Opinion
Criminal Action No. 03-16, Section: I.
June 1, 2005
ORDER AND REASONS
Before the Court on reconsideration is a motion, filed on behalf of defendant, Kenneth Vicknair, to exclude the testimony of the government's expert witness in international banking, Vincent M. Maulella. In support of the motion, defendant asserts three objections to Maulella's anticipated testimony: (1) Maulella's expected testimony does not meet the relevance and reliability standard established in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); (2) the government has retained Maulella in order to introduce inadmissible hearsay; and (3) Maulella will impermissibly express an opinion on an ultimate issue. For the following reasons, the motion is GRANTED IN PART AND DENIED IN PART.
Rec. Doc. No. 128.
The motion in limine was initially filed on behalf of both Vicknair and a co-defendant, David Wallace. In addition to the arguments set forth above, defendants argued that Maulella's testimony should be excluded on the ground that disclosure of Maulella's expert report was untimely. See id. at 10. At the time the motion was initially filed, trial was set less than a month after the government provided Maulella's report to the defense. Ruling in favor of defendants, this Court agreed with the defense's argument that the disclosure was untimely and this Court excluded the testimony on that ground. See Rec. Doc. No. 132. Subsequently, Wallace pled guilty to one count of the superseding indictment and Vicknair's trial was continued. See Rec. Doc. Nos. 141, 145. Based upon the continuation of the trial date, this Court granted the government's motion to reconsider the ruling excluding Maulella's testimony on the ground of untimely disclosure. Rec. Doc. No. 151. On reconsideration, both parties agree that untimeliness is not at issue.
BACKGROUND
On April 29, 2004, the United States filed a superseding indictment charging the defendant with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), and conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371. The instant prosecution revolves around defendant's alleged participation in a transaction involving the attempted sale of 155 million dollars worth of promissory notes, allegedly issued by a Venezuelan bank, to an undercover Secret Service agent posing as an individual seeking to launder drug proceeds.On February 16, 2005, the United States gave the defendant notice of its intent to introduce the testimony of an international banking and trade specialist, Vincent M. Maulella. The government intends to introduce Maulella's expert opinion that the purported Venezuelan notes are fraudulent and that the circumstances of the attempted sale are inconsistent with a legitimate financial transaction.
LAW AND ANALYSIS
Rule 702 of the Federal Rules of Evidence states:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
As recently noted by the Fifth Circuit:
Amended Rule 702 reflects the Supreme Court's decisions in Daubert and its progeny emphasizing the district courts' broad latitude in weighing the reliability of expert testimony for admissibility. E.g., Daubert, 509 U.S. at 591, 113 S.Ct. 2786; Kumho Tire Co. v. Carmichael, 526 U.S. 137, 142, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). Kumho Tire clarified that the Rule 702/ Daubert analysis applies to all proposed expert testimony, including nonscientific "technical analysis" and other "specialized knowledge". 526 U.S. at 141, 119 S.Ct. 1167.Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004). In assessing the admissibility of expert testimony, a trial court's task is to make a preliminary assessment of whether the reasoning or methodology underlying the testimony is valid and of whether that reasoning or methodology properly can be applied to the facts at issue. Burleson v. Tex. Dep't of Criminal Justice, 393 F.3d 577, 583-84 (5th Cir. 2004) (citation omitted). "Stated differently, the trial judge must determine whether the expert testimony is both reliable and relevant." Id. at 584 (citation omitted); Crown Equip. Corp., 394 F.3d at 325 ("It goes without saying that Daubert clarified a district court's gate-keeping function: the court must ensure the expert uses reliable methods to reach his opinions; and those opinions must be relevant to the facts of the case.").
A. Relevance
For expert testimony to be admissible pursuant to the Daubert/Rule 702 framework, such testimony must "assist the trier of fact to understand the evidence or to determine a fact in issue." Fed.R.Evid. 702; Pipitone v. Biomatrix, Inc., 288 F.3d 239, 245 (5th Cir. 2002) (citation omitted). Pursuant to Fed.R.Evid. 401, "`[r]elevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence."
(1) The Alleged Fraudulent Nature of the Venezuelan Promissory Notes
The government expects Maulella to testify that the Venezuelan notes are fraudulent. Defendant's first argument is that Maulella's testimony that the notes are, in fact, fraudulent is irrelevant. In particular, defendant contends that Maulella's testimony in that regard is irrelevant because he is charged with conspiracy to commit fraud, not with the possession or attempted sale of counterfeit notes.
