Jill Westmoreland Rose, United States Attorney, has filed a motion in limine to preclude Paul Burks from introducing “irrelevant testimony” through Nehra & Waak, Keith Laggos, Kevin Grimes, Howard Kaplan, Gregory Caldwell, and Greer & Walker.
A motion in limine is a motion made at the start of a trial requesting that the judge rule that certain evidence may not be introduced in trial.
The Motion goes on to say:
On or about April 11, 2016, Defendant notified the United States that he may assert a reliance defense in his response (Doc. 52) to the Government’s Motion in Limine regarding the reliance defense (Doc. 47), though no specific individuals upon whose advice the Defendant relied were named. On or about June 26, 2016, the defense again repeated that he may assert a reliance defense in its trial brief. (Doc. 86, page 6.) Again, no specific individuals were named. Moreover, Defendant’s trial brief asserts that his purported reliance defense is based upon the assertion that he made changes to the (already existing and implemented) program in good faith based on the advice of experts. That is, by his own admission Defendant did not seek advice about potential future conduct, but instead about his ongoing conduct.
Burks also appears to net be able to keep his dates straight:
In particular, Defendant has asserted that he first sought advice from the following individuals during the following months:
• Nehra & Waak – April 2011 (though this appears to be an error and should be June 2011)
• Keith Laggos – June 2011
• Kevin Grimes – December 2011
• Howard Kaplan – January 2012
• Gregory Caldwell – January 2012
• Greer & Walker – March 2012
The prosecution contends that at trial, they will establish that Zeek Rewards launched in January 2011 and promised a 125% return. Additional evidence will show that Burks and his co-conspirators “were aware that compounding bids purchased by affiliates in Zeek rewards were ‘debt bids’ creating exponential debt to the company well beyond 125% and driving away retail customers.”
Though cosmetic changes were later made to the program, it continued to essentially function in the exact same manner as it had before any consultants or attorneys were employed: money came in largely from affiliates (who were supposed to be the “advertising” force for Zeekler.com the penny auction); those affiliates received a purported “profit-share” equivalent to approximately a 125% return on their bid purchases in a 90 day period (later as a Retail Profit Pool percent averaging 1.43% per day); and Defendant Burks promoted the program as sharing the profits from the penny auctions.
Next, they establish how the testimony would be irrelevant:
Even if Defendant can establish “that he disclosed all material facts to [the counsel or expert] and that he acted strictly in accordance with [the counsel or expert’s] advice,” to establish a reliance defense, he must establish that he obtained that advice prior to and with regard to future conduct.
Simply, “a defendant who takes ‘significant steps’ toward the completion of his criminal action cannot avail himself of later-received advice of counsel respecting the lawfulness of that action.” Id.
Put another way, “[t]he party must also consult the attorney as to the lawfulness of his possible future conduct and may not consult an attorney after he has already manifested an intent to act unlawfully in an attempt to retroactively protect himself from the consequences of his illegal conduct.”
Defendant Burks had formed intent and taken significant steps in the scheme prior to the time he sought counsel.
The Conclusion says it all:
Without evidence presented that Defendant (1) obtained the advice of counsel or expert (1) prior to engaging in the conduct and then (2) relied upon the instructions or advice of a particular “expert,” there can be no reliance defense. See Pearrell, 1996 WL 10284 at *2; Polytarides, 584 F.2d at 1352. Here the evidence already establishes that Defendant did not seek advice until after he had manifested the intent to commit his crimes and taken significant steps in furtherance of his scheme. Thus, there can be no reliance defense, and the testimony of Defendant’s “Advice of Counsel/Expert” witnesses should be precluded as irrelevant, as their testimony would not make any fact of consequence more or less probable.
The prosecution believes that is these “expert witnesses” are allowed to testify, the “minimal relevance will be outweighed by the risk of confusing the issues and misleading the jury.”