway through trial, the Court dismissed Juror No. 3, who the defense
considered to be a very favorable juror. 3 The Defendant personally requested, through defense
counsel, that Juror No. 3 remain on the jury and not be dismissed. The defense strenuously and
repeatedly objected to dismissal of Juror No. 3.
3
Juror No. 3 was the owner and CEO of a large construction company for over 27 years. He was
obviously familiar with many of the issues that arose during the trial and likely could see the issues
from Defendant’s perspective better than any other juror.
8
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 9 of 18
Several days before his ultimate dismissal, and after trial had already begun, Juror No. 3
was called into Court given the government’s alleged concerns that he may not be able to focus on
the trial given his wife’s illness. Juror No. 3 assured the parties and the Court, on the record, that
this was not the case. He said was able to focus, and if that should change for any reason, he would
inform the Court immediately. The Court advised it was not willing to excuse this juror who had
only asked to be accommodated. [12/11/23 Tr. 4:13-14].
The very next day, it came to the Court’s attention that Juror No. 3 needed two mornings
off to attend appointments with his wife, who needed surgery. Notably, Juror No. 3 still never
requested dismissal or told the Court that he was unable to focus on the trial. Nonetheless, because
Juror No. 3’s schedule would require the Court to take partial days off from trial, the Court
dismissed Juror No. 3 over the defense objections (and contrary to the Court’s pronouncement the
previous day) for the stated reason that accommodating his schedule would impact the trial
schedule. [12/12/23 AM Tr. 6:25-5]. Not only was dismissal of Juror No. 3 highly prejudicial to
the defense and without good cause but removing him did not solve any of the Court’s scheduling
problems. Trial in this matter continued until January 12, 2024—an entire month after Juror No.
3’s dismissal, including a 3-week adjournment over the holidays.
IV. The Court Erred By Allowing Evidence Of Uncharged Tax Violations And Other
Evidence of “Bad Character”
The government also made repeated references to Defendant violating various tax laws
which were not charged. In particular, the government’s IRS expert spent substantial time
testifying about alleged tax violations, which went far outside the scope of his expert disclosure.
[D.E. 74]. The defense filed a motion in limine on the issue, in part based on the expert disclosure,
which was denied. [D.E. 84].
As soon as the IRS expert exceeded the scope of his notice, the defense objected. That
objection was overruled, and the expert was given free rein to testify to all matters put to him by
the government, including numerous claimed or suggested additional alleged tax violations or
crimes, beyond the scope of the Superseding Indictment, beyond the scope of the expert disclosure,
and for which the defense was unprepared to respond, as well as gratuitous attacks on Defendant’s
income and wealth. [11/28/23 PM (Palmer) 20:5-21-22:6; see, e.g., 24:3-25; 29:19-32:23; 36:5-
39:2; 39:13-42:22; 43:18-44:6; 47:21-48:3; 50:3-4]. The testimony includes topics such as Mr.
Sheppard’s personal tax returns, also admitted over Defendant’s objection, and without a limiting
9
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 10 of 18
instruction, and the irrelevant but prejudicial fact that no personal return was filed in recent years,
the final point made by the prosecutor on the final question on direct, to underscore the
prosecutor’s focus on prejudicial, irrelevant, alleged tax non-compliance. [Id. at 39:13-42:22,
55:19-15]. The expert was also permitted to testify extensively to these alleged bad acts for 2018
and 2019, which is outside the time frame of the Superseding Indictment and well outside the
substance of the charges. [See, e.g. id. at 29:19-32:23; 36:5].
The government portrayed Defendant as someone who did not pay his taxes or file his tax
returns on time, none of which was charged (and none of which was true). As one example, among
many, the government elicited testimony from multiple witnesses that suggested to the jury there
were no W-2 employees in 2019. During its case in chief, the defense proved this was false, or at
least was represented to be false to Sheppard by his accounting department. The defense admitted
Trial Exhibit Y-1, which showed HMMD W-2s for 2019, as well as printed confirmations and
online chat correspondence with an unknown individual confirming that the 2019 W-2s were e-
filed on January 31, 2020. In addition to prejudicing Defendant because these were uncharged tax
violations, it also prejudiced Defendant and served to distract the jury to have so much collateral
litigation over uncharged crimes. Admitting this evidence over repeated defense objections pre-
trial and during trial, and permitting closing arguments focused on these uncharged acts, was error.
