Expert witness objections in Paul Burks criminal case
With Paul Burks’ criminal trial just three days away and trial briefs field by both parties, objections have been raised regarding proposed expert witnesses.
Paul Burks is objecting to Tucker Greer of Price Waterhouse Coopers. The DOJ are objecting to John White and Morris Aaron.
Paul Burks identifies Tucker Greer as a “computer examiner”.
In his objection, Burks seeks to ‘preclude or limit aspects of Mr. Greer’s anticipated testimony‘ that might fall outside of this scope.
It is readily apparent from Mr. Greer’s background and information provided by the government that he does not have expertise in the areas of finance, mathematics, or predictions.
Nonetheless, the government has stated its intention to have Mr. Greer, among other things, “analyze” dollars paid into the program and testify about the “number of victim-investors.”
The prosecution has also suggested to undersigned counsel that the government may seek to have Mr. Greer testify about “modeling/forecasting” with respect to the ZeekRewards program.
Despite the aforementioned limitations on Mr. Greer’s anticipated testimony to that of a “computer examiner” who reconstructed the company’s databases, the prosecution appears to be intent on having Mr. Greer provide expert testimony on matters that concern financial or mathematical analyses and forecasting.
These types of analyses and forecasting fall well outside of the scope of Mr. Greer’s noticed expertise as a “computer examiner.”
Accordingly, Mr. Burks, through undersigned counsel, moves this Court in limine to preclude or limit Mr. Greer from testifying beyond the scope of a “computer examiner” and about the aforementioned “subject areas.”
In what might be another example of a fishing expedition, Burks is asking for a pre-trial “written summary” of Tucker Greer’s testimony.
The handful of charts and graphs provided by the prosecution, which apparently consist of Mr. Greer’s analyses and predictions about the data in question, are not accompanied by anything resembling his actual opinion.
Rule 16 requires more.
to the extent that the prosecution intends to elicit testimony from Mr. Greer concerning matters beyond how “certain evidence was located and recreated,” Mr. Burks, through undersigned counsel, requests that the Court direct the prosecution to provide Mr. Greer’s actual opinion(s) and bases for his opinion(s) regarding those “subject areas,” as well as any additional background or experience to support his putative expert testimony.
He’s also asked the court to prohibit Greer from using the terms “investment” and “interest”, ‘based on the anticipated scope of his testimony as a “computer examiner”‘.
Burks wants the terms “victim-investors”, “winners” and “losers” off-limits too.
These are not terms or labels found in the company data that Mr. Greer was tasked with analyzing.
Instead, these are terms and labels that the prosecution has applied to matters that are for the jury to decide.
I will say that they might indeed not be terms found in “company data”, however they do accurately describe the different classes of affiliates who participated in Zeek Rewards.
Not that substitutes aren’t readily available. Greer could replace “victim-investor” with “Zeek Rewards affiliates”, “winners” with “affiliates who made money” and “losers” with “affiliates who lost money”.
The statistics these terms would be used present should be damning enough.
Finally, Burks also wants clarified the specific role in which Greer will deliver his expert testimony.
It is not entirely clear how the prosecution intends to use Mr. Greer.
However that is resolved, the potential dangers that exist when a witness’ role is conflated can prejudice a defendant’s right to a fair trial and result in reversible error.
Accordingly, Mr. Burks, through undersigned counsel, respectfully requests that the Court order the prosecution to clearly identify whether it intends to introduce Mr. Greer as a fact or expert witness—or both.
A hearing on the matter has been requested. I’m not sure if that would have to be on Monday or whether a separate hearing can be held while the actual trial is taking place.
As per a June 22nd report purportedly filed by John White, the DOJ asserts he
intends to offer two opinions on behalf of Burks.
In particular, White intends to offer:
(1) An “Opinion regarding Zeekrewards not being a Ponzi Scheme;” and
(2) An “Opinion regarding Determination of the Daily RPP Award.”
The DOJ argue that ‘neither opinion should be permitted‘.
White’s first opinion – his recitation of the definition of a Ponzi Scheme from Black’s Law Dictionary and then a comparison of the “characteristics” in that definition to Defendant’s scheme – is a clear effort to usurp the role of the Judge in instructing the jury on the relevant law and the jury in deciding the applicability of the law to the facts of this case.
It is well established that “[t]his type of expert testimony is not permitted.”
Such testimony is also irrelevant as Defendant is not charged with securities fraud or with operating a Ponzi scheme.
He is charged with conspiracy to commit mail and wire fraud, as well as substantive counts of mail fraud and wire fraud.
Interesting play by the DOJ.
And if you’re stuck trying to get your head around it: Zeek Rewards was a Ponzi scheme, Paul Burks has been indicted for wire fraud.
Further, to suggest that the Government must prove the elements of a Ponzi scheme (as defined by Defendant’s expert) is not only legally incorrect and unhelpful to the jury, but would also be confusing, mislead the jury, and be a waste of time and judicial resources under Rule 403.
And, even if such an opinion was proper, White is not qualified to offer such opinion, as he is not an attorney.
