Ruling — United States v. Alden Hall, No. 16-00102-BAJ-RLB (Dkt. 88, M.D. La.)

Summary

In a June 2017 ruling in United States v. Alden Hall, No. 16-00102-BAJ-RLB, Chief Judge Brian A. Jackson of the Middle District of Louisiana rules on the defendant's opposition (Doc. 30) to evidence the government gave notice of under Federal Rule of Evidence 404(b). Count Six charges Hall with unlawful money transactions on or about December 21, 2011 under 18 U.S.C. § 1957. The court finds intrinsic, highly relevant and not unfairly prejudicial the evidence of uncharged conversions of Department of Education funds, forensic analyses tracing funds from the bank account of Hall's school, and portions of Hall's testimony before the Louisiana Board of Cosmetology on June 11, 2012 about students and Pell Grant programs. The ruling declares that evidence ADMISSIBLE at trial.

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UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA CRIMINAL ACTION

VERSUS

ALDEN HALL NO.: 16-00102-BAJ-RLB
RULING

Before the Court is Defendant’s Opposition to 404(b) Evidence (Doc. 30),
in which Defendant expresses her opposition to the Government’s intention to
introduce various evidence at trial. On April 21, 2017, the Court addressed the

matter during a hearing.

Pursuant to Federal Rule of Evidence 404(b)(2), the United States of America
(“Government”) provided notice to Defendant that it intended to introduce the
following evidence at trial: “evidence of uncharged instances of [Defendant's]
converting Department of Education funds into personal funds;” “[pJortions of a
transcript of [Defendant’s] testimony before the Louisiana Board of Cosmetology on
June 11, 2012;” “forensic analysis of... [D]efendant’s bank account [that] shows how
the flow of funds... moved from [the bank account of Defendant’s school] into funds
paid directly to [Defendant] or to her other bank accounts;” and “analysis [regarding]

how [Defendant] channeled other unlawfully obtained Pell disbursements to herself

or to her other bank accounts.” (Doc. 30 at pp. 1-2 (quoting a private letter from the
Government)). Defendant objects to the introduction of the uncharged instances of
Defendant's conversion of Department of Education funds and to the two forensic
analyses of Defendant’s bank accounts (collectively, “conversion and forensic analysis
evidence”) on the ground that such evidence is not relevant because Count Six of the
Indictment charges Defendant only with engaging in unlawful money transactions in
connection with her alleged conduct on or about December 21, 2011, in violation of 18
U.S.C. § 1957; Defendant asserts that the conversion and forensic analysis evidence
concerns transactions that bear no relation to the charged conduct that allegedly took
place in late-December 2011.! Defendant argues that this evidence is not relevant
under Rule 401 and that, if it is relevant, its probative value is substantially
outweighed by a danger of unfair prejudice and confusing the issues under Rule 403.
Defendant further asserts that the only issue to which the conversion and forensic
analysis evidence is relevant is Defendant’s character, and thus the evidence is
inadmissible pursuant to Rule 404. Defendant likewise argues that her testimony
before the Louisiana Board of Cosmetology (“testimony evidence”) is inadmissible
because it concerns matters that are irrelevant to the above-captioned matter under
Rule 401 and that, if it is relevant, its probative value is substantially outweighed by

unfair prejudice and confusing the issues under Rule 403.

1 Defendant concedes that a portion of this evidence is relevant to the December 2011 conduct and
does not oppose the introduction of that evidence. Doc. 30 at pp. 4-5. This Ruling concerns the
balance of the conversion and forensic analysis evidence.

2
“Other act’ evidence is ‘intrinsic’ when the evidence of the other act and the
evidence of the crime charged are ‘inextricably intertwined’ or both acts are part of a
‘single criminal episode’ or the other acts were ‘necessary preliminaries’ to the crime
charged.” United States v. Williams, 900 F.2d 823, 825 (5th Cir. 1990). “Intrinsic
evidence is admissible to ‘complete the story of the crime by proving the immediate
context of events in time and place...’ and to ‘evaluate all of the circumstances under
which the defendant acted.” United States v. Rice, 607 F.3d 133, 141 (5th Cir. 2010)
(first quoting United States v. Coleman, 78 F.3d 154, 156 (5th Cir. 1996); then quoting
United States v. Randall, 887 F.2d 1262, 1268 (5th Cir. 1989)). “Intrinsic evidence
does not implicate [R]ule 404(b), and ‘consideration of its admissibility pursuant to
[that Rule] is unnecessary.” Id. (quoting United States v. Garcia, 27 F.3d 1009, 1014

(5th Cir. 1994)).

The Court finds that the conversion and forensic analysis evidence is intrinsic
in nature.2. The evidence is “inextricably intertwined” with the evidence of the
conduct alleged in Count 6 because it demonstrates the manner in which the alleged
money laundering was or may have been carried out as part of a larger scheme.
Williams, 900 F.2d at 825. Further, the conversion and forensic analysis evidence,
because of its nature as intrinsic evidence, is highly relevant, and its relevance is not

substantially outweighed by the danger of unfair prejudice to the Defendant or the

2 At a hearing on June 14, 2017, the Government stated that the witness who will testify regarding
the conversion and forensic analysis evidence will only testify as to the facts surrounding such
evidence; he will not provide an expert opinion on how persons generally obscure funds through
various banking transactions.
jury’s confusing the issues pursuant to Rule 403.

After reviewing the testimony evidence, the Court similarly finds that it is
intrinsic in nature. The testimony evidence focuses on representations that
Defendant made to the Louisiana Board of Cosmetology regarding which students
were enrolled in programs that were approved for the disbursement of Pell Grant
funds and which were not, as well as the number of hours that students in fact
attended classes. Because the Government has alleged that Defendant engaged in a
scheme to fraudulently obtain funds from the Department of Education — namely,
Pell Grant funds — the testimony evidence is intrinsic evidence because it evinces an
attempt to conceal the alleged scheme. Such evidence thus will allow the jury to
“evaluate all of the circumstances under which the defendant acted.” Randall, 887
F.2d at 1268. Additionally, the testimony evidence, because of its nature as intrinsic
evidence, is highly relevant, and its relevance is not substantially outweighed by the
danger of unfair prejudice to the Defendant or the jury’s confusing the issues

pursuant to Rule 403

Accordingly, this evidence — evidence of uncharged instances of Defendant’s
converting Department of Education funds into personal funds; portions of a
transcript of Defendant’s testimony before the Louisiana Board of Cosmetology on
June 11, 2012; forensic analysis of Defendant’s bank account that shows how the flow
of funds moved from the bank account of Defendant’s school into funds paid directly

to Defendant or to her other bank accounts; and analysis regarding how Defendant
channeled other unlawfully obtained Pell disbursements to herself or to her other

bank accounts — is ADMISSIBLE.

Baton Rouge, Louisiana, this aay of June, 2017.

BRIAN A. JACKSON, CHIEF JUDGE
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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