The government also repeatedly elicited witness testimony that Defendant did not pay his
bills, suggesting to the jury that if Defendant received PPP monies, he should have at least paid
his workers with it.4 For example, at the end of its redirect, the government asked Mr. Graff if he
was owed money when he left Defendant’s company, and whether Defendant contacted him after
the PPP and EIDL loans were funded to pay him back. [12/6/23 T. (Graff) at 95:1-96:5]. The
government continued with this improper tactic through its rebuttal case, when it elicited
testimony, over objection, about unpaid bills to an accounting firm. [1/10/24 PM Tr. P. 132:15-
20]. This too became a featured theme of the government throughout the proceedings, and, over
objections, was permitted by the Court. 5
4
In truth, the unrebutted expert testimony from the defense’s expert witness, Scott Bouchner, was
that Defendant paid over $900,000 in payroll during the relevant period, which exceeded the total
amount of all government loan proceeds, charged and uncharged. [1/10/24 PM Tr. at 56:22-58:8].
5
The defense anticipated this improper line of attack and moved in limine to exclude it, but the
motion was denied.
10
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 11 of 18
V. The Court Erred By Denying The Defense Re-Cross Examination Where
Appropriate
The Court erred in not permitting the Defendant to have re-cross after the government
intentionally waited until re-direct to introduce evidence on a particular topic. Specifically, with
regards to testimony of PayPal representative Jammie Hutchinson, on cross-examination it was
established that PayPal did not request, review, or rely on the tax returns of the applicant.
Thereafter, on re-direct, for the first time, the government questioned Ms. Hutchinson about a new
theory on why 1065 tax returns of the applicant might be required. When the defense asked for
limited re-cross to address this new theory, the Court denied the request without discussion or
hearing argument. [11/30/24 PM Tr. 132:24-2]. This occurred again later during trial, with Spencer
Lord, a representative for Cross River Bank, on the same issue. [12/5/23 PM Tr. 126:20-25,
127:16-17].
VI. The Court Erred By Improperly Limiting The Defense’s Cross-Examination
The Court prohibited cross examination of key government witnesses by sustaining
government objections which were not made in good faith and were apparently seeded in the fact
that the government never did a proper investigation into the backgrounds of their own witnesses
and were surprised at the information. For example, the Court limited cross examination of Joe
Beirne, a critical witness on all Counts, by preventing questioning by the defense regarding Mr.
Beirne’s businesses and what he previously told the FBI in an interview memorialized in a 302
report.
The government called Mr. Beirne to testify that he was an independent contractor and not
a W-2 employee. The defense attempted to impeach Mr. Beirne but was repeatedly shut down by
the Court. The government, through Mr. Beirne, painted Defendant as a deadbeat who owed Mr.
Beirne money, which was a lie. When the defense attempted to impugn Mr. Beirne’s credibility
with his own bankruptcy case and filings, as well as judgments against him for fraud, the Court
sustained the government’s objections and deemed the questioning irrelevant. [11/29/23 PM 23:6-
23; 34:19-39:24]. At sidebar, the Court erred by ruling that unless Defendant had evidence of a
criminal conviction of Mr. Beirne, the information was not to be used as impeachment. This
impeachment was critical to show that Mr. Beirne, like Mr. Salem, lied to the FBI during his
interview about his business in Ohio and the circumstances of his working for Defendant in
Orlando. The truth was Mr. Beirne was out of business and had a pending bankruptcy and 22
11
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 12 of 18
lawsuits against him, most of which were for fraud and failure to pay workers. This information
would have directly impeached his testimony and showed he deliberately lied to the FBI when
interviewed. Moreover, it would have shown his bias. The Court prohibited all of it. [11/29/23 PM
Tr. p. 39:8-20]. The witness’s credibility was also important because he testified, falsely, that he
helped Defendant submit a hard copy PPP loan application, by hand, to an unnamed bank.
Defendant was prohibited from a full and fair cross examination of this key witness.
A second example, also discussed above, occurred during the cross-examination of Mr.
Graff. On direct, the government asked Mr. Graff numerous questions suggesting to the jury that
Mr. Graff’s name would not have been forged on the Visa application documents without being
directed to do so by Defendant. [12/6/23 PM (Graff) 71:5-72:10]. On cross, Mr. Graff stated
Defendant’s companies would not normally “go rogue.” [12/11/23 Tr. (Graff) at 141: 8-11]. The
defense attempted to ask Mr. Graff about one of Defendant’s former project managers, Scott Fish,
who stole millions of dollars from Defendant’s companies, without Defendant’s knowledge,
during Mr. Graff’s tenure. [12/11/23 Tr. p. 141:17-142:20]. This was critical and material cross-
examination to counter Mr. Graff’s suggestion that neither Jeff Vasilas or Jeanette Gonzalez could
have or would have done anything improper without Defendant knowing it or directing it.6 The
Court sustained repeated objections to this testimony and denied defense counsel’s requested
sidebar to explain the relevance. [Id.]