There’s a disconnect between reading the definition of a Ponzi scheme and arguing differences, versus sticking to the facts of Burks’ actual indictment.
The DOJ have also objected to the inherent speculative nature of White’s testimony.
White’s second opinion is an improper attempt to offer testimony of the mental state of the Defendant in calculating the RPP by speculating as to what Defendant might have reviewed or might have considered in making the calculation.
Such testimony is unhelpful to the jury as well as wholly irrelevant – unless or until there is evidence that Defendant did in fact review and consider the information White used in calculating the RPP.
The DOJ’s objection to Morris Aaron’s testimony is narrower, with the DOJ seeking to limit his first opinion and preclude two others out of six.
A portion of Aaron’s first opinion and his third opinion relate to what records were available to calculate the daily RPP and whether those records could have been used or would have been sufficient to calculate the RPP.
These opinions should be excluded for the same reasons as Mr. White’s similar opinions – they are an improper attempt to use an expert to “invite the jury to speculate a non-existent defense into existence.”
They are also an improper attempt to offer testimony of the mental state of
Defendant without laying any foundation that Defendant actually considered or used the records and methodology described in calculating the RPP.
Simply put, speculative testimony as to what Defendant could have or might have done is irrelevant, unhelpful to the jury, and likely to be confusing, mislead the jury, and be a waste of time.
Aaron’s fifth opinion purports, without any foundation or support, to offer an explanation of “internal policies and regulations of the banks and merchants” and summarily asserts that the banks and merchants did not conclude “that the Company had conducted criminal or fraudulent activities.”
These “opinions” should be precluded as they are not proper topics for expert testimony, but instead an improper attempt to have an expert speculate about what fact witnesses did and why.
It does seem a bit strange to have an expert witness speculate on why banks and merchants did what they did, rather than just ask them.
If Defendant wishes to present evidence regarding the internal policies and regulations of the banks and merchants and/or why they were unwilling and/or prohibited from providing services to Defendant, he is welcome call representatives from the banks and merchants – who have personal knowledge of those facts – to testify as to those facts, and then argue whatever is supported by the evidence in closing.
But he should be precluded from offering that testimony and argument through a paid expert.
Unless you’re not trying to construct a convenient defense based on speculation, I suppose.
A decision on either motion has yet to be made. I suspect one will be filed this Monday, with Burks’ trial still scheduled to kick off on Tuesday the 5th.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of Paul Burks’ and the DOJ’s respective expert testimony objections (filed June 30th and July 1st).
For the record, Andy “Ad Surf Daily” Bowdoin went to jail for wire fraud, not for Ponzi scheme.
DOJ merely have to prove that the “daily profit share” is NOT what Zeek told everybody it says it is “i.e. a real share of profit generated” and that’s easy-peazy”. The daily profit is 100 times or so larger than it should be.
IMHO, DOJ will let the computer examiner issue slide. They just need him to testify that there is NOTHING in the system capable of CALCULATING the daily profit, nor any record of it ever been calculated, and his job is done. It will sufficiently prove that Burks made up the number in his head, and told everybody it’s calculated. That’s fraud. Over and out.
Basically, PB’s attorneys are barking up the wrong tree, and they don’t even realize it. They still seem to think they are defending against at PONZI case, and the DOJ attorneys ain’t gonna say nothing.
i don’t quite agree with this ^^.
the criminal indictment of paul burks explains the scheme to defraud as a ‘ponzi’ scheme. the term ‘ponzi scheme’ is used several times in the indictment.
the DOJ did not only say that burks ran a fraudulent scheme in which he falsely represented profits with the intent to defraud.
the DOJ in the indictment clearly states that zeek was a ‘ponzi scheme’ which ‘fraudulently’ represented profits and made ‘ponzi like’ payments.
paul burks has not been ‘charged’ with ‘making up profits’ for the RPP either, he has been charged with mail and wire fraud.
but, to prove mail and wire fraud, the DOJ intends to show that not only was the RPP profit a ‘made-up’ percentage, but also that zeek did not have the wherewithal to ‘pay out’ the RPP profit to affiliates.
the DOJ’s argument appears to be that zeek did not have the wherewithal to ‘pay out’ RPP profit, because these payments were ‘ponzi like’, and would need more and more investors to continue. so, if the terms ‘ponzi’ and ‘ponzi-like’ is used in the indictment, then jurors would be entitled to know what they mean.
if the DOJ insists that burks has not been ‘charged’ with running a ‘ponzi’ or securities fraud’, they should not have described the zeek fraud as a ‘ponzi’ in the indictment. they should have just said that the zeek scheme was ‘fraudulent’ as the RPP profit was made up, and the profits did not genuinely arise from penny auctions. you cannot say ‘ponzi scheme’, and then say the jury doesn’t need to be confused with the meaning of the term!
it will be interesting to see how judge cogburn decides on the testimony of john white.
also, in its trial brief the DOJ refers to the ASD scheme in which bowdoin was charged with ‘securities fraud’. they claim that ASD was a ‘similar’ scheme to zeek, which was shut down. yet they have not charged burks with ‘securities fraud’.
so, the DOJ uses the term ponzi several times in its indictment, compares zeek to ASD which was indicted for ‘securities fraud’ and yet thinks the meaning of ‘ponzi scheme’ is irrelevant, legally incorrect and will confuse the jury?
the DOJ’s stand on this is confusing to me, and judge cogburns ruling will be very interesting.
