Memorandum Opinion and Order granting the United States unopposed — No. 5:24-cr-00022 (Dkt. 36, E.D. Ky.)
Summary
A Memorandum Opinion and Order in United States v. Vonnie J. McDaniels, Criminal Action No. 5: 24-022-DCR, in the United States District Court for the Eastern District of Kentucky, Central Division at Lexington, dated and filed June 27, 2024 as Doc #: 36. It notes that McDaniels is charged with wire fraud under 18 U.S.C. § 1343, aggravated identity theft under 18 U.S.C. § 1028A and money laundering under 18 U.S.C. § 1957, relating to an alleged scheme to defraud COVID-19 relief programs. The court grants the government's unopposed motion in limine to admit, under Rules 803(6)-(8), certified business records including PPP application records from Blue Vine, Inc. and Kabbage, Inc. and bank records. It also admits certifications of the absence of IRS filing records and unemployment wage reports, and a record of the 2017 administrative dissolution of V&R Foods LLC.
Summary drafted by a model from the text of the original file linked on this page 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
Cite this document
“Memorandum Opinion and Order granting the United States unopposed — No. 5:24-cr-00022 (Dkt. 36, E.D. Ky.).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/memorandum-opinion-and-order-granting-the-united-states-unopposed-no-5-5f0274c035/
, SHA-256 fd416a0a630e3699b480c0fa971a8c15aff35b69d79f9f19302b1bbb5fd1f356.Full text
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 1 of 7 - Page ID#:
<pageID>
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
UNITED STATES OF AMERICA, )
)
Plaintiff, ) Criminal Action No. 5: 24-022-DCR
)
V. )
)
VONNIE J. MCDANIELS, ) MEMORANDUM OPINION
) AND ORDER
Defendant. )
*** *** *** ***
Defendant Vonnie McDaniels has been charged with committing wire fraud in violation
of 18 U.S.C. § 1343, aggravated identity theft in violation of 18 U.S.C. § 1028A, money
laundering in violation of 18 U.S.C. § 1957, and violating conditions of his release pursuant
to 18 U.S.C. § 3147. These charges relate to an alleged scheme to defraud COVID-19 relief
programs. [Record No. 1] In advance of the jury trial, the United States has filed an unopposed
motion in limine to admit certain documents as business records, lack of business records, and
public record pursuant to Rule 803(6)-(8) of the Federal Rules of Evidence. [Record Nos. 33,
35] The motion will be granted for the reasons outlined below.
I.
The United States alleges that Defendant McDaniels executed a scheme to defraud
COVID-19 pandemic relief programs, including the United States Small Business
Administration’s Payment Protection Program and Economic Injury Disaster Loan program,
as well as Lexington-Fayette Urban County Government’s Housing Stabilization Program
(“HSP”). Specifically, the government contends that McDaniels submitted false statements
-1-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 2 of 7 - Page ID#:
<pageID>
and documents about his businesses and rental properties to obtain government funds. It also
asserts that McDaniels committed aggravated identity theft by using the identity of his two
tenants as part of the HSP rental relief application.
II.
Rule 803(6) of the Federal Rules of Evidence “permits business records to be admitted
into evidence despite the normal bar against the introduction of hearsay provided that the
records: (1) were ‘created in the course of a regularly conducted business activity;’ (2) were
‘kept in the regular course of that business; (3) resulted from a ‘regular practice of that
business’ to create such documents; and (4) were ‘created by a person with knowledge of the
transaction or from information transmitted by a person with knowledge.’” United States v.
Ramer, 883 F.3d 659, 677–78 (6th Cir. 2018) (quoting Yoder & Frey Auctioneers, Inc. v.
EquipmentFacts, LLC, 774 F.3d 1065, 1071–72 (6th Cir. 2014). These conditions may be
shown “by a certification that complies with Rule 902(11).” Ramer, 883 F.3d at 678 (quoting
Rule 803(6)(D) of the Federal Rules of Evidence). A business record is self-authenticating
once it is certified. See Fed R. Evid. 902.