Given these limitations, the defense was also prohibited from developing one of its theories
of defense—that the FBI did not meaningfully start investigating this case until right before trial,
and agents never even did a background check on these witnesses. In its rush to judgment, the FBI
neglected to take any action on these fraudsters—much like with Mr. Graff who admitted to
committing tax fraud on the stand to the tune of over one million dollars, which was more money
than Defendant was charged with in this case.
VII. The Court Erred By Denying Defense Motion For Mistrial After Closing
As detailed below in Section VIII, the government committed prosecutorial misconduct in
closing argument. The Court erred by overruling the defense’s objections to the government’s
6
In closing, the government said it was “ludicrous” to think that Jeff Vasilas or Jeanette Gonzalez
would do any such thing, despite uncontroverted evidence otherwise, including Mr. Vasilas
forging Defendant’s name, and other evidence such as testimony from Mari Ataca that Mr. Vasilas
had access to the home office and computer, even when Defendant was absent.
12
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 13 of 18
closing argument and not granting a mistrial based upon the government’s misconduct. [1/11/23
AM Tr. p, 156:23-157:24].
VIII. Prosecutorial Misconduct During Trial And Closing Argument
As discussed above, there are numerous examples of the government’s prosecutorial
misconduct during trial.
The government’s conduct only got worse during closing argument, when it repeatedly
made arguments to the jury that were not supported by any competent evidence. There are several
egregious examples.
First, during rebuttal closing, the government ended its presentation by falsely suggesting
that Defendant forged Visa application documents and, if he had forged before, he would do it
again. [1/11/23 AM Tr. 148:12-19]. The defense immediately objected and reserved a motion. Mr.
Graff never testified that Defendant forged Visa application documents. In fact, Mr. Graff admitted
that the handwriting on the Visa application documents was not Defendant’s handwriting. Even
worse, the government represented to the Court that it would not use the alleged 404(b) evidence
to show propensity. 7 But that is exactly what it did, and the government made sure it was its final
word to the jury. This too was highly prejudicial, and given it was rebuttal closing, Defendant had
no ability to even respond.
Second, the government argued Defendant forged Jeanette Gonzalez’s name on documents
by comparing her purported signature on documents in question. [1/11/23 AM Tr. 76:13-20].
There was zero competent evidence regarding Jeanette Gonzalez’s “real” signature. Jeanette
Gonzalez, despite receiving immunity from the government, was never called as a witness. The
government never established her true signature with any witness. It was inappropriate, and
without any basis, to show the jury in closing a document purporting to contain her real signature
and then compare it to some other signature. It was even worse for the government to attribute any
of these signatures to Defendant as “forgeries.”
Third, the government argued that Defendant committed uncharged tax violations, as
discussed further above. [1/11/23 AM Tr. 135:11-14].
7
See [D.E. 77 at 2] (“The government intends to introduce the evidence outlined in this Notice for
the uses authorized by Fed. R. Evid. 404(b) . . .”) (emphasis added). See also [D.E. 116 at 6]
(calling Defendant’s argument that Mr. Graff’s testimony would be used to cause the jury to draw
an improper propensity inference “not persuasive”).
13
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 14 of 18
Fourth, the government told the jury that the tax returns signed by Mr. Cupersmith lent
“credibility and reliability” to the applications, and “the means of identification . . . is to lend
credibility to his applications.” [1/11/23 AM Tr. 78:4-15]. This was wrong, misleading, and
prejudicial. There is absolutely no evidence that the use of Mr. Cupersmith’s identity on the returns
had any impact at all on the underwriting process at Northeast or Cross-River (Counts 13 and 14),
such as by lending credibility or reliability to the applications. Because the government lacked any
evidence of same, it resorted to misleading the jury with false and unsupported statements in
closing, telling the jury what to believe.
Fifth, the government varied from the Superseding Indictment dramatically, making the
case largely about $1.8 million including Uncharged Loans, as opposed to the $460,000 in four
Charged Loans named in the Superseding Indictment. These Uncharged Loans became a feature
of the case, and this continued during closing. The government presented for closing a blown-up
chart containing numerus Uncharged Loans, effectively instructing the jury that the scheme went
far beyond the timeframe in the Superseding Indictment. The chart was left in front of the jury for
the entirety of the government closing. This was improper. Tellingly, this was the only document
the jury requested to see while deliberating.
