United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
EDWARD J. LODGE, District Judge.
Pending before the Court in the above-entitled matter are numerous pre-trial motions by Defendant Randy Gard Teall ("Defendant") including: Motion to Strike Surplusage (Dkt. 21); Motion to Disclose Federal Rule of Evidence 404(b) and 609 Material (Dkt. 22); Motion in Limine Regarding Defendant's Prior Conviction (Dkt. 23); Motion to Dismiss Count One (Dkt. 24); Motion to Compel Grand Jury Transcripts (Dkt. 25); Motion to Sever Counts (Dkt. 26); and Motion for Fed. R. Crim. P. 17(c) Subpoena Duces Tecum (Dkt. 32).
In an effort to give the parties direction on the evidentiary issues that have been raised in the Motions, the Court will set forth its views on those matters and make rulings where possible based on the information presently before the Court. These rulings are preliminary and may be subject to revision upon consideration of a particular evidentiary issue presented within the context of the trial. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motions shall be decided on the record before this Court without oral argument.
Defendant has worked in financial institutions for more than 30 years. In 1998 he was hired as a loan officer for Global Credit Union ("GCU"). A year later he was promoted to the position of Branch Manager for GCU's Coeur d'Alene, Idaho branch. In 2006, Defendant became the Vice President of Real Estate Lending/Idaho operations. In 2009, GCU made some changes due to the economy, and Defendant's position as Vice President was closed. Defendant was initially placed under a Ms. Kim Shill, who became the Operations Branch Vice President for GCU's branch offices in Idaho. However, in August of 2010, Defendant was terminated due to a reduction in force.
According to an FBI interview of Ms. Shill on May 14, 2012, GCU was first notified of potential issues with loans Defendant had made when GCU received a repurchase request from Citibank. GCU had approved a mortgage loan to an individual named John Wikum in 2007, which was in turn "sold" to Citibank. In 2011, Citibank requested that GCU repurchase the loan because Mr. Wikum's reported income in his loan application did not match the income stated on his tax returns. While researching the loan, Ms. Shill met with another GCU employee, who stated Mr. Wikum was Defendant's uncle. This information concerned Ms. Shill because GCU policy forbids employees from approving any loans to family members. Other "family loan" files were reviewed, and Ms. Shill relayed the information to GCU's Chief Executive Officer. Once Defendant's loan files were collected, they were submitted to GCU's bonding company, CUMIS Insurance Society. CUMIS required GCU to complete an internal audit and GCU hired Moss Adams.
Following the audit, Defendant was eventually charged, on June 17, 2014, in a nine-count indictment with one count of bank fraud, four counts of willful misapplication of funds, and four counts of false entry in books and records of a financial institution. (Dkt. 1.) On July 8, 2014, Defendant made his initial appearance, was appointed counsel and was arraigned. (Dkts. 4-8.) Defendant thereafter filed two motions to continue. (Dkts. 9, 12.) On April 22, 2015, Defendant filed six of the seven pre-trial motions addressed in this Order. (Dkts. 21-26.) Defendant filed the seventh pre-trial motion addressed in this Order on May 4, 2015. (Dkt. 32.) On May 19, 2015, the Government filed a Superseding Indictment. (Dkt. 54.)
The Superseding Indictment charges Defendant with the same offenses, but alleges each execution of bank fraud as a separate count. Counts 1-9 of the Superseding Indictment are thus for bank fraud involving false entries Defendant allegedly made on different loan and credit applications between April 9, 2007 and June 15, 2009. Counts 10-17 of the Superseding Indictment charge Defendant with four counts of willful misapplication in violation of 18 U.S.C. § 657 and four counts of false entry in violation of 18 U.S.C. § 1006. Trial is set for September 15, 2015.
Standard of Law
Trial judges are afforded wide discretion in determining whether evidence is relevant. United States v. Alvarez, 358 F.3d 1194, 1205 (9th Cir. 2004) (citing United States v. Long, 706 F.2d 1044, 1054 (9th Cir. 1983)). Because an in limine order precluding the admission of evidence or testimony is an evidentiary ruling, a district court has discretion in ruling on a motion in limine. United States v. Ravel, 930 F.2d 721, 726 (9th Cir. 1991) (citing United States v. Komisaruk, 885 F.2d 490, 492 (9th Cir. 1989)).