Generally, the business records exception “is based on the indicia of reliability that
attaches to a record created or maintained by an employer in the ordinary or regular course of
their business.” Peak v. Kubota Tractor Corp., 559 F. App’x 517, 523 (6th Cir. 2014) (quoting
Cobbins v. Tenn. Dep't. of Transp., 566 F.3d 582, 588 (6th Cir. 2009)). Once a proper
foundation has been laid for the introduction of a business record, it should be admitted “absent
specific and credible evidence of untrustworthiness,” and the jury should be permitted to
determine the weight to give to the record. Peak, 559 F. App’x at 523 (citing United States v.
Hathaway, 798 F.2d 902, 907 (6th Cir. 2006)). Whether to grant a motion in limine falls within
-2-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 3 of 7 - Page ID#:
<pageID>
the sound discretion of the trial court. Branham v. Thomas Cooley Law Sch., 689 F.3d 558,
560 (6th Cir. 2012).
The United States seeks to admit seven sets of documents as business records pursuant
to Rule 803(6). Most of the records reference the business activities of V&M Leawood of
Frankfort LLC and V&R Foods LLC. Defendant McDaniels is the sole member of each LLC.
The United States provided McDaniels with notice of its intent to offer each record, as well as
the opportunity to challenge each record’s admissibility. To determine admissibility, the Court
independently analyzes each record request.
Blue Vine, Inc. Payment Protection Program (PPP) Records
McDaniels submitted two applications for the Paycheck Protection Program (“PPP”)
to Blue Vine, Inc., a federally insured financial institution approved by the Small Business
Administration to process PPP loan applications. He submitted one application for V&M
Leawood of Frankfort LLC and another for V&R Foods LLC. A representative of Blue Vine,
Inc. provided the United States with these records as they are maintained in the regular conduct
of business along with a business records certification. This constitutes self-authentication
pursuant to Rule 902(11). FED. R. EVID. 902(11).
Kabbage, Inc. PPP Records
McDaniels submitted two PPP applications to this federally insured financial institution
for V&R Foods LLC, including a “first draw” and “second draw” application. Valerie Holland,
a paralegal at Kabbage, Inc., provided the records the company maintains in the regular course
of business to the United States and attached a business records certification, satisfying Rule
902(11).
-3-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 4 of 7 - Page ID#:
<pageID>
Commonwealth of Kentucky Records
The United States intends to introduce records produced by Kentucky’s Department of
Facilities and Support Services. These records “include leases, lease modification documents,
records relating to the cancelation of the lease, and records relating to a fraudulent letter
purportedly from the Department of Facilities.” [Record No. 33] Brian Hoover, a property
management branch manager with Kentucky, provided these documents to the United States
along with a business records certification. Thus, Rule 902(11) is satisfied.
Kentucky Bank Records
Kentucky Bank issued a mortgage on 911 Leawood Drive to V&M Leawood of
Frankfort LLC. The records the United States intends to introduce refer to communications
between McDaniels and Kentucky Bank regarding the process for obtaining the mortgage.
They also show purportedly falsified documents, mortgage documents, and an internal memo
created by Kentucky Bank. Melinda Biddle, a records custodian at Kentucky Bank, provided
these documents to the United States along with a business records certification, satisfying
Rule 902(11).
JP Morgan Chase Records
The United States received three sets of records from JP Morgan Chase Bank. 1 The
first set V&M Leawood of Frankfort LLC includes account opening documents and statements
from June 2019 to February 2020. The second set for V&M Leawood includes monthly
statements from February 2020 to April 2021, reflecting potentially unlawful transactions. The
third set of records include statements regarding V&M Leawood, McDaniels’ personal
1
These bank documents relate to the account for V&M Leawood of Frankfort LLC
ending in *0179.
-4-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 5 of 7 - Page ID#:
<pageID>
account, and credit card statements. These records reflect a potentially unlawful deposit of
funds. JP Morgan Chase Bank provided business record certifications from custodians for
each set of records, satisfying the rules for admissibility.