Sixth, contrary to the all the evidence, the government argued to the jury that the Defendant
improperly commingled the loan funds and used the money for his personal benefit, paying his
home mortgage and for jewelry. Every single government witness who was asked, testified that
commingling of government loan proceeds with other monies was expected and acceptable, and
that money was fungible, and that tracing was not required to show how the loan proceeds were
spent. Moreover, defense expert Scott Bouchner testified that during all relevant periods, there was
sufficient non-government loan funds in the accounts to cover all personal expenses. The
government could have rebutted the testimony of Mr. Bouchner, who carefully analyzed all the
monies in and out of the accounts, dispelling the government’s claims regarding payment of
personal expenses. But the government chose not to do so, and instead argued in closing as if Mr.
Bouchner’s testimony, and the testimony of its own witnesses, did not exist.
Seventh, the government misrepresented Mr. Graff’s testimony concerning the Form 941s
at issue. The jury found Defendant guilty of submitting fraudulent 941s, and that decision was
undoubtedly aided by the government’s improper closing argument about Defendant’s and Ms.
Gonzalez’s signatures, discussed above. But it was also heavily impacted by the government’s
14
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 15 of 18
false assertion that Mr. Graff identified Mr. Sheppard’s handwriting on “each and every one of
these false 941s”. [1/11/23 AM Tr. 71:21-72:7; 76:9-20]. In fact, Mr. Graff failed to identify Mr.
Sheppard’s handwriting on most of the 941s given many were typed, and of the two that were
handwritten, one was clearly not done by Defendant:
AUSA: This one, on this page, is the handwriting the same or a little bit different? . . .
AUSA: Does it look to you like the Defendant's handwriting?
GRAFF: Not overly.
AUSA: I’m sorry not what?
GRAFF: It does not overly look like the Defendant's handwriting.
AUSA: Are you sure or unsure?
[defense objection sustained]
[12/06/23 PM Tr. p. 58:18-59:8]. This is a far cry from identifying Mr. Sheppard’s handwriting on
“each and every one” as the government misrepresented. Indeed, several 941s were not even shown
to Mr. Graff.
The government’s prosecutorial misconduct in closing was highly prejudicial given the
length of trial, the number of Uncharged Loans inserted into the case improperly, the multiplicitous
and duplicitous Superseding Indictment, and the 3-week break occurred in trial over the holidays,
which no doubt hampered the jury’s ability to recall all the evidence. The members of the jury
were looking to the lawyers in closing to remind them of the evidence. The jury naturally relied
on the good-faith of the prosecutors to stick to the evidence and not argue evidence that did not
exist. And with only 1.5 hours to tell the defense story, which was not enough before the
government’s conduct in its closing, the defense could not refute all the government’s
misrepresentations in its own closing argument.
Based on the government’s prosecutorial misconduct during trial and closing argument, as
discussed above, Defendant requests dismissal of the charges for which he was found guilty.
Defendant suffered actual prejudice from the government’s misconduct. See United States v. Barr,
2019 WL 3066327 (N.D. Ga. April 23, 2019) (dismissal of indictment for prosecutorial
misconduct depends upon a showing of actual prejudice). The government knew going into closing
arguments that the jury may very well acquit, and it made the cynical decision to cross the line—
blatantly and repeatedly—on the calculus that that a conviction that might be reversed is better
than an acquittal. The government should not get a pass on this.
15
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 16 of 18
CUMULATIVE IMPACT OF ERRORS AND PROSECUTORIAL MISCONDUCT
If the Court does not find dismissal is warranted given the government’s prosecutorial
misconduct, it is Defendant’s position that a new trial is warranted.
Many of the above errors are serious and standing on their own deprived Defendant of a
fair trial. But even if the Court were to find that all its rulings, individually, were justified or
constituted harmless errors, it is the cumulative effect of the errors compounded with the
government’s prosecutorial misconduct in closing and throughout the proceeding that deprived
Defendant of a trial. See Pearson, 746 F.2d at 796 (finding that even if a single error, standing
alone, is found to be harmless, the cumulative effect of more than one error may be sufficient to
deprive a defendant of a fair trial); Vasquez, 225 Fed. Appx. at 836 (“The cumulative effect of
several errors that are harmless by themselves could so prejudice the defendant's right to a fair trial
that a new trial might be necessary”) (internal quotations omitted).