Count 2 of the indictment charges Vicknair with conspiracy to commit wire fraud in violation of 18 U.S.C. § 371.
A section 371 conspiracy comprises the following elements: (1) an agreement between the defendant and a co-conspirator to violate a law of the United States; (2) an overt act by one conspirator in furtherance of the conspiracy; and (3) the specific intent to further an unlawful objective of the conspiracy. United States v. Sharpe, 193 F.3d 852, 863 (5th Cir. 1999). The requirement of an agreement is the central element and the agreement, therefore, must be arrived at knowingly. United States v. Holcomb, 797 F.2d 1320, 1327 (5th Cir. 1986); United States v. Ballard, 663 F.2d 534, 543 (5th Cir. 1981). . . . The existence of an agreement, however, may be proved by circumstantial evidence, see Holcomb, 797 F.2d at 1327, and even minor participation in the conspiracy may serve as the basis for a conviction. United States v. Prieto-Tejas, 779 F.2d 1098, 1103 (5th Cir. 1986). Moreover, in a conspiracy case: "[a]n agreement may be inferred from `concert of action,'" "[v]oluntary participation may be inferred from `a collocation of circumstances,'" and "[k]nowledge may be inferred from `surrounding circumstances.'" United States v. Lechuga, 888 F.2d 1472, 1476-77 (5th Cir. 1989).United States v. Bieganowski, 313 F.3d 264, 276-77 (5th Cir. 2002) (ellipsis supplied). The elements of wire fraud are the following: (1) knowing participation in a scheme to defraud; (2) use of interstate wire communications in furtherance of the scheme; and (3) intent to cause some harm as a result of the fraud. United States v. Powers, 168 F.3d 741, 746 (5th Cir. 1999); see also United States v. St. Gelais, 952 F.2d 90, 95 (5th Cir. 1992). "An intent to defraud for the purpose of personal gain satisfies the `harm' requirement of the wire fraud statute." Powers, 168 F.3d at 746; St. Gelais, 952 F.2d at 95. A conspiracy to commit an offense requires proof of the degree of criminal intent necessary to commit the underlying offense. United States v. Sneed, 63 F.3d 381, 385 (5th Cir. 1995).
Rec. Doc. No. 61, pp. 2-4.
The scheme to defraud alleged in the superseding indictment is the attempted sale of the Venezuelan notes "by means of materially false and fraudulent pretenses, representations, and promises." The superseding indictment alleges, inter alia, that in connection with the scheme to defraud, defendant committed various overt acts, including representing to the buyers that he had discussed the notes with federal agencies and that the notes were "fine." Additionally, the indictment charges that defendant's alleged co-conspirator represented to the buyers that as far as he and the defendant knew, the notes were legitimate.
Rec. Doc. No. 61, ¶ 2.
Id. at 4.
Id.
Maulella's testimony that the notes are fraudulent is undoubtedly relevant to proving that defendant's representations about the legitimacy of the bonds were, in fact, false. Moreover, because defendant's knowing participation in the charged conspiracy may be inferred from all of the surrounding circumstances, Maulella's anticipated testimony that the notes are fraudulent bears not only on the legitimacy of the notes, but on defendant's agreement to participate in a transaction with the intent to defraud. Maulella's testimony will tend to cast doubt on the statements made by defendant and his co-conspirator with respect to their efforts to verify the validity of the notes and, in turn, will tend to undermine any belief asserted by defendant that the notes were legitimate. In short, because the conspiracy to commit wire fraud alleged in count 2 of the superseding indictment rests, at least in part, on the allegation that defendant conspired to commit wire fraud by falsely representing the validity of the notes to the prospective buyers, Maulella's testimony is relevant to the conspiracy charged in count 2 of the superseding indictment and it will assist the jury in determining a fact in issue.
The government does not argue that Maulella's testimony with respect to the fraudulent nature of the notes is relevant to proving the conspiracy to commit money laundering charged in count 1 of the superseding indictment.