Within the context of expert testimony at Burks’ trial, he hasn’t been charged with running a Ponzi scheme.
Zeek Rewards was a Ponzi scheme, but Burks has been charged with wire fraud – which is what the trial is about. An expert witness going on about Ponzi schemes in general (reading dictionary definitions) serves no purpose.
Expert testimonial about Ponzi schemes might be relevant in say the SEC’s case against TelexFree, but not in a criminal trial pertaining to wire fraud.
That of course doesn’t mean Burks can’t provide evidence that Zeek Rewards wasn’t a Ponzi scheme in his defense, but that doesn’t include expert testimony about Ponzi schemes in general (which as the DOJ points out, will likely only cause confusion and detract from the wire fraud indictment).
That’s how I’m reading the DOJ’s stand.
I am not up to speed on current case law but in the past, I know that the US laws didnt have charges based on the actual term “ponzi scheme”.
So the indictment might refer to the defendant running a “Ponzi Scheme” but the actual charges will be related to fraud or money laundering.
The charges that have to do with indictment and then subsequently prison time if someone is found guilty or takes a plea is usually tied to securities fraud, wire fraud, money laundering etc…
The government also had to convince a grand jury to indict so that means the government has more than enough evidence to prove that fraud was committed.
Since this will be a criminal jury trial, most if not all jurors will be familiar with the term “ponzi scheme” and could assign guilt beforehand and am guessing that Burks feels he will be prejudiced against if that term is brought up, even though just a cursory look at the structure of Zeek, its very clear that it was a Ponzi scheme.
regarding the information in the SQL database which paul burks claims was sufficient to calculate daily RPP profit, the DOJ has a good point here in my view.
paul burks will have to ‘show’ that this data was ‘actually used’ to compute the daily profit, and not merely that such data was available to him.
the DOJ has provided a couple of examples of how burks communications with daniel olivaries proved that the RPP profit percentage was ‘made-up’.
similarly, burks will need to demonstrate via examples, how exactly the SQL data of a particular day was used to arrive at the correct profit percentage.
eg he would have to correlate the SQL data of say feb 1, 2012, to the RPP profit percentage of the same day, and demonstrate to the jury how exactly he arrived at it.
Most juries are not math or tech saavy so they are going to rely on expert witnesses.
I am guessing their eyes are going to glaze over at calculations of profit percentages and the like.
At the end of the day, 98% of cases like this end up with a guilty verdict especially if one of his accomplices agree to testify against him so it stands to reason that Mr Burks is going to be going away for a few years or more especially if he did not take a plea deal and the government normally comes down harsh on those cases.
What is left now is to see how many years he is going to be a guest of the federal government.
according to stats over 90% of criminal cases are settled via plea bargains.
of the remaining that go to trial, over 90% result in ‘guilty’ verdicts, and around 2.5% result in hung juries. in urban federal district courts hung juries can reach even 12 %.
in federal trials the jury has to return a unanimous decision, and even one disagreeing jury member can result in a hung trial.
the stats are really against paul burks, and i hope his defense team is not misleading him or maybe he has not been offered a plea deal.
anyway, it may be too late in the game to make a plea bargain. a deal just before the trial will show the prosecution in a bad light.
asdupdates reports that on june 28, the DOJ filed a motion asking :
burks defense has in april, 2016, dug out some ‘handwritten notebooks’, and introduced them as evidence .
the defense expert witnesses john white and morris aaron, in their report to the court, also refer to these ‘hand written notebooks’ in drawing their conclusions.
though what is in these notebooks is not revealed, they appear to have something to do with calculations for the daily RPP profit percentage.
the prosecution contends that burks did not provide these notebooks to the grand jury [which indicted him] back in 2012, and even during the discovery process before the criminal trial. only around april 8, 2016, prosecution was notified about the existence of these handwritten notebooks.
the prosecution is questioning the authenticity of these ‘notebooks’, and want them to be excluded from evidence, unless burks testifies himself at his trial and swears to their authenticity.
if burks defense is trying to ‘manufacture’ evidence just before his criminal trial it will be the silliest thing ever. don’t see judge cogburn admitting these notebooks as ‘evidence’, which in turn will affect john white’s and morris aaron’s expert testimony in favor of burks. this could seriously puncture burks defense.
Pretty shady the notebooks only came up a few months before trial.
Even if they are admitted, they won’t prove anything beyond the actual numbers.
Depending on what’s in the notebook it should be relatively easy to double-check against the actual numbers like bank transactions and database records. You can’t make 1+1=100, even with Ponzi math.
Frankly, this sort of bull**** is something CRADDOCK claimed to have when Zeek closed, and those NEVER appeared. What are the chances Burks would have surrendered 4 mil if he had these in his possession when SEC came calling?