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United States v. Lignelli

United States District Court, W.D. Pennsylvania

May 15, 2014

UNITED STATES OF AMERICA,
v.
JAMES LIGNELLI, Defendant.

MEMORANDUM OPINION AND ORDER

TERRENCE F. McVERRY, District Judge.

Pending before the Court are numerous motions in limine filed by Defendant James Lignelli: MOTION IN LIMINE REGARDING OUT-OF-COURT STATEMENTS OF ALLEGED CO-CONSPIRATORS AND GOVERNMENT INFORMERS (ECF No. 77); MOTION IN LIMINE TO PRECLUDE CERTAIN EVIDENCE OF UNCHARGED CONDUCT (ECF No. 78); MOTION IN LIMINE TO PRECLUDE LAY OPINION TESTIMONY ON PROPERTY VALUES (ECF No. 79); and MOTION IN LIMINE TO PRECUDE EXPERT TESTIMONY AND EVIDENCE REGARDING 2010 APPRAISAL OF 993 BRODHEAD ROAD (ECF No. 80). The government filed an omnibus response and the motions are ripe for disposition. Jury selection and trial is scheduled to commence on May 27, 2014. The motions will be addressed seriatim.

Factual and Procedural Background

Lignelli is a professional real estate appraiser. On October 25, 2011, a federal grand jury returned a five-count indictment which has charged Lignelli with: Count 1, Conspiracy to commit bank fraud from February-April 2005, along with Michael Pope, Tiffany Sprouts and others, by having prepared a fraudulent real estate property appraisal for the "Sugar Camp Property, " in violation of 18 U.S.C. § 1349; Counts 2 and 3, Bank Fraud on Bank of America and JP Morgan Chase, respectively, resulting from the fraudulent appraisal for the "Sugar Camp Property, " in violation of 18 U.S.C. § 1344(1) and (2); Count 4, Bank Fraud on S&T Bank from April-August 2005, along with Michael Staaf and others, by having prepared a fraudulent real estate property appraisal for the "Perry Highway Property, " in violation of 18 U.S.C. § 1344(1) and (2); and Count 5, Conspiracy to commit bank fraud from July 2008-December 2009, along with Michael Staaf and others, by having prepared a fraudulent real estate property appraisal for the "Brodhead Road Property, " in violation of 18 U.S.C. § 1349.

1. Statements of Alleged Co-Conspirators (#77)

Defendant contends that the government should be precluded from referring to out-of-court statements made by alleged co-conspirators and informants until it has satisfied the requirements of Rule 801(d)(2)(E). Specifically, Defendant seeks to preclude such references during opening statements, questions to witnesses or objections.

In Government of Virgin Islands v. Brathwaite , 782 F.2d 399, 403 & n.1 (3d Cir. 1986), the Court explained that "the prosecution must lay a foundation for the admission of co-conspirator testimony by establishing the existence of a conspiracy that included the defendant or defendants, " but noted that there is a distinction between the crime of conspiracy and the "coconspirator exception to the hearsay rule set forth in Federal Rule of Evidence 801(d)(2)(E)." In United States v. Giampa , 904 F.Supp. 235, 286 (D.N.J. 1995), the Court explained: "a practical evidentiary rule has developed whereby a co-conspirator's statement is conditionally admitted into evidence, subject to the Government's obligation to prove the conspiracy's existence and each conspirator's participation therein before the close of the Government's case." "In the event the Government fails sufficiently to connect the defendant to the conspiracy, the "connection up" rule of admitting co-conspirator statements can lead to a mistrial." Id .

This procedure appears to be eminently practical in this case. In particular, it may be beneficial to the jury for the government to provide an outline of its complex evidence in this case during its opening statement. Thus, the government will be permitted to make prospective references to alleged co-conspirator statements, but it will be the government's burden to "connect up" each such statement(s) with the Defendant during the trial. In accordance with the foregoing, the MOTION IN LIMINE REGARDING OUT-OF-COURT STATEMENTS OF ALLEGED CO-CONSPIRATORS AND GOVERNMENT INFORMERS (ECF No. 77) is DENIED.

2. Uncharged Conduct (#78)

Lignelli seeks to preclude the government from offering evidence of uncharged conduct regarding: (1) an alleged fraudulent real estate property appraisal of Chioda's Plaza at the request of Staaf in 1999; (2) references to a trip to Florida in March 2005 with Staaf for a real estate property appraisal of the Dolphin Inn Motel, and their alleged visits to strip clubs while on that trip; and (3) a real estate property appraisal of 1505 Scenery Ridge on behalf of Pope in September 2005. Defendant contends that such evidence is neither related to the charged conspiracies, nor admissible under Rule 404(b). In the alternative, Defendant contends that such evidence should be precluded under Rule 403(b) because the danger of unfair prejudice outweighs the probative value of same. In response, the government contends that the entire, overall relationship between Staaf and Lignelli constitutes intrinsic evidence of the crimes charged in Counts 4 and 5; and that the Scenery Ridge real estate property appraisal used the same technique (flawed comparable properties) as the Sugar Camp real estate property appraisal.

Lignelli is not charged with a single, decade-long conspiracy. Rather, Count 1 charged a narrow, three-month (February-April 2005) conspiracy with Pope which involved a real estate appraisal of a single parcel of property (Sugar Camp); and Count 5 charged a separate conspiracy with Staaf some years later (July 2008-December 2009) which involved a real estate property appraisal of only the Brodhead Road parcel. Indeed, Defendant challenged whether these two counts should have been charged in the same indictment. See ECF No. 31. The Court denied Lignelli's motion for severance, but noted that the jury must be instructed to consider each count separately.

The real estate property appraisal of Chioda's Plaza occurred ten years prior to the Brodhead Road conspiracy with Staaf as alleged in Count 5 of the Indictment and the Dolphin Inn trip to Florida occurred at least three years prior to the above-referenced appraisal.[1] The Scenery Ridge appraisal took place after the conspiracy alleged in Count 1 had already ended, and thus has limited relevance as to whether Lignelli knew that Pope was engaged in fraud during the charged crime. In sum, the Court concludes that none of these three incidents were within the temporal or topical scope of the crimes charged in the Indictment.

Nor is the proffered evidence admissible under Rule 404(b). Although Rule 404(b) is a rule of inclusion, the use of "prior bad acts" evidence is sensitive and requires sensitivity and care from prosecutors and judges alike. United States v. Davis , 726 F.3d 434, 442 (3d Cir. 2014). As recently summarized in United States v. Alfred , 2014 WL 4874978 (3d Cir. September 5, 2014) (non-precedential):

Rule 404(b) prohibits the admission of "[e]vidence of a crime, wrong, or other act... to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character." Fed.R.Evid. 404(b)(1). Rule 404(b), however, does permit evidence of crimes, wrongs, and other acts to be admitted to prove, among other things, knowledge or absence of mistake. See Fed.R.Evid. 404(b)(2). "To be admissible under Rule 404(b), evidence of uncharged crimes or wrongs must (1) have a proper evidentiary purpose; (2) be relevant; (3) satisfy Rule 403; and (4) be accompanied by a ...

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