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United States v. Babajian

February 17, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
JOSEPH ARAM BABAJIAN ET AL., DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER ON THE GOVERNMENT'S MOTIONS IN LIMINE

[Motions filed on December 15, 2008; Dkt. Nos. 131-136, 138]

This Order is subject to the revisions to the form of documents stated on the record during the hearing on February 9, 2009.

I. BACKGROUND

The Indictment alleges that Defendants Aram Babajian, Kyle Grasso, Lila Rizk, and Lester Robinson participated in a scheme to defraud lenders out of tens of millions of dollars by obtaining fraudulently inflated loans for homes from federally-insured lenders, from approximately July 2000 through January 2003. (Indict. ¶ 1.) Rizk and Robinson are real estate appraisers, while Babajian and Grasso are real estate agents. (Id. ¶ 5-16.) The alleged primary leaders of the conspiracy were mortgage brokers Mark Abrams and Charles Fitzgerald ("Abrams-Fitzgerald") and the various entities they controlled. (Id. ¶ 17-18.) Abrams and Fitzgerald are not defendants in the present Indictment.

The government now brings seven Motions in Limine for the Court's consideration.

II. MOTIONS IN LIMINE

A. Motion in Limine to Admit Prior Statements of Alleged Co-Conspirator Jamieson Matykowski

1. Background

The government seeks to admit statements from 2002 made by Abrams-Fitzgerald employee Jamieson Matykowski to independent real estate agent Barry Sloane. Matykowski had the responsibilities of a buyer's agent for Abrams-Fitzgerald. He located and toured properties, negotiated purchase contracts, and handled the paperwork for transactions. (Indict. ¶ 63.) Matykowski also worked on two purchases for Abrams-Fitzgerald where Babajian and Grasso received payments, but allegedly performed no services. (Id.) In 2002, Matykowski had a conversation with Sloane. In this conversation, Matykowski admitted that Babajian and Grasso were receiving commissions on a real estate transaction for which they had provided no services, and that they received these commissions as part of an arrangement with Abrams-Fitzgerald.

The government intends to offer Sloane's corroborating testimony in the event Matykowski's testimony is challenged by Defendants. The government argues that Sloane's testimony is admissible under either Federal Rule of Evidence 801(d)(1)(B), as a prior consistent statement, or Rule 801(d)(2)(E), as a statement made in furtherance of the charged conspiracy.

2. Discussion

A co-conspirator's statement is admissible where: 1) the conspiracy existed when the statement was made; 2) the defendant had knowledge of and participated in the conspiracy; and 3) the statement was made in furtherance of the conspiracy. United States v. Moran, 493 F.3d 1002, 1010 (9th Cir. 2007). However, any statements made for "personal objectives outside the conspiracy or as part of idle conversation are not admissible under Rule 801(d)(2)(E)." Id.

The parties dispute the reason why Matykowski informed Sloane about Babajian and Grasso's agreement with Abrams-Fitzgerald. (See Gov. Ex. C ¶ 17.) The evidence itself is ambiguous as to whether Matykowski's comments were actually in furtherance of the conspiracy; as they imply both that Matykowski's explanation was required to complete the transaction and alternatively merely a conversational description of background information related to the deal. See Moran, 493 at 1010 ("Statements made for personal objectives outside the conspiracy or as part of idle conversation are not admissible . . . ."). As such, the government's argument that Matykowski's purpose in telling Sloane was to prevent him from learning about the kickbacks scheme is speculative. The Court declines to grant the government's motion on this ground.

The government also moves to have Matykowski's comments to Sloane admitted under Rule 801(d)(1)(B), as prior consistent statements. A statement is not hearsay where the declarant testifies at trial, is subject to cross-examination concerning the statement, and the statement is "consistent with the declarant's testimony and is offered to rebut an express or implied charge against the declarant of recent fabrication or improper influence or motive." Fed. R. Evid. 801(d)(1)(B). Defendants argue*fn1 that it is premature to make any ruling on this basis, as Matykowski has not been subjected to cross-examination. The Court agrees.

The Court grants the government's Motion in Limine to admit the statements of alleged co-conspirator Matykowski to Sloane as a prior consistent statement, subject to the requirements of Federal Rule of Evidence 801(d)(1)(B).

B. Motion in Limine to Admit Testimony of Former Wife of Defendant Kyle Grasso

The government seeks to admit testimony of the former wife of Defendant Kyle Grasso, subject to the confidential communications privilege. Defendants do not oppose this Motion on these grounds.

The Court grants the government's Motion on this issue, subject to the confidential communications privilege.

C. Motion in Limine to Admit Defendant Rizk's Admissions in Regulatory Agency's Disciplinary Action

1. Background

The California Office of Real Estate Appraisers ("COREA") is a state agency that licenses, regulates, and disciplines real estate appraisers in the state. COREA investigated Defendant Rizk's conduct in the transaction at 2055 Stradella Road in Los Angeles. This property is expressly identified in the Indictment, and the government alleges that Rizk provided an inflated appraisal for it. (Indict. 59-60.) In its statement of charges against Rizk, styled as an "Accusation," COREA alleged several violations of the Uniform Standards of Professional Appraisal Practice, including that Rizk:

1) overstated the estimate of market value for the Stradella property and produced a misleading appraisal; 2) made numerous errors in reporting comparable sales data; 3) failed to adequately collect and analyze available comparable sales data; and 4) failed to disclose the concurrent listing of the Stradella property. (Mot. 3-4; Gov. Ex. 3618 ¶ 8, Ex. A, ¶ 5.) Rizk stipulated to "the truth of each and every charge and allegation" contained in the Accusation in a "Stipulation for Order of Public Reproval" ("Stipulation"). (Id.) The Stipulation also provides that Rizk's admissions "shall not be admissible in any other criminal or civil proceeding." (Gov. Ex. 3618 ¶ 10.) This Stipulation was then adopted as COREA's "Decision and Order" on January 10, 2005 ("COREA Decision").

The government seeks to admit this evidence under Rule 408(a)(2), in order to show: 1) Rizk herself generated the Stradella property's appraisal (rather than another person); 2) the Stradella appraisal grossly overvalued the Stradella property; and 3) the Stradella appraisal was deficient, misleading, and grossly breached professional rules in the appraisal field. (Mot. 5-6.)

2. Discussion

Federal Rule of Evidence 408 applies to "Compromises and Offers to Compromise" and reads as follows:

(a) Prohibited uses. Evidence of the following is not admissible on behalf of any party, when offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or contradiction:

(1) furnishing or offering or promising to furnish--or accepting or offering or promising to accept--a valuable consideration in compromising or ...


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