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United States v. Yang

United States District Court, N.D. California, San Jose Division

October 25, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
JENNIFER YANG & DANIEL WU, Defendants.

          ORDER REGARDING GOVERNMENT'S MOTIONS IN LIMINE, DEFENDANT YANG'S MOTION IN LIMINE NO. 3, AND DEFENDANT WU'S MOTION IN LIMINE TO EXCLUDE RULE 404(B) EVIDENCE Re: Dkt. No. 166, 170, 174

          Lucy H. Koh United States District Judge.

         On October 12, 2017, a federal grand jury returned a Superseding Indictment charging Defendants Jennifer Yang and Daniel Wu with one count of conspiracy (“Count 1”), three counts of visa fraud (“Counts 2 through 4”), two counts of mail fraud (“Counts 5 and 6”), and two counts of aggravated identity theft (“Counts 7 and 8”). ECF No. 4 (“Superseding Indictment”). The Superseding Indictment also charges Defendant Jennifer Yang with two counts of money laundering (“Counts 9 and 10”). Id. Trial in this case is scheduled to begin on November 12, 2019. A pre-trial conference will take place on October 30, 2019.

         On October 15, 2019, in advance of the pre-trial conference, the Government filed ten motions in limine. ECF No. 166 (“USA Mot.”). Defendants Yang and Wu filed separate oppositions on October 22, 2019. ECF Nos. 189 (“Yang Opp.”), 192 (“Wu Opp.”). In addition, Defendants Yang and Wu filed their own motions in limine on October 15, 2019. Two of those motions overlap with one of the Government's motions in limine: Defendant Yang's Motion in Limine No. 3 to Exclude Government 404(b) Evidence, ECF No. 170, and Defendant Wu's Motion in Limine to Exclude Rule 404(b) Evidence Regarding Tax Returns, ECF No. 174. The Government filed a consolidated response to those motions on October 22, 2019. ECF No. 190. These motions in limine are now before the Court. The Court will rule on Defendants' remaining motions in limine in a separate order.

         Having considered the parties' submissions, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part the Government's motions in limine. The Court also DENIES Defendant Yang's Motion in Limine No. 3 to Exclude Government 404(b) Evidence and Defendant Wu's Motion in Limine to Exclude Rule 404(b) Evidence Regarding Tax Returns.

         I. LEGAL STANDARD

         Motions in limine are a “procedural mechanism to limit in advance testimony or evidence in a particular area.” United States v. Heller, 551 F.3d 1108, 1111 (9th Cir. 2009). Like other pretrial motions, motions in limine are “useful tools to resolve issues which would otherwise clutter up the trial.” City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1070 (9th Cir. 2017). Accordingly, “a ruling on a motion in limine is essentially a preliminary opinion that falls entirely within the discretion of the district court.” Id.; see Luce v. United States, 469 U.S. 38, 41 n. 4 (1984) (explaining that a court may rule in limine “pursuant to the district court's inherent authority to manage the course of trials”).

         In many instances, however, rulings “should be deferred until trial, so that questions of foundation, relevancy, and potential prejudice may be resolved in proper context.” United States v. Pac. Gas & Elec. Co., 178 F.Supp.3d 927, 941 (N.D. Cal. 2016). For example, in order to exclude evidence on a motion in limine, “the evidence must be inadmissible on all potential grounds.” McConnell v. Wal-Mart Stores, Inc., 995 F.Supp.2d 1164, 1167 (D. Nev. 2014). Thus, denial of a motion in limine to exclude certain evidence does not mean that all evidence contemplated by the motion will be admitted, only that the court is unable to make a comprehensive ruling in advance of trial. Id. Moreover, even if a district court does rule in limine, the court may “change its ruling at trial because testimony may bring facts to the district court's attention that it did not anticipate at the time of its initial ruling.” City of Pomona, 866 F.3d at 1070; see also Ohler v. United States, 529 U.S. 753, 758 n.3 (2000) (“[I]n limine rulings are not binding on the trial judge, and the judge may always change his mind during the course of a trial.”).

         II. GOVERNMENT'S MOTIONS IN LIMINE

         The Government filed an omnibus brief containing ten motions in limine. Below, the Court takes each motion in turn.

         A. Motion in Limine No. 1

         In its first motion in limine, the Government asks the Court to “preclude Defendants from offering an improper defense blaming their victims.” USA Mot. at 2-4. Specifically, the Government is concerned that Defendants may attempt to bring evidence (1) “that the victims in this case . . . could have or should have exercised more diligence or skepticism in their dealings with Defendants, ” or (2) “that the victims did not in fact rely on the materially false and misleading statements made by Defendants.” Id. at 2. Defendants oppose the motion to the extent that the Government seeks to limit Defendants' ability to introduce evidence “(1) that may potentially be used for impeachment purposes, or (2) that is relevant to the jury's assessment of whether the alleged misstatements were material.” Yang Opp. at 1; see Wu Opp. at 1.

         It is true, as the Government points out, that the federal fraud statutes do not require proof that the victim relied on the false statements or was damaged by the statements. Neder v. United States, 527 U.S. 1, 25 (1999). It is likewise no defense that the victim of the fraud was negligent, gullible, or incompetent. United States v. Ciccone, 219 F.3d 1078, 1083 (9th Cir. 2000) (“In this circuit, it is immaterial whether only the most gullible would have been deceived by the defendants' scheme.”) (internal quotation marks and alterations omitted). “What is important is the intent of the person making the statement that it be in furtherance of some fraudulent purpose.” United States v. Blixt, 548 F.3d 882, 889 (9th Cir. 2008) (mail fraud).