The trial schedule also contributed to the cumulative impact of the errors and the harm
caused by the government’s prosecutorial misconduct. Before trial began, the government
estimated that its case would take 5-7 trial days. At calendar call, the government modified its
estimate to 8-10 trial days. At that time, everyone knew the defense would have its own substantial
case to present, as it had already disclosed a forensic accounting expert witness before calendar
call, among several other witnesses on the defense witness list. [See, e.g., D.E. 63].
At the end of the day, the trial took almost twice as many trial days as anticipated and lasted
well over 6 weeks. This included a 3-week adjournment over the holidays. The jury was so
desperate for this case to end that the same after they received the case for deliberations, late in
the day on Thursday, January 11, they informed the Court they could not come to agreement on
12 of 14 counts and were deadlocked. The jury rendered its verdict the next day—early Friday
afternoon of a long holiday weekend. The verdict, which was obviously a compromise, is also
inconsistent.
For example, no reasonable juror could find Defendant guilty of Count 5 of the Superseding
Indictment, after having found him not guilty of Counts 4 and 6. Count 5 related to the electronic
submission of IRS Form 941s to PayPal on February 11, 2021. [D.E. 60 at 7]. The jury found Mr.
Sheppard guilty of submitting these 941s, which were allegedly fraudulent because they suggested
Mr. Sheppard’s companies had W-2 employees during the relevant period. Count 4 related to
submission of a fraudulent PPP application to PayPal a few weeks earlier, on January 19, 2021.
16
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 17 of 18
Id. This application was allegedly fraudulent because, among other things, it claimed average
monthly payroll for W-2 employees during the relevant period, but the jury found Mr. Sheppard
not guilty of submitting a fraudulent application to PayPal. Similarly, Count 6 related to electronic
submission of a fraudulent Form 1065 to PayPal on February 26, 2021, after the submission of the
941s. Id. The tax return was allegedly fraudulent because it represented that Mr. Sheppard’s
companies had W-2 employees during the relevant period. The jury found Mr. Sheppard not guilty
of submitting the fraudulent 1065. Thus, inexplicably, the jury found Mr. Sheppard did not submit
a fraudulent application with fake W-2 payroll to PayPal in January 2021; found he did submit
fraudulent 941s to PayPal with fake W-2 payroll on February 11, 2021; and found he did not
submit a fraudulent tax return to PayPal with fake W-2 payroll on February 26, 2021. These
verdicts are inconsistent and impossible to reconcile.
Similarly, no reasonable juror could find Defendant guilty of Count 13 of the Superseding
Indictment, after having found him not guilty of Count 12. Both Counts 12 and 13 charged
Defendant with aggravated identity theft for using Neil Cupersmith’s name and tax information
on tax returns submitted to PayPal on February 26, 2021, and to Northeast Bank on March 11,
2021. [D.E. 60 at 8]. The tax returns at issue in these two counts are identical photocopies of each
other. The only difference is a handwritten change at the top of the tax return for Count 13, which
has no bearing on the identity theft aspect of the charge.
The jury’s inconsistent verdict was the natural consequence of an unfair trial, caused by
the cumulative effect of errors, prosecutorial misconduct, and the trial schedule. Inconsistent
verdicts reflect an irrational decision prompted after delivery of a coercive Allen charge, to a jury
that had expected to be done with the case before the holiday, not in mid-January.
CONCLUSION
For the reasons set forth herein, Defendant Eric Sheppard respectfully requests that this
Court either (1) dismiss the charges for which he was found guilty, or (2) grant him a new trial
pursuant to Rule 33 of the Federal Rules of Criminal Procedure.
17
Case 1:22-cr-20290-BB Document 204 Entered on FLSD Docket 02/02/2024 Page 18 of 18
Dated: February 2, 2024. Respectfully submitted,
NELSON MULLINS
One Biscayne Tower, 21st Floor
2 S. Biscayne Boulevard
Miami, FL 33131
Telephone: 305.373.9400
By: /s/ Jayne C. Weintraub
Jayne C. Weintraub
Florida Bar No. 320382
Jonathan Etra
Florida Bar No. 686905
Christopher Cavallo
Florida Bar No. 0092305
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on February 2, 2024, the foregoing document was filed via the
Court’s CM/ECF system to all counsel of record.
By: /s/ Jayne C. Weintraub
Jayne C. Weintraub
18
File and source
- File
- gov.uscourts.flsd.615772.204.0.pdf
- Size
- 314,859 bytes
- SHA-256
- 84969d05cd1809a8229130b28841a94113788c52101d417f227a06817b80f289
- Original
- storage.courtlistener.com