(2) The Circumstances of the Attempted Sale of the Notes
The government expects Maulella to testify that, based upon his experience in international banking transactions and his knowledge of international standard banking practice, the circumstances surrounding the attempted sale of the notes are not consistent with a legitimate financial transaction. Some of the circumstances of the transaction referenced in Maulella's report are the lack of defendant's knowledge of the full names of the buyers, the absence of lawyers, the lack of written documentation with respect to the transaction, the fact that the attempted sale transaction occurred in a hotel conference room, and the proposed exchange of a large amount of cash for the purchase of the notes. Maulella also based his opinion on his observation that defendant was attempting to sell a promissory note to a third party when the note was beyond its initial maturity date and that such a transaction did not have a sound economic basis. Defendant argues that Maulella's opinion as to the legitimacy of the transaction based upon such circumstances is not relevant to proving any criminal activity. Defendant contends that the circumstances of the transaction merely show that he was a poorly equipped businessman.
Rec. Doc. No. 129, Ex. B., ¶¶ 25-28.
Id. at ¶ 29.
Count 1 of the superseding indictment charges the defendant with conspiring to commit money laundering in violation of 18 U.S.C. § 1956(h). The object of the charged conspiracy is a violation of 18 U.S.C. § 1956(a)(1)(B)(i), i.e. "concealment" money laundering. The elements of concealment money laundering are that "the defendant 1) conducted or attempted to conduct a financial transaction, 2) which the defendant knew involved the proceeds of unlawful activity, 3) with the intent . . . to conceal or disguise the nature, location, source, ownership, or control of the proceeds of unlawful activity." United States v. Odiodio, 244 F.3d 398, 403 (5th Cir. 2001) (citation and internal quotation marks omitted) (alteration in original).
Rec. Doc. No. 61, ¶ 1.
See id.
The Court finds persuasive the government's argument that Maulella's anticipated testimony regarding the circumstances of the transaction and the defendant's conduct is analogous to expert testimony by law enforcement officers admitted pursuant to Fifth Circuit authority in drug trials. The Fifth Circuit has noted the "well-established" rule that "an experienced narcotics agent may testify about the significance of certain conduct or methods of operation unique to the drug distribution business," as such testimony helps the trier of fact understand the evidence. United States v. Buchanan, 70 F.3d 818, 832 (5th Cir. 1995) (citations omitted). Such testimony "is permissible because it is based on specialized knowledge, and is admitted to aid the jury in understanding a fact in issue — whether [the defendant's conduct] was innocent or not." Id. As in Buchanan, Maulella's testimony with respect to certain standards, practices and procedures involving these type financial transactions, specifically, sale transactions involving promissory notes, will assist the jury in understanding whether the defendant's conduct and participation in the alleged transaction was innocent or not. Maulella's testimony will assist the jury in determining whether or not the transaction in this case lacks the hallmarks of a legitimate transaction and whether the transaction was designed to conceal or disguise the source of the purchase funds. Therefore, Maulella's testimony is relevant to proving that defendant conspired to commit money laundering as charged in Count 1 of the superseding indictment.
However, Maulella will not be permitted to testify as to his conclusion that the parties "appear to have created the illusion of legitimacy" by their conduct. Rec. Doc. No. 129, Ex. B, ¶ 32. Such a determination is better left to the jury as the fact finder in this case.
The government has not argued that Maulella's testimony with respect to the circumstances of the attempted sale are relevant to count 2 of the superseding indictment.
B. Reliability
In United States v. Hicks, 389 F.3d 514 (5th Cir. 2004), the Fifth Circuit set forth the governing principles pertaining to an analysis of the reliability of expert testimony:
In Daubert, the Supreme Court announced several factors that courts should consider when exercising their gate-keeping function, including: (1) whether the technique in question has been tested; (2) whether the technique has been subjected to peer review and publication; (3) the error rate of the technique; (4) the existence and maintenance of standards controlling the technique's operation; and (5) whether the technique has been generally accepted in the scientific community. Daubert, 509 U.S. at 593-94, 113 S.Ct. 2786. The proponent of expert testimony — here, the government — has the burden of showing that the testimony is reliable. See Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc). To show that expert testimony is reliable, however, the government need not satisfy each Daubert factor. As the Supreme Court has stated, the test of reliability "is `flexible,' and Daubert's list of specific factors neither necessarily nor exclusively applies to all experts or in every case. Rather, the law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination." Kumho Tire Co., 526 U.S. at 141, 119 S.Ct. 1167 (emphasis in original). Reaffirming the latitude given to trial judges to determine reliability, the Supreme Court further stated in Kumho Tire that "whether Daubert's specific factors are, or are not, reasonable measures of reliability in a particular case is a matter that the law grants the trial judge broad latitude to determine." Id. at 153, 119 S.Ct. 1167.Id. at 525.