In limine rulings are provisional. Such "rulings are not binding on the trial judge [who] may always change his mind during the course of trial." Ohler v. United States, 529 U.S. 753, 758 n. 3 (2000); accord Luce v. United States, 469 U.S. 38, 41 (1984) (noting that in limine rulings are always subject to change, especially if the evidence unfolds in an unanticipated manner). "Denial of a motion in limine does not necessarily mean that all evidence contemplated by the motion will be admitted to trial. Denial merely means that without the context of trial, the court is unable to determine whether the evidence in question should be excluded." Indiana Ins. Co. v. General Elec. Co., 326 F.Supp.2d 844, 846 (N.D. Ohio 2004).
1. Motion to Strike Surplusage (Dkt. 21)
Pursuant to Federal Rule of Criminal Procedure 7(d), Defendant seeks to strike all surplusage in the Indictment that refers to Defendant's alleged breach of GCU's policy and procedures by loaning money to family members. "The purpose of a motion to strike under Fed. R. Crim. P. 7(d) is to protect a defendant against prejudicial or inflammatory allegations that are neither relevant nor material to the charges." United States v. Terrigno, 838 F.2d 371, 373 (9th Cir. 1988).
Defendant argues breach of a lending company's policy and procedures is not illegal and is not an element of any of the charged offenses. As such, Defendant maintains allegations regarding Defendant's breach of company policy are not necessary to the indictment. See United States v. Jenkins, 785 F.2d 1387, 1392 (9th Cir. 1986) (If "the language of the indictment goes beyond alleging elements of the crime, it is mere surplusage that need not be proved.") Defendant suggests reference to violation of GCU's policy is not only irrelevant, but is also prejudicial because it could give the jury an unflattering view of Defendant as former Vice President of GCU. The Government counters that Defendant's violation of GCU's policies and procedures demonstrates his intent to defraud the institution, an essential element of bank fraud, willful misapplication and false entry. The Government suggests Defendant's intent to defraud is demonstrated by Defendant's repeated decision to put his interests, and the interests of his family, before those of GCU.
The Defendant's request to strike surplusage from the Indictment is moot because neither the Indictment nor the Superseding Indictment will be read to the jury during the trial nor given to the jury during deliberations. The jury cannot be biased by information it will not see. However, Defendant also asks that the Court "order that the government is prohibited from referencing any of [GCU's] policies or procedures as it relates to prohibitions of making loans to friends or family, either in its opening at trial, case-in-chief or during rebuttal." (Dkt. 21-1, p. 11.) The Court denies this request because Defendant's violation of GCU's policies is potentially material and relevant to each of the crimes charged. Terrigno, 838 F.2d at 373. Specifically, the Government must establish Defendant acted with intent to defraud GCU in order to prove Defendant committed bank fraud, willful misapplication and false entry. To prove Defendant's intent, the Government may seek to present to the jury what policies and procedures GCU had in place to protect depositors' funds. That Defendant allegedly frequently violated such policies and procedures for the benefit of himself and his family illustrates his intent to defraud GCU. Facts regarding Defendant's violation of GCU's policies, though somewhat prejudicial, appear to be relevant and material to the charges at issue, and may therefore be admissible. Id. The Court will rule upon the admissibility of this evidence when it is offered at trial.
2. Motion to Disclose Federal Rule of Evidence 404(b) & 609 Material (Dkt. 22)
Pursuant to Federal Rule of Evidence 404(b), Defendant requests advance notice of what crimes, wrongs or other acts, if any, the Government intends to introduce at trial. Defendant also seeks, pursuant to Federal Rule of Evidence 609, evidence of what prior convictions, if any, the Government seeks to introduce at trial. The Government subsequently provided notice of the Rule 404(b) and Rule 609 material it may introduce at trial. (Dkts. 35, 37.) Defendant's Motion to Disclose is moot.
3. Motion in Limine Regarding Prior Conviction (Dkt. 23)
Defendant seeks to exclude evidence of his 1997 conviction for making false statements on a loan application. The Government has provided notice that it will not attempt to introduce evidence of Defendant's 1997 conviction in its case-in-chief, but may question Defendant or witnesses about the conviction if the defense opens the door to such questioning. (Dkts. 35, 37.) As such, the Government asks that the Court reserve ruling on Defendant's Motion in Limine until this issue becomes ripe at trial.
Federal Rule of Evidence 609 governs the use of convictions as evidence of truthfulness for impeachment purposes. Under Federal Rule of Evidence 609(a), evidence of prior convictions is admissible only if the probative value of the evidence outweighs its prejudicial effect to the defendant. The Ninth Circuit has outlined five factors a court must consider when deciding whether to admit evidence under Rule 609(a)(1):
1. the impeachment value of the prior crime;
2. the point in time of the conviction and the witness' ...