         At the same time, “materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.” Neder, 527 U.S. at 25. A statement is material if it “has a natural tendency to influence, or was capable of influencing, the decision of the decisionmaking body to which it was addressed.” United States v. Peterson, 538 F.3d 1064, 1072 (9th Cir. 2008) (quoting Kungys v. United States, 485 U.S. 759, 770 (1988)). The Ninth Circuit has made clear, moreover, that this is an “objective test.” Id. Yet, courts have said that how a particular decisionmaker would have reacted to particular statements is relevant to whether those statements were material. See Peterson, 538 F.3d at 1073 (holding that “[a] reasonable juror could have concluded that the false statements in the Fisher Gift Letter were material” based on a witness's testimony that “had HUD known that the Petersons directly funded the down payment, HUD would not have insured the loan.”); see also United States v. Maximov, No. CR10-822-PHX-DGC, 2011 WL 4915162, at *4 (D. Ariz. Oct. 17, 2011) (“[T]he jury must consider the decisionmaking body to which the false statement was addressed in deciding whether a misrepresentation is material.”). Hence, although “a misrepresentation may be material without inducing any actual reliance, ” Blixt, 548 F.3d at 889, the line between evidence that goes to materiality as opposed to an improper defense (e.g., of the victim's lack of reliance) is less than clear.

         Furthermore, the Court agrees with Defendants that a victim's knowledge of the fraud could constitute relevant impeachment evidence. If, for instance, the Government elicits testimony from a witness that he or she had in fact been deceived by the false statements, such testimony could open the door to evidence that the witness was aware the statements were false.

         To the extent the Government's motion seeks to preclude impeachment evidence and evidence bearing on materiality, the Court DENIES the Government's motion. The Government's motion is otherwise GRANTED.

         B. Motion in Limine No. 2

         In its second motion in limine, the Government asks the Court to exclude “evidence and arguments that Defendants believed their conduct was lawful or had a good-faith belief that their victims would be repaid and would sustain no loss.” USA Mot. at 5. Defendants oppose the motion to the extent that the Government seeks to limit Defendants' ability to introduce evidence that is probative of Defendants' intent to defraud. Yang Opp. at 2-3; see Wu Opp. at 1. Specifically, Defendants may seek to introduce evidence that they possessed a good faith belief that the alleged misrepresentations were true because, for instance, their expenditures and compensation were authorized. Id.

         The Government is of course correct that “ignorance of the relevant fraud laws is no excuse.” USA Mot. at 5; see, e.g., Shaw v. United States, 137 S.Ct. 462, 468 (2016) (ignorance of whether the targeted was “property” for purposes of the bank fraud statute is no defense); Shevlin-Carpenter Co. v. State of Minn., 218 U.S. 57, 68 (1910) (“[I]nnocence cannot be asserted of an action which violates existing law, and ignorance of the law will not excuse.”). The Government is also correct that an “intent to repay fraudulently obtained funds is not a defense to mail fraud.” United States v. Bowman, 81 Fed.Appx. 104, 106 (9th Cir. 2003); see also United States v. Olson, 925 F.2d 1170, 1175 (9th Cir. 1991) (“What matters on this mail fraud indictment is that Olson fraudulently obtained the use of others' money. Whether he intended that the effects of his fraud be permanent or temporary has no legal relevance.”); United States v. Benny, 786 F.2d 1410, 1417 (9th Cir. 1986) (“While an honest, good-faith belief in the truth of the misrepresentations may negate intent to defraud, a good-faith belief that the victim will be repaid and will sustain no loss is no defense at all.”). After all, actual loss to a victim is not an element of mail fraud, nor is an intent to cause loss. United States v. Hickey, 580 F.3d 922, 930 (9th Cir. 2009).

         On the other hand, Defendants are correct that they are “entitled to advance the claim that [they] did not intend to defraud the victims.” United States v. Hickey, 580 F.3d 922, 931 (9th Cir. 2009). In particular, “[a]n honest, good faith belief in the truth of the misrepresentations may negate intent to defraud.” United States v. Benny, 786 F.2d 1410, 1417 (9th Cir. 1986).

         Accordingly, Defendants are entitled to argue that they lacked intent to defraud because they believed, in good faith, that any alleged misrepresentations were true. For instance, Defendants are entitled to argue that they did not misstate the true manner in which the investment monies were used because the expenditures at issue were authorized by the investment entities and served legitimate business purposes. See Yang Opp. at 2; Wu Opp. at 1.

         On its face, however, the Government's motion only covers evidence and arguments that Defendants were ignorant of the fraud laws or had a good-faith belief that their victims would be repaid and would sustain no loss. Because such evidence is indeed legally irrelevant, the Government's motion is GRANTED. However, the Court notes that Defendants may seek to introduce evidence that their expenditures and compensation were authorized and that they possessed a good faith belief that the alleged misrepresentations were true.

         C. Motion in Limine No. 3

         In its third motion in limine, the Government seeks to preclude the “introduction of improper character evidence, ” e.g., specific instances of a defendant's good conduct through the testimony of others. USA Mot. at 6. The Government's motion is consistent with Federal Rules of Evidence 404 and 405. Meanwhile, Defendants represent that they do not intend to ...


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