Determining whether the specific factors set forth in Daubert may or may not be pertinent to a court's reliability determination depends "`on the nature of the issue, the expert's particular expertise, and the subject of his testimony.'" Pipitone, 288 F.3d at 244 (quoting Kumho Tire Co., 526 U.S. at 150, 119 S.Ct. at 1167). However, in order to assess the reliability of any expert testimony, whether such testimony is based upon scientific, technical or other specialized knowledge, a district court "should ensure that the opinion comports with applicable professional standards outside the courtroom and that it `will have a reliable basis in the knowledge and experience of [the] discipline.'" Watkins v. Telsmith, Inc., 121 F.3d 984, 991 (5th Cir. 1997) (quoting Daubert, 509 U.S. at 592, 113 S.Ct. at 2796) (alteration in original); see also Burleson, 393 F.3d at 584 ("The district court's responsibility `is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.'") (quoting Kumho Tire Co., 526 U.S. at 152, 119 S.Ct. at 1167).
Defendant asserts that Maulella's conclusions are unreliable because Maulella conducted internet research and because "there is no independent verifiable evidence to suggest that the methods and/or techniques employed by Maulella in this case have ever been tested, been the subject of a peer review, received general acceptance in the financial and securities arenas, or are known to have potential error rate." Finally, defendant asserts that there is nothing to suggest that Maulella's conclusions are based upon sufficient facts or data.
See Rec. Doc. No. 128, pp. 7-8 (emphasis in original).
Defendant's objection to Maulella's testimony on the ground that his methodology was not subject to "testing" or "peer review" and that it does not have a known "potential error rate" is unpersuasive. The nature and subject matter of Maulella's testimony are not such that those factors are relevant in determining whether Maulella's testimony is reliable. In accordance with Kumho Tire Co. and Pipitone, the advisory committee's note to the 2000 amendments to Rule 702 explain:
Some types of expert testimony will not rely on anything like a scientific method, and so will have to be evaluated by reference to other standard principles attendant to the particular area of expertise.
. . .
Nothing in this amendment is intended to suggest that experience alone — or experience in conjunction with other knowledge, skill, training or education — may not provide a sufficient foundation for expert testimony. . . . In certain fields, experience is the predominant, if not sole, basis for a great deal of reliable expert testimony. [citations omitted].
If the witness is relying solely or primarily on experience, then the witness must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.See also Crown Equip. Corp., 394 F.3d at 325 ("The 2000 amendments to Rule 702 also reflect the Supreme Court's determination that the analysis must remain flexible: not every Daubert factor will be applicable in every situation; and a court has discretion to consider other factors it deems relevant.") (citation omitted).
In arriving at his conclusions, Maulella conducted research and relied on thirty years of personal experience in financing and facilitating international trade, his knowledge of standard banking practices, the wording of the particular notes at issue, his knowledge and research of rules and regulations of the International Chamber of Commerce ("ICC"), official warnings and press releases issued by the ICC and other government and banking institutions about the type of promissory notes at issue, and his review of numerous documents filed in conjunction with this case and the prior trial of defendant's co-defendant. The "method" relied upon by Maulella is the application of his extensive experience, knowledge and research to the facts of this case. The Court finds that the combination of Maulella's experience, knowledge and research form a sufficiently reliable basis upon which to rest his conclusions.
The Court declines to conclude, as defendant suggests, that Maulella's research is inherently unreliable simply because the research was conducted via the Internet. Maulella's report reflects that the information gleaned from various websites is based upon either official warnings or official publications of the ICC, the Office of the Comptroller of the Currency, banks, and the United States government. Notably, although defendant objects to Maulella's method of research, defendant does not contest the authenticity of the warnings and notices which, in part, form the basis for Maulella's conclusions.
Furthermore, the Court finds that Maulella's report demonstrates that his knowledge, experience and research are reliably applied to the alleged facts of this case. As noted in Maulella's report, a key feature of the notes at issue in this case is that they bear the title, "Promissory Note ICC 290." Given that feature of the notes, Maulella's research of ICC rules, regulations and official warnings regarding promissory notes, as well as official warnings by the Venezuelan government and other banking institutions regarding similar promissory notes, is a reliable method of analyzing the legitimacy of the notes. Similarly, with respect to Maulella's expected testimony regarding the circumstances of the transaction, Maulella's extensive experience in and knowledge of international banking and trade practices and procedures apply to the alleged facts and support his conclusion that the circumstances of the sale were not consistent with a legitimate sale of promissory notes. Accordingly, Maulella's testimony satisfies the reliability prong of the Daubert/Rule 702 standard for admissibility.
See Rec. Doc. No. 129, Ex. B., ¶ 17.
C. Hearsay
Defendant argues that Maulella's anticipated testimony is inadmissible because the government is introducing Maulella's testimony in an effort to introduce inadmissible hearsay. Specifically, defendant argues that the documents and research gathered on the Internet from the ICC and other international banking and financial institutions and authorities are inadmissible hearsay and that there is no exception to the hearsay rule which permits Maulella to testify as to the positions and/or statements of those international financial organizations, agencies, and banks.
Fed.R.Evid. 703 provides in pertinent part:
The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be admitted.
(emphasis supplied). Pursuant to Rule 703, "experts may rely upon hearsay that is trustworthy." Whitehead v. Food Max of Miss., Inc., 163 F.3d 265, 275 (5th Cir. 1998) (citing Christophersen v. Allied-Signal Corp., 939 F.2d 1106, 1113-14 (5th Cir. 1991) (en banc), overruled on other grounds by Daubert, 509 U.S. at 587 n. 5, 113 S.Ct. at 2793 n. 5). In contrast, a district court "may reject opinions founded on critical facts that are plainly untrustworthy, principally because such an opinion cannot be helpful to the jury." Christophersen, 939 F.2d at 1114 (citations omitted). A court will examine the reliability of the expert's sources to determine whether they satisfy the threshold established by Rule 703. Id.; see also Slaughter v. Southern Talc Co., 919 F.2d 304, 306-07 (5th Cir. 1990).
The government has represented to the Court that it does not intend to introduce the substance of the various press releases, official warnings and statements of the ICC and other international banking institutions and agencies upon which Maulella's expert opinion relies. Additionally, defendant does not challenge the authenticity of the official statements and warnings and he does not contest that official statements and warnings of the type at issue may be reasonably relied upon by experts in international banking and trade. Accordingly, based upon the showing made, Maulella's testimony is not subject to exclusion because it is based upon inadmissible hearsay.
See Rec. Doc. No. 152.
Should defendant intend to contest whether experts in international banking and trade reasonably rely on the type of statements and warnings at issue in this case, defendant shall present such an objection to the Court prior to Maulella testifying at trial.
D. Testimony Pertaining to an Ultimate Issue
Pursuant to Fed.R.Evid. 704(a), expert testimony "in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact." Pursuant to Rule 704(b), an expert in a criminal case "may not, however, offer `an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged.'" United States v. Gutierrez-Farias, 294 F.3d 657, 662 (5th Cir. 2002) (quoting Fed.R.Evid. 704(b)). "Such issues are matters for the trier of fact alone." Id.; see also Fed.R.Evid. 704(b). Applying Rule 704(b), the Fifth Circuit has distinguished between cases in which an expert in a criminal case offers an impermissible opinion on an ultimate legal issue and those in which the expert offers "a mere explanation of the expert's analysis of the facts which would tend to support a jury finding on the ultimate issue." United States v. Speer, 30 F.3d 605, 610 (5th Cir. 1994) (citing United States v. Dotson, 817 F.2d 1127, 1132 (5th Cir. 1987)); see also Gutierrez-Farias, 294 F.3d at 663 n. 5; Buchanan, 70 F.3d at 833 n. 20. Expert testimony does not violate Rule 704(b) if it may be characterized as "an analysis of the evidence in the light of [the expert's] special knowledge" in the relevant field. Speer, 30 F.3d at 610; Buchanan, 70 F.3d at 833 n. 20.
In Speer, the Fifth Circuit stated that "Rule 704(b) is not strictly construed and prohibits only a direct statement of the defendant's intent." 30 F.3d at 610 (citations omitted). In a subsequent line of narcotics cases, the Fifth Circuit has retreated slightly from its statement in Speer that Rule 704(b) is violated only when an expert makes a direct statement of the defendant's state of mind. See United States v. Mendoza-Medina, 346 F.3d 121, 127-29 (5th Cir. 2003); United States v. Remirez-Velasquez, 322 F.3d 868, 878-79 (5th Cir. 2003); Gutierrez-Farias, 294 F.3d at 663.