Navy Federal Credit Union Records
The United States received two sets of Defendant McDaniels’ Navy Federal Credit
Union records. The first set contains documents from 2017 to June 2020 while the second
contains documents from June 2020 to October 2021. These records suggest potentially
unlawful transactions occurred. The Navy Federal Credit Union provided business record
certifications from custodians for each set of these records, satisfying the rules for
admissibility.
Google Subscriber Records
As a landlord, McDaniels allegedly submitted applications to obtain funding from the
HSP through the Lexington-Fayette Urban County Government for two of his rental properties.
Both the landlord and the tenant were required to submit applications. The United States
obtained subscriber records from Google LLC for the email addresses used on the tenant
portions of the associated HSP applications. Katrina Thompson, a records custodian with
Google LLC, provided these documents to the United States along with a business records
certification. These records meet the requirements of Rule 902(11).
III.
The United States also seeks to introduce two sets of documents for the purpose of
proving absence of records regarding a regularly conducted activity under Rule 803(7) of the
Federal Rules of Evidence. This rule permits the admission of the absence of a record
regarding a regularly conducted activity if: (1) “the evidence is admitted to prove that the
-5-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 6 of 7 - Page ID#:
<pageID>
matter did not occur or exist;” (2) “a record was regularly kept for a matter of that kind;” and
(3) “the opponent does not show that the possible source of the information or other
circumstances indicate a lack of trustworthiness.” FED. R. EVID. 803(7)(A)-(C).
Lack of IRS Records
The Internal Revenue Service (“IRS”) certified that it lacks filing records for
McDaniels, V&R Foods LLC, and V&M Leawood of Frankfort LLC. The certification states
that the Commissioner of the IRS has custody of federal tax records, notes that the
Commissioner would maintain the records listed on the form and would have access to the
records, and signifies that no such records were located. Specifically, “the IRS stated that it
did not have tax returns filed for any of these entities.” [Record No. 33] These statements
“were certified to be true, signed by an IRS disclosure specialist, and affixed with an IRS seal.”
Id. These records ay be introduced under Rule 803(7) as a result.
Lack of Office of Unemployment Insurance Records
The Kentucky Labor Cabinet responded to two grand jury subpoenas seeking
“Quarterly Unemployment Wage and Tax Reports” for V&R Foods LLC from 2017 to 2021
and V&M Leawood of Frankfort LLC from 2018 to 2023. [Record No. 33] The Office of
Unemployment Insurance provided letters stating that it did not have responsive records. On
May 9, 2024, a records custodian of Kentucky Office of Unemployment Insurance provided a
certification regarding the lack of these business records on file. Id. Specifically, the custodian
did not have Quarterly Unemployment Wage and Tax Reports for the defendant’s companies
involved in this matter, even though it was regular practice to record these documents if they
had been filed. As such, these records can be admitted pursuant to Rule 803(7).
-6-
Case: 5:24-cr-00022-DCR-MAS Doc #: 36 Filed: 06/27/24 Page: 7 of 7 - Page ID#:
<pageID>
IV.
Finally, the United States intends to introduce a certified record of the 2017
administrative dissolution of V&R Foods LLC from the Kentucky Secretary of State. Rule
803(8) of the Federal Rules of Evidence allows a record or statement of a public office to be
admitted if “it sets out . . . the office’s activities, a matter observed while under a legal duty to
report” and “the opponent does not show that the source of information or other circumstances
indicate a lack of trustworthiness.” FED. R. EVID. 803(8). Under KRS 14.040, the Kentucky
Secretary of State certifies its official acts under its seal. This record is admissible pursuant to
Rule 803(8).
V.
Based on the foregoing, it is hereby
ORDERED that the United States’ motion in limine [Record No. 33] is GRANTED.
Dated: June 27, 2024.
-7-
File and source
- File
- 36-memorandum-opinion-and-order-granting-the-united-states-unop.pdf
- Size
- 302,709 bytes
- SHA-256
- fd416a0a630e3699b480c0fa971a8c15aff35b69d79f9f19302b1bbb5fd1f356
- Original
- www.govinfo.gov