In Gutierrez-Farias, a law enforcement agent testified that "(1) drug owners have managers and other people who work for them; (2) people higher up in the organization hire other people to transport the drugs; and (3) the people doing the hiring look for people, individuals, approach individuals that have knowledge, that they're involved in this kind of business, and they charge a price." 294 F.3d at 662 (internal quotation marks omitted). The agent continued by testifying that drug dealers usually do not choose people to transport drugs that have "no knowledge." Id. Holding that the agent's testimony was inadmissible, the Fifth Circuit first questioned whether the agent's testimony regarding what a person in the defendant's position would have known about the drugs was fairly considered "expert." Id. at 663. The Fifth Circuit reasoned that "[r]ather than assisting the jury to understand evidence presented or complicated fact issues in the case, [the expert/agent] presented the jury with a simple generalization: In most drug cases, the person hired to transport the drugs knows the drugs are in the vehicle." Id. The Fifth Circuit continued its analysis stating:
More importantly, we believe Agent Afanasewicz's testimony crosses the borderline long recognized by this court between a "mere explanation of the expert's analysis of the facts" and a "forbidden opinion on the `ultimate legal issue'" in the case. United States v. Speer, 30 F.3d 605, 610 (5th Cir. 1994); United States v. Dotson, 817 F.2d 1127, 1132 (5th Cir. 1987). The clear suggestion of Agent Afanasewicz's testimony is that, because most drivers know there are drugs in their vehicles, Gutierrez must have known too. Although admittedly Agent Afanasewicz did not say the magic words — "In my expert opinion, Gutierrez knew the marijuana was in the tires." — we believe his testimony amounted to the functional equivalent of such a statement.Id. The Fifth Circuit rejected the government's contention that the agent's testimony was admissible barring a "direct statement" of the defendant's intent. Id. at 663 n. 5. The panel distinguished cases such as Speer in which "the expert was called to interpret the behavior of persons and of facts in evidence in light of the expert's experience" and expert testimony resting upon generalizations regarding the state of mind of other persons similarly situated to the defendant. See id.
Defendant challenges Maulella's anticipated testimony on the ground that the testimony will speak directly to the defendant's state of mind. He argues that Maulella's anticipated testimony is inadmissible because "Maulella purports to know what is and what is not a legitimate business transaction" and because he "claims to `know' that the Venezuelan bonds are fraudulent." He argues that such testimony is inadmissible because it "goes specifically to whether the defendant possessed the requisite knowledge to commit financial fraud."
Rec. Doc. No. 128, p. 8.
Id.
With respect to one aspect of Maulella's anticipated testimony, defendant's argument is well taken. In his expert report, Maulella concludes not only that the promissory notes at issue in this case are illegitimate, but that it "should have been evident to anyone purporting to be in the investment or banking business" that the notes were illegitimate. Maulella's conclusion in that regard is remarkably similar to the agent's impermissible generalization about knowledge of narcotics drivers held inadmissible in Gutierrez-Farias. The clear implication of Maulella's conclusion is that because other people in defendant's position, i.e., people "purporting to be in the investment and banking business," would have known that the notes were illegitimate, defendant must have either (1) had knowledge that the notes were fraudulent; or (2) had the intent to defraud the purchasers. That conclusion is the "functional equivalent" of a direct statement of defendant's state of mind which, pursuant to Gutierrez-Farias, is inadmissible.
Rec. Doc. No. 129, Ex. B., ¶ 31.
However, Maulella's remaining conclusions are not inadmissible. Maulella's anticipated testimony includes testimony that, based upon his research and experience, the notes are, in fact, fraudulent and that the circumstances of the transaction are inconsistent with a legitimate sale of 155 million dollars worth of international promissory notes. By reference to Maulella's report, those conclusions do not appear to cross the line between an impermissible opinion with respect to defendant's state of mind and permissible expert testimony based upon an analysis of defendant's behavior and of certain facts in light of Maulella's special knowledge and experience in financial transactions and international trade. Although it is difficult to know at this time precisely the manner in which Maulella's testimony will be introduced, the Court finds that, subject to proper questioning directed to Maulella, his anticipated testimony as outlined in his report, with the exception noted above, is not subject to exclusion pursuant to Rule 704(b).
Accordingly, for the above and foregoing reasons, defendant's motion in limine is GRANTED IN PART AND DENIED